Alberts, Trustee for the DCHC Liquidating Trust v. NUCOAT, INC.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
GREATER SOUTHEAST COMMUNITY
HOSPITAL CORP., I, et al.,
Debtors.
____________________________
SAM J. ALBERTS, TRUSTEE FOR
THE DCHC LIQUIDATING TRUST,
Plaintiff,
v.
NUCOAT, INC.,
Defendant.
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Case No. 02-02250
(Chapter 11)
(Jointly Administered)
Adversary Proceeding No.
05-10040
DECISION AND ORDER VACATING DEFAULT JUDGMENT
AND EXTENDING DEADLINE TO SERVE A NEW SUMMONS AND THE COMPLAINT
Sam J. Alberts, trustee for the DCHC Liquidating Trust and
the plaintiff in this adversary proceeding, obtained a default
judgment against the defendant, Nucoat, Inc., but it later came
to the court's attention that Alberts may not have timely served
the summons and complaint on the defendant. 	The court issued an
order to show cause to Alberts to address why the default
The order below is hereby signed.
Signed: November 08, 2006.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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1 	The court inadvertently did not mail a copy of the order
to show cause to the defendant, but based on the defendant's
inaction in the proceeding, the court deems it appropriate to
dispose of the order to show cause without hearing from the
defendant.
2
judgment ought not be vacated because service was not timely made
on the correct defendant. 1 	On October 30, 2006, Alberts filed a
response (Docket Entry No. 30). 	Alberts has not, however, shown
cause why the default judgment ought not be vacated.
The only summons ever issued in this proceeding was issued
on June 23, 2005. 	The summons and complaint were not served on
the correct defendant until July 13, 2005. 	See Docket Entry No.
5 (reflecting service by mail on that date). 	Accordingly, proper
service was not accomplished within the time limit imposed by
F.R. Bankr. P. 7004(e) of 10 days after issuance of the summons,
and the attempted service of the summons after the 10-day
deadline had passed was a nullity. 	See Ruthe v. Dohring (In re
Dohring), 245 B.R. 262, 263 (Bankr. N.D. Tex. 2000) (“The
summons, as served, was expired and therefore service of it was a
nullity and should be quashed.”).
A judgment obtained without having obtained jurisdiction
over the defendant, via the defendant's having voluntarily
submitted itself to the jurisdiction of the court or via proper
service of process, is void. 	Combs v. Nick Garin Trucking, 825
F.2d 437, 442 (D.C. Cir. 1987).
Alberts might argue that because the defendant has chosen
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not to respond to the complaint or to respond to the motion for
default judgment it is obvious that the defendant has no
intention of defending this adversary proceeding, and the court
ought not require the useless act of serving a summons anew which
will result in yet another granting of judgment by default.
However, the defendant's inaction does not give this court
jurisdiction to uphold the default judgment against it. 	Combs,
825 F.2d at 442 n.42. 	In any event, the court will not speculate
that the defendant will not defend once properly served.
Alberts might contend that F.R. Bankr. P. 9006 allows a
court to enlarge the 10-day time limit of Rule 7004(e), and that
the court should retroactively enlarge the 10-day time limit of
Rule 7004(e) to July 13, 2005, the date of service of the
summons. 	No decision has held that the 10-day time limit of Rule
7004(e) can be enlarged under Rule 9006, but it is unnecessary to
address whether Rule 9006 is inapplicable in all circumstances to
Rule 7004(e), as it would clearly be inappropriate to
retroactively enlarge the Rule 7004(e) deadline in this
proceeding even if Rule 9006 does apply. 	The summons set a
deadline of July 23, 2005, to respond to the complaint. 	On that
date, no motion had been filed and no order had been issued to
enlarge the 10-day time limit of Rule 7004(e) to July 13, 2005,
and accordingly, the summons remained stale and ineffective. 	The
defendant was entitled to disregard the summons as a nullity, and
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did not default in defending as the plaintiff had failed to make
proper service. 	The court will not undo that entitlement by
retroactively extending the Rule 7004(e) deadline to make service
of the summons timely.
The time for making service under F.R. Civ. P. 4(m) (made
applicable by F.R. Bankr. P. 7004(a)) has expired. 	However, it
appears that both parties mistakenly viewed the summons as
timely. 	The defendant received the summons and complaint and
entered into settlement negotiations with the plaintiff. 	A
settlement was reached. 	When that settlement was breached, the
plaintiff rescinded that settlement agreement and moved for
default judgment as though he had made timely service of the
summons. 	The defendant did not defend against that motion based
on lack of timely service of the summons. 	If this court were to
dismiss the adversary proceeding without prejudice, the statute
of limitations would likely bar a new adversary proceeding, to
the prejudice of Alberts. 	On the other hand, the defendant will
not be prejudiced by enlarging the time for Alberts to make
service as the defendant has long been well aware of this
proceeding.
The current version of Rule 4(m) of the Federal Rules of
Civil Procedure, in contrast to its predecessors, does not limit
the court's ability to enlarge the 120-day period for
accomplishing service to a showing of cause by the plaintiff for
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5	O:\Andrew Fausett Temp Docs\Decisions with Related Orders\Alberts v. NuCoat, Inc. (In re Greater Southeast Cmty. Hosp. Corp. I)\opinion_re_OTSC_re_Timely_Service.wpd
such an enlargement. 	This is an appropriate proceeding for the
court to exercise its discretion to enlarge the 120-day period
without requiring a further filing by the plaintiff to show
cause. 	It is accordingly
ORDERED that the Final Judgment entered on September 13,
2006 (Docket Entry No. 24) is VACATED, and the plaintiff's Motion
for Default Judgment (Docket Entry No. 17) is DENIED. 	It is
further
ORDERED that the clerk shall issue a new summons in this
adversary proceeding, and further summonses upon request of the
plaintiff if he fails to make service within the 10-day deadline
of Rule 7004(e). 	It is further
ORDERED that the time under F.R. Civ. P. 4(m) to serve a
summons and the complaint is enlarged to December 8, 2006.
[Signed and dated above.]
Copies to:
All counsel of record
Office of the U.S. Trustee
Suite 210
115 South Union Street
Alexandria, VA 22314
NuCoat Inc.
130 Utopia Road, Suite 13
Manchester, Connecticut 06040
Jeff Shimanski
130 Utopia Road, Suite 13
Manchester, CT 06040-2195
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