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Flemons v. J.P. Morgan Chase Bank, N.A.

United States District Court, D. Maryland

November 14, 2014

J.P. MORGAN CHASE BANK, N.A., Defendant.


ELLEN L. HOLLANDER, District Judge.

On May 19, 2014, eighteen individual plaintiffs filed suit against defendant, J.P. Morgan Chase Bank, N.A., alleging violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. ยง 2601, and common law claims for breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, fraudulent concealment, and unjust enrichment. Complaint, ECF 1. Wardell Huff, Esq., of the The Law Offices of Wardell Huff PLLC, is the sole attorney representing all eighteen plaintiffs. See Docket. As of the date of this Memorandum, defendant has not been served with summons and the complaint. For the reasons that follow, I will dismiss the complaint, without prejudice, pursuant to Fed.R.Civ.P. 4(m).

On September 17, 2014, some four months after suit was filed, plaintiffs filed a "Motion for Stay." ECF 3. In the motion, plaintiffs stated that they are "clients of the Hoffman Law Group, P.A.". Id. Plaintiffs' counsel explained that his law office has appeared as "Of Counsel to The Law Office of Yariv Katz, P.C., " and that the Law Office of Yariv Katz, P.C. "has also been acting as of counsel to The Hoffman Law Group, P.A." ECF 3. Counsel further stated that there is a "stay against the Hoffman Law Group" and asserted that this stay "is the underlying reason Defendant has not yet been served in this action." Id. In support of this statement, plaintiffs submitted a copy of a motion for a temporary restraining order against the Hoffman Law Group ("HLG"), filed in July 2014 in the U.S. District Court for the Southern District of Florida by the Consumer Financial Protection Bureau and the Office of the Attorney General of Florida. ECF 3-2. The motion for stay did not make clear why legal problems for HLG affected plaintiffs' ability to proceed in the instant case. On September 17, 2014, I denied the motion for stay. ECF 4.

Twenty-one days later, on October 27, 2014, I issued a memorandum to counsel asking plaintiffs to show cause why their claims should not be dismissed, under Fed.R.Civ.P. 4(m) and Local Rule 103.8, for failure to effect service of process. ECF 5 ("Show Cause Order"). I explained, ECF 5 at 2:

It is not clear to the Court, from counsel's explanation [in the Motion to Stay], how plaintiffs are clients of the Hoffman Law Group. According to the docket, plaintiffs' counsel has appeared in this case as "Wardell Huff, " of "The Law Offices of Wardell Huff PLLC." Moreover, it is not clear, from the Motion to Stay (ECF 3) or the copy of the Florida motion submitted (ECF 3-2), what effect the purported "stay against the Hoffman Law Group" might have on this case, see ECF 3, even if plaintiffs are in fact clients of the Hoffman Law Group.
Accordingly, within fourteen days from the docketing of this Order, plaintiffs are directed to show cause why their claims should not be dismissed under Fed.R.Civ.P. 4(m) and Local Rule 103.8.

On November 11, 2014, plaintiffs responded to the Show Cause Order. See ECF 6 ("Response"). Regarding the Court's question as to plaintiffs' relationship with HLG, plaintiffs' counsel stated that "the clients named in this lawsuit were originally retained by HLG, " but that "[t]o counsel's knowledge the only assistance [HLG and other firms] have provided to any of the Plaintiffs named in the suit is to refer them to the Law Offices of Wardell Huff, PLLC." ECF 6 at 1.

Regarding plaintiffs' earlier request for a stay and the Court's Show Cause Order, counsel added, id.:

Since learning of the investigation and shutdown of HLG, counsel has been working with many of the Plaintiffs and all work has been on a pro-bono basis to facilitate their pursuit of loan modifications or other options.... Counsel is not a litigator and only accepted this case with the understanding that complete litigation support would be provided by The Law offices of Yariv Katz, P.C. and The Law Offices of Michael E. Herkowitz. However, since the shutdown of HLG, although the aforementioned firms have provided relevant information regarding this matter, they have refused to provide litigation support to counsel.... As a result, ... counsel has been reaching out to Plaintiffs to assist them in pursuit of their loan modifications and other options. Opposing counsel for the Defendant has been cooperating with counsel to facilitate various loan modification requests and a good working relationship has developed.
However, counsel did previously request that this Court stay the proceedings because in counsel's opinion, the result of the Florida lawsuit against HLG would have an impact on whether or not this present lawsuit would be pursued. In addition, it would provide an extended period of time for any Plaintiffs that would like to hire new counsel. However, counsel recognizes the Court's patience in this matter and that the Court may disagree and instead choose to dismiss the case.

Fed. R. Civ. P. 4(m) requires a plaintiff to serve a defendant "within 120 days after the complaint is filed." If a defendant is not served within that time, "the court... must dismiss the action without prejudice against that defendant or order that service be made within a specified time." Id. "But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period." Id. If a plaintiff "has not effected service of process within 120 days" of filing the complaint, Local Rule 103.8 provides that "the Court may enter an order asking the party to show cause why the claim should not be dismissed." The same Local Rule states that "the claim shall be dismissed without prejudice" if the plaintiff "fails to show cause within" a "time set by the Court."

Rule 4(m) was enacted in 1993 as a successor to former Rule 4(j), which had required that a case "shall be dismissed" if the defendant was not served within 120 days and the plaintiff "cannot show good cause why such service was not made within that period." Hammad v. Tate Access Floors, Inc., 31 F.Supp.2d 524, 526 (D. Md. 1999). After Rule 4(m) was enacted, the Fourth Circuit decided Mendez v. Elliott, 45 F.3d 75, 78 (4th Cir. 1995), in which it opined that the new Rule 4(m) represented a "renumber[ing]" of former Rule 4(j), "without a change in substance, " and stated: "Rule 4(m) requires that if the complaint is not served within 120 days after it is filed, the complaint must be dismissed absent a showing of good cause." Id. at 78. In so stating, however, the Mendez Court did not discuss the Advisory Committee Notes to Rule 4(m), which state that the rule "authorizes the court to relieve a plaintiff of the consequences of an application of this subdivision even if there is no good cause shown. '" Hammad, 31 F.Supp.2d at 527 (quoting Advisory Committee Notes) (emphasis altered).

After Mendez, the Supreme Court decided Henderson v. United States, 517 U.S. 654 (1996). In dicta, the Supreme Court stated that, under Rule 4(m), "courts have been accorded discretion to enlarge the 120-day period even if there is no good cause shown.'" Id. at 662 (quoting Advisory Committee Notes to Rule 4(m)); see also id. at 658 n. 5 ("Rule 4(m)... permits a district court to enlarge the time for service even if there is no good cause shown.'").

Several decisions in the District of Maryland have observed that in this circuit it is unclear whether Rule 4(m) vests a court with discretion to grant an extension of the 120-day deadline, in the absence of good cause. See, e.g., Lehner v. CVS Pharmacy, RWT-08-1170, 2010 WL 610755, at *2 (D. Md. Feb. 17, 2010); Knott v. Atlantic Bingo Supply, Inc., JFM-05-1747, 2005 WL 3593743, at *1 n.1 (D. Md. Dec. 22, 2005); Hoffman v. Baltimore Police Dep't, 379 F.Supp.2d 778, 786 (D. Md. 2005); Melton v. Tyco Valves & Controls, Inc., 211 F.R.D. 288, 289 (D. Md. 2002); Hammad, 31 F.Supp.2d at 526; United States v. Britt, 170 F.R.D. 8, 9 (D. Md. 1996). Some regard Mendez as binding circuit precedent, see, e.g., Britt, 170 F.R.D. at 9, while others have concluded that " Mendez is no longer good law." Hammad, 31 F.Supp.2d at 527; see also Melton, 211 F.R.D. at 289-90. Others have found it unnecessary to resolve definitively whether a finding of good cause is mandatory before an extension can be granted. See, e.g., Lehner, 2010 WL 610755, at *2; Knott, 2005 WL 3593743, at *1 n.1. Nevertheless, other judges of this court have held that, even if good cause is no longer an absolute requirement under Rule 4(m), "the Court would still need to have some reasoned basis to exercise its discretion and excuse the untimely service: the Court must give some import to the rule." Hoffman, ...

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