Anglin Automotive LLC v. EBF Holdings, LLC

Background

The plaintiffs filed the complaint on February 20, 2023. The 90-day period for serving the defendants expired on May 23, 2023. On June 8, 2023, the court ordered the plaintiffs to show why their claims against Silverline Services, Inc. and Five G Funding LLC should not be dismissed under Federal Rule of Civil Procedure 4(m) for failure to make timely service or under Rule 41(b) for failure to prosecute.

The plaintiffs did not respond by the June 22 deadline. On June 29, the court recommended dismissing the claims against Silverline and Five G without prejudice for failure to make timely service. The plaintiffs filed a response on July 13, more than three weeks late, explaining that their lawyer had mistakenly entered July 22 as the response deadline.

Service on Five G and Silverline

The plaintiffs submitted an affidavit showing that Five G was served on February 28, 2023. They also submitted an affidavit showing that a process server attempted to serve Silverline on March 1, 2023, at 265 Sunrise Highway, Suite 236, Rockville Centre, New York. The process server reported that there was no Suite 236 at that address. The plaintiffs stated that the address was listed with the New York Department of State as Silverline’s principal executive officer address and as the address for service-related mail.

Rule 4(m) generally requires service within 90 days after a complaint is filed. If service is not timely, the court must dismiss the action without prejudice against that defendant or order service within a specified time. If the plaintiff shows good cause, the court must extend the service period. The court explained that inadvertence, neglect, or mistake generally is not good cause. Even without good cause, however, a court may use its discretion to extend the deadline.

The court found that the plaintiffs satisfied the order to show cause as to Five G because they had filed proof of timely service. As to Silverline, the court found that the plaintiffs had not shown good cause because, after learning that the first service attempt failed, they did not try alternative methods, including service through the New York Secretary of State.

The court nevertheless found a discretionary extension appropriate. It relied in part on Silverline’s apparent failure to maintain a correct service address with New York authorities.

Order

The court VACATED the June 29 report and recommendation. It found the order to show cause SATISFIED as to Five G and ordered the plaintiffs to request a certificate of default from the Clerk of Court by July 21, 2023, then file a motion for default judgment against Five G by August 11, 2023.

Although the plaintiffs FAILED TO SATISFY the order to show cause as to Silverline, the court GRANTED them a discretionary extension of time to serve Silverline. The plaintiffs were required by July 28, 2023, to serve Silverline and file proof of service, or show good cause why they could not do so. The court warned that failure to comply would result in a recommendation to dismiss the claims against Silverline.