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Pugh v. Bank of America

United States District Court, E.D. Louisiana

April 21, 2017

ERNEST PUGH, ET AL,
v.
BANK OF AMERICA

         SECTION: “H” (1)

          ORDER AND REASONS

          JANE TRICHE MILAZZO UNITED STATES DISTRICT JUDGE.

         Before the Court are Plaintiffs' Motion for Default Judgment (Doc. 7) and Motion for Cease and Desist Order (Doc. 14) and Defendant's Motion to Set Aside Default and Motion to Dismiss (Doc. 11). For the following reasons, Plaintiffs' Motions are DENIED, and Defendant's Motion is GRANTED.

         BACKGROUND

         In the instant action, Plaintiffs Ernest and Linda Pugh seek damages in the amount of $10, 000, 000 against Defendant Bank of America. Though the factual predicate of this claim is not entirely clear from the Complaint, it appears to center on a dispute concerning a mortgage on 2232 Oakmere Dr. in Harvey, Louisiana. Plaintiffs filed a Motion for Entry of Default as to Bank of America, averring that Bank of America has failed to answer despite being properly served. Accordingly, the clerk entered preliminary default against Defendant. Plaintiffs then filed the instant Motion for Default Judgment. Defendant has responded with a motion of its own, arguing that the default should be set aside and the case dismissed because it has not been properly served. Alternatively, it moves for dismissal under Rule 12(b)(6). In response, Plaintiffs filed a Motion for Cease and Desist Order.

         LEGAL STANDARD

         I. Motion to Dismiss for Improper Service

         “Federal Rule of Civil Procedure 12(b)(5) provides for dismissal of a claim if service of process was not timely made in accordance with Federal Rule of Civil Procedure 4 or was not properly served in the appropriate manner.”[1] “In the absence of valid service of process, proceedings against a party are void.”[2] The party responsible for serving has the burden of showing that service was valid in the face of a 12(b)(5) challenge.[3] Rule 4(m) provides in part:

If a defendant is not served within 90 days after the complaint is filed, the court-on motion or on its own after notice to the plaintiff-must dismiss the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period.[4]

         Thus, a Court faced with a defendant's Rule 12(b)(5) motion to dismiss for failure to timely serve must undertake a two part inquiry.[5] First, the Court must determine if the plaintiff can show “good cause” for its failure to timely serve. If good cause exists, the Court is required to extend the 90 day period for service of process.[6] “If good cause does not exist, the Court may, in its discretion, decide whether to dismiss the case without prejudice or extend time for service.”[7] “The district court enjoys a broad discretion in determining whether to dismiss an action for ineffective service of process.”[8]

         LAW AND ANALYSIS

         The key issue presented in these Motions is whether service has been properly made on Defendant. If not, the default must be set aside, Plaintiffs' Motion for Default Judgment must be denied, and the matter may be subject to dismissal. Accordingly, the Court first considers the propriety of service.

         Defendant argues that it has never been properly served in this matter. Service on corporate entities is governed by Federal Rule of Civil Procedure 4(h), which provides, in pertinent part, as follows:

(h) Serving a Corporation, Partnership, or Association. Unless federal law provides otherwise or the defendant's waiver has been filed, a domestic or foreign corporation, or a partnership or other unincorporated association that ...

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