United States District Court, N.D. Alabama, Southern Division
ANDRE M. TOFFEL, Trustee, Plaintiff,
NATIONWIDE MUTUAL INS. CO.,, Defendants.
MEMORANDUM OPINION AND ORDER
OWEN BOWDRE, CHIEF UNITED STATES DISTRICT JUDGE
case arises out of a dispute over insurance coverage for
state court judgments totaling approximately 15 million
dollars entered against The Nineteenth Street Investments,
Inc. for violating Alabama's dram shop law. Plaintiff
Andre M. Toffel, Trustee of the Bankruptcy Estate of
Nineteenth Street, brought claims of negligent and/or wanton
failure to procure insurance coverage; breach of contract;
bad faith refusal to defend, indemnify, and settle; and
recovery of property of estate. (Doc. 1-1). This matter was
initially filed as an adversary proceeding in the Bankruptcy
Court for the Northern District of Alabama, but was
transferred to this court after the undersigned granted
Plaintiff's Motion to Withdraw the Reference. (Doc. 7);
see (Doc. 1). This court then dismissed
Plaintiff's Complaint based on insufficient service of
process and because Plaintiff's claims were barred by the
applicable statute of limitations. (Doc. 22). The court
simultaneously denied Plaintiff's Motion for Leave to
Amend Complaint. (Id.).
matter now comes before the court on Plaintiff's Rule
59(e) Motion to Alter or Amend. (Doc. 24). Mr. Toffel argues
that manifest errors of law and fact support altering or
amending the court's dismissal order.
only grounds for granting a Rule 59 motion are
newly-discovered evidence or manifest errors of law or fact.
A Rule 59(e) motion cannot be used to relitigate old matters,
raise argument or present evidence that could have been
raised prior to the entry of judgment.” Arthur v.
King, 500 F.3d 1335, 1343 (11th Cir. 2007) (citations
omitted). Mr. Toffel must “demonstrate why the court
should reconsider its prior decision and ‘set forth
facts or law of a strongly convincing nature to induce the
court to reverse its prior decision.'” Fidelity
& Deposit Co. of Maryland v. Am. Consertech, Inc., No.
06-0338-CG-M, 2008 WL 4080270, at *1 (S.D. Ala. Aug. 28,
2008) (quoting Cover v. Wal-Mart Stores, Inc., 148
F.R.D. 294, 295 (M.D. Fla. 1993)).
Dismissal for Insufficient Service of Process
insufficient service of process, the court found in
dismissing Plaintiff's Complaint that Plaintiff presented
prima facie evidence of valid service in the form of executed
returns of service. The court noted that the prima facie
evidence was weaker than usual because the Certificates of
Service were completed by the Plaintiff's attorney rather
than a process server and because Plaintiff's attorney
did not file the Certificates until fourteen months after the
date on which he allegedly mailed the summonses and
Complaints. In any event, the court found that Defendants
presented “strong and convincing evidence”
sufficient to overcome Plaintiff's evidence of valid
service. See In re Premium Sales Corp., 182 B.R.
349, 351 (Bankr. S.D. Fla. 1995).
Defendants' signed, sworn statements attested to their
normal procedures for receiving summons, which suggested that
they would have a record of receiving the summons if they had
been served; Defendants are sophisticated businesspeople who
are familiar with handling summonses; none of the
three Defendants received the summons and Complaint; and the
lapse of time between the alleged mailing and the filing of
the Certificates of Service was suspicious. This evidence
indicated that Plaintiff did not serve the Defendants.
Toffel argues in his Motion that Defendants had actual notice
of this lawsuit but failed to inform Mr. Toffel's
attorney that they had not been served with the summons and
Complaint, making dismissal under Federal Rules of Civil
Procedure 12(b)(5) and 4(m) unjust. He argues that even in
the absence of good cause for delay, a court may extend the
time to perfect service beyond the 120-day deadline where
circumstances warrant an extension. Prince Hotel, S.A. v.
Blake Marine Grp., 858 F.Supp.2d 1287, 1292 (S.D. Ala.
2012). “Relevant circumstances may include, for
example, such factors as whether the statute of limitations
would bar a refiled action, whether the defendant evaded or
concealed a defect in service, and whether the
defendant had actual notice of the suit.”
Id. (emphasis added) (citation omitted).
Mr. Toffel points to language in November 2014 emails between
Valrey Early, Plaintiff's attorney, and Kori Clement,
Nationwide's attorney, demonstrating that Mr. Early and
Ms. Clement spoke on the phone in September 2013 to discuss
this lawsuit. Mr. Toffel argues that the language of the
emails indicates that Ms. Clement knew of the lawsuit shortly
after Mr. Toffel allegedly mailed the summonses and
Mr. Toffel attacks the credibility of Defendant Pat
Donalson's declaration, maintaining that Ms.
Donalson's statement that she first learned of this
proceeding in November 2014 is contradicted by her other
testimony. Ms. Donalson declares that her “routine
practice is to forward any legal papers to Nationwide Mutual
Insurance Company, ” and the evidence indisputably
shows that the Bankruptcy Court for the Northern District of
Alabama mailed Ms. Donalson scheduling orders in the
adversary proceeding in December 2013 and April 2014. (Doc.
9-2 at 6 ¶ 3). The inference, according to Mr. Toffel,
is that Ms. Donalson was aware of this suit.
Mr. Toffel calls into question Mara Velasco's
declaration, in which Ms. Velasco maintains that CT Corp.,
Defendant Nationwide's registered agent, maintains
records of all documents it receives for Nationwide and has
no record of receiving a summons or complaint in this case.
Mr. Toffel argues that the declaration is not credible
because Ms. Velasco does not explain how she conducted her
search or address whether CT Corp. received the bankruptcy
Toffel's arguments do not satisfy his burden to
“set forth facts or law of a strongly convincing
nature” that demonstrate a manifest error of law or
fact. See Fidelity & Deposit Co., 2008 WL 4080270,
at *1 (quoting Cover, 148 F.R.D. at 295). Rather,
they represent an attempt to re-litigate the substance of the
Motion to Dismiss, in reliance upon arguments and evidence
that could have been presented during the first go-round.
taking into consideration the new cases and facts Mr. Toffel
presents, strong and convincing evidence establishes that
Defendants were not served. The court finds that no good
cause explains Mr. Toffel's failure to perfect service
and that “relevant circumstances” do not warrant
extending the deadline for service here. See Prince
Hotel, 858 F.Supp.2d at 1292 (citation omitted);
see, e.g., In re Anderson, 179 B.R. 401,
407 (D. Conn. 1995) (finding good cause for plaintiff's
failure to timely perfect service under Federal Rule of
Bankruptcy Procedure 7004(f) by mailing summons and complaint
within 10 days of summons issuance, where defendants
actually received summons and complaint within
twenty days of complaint's filing but “lay in
wait” and did not move to dismiss under F.R.C.P. 4(j)
until after 120-day window passed). Defendants would be
prejudiced by permitting Plaintiff to serve them now, after
Mr. Toffel waited fourteen months to take any action