Roger C. Adams v. Alliedsignal General , 74 F.3d 882 ( 1996 )

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No. 94-4104
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Roger C. Adams; Harriet A. *
Graham; Robert H. Adams; David *
Adams; F. Montgomery Adams, *
Jr., individually and as *
children of decedents Frank M. *
and Novella C. Adams, *
*
Plaintiffs - Appellants, * Appeal from the United States
* District Court for the
v. * Eastern District of Missouri.
*
AlliedSignal General Aviation *
Avionics; AlliedSignal, Inc.; *
AlliedSignal Aerospace Company; *
AlliedSignal Aerospace, *
Avionics Group, *
*
Defendants - Appellees. *
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Submitted: September 15, 1995
Filed: January 26, 1996
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Before WOLLMAN, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
___________
LOKEN, Circuit Judge.
On May 27, 1990, Idaho residents Novella and Frank Adams were
killed in a single engine airplane crash near Naylor, Missouri. In
this diversity action, their five children seek damages for claims
that the crash was caused by a defect in the airplane's autopilot,
a product named the Bendix/King KFC 150. Plaintiffs appeal the
dismissal of their wrongful death action without prejudice due to
insufficient service of process. Concluding that the district
1
court did not abuse its discretion, we affirm.
I. Background.
Plaintiffs filed their initial complaint on May 21, 1993,
alleging that the named defendant, "AlliedSignal General Aviation
Avionics (Formerly Bendix/King General Avionics)," is liable as
manufacturer of the autopilot. Plaintiffs personally served the
complaint on R. Craig Christie at a business address in Olathe,
Kansas. Plaintiffs later explained that they chose this method of
service based upon (i) statements in the 1993 edition of an
aviation industry buyers reference book, World Aviation Directory,
that Bendix/King is now named AlliedSignal General Aviation
Avionics ("ASGAA"), that ASGAA is located at the Kansas address,
and that Mr. Christie is its president; and (ii) an anonymous
telephone call to the number listed for ASGAA in the Kansas City
telephone directory in which plaintiffs' counsel was told that
ASGAA is the company's name and Christie is its president.
ASGAA moved to dismiss the complaint for insufficiency of
process and insufficiency of service of process,2 submitting an
affidavit by Mr. Christie stating that he is not an employee,
officer, or director of ASGAA, is not authorized to accept service
for ASGAA, and indeed is not aware of any corporation named ASGAA.
Plaintiffs promptly moved for leave to file an amended complaint
naming as additional defendants AlliedSignal, Inc.; AlliedSignal
Aerospace Company; and AlliedSignal Aerospace, Avionics Group. The
1
The HONORABLE JEAN C. HAMILTON, Chief Judge of the United
States District Court for the Eastern District of Missouri.
2
See Fed. R. Civ. P. 12(b)(4) and (5). The distinction
between the two insufficiencies is often blurred, and it is
appropriate to present and analyze service issues under both
rules. See 5A Charles A. Wright & Arthur R. Miller, Federal
Practice and Procedure: Civil § 1353, at 277 (2d ed. 1990).
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amended complaint alleged that these four defendants "individually
or collectively, is [sic] a corporation and/or business." The
district court granted leave to amend. Plaintiffs served the new
defendants by personally serving Mr. Christie at the Kansas
address, after counsel again consulted the World Aviation Directory
and placed another anonymous call to that business office.
The new defendants filed motions to dismiss, and ASGAA renewed
its motion to dismiss, again challenging service of process.
Defendants submitted two additional Christie affidavits stating
that (i) he is Senior Vice President of King Radio Corporation, a
Kansas corporation located at the Olathe, Kansas, address; (ii)
King Radio is a wholly-owned but separately-operated subsidiary of
AlliedSignal, Inc., a Delaware corporation having its principal
office in New Jersey; (iii) he is not an employee, officer, or
director of AlliedSignal, Inc., and is not authorized to accept
service on its behalf; and (iv) the other new defendants,
AlliedSignal Aerospace Company and AlliedSignal Aerospace, Avionics
Group, do not exist as legal entities.
Plaintiffs made no additional effort to serve the four named
defendants, did not seek leave to add King Radio as an additional
defendant, and did not seek discovery on the service issues.
Instead, plaintiffs filed an affidavit explaining the results of
their World Aviation Directory and telephone inquiries, arguing
that this research established that Christie is president of ASGAA,
which has an office at the Kansas address. Therefore, plaintiffs
concluded, service on Christie was personal service on the
corporation that manufactured the allegedly defective autopilot.
Some months later, with discovery paralyzed by the service of
process dispute, the district court took up defendants' long-
pending motions and dismissed the amended complaint without
prejudice. The court reasoned that World Aviation Directory
excerpts and plaintiffs' telephone inquiries did not reliably
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refute defendants' showing that Mr. Christie was not authorized to
accept service of process on behalf of any named defendant.
Plaintiffs then filed a motion to reconsider, arguing again
that service on Christie was effective to serve all four named
defendants. Plaintiffs' submission in support of that motion
included: (i) State of Kansas Corporate Annual Reports for King
Radio Corporation for 1989-1992. These reports confirmed
Christie's averral that King Radio was a wholly-owned subsidiary of
AlliedSignal, Inc., doing business at the Olathe, Kansas, address.
(ii) An affidavit and chart describing the corporate structure of
AlliedSignal, Inc., and some of its operating divisions and
subsidiaries, based upon information informally provided by an
AlliedSignal public relations office. That information, too, was
consistent with the facts presented in support of defendants'
motions to dismiss. (iii) Pleadings from a lawsuit in the Northern
District of Ohio showing that King Radio had, without objecting to
the manner of service, answered a complaint that improperly named
King Radio as Allied Signal Aerospace Co.
As an alternative to their request that the district court
reverse its prior ruling, plaintiffs requested an additional sixty
days to reserve defendants. Plaintiffs argued that dismissal
without prejudice was too harsh because a three-year Missouri
statute of limitations had then expired.3 They further argued that
there was good cause to extend the 120-day time limit for service
of process because plaintiffs were misled by defendants' "maze of
organizations, shells, strategic business units, operating units,
and other such corporate structures." Plaintiffs requested a
"short window of discovery" to explore these service issues.
3
For purposes of the appeal, we assume without deciding that
this Missouri statute of limitations governs plaintiffs' claims.
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The district court denied the motion to reconsider, concluding
that plaintiffs had presented no new evidence that service on Mr.
Christie was effective service on any defendant. The court denied
plaintiffs' request to reserve and for discovery because plaintiffs
had not acted diligently and indeed had yet to serve the proper
defendant despite being given sufficient information to do so in
the Christie affidavits. This appeal followed.
II. Adequacy of Service.
On this record, one of two corporations may be the proper
entity to defend plaintiffs' claims -- AlliedSignal, Inc., which
was never served, and its subsidiary, King Radio, which was never
named. Plaintiffs have no proof that the other three named
defendants are separate corporations. These defendants appear to
be either operating divisions of AlliedSignal, Inc., or trade names
used by AlliedSignal or one of its subsidiaries. Of course, the
actual structure of the AlliedSignal corporate family may be
different, but plaintiffs have elected to have service issues
decided on this record.
Changing their emphasis on appeal, plaintiffs stress the
contention that Christie was authorized to accept service on behalf
of the parent corporation, AlliedSignal, Inc., the only named
defendant that clearly exists. However, they have no evidence
effectively contradicting Christie's sworn statement that he is not
an agent of that corporation on whom process may be served under
Fed. R. Civ. P. 4(h)(1). Christie is an officer of King Radio, and
plaintiffs submitted evidence that King Radio advertises its
subsidiary relationship with AlliedSignal, Inc. But absent
probative evidence that the two corporations are not independently
operated, service on an officer of a subsidiary, here King Radio,
does not effect service on the parent corporation, AlliedSignal,
Inc. See I.A.M. Nat'l Pension Fund v. Wakefield Indus., 699 F.2d
1254, 1258-59 (D.C. Cir. 1983); Orbis Marine Enters. v. TEC Marine
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Lines, Ltd., 692 F. Supp. 280, 286 (S.D.N.Y. 1988). And if
AlliedSignal, Inc., was improperly served, the district court
lacked jurisdiction over that defendant whether or not it had
actual notice of the lawsuit. See Printed Media Servs., Inc. v.
Solna Web, Inc., 11 F.3d 838, 843 (8th Cir. 1993).
Plaintiffs' failures to properly serve AlliedSignal, Inc., and
to name King Radio are baffling. The use of trade names, operating
divisions, and independent subsidiaries by enterprises the size of
AlliedSignal, Inc., is hardly unusual. The need to identify the
proper corporate defendant is apparent to any practicing attorney,
particularly if issues of successor corporate liability loom, as
the Bendix/King product name suggests. Industry buyer guides and
anonymous calls to business offices are not reliable sources for
identifying proper corporate names, whereas the Christie affidavits
identified King Radio and AlliedSignal, Inc., and told plaintiffs
where to serve them. Then, when plaintiffs belatedly went to a
reliable source, the State of Kansas Corporate Annual Reports,
those reports confirmed Christie's averrals.
For these reasons, the district court properly ruled that
plaintiffs had failed to serve any defendant within 120 days, the
time limit imposed by Fed. R. Civ. P. 4(m). As in Gonzalez v.
Temple Mountain Ski Resort, Inc., 613 F. Supp. 354, 355 (D. Mass.
1985), there is no proper service when the person served is an
officer of a corporation not named a defendant. Plaintiffs
complain that King Radio apparently waived a similar defect in the
Ohio litigation. But defendants had no obligation to waive their
due process right to proper service. They were obliged not to
evade service, but because they provided accurate information in
the Christie affidavits, they cannot be accused of evading service.
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III. Dismissal of the Action.
As in the district court, plaintiffs alternatively argue that
the district court erred in dismissing their amended complaint
without prejudice. Rule 4(m) provides:
If service of the summons and complaint is not made upon a
defendant within 120 days after the filing of the complaint,
the court . . . shall dismiss the action without prejudice as
to that defendant or direct that service be effected within a
specified time; provided that if a plaintiff shows good cause
for the failure, the court shall extend the time for service
for an appropriate period . . . .
This Rule was effective on December 1, 1993, and governs "all
proceedings in civil cases thereafter commenced and, insofar as
just and practicable, all proceedings in civil cases then pending."
Supreme Court Order of April 22, 1993, Adopting and Amending Rules
of Civil Procedure, ¶ 2.
Plaintiffs first argue that we must remand because the
district court failed to perceive that it had the discretion to
quash service of process but retain jurisdiction. See C & L Farms,
Inc. v. Federal Crop Ins. Corp., 771 F.2d 407, 408-09 (8th Cir.
1985); Haley v. Simmons, 529 F.2d 78, 79 (8th Cir. 1976). After
careful review of the district court's two thorough opinions,
however, we are satisfied the court appreciated that its decision
to dismiss was discretionary, rather than mandatory.
Plaintiffs next argue that the district court abused its
discretion by denying their requests to correct the names of the
defendants sued, and for limited discovery on service of process
issues. The request for discovery requires little discussion. It
came nearly one year after defendants first raised service of
process issues and submitted the Christie affidavits. The district
court did not abuse its discretion in denying this belated request
as untimely.
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The request to correct defendants' names as pleaded is more
difficult. On appeal, plaintiffs assert that they asked to
substitute King Radio Corporation for one of the non-existent named
defendants, as effectively happened in the Ohio litigation when
King Radio answered disclosing its correct corporate name. Had
this been explained to the district court, such relief might have
been appropriate. See Cobb v. Stringer, 660 F. Supp. 1133, 1136-37
(W.D. Ark. 1987) (subsequent history omitted). But plaintiffs
instead asked the district court to substitute King Radio's March
1994 successor4 for King Radio, claiming that King Radio had
"operated at all times relevant herein as a unit of the other
defendants." This untimely request did not address plaintiffs'
real problem -- their persistent, inexplicable failure to name as
defendant King Radio, the separate corporation of which Christie
was admittedly an officer and managing agent. Thus, we conclude
there was no abuse of discretion in denying this request.
For the first time in their reply brief, plaintiffs raise
another issue they belatedly presented to the district court --
whether that court's dismissal was an abuse of discretion under new
Rule 4(m). The prior Rule required dismissal if plaintiff "cannot
show good cause why such service was not made within" 120 days.
See Fed. R. Civ. P. 4(j) (1991). The new Rule increases a district
court's discretion to extend the 120-day time period by authorizing
the court "to relieve a plaintiff of the consequences of an
application of this subdivision even if there is no good cause
shown." Rule 4 Advisory Committee Notes (1993). Thus, under Rule
4(m), if the district court concludes there is good cause for
plaintiff's failure to serve within 120 days, it shall extend the
time for service. If plaintiff fails to show good cause, the court
still may extend the time for service rather than dismiss the case
4
Apparently, King Radio changed its name to AlliedSignal
Avionics, Inc., following its March 1994 merger with another
AlliedSignal entity (not a named defendant).
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without prejudice. See Espinoza v. United States, 52 F.3d 838, 841
(10th Cir. 1995); Petrucelli v. Bohringer & Ratzinger, 46 F.3d
1298, 1305 (3d Cir. 1995).
Plaintiffs argue that their diligent inquiries and prompt
filing of an amended complaint satisfy Rule 4(m)'s good cause
standard. A showing of good cause requires at least "excusable
neglect" -- good faith and some reasonable basis for noncompliance
with the rules. See Lujano v. Omaha Public Power Dist., 30 F.3d
1032, 1035 (8th Cir. 1994); Pellegrin & Levine, Chartered v.
Antoine, 961 F.2d 277, 282-83 (D.C. Cir. 1992). When counsel has
ample notice of a defect in service, does not attempt an obvious
correction, and chooses to defend the validity of the service
attempted, there is no good cause for the resulting delay if that
method of service fails. See Traina v. United States, 911 F.2d
1155, 1157 (5th Cir. 1990).
Here, for one year plaintiffs ignored reliable sources of
corporate structure information, such as the Kansas Secretary of
State, and refused either to act on the information provided in the
Christie affidavits, or to look behind that information through
discovery. Even when the Kansas Corporate Annual Reports and
information provided by an AlliedSignal public relations office
confirmed the Christie affidavits, plaintiffs stubbornly refused to
take the obvious step of moving for leave to add King Radio as a
named defendant. Thus, plaintiffs' insufficiency of service was
willful, not inadvertent. We cannot conclude that the district
court abused its discretion in finding no good cause for the
resulting delay. See Edwards v. Edwards, 754 F.2d 298, 299 (8th
Cir. 1985) (standard of review).
Alternatively, plaintiffs argue that the district court abused
its Rule 4(m) discretion by refusing to grant a permissive
extension of the 120-day time limit. Plaintiffs rely upon the Rule
4(m) Advisory Committee Notes, which state that such relief "may be
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justified, for example, if the applicable statute of limitations
would bar the refiled action." However, "the running of the
statute of limitations does not require the district court to
extend time for service of process." Petrucelli, 46 F.3d at 1306.
Plaintiffs requested this discretionary relief almost one year
after service issues were first raised. During that period, the
service of process dispute frustrated discovery (because no named
defendant had been served) and disrupted the court's efforts to set
a trial date. Plaintiffs in requesting more time assured the
district court that they could now effect service. But they never
took the obvious step of seeking to add King Radio, and they did
not advise the district court what steps would now be taken to
effect service and why the failure to serve would then be cured.
Indeed, even on appeal plaintiffs do not acknowledge the need to
sue King Radio (or its successor), despite clear record evidence to
the contrary.
At some point, a litigant must bear the consequences of
conscious strategic or tactical decisions of this kind. Although
this dismissal without prejudice may prove to have severe
consequences, the district court correctly applied the applicable
rules of civil procedure, carefully considered plaintiffs'
arguments on the service issues, and gave plaintiffs repeated
opportunities to correct their service insufficiencies. We
conclude that the court's ultimate decision to dismiss without
prejudice was not an abuse of its substantial Rule 4(m) discretion.
The judgment of the district court is affirmed.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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