Hovde Acquisition, LLC v. Thomas, Not Reported in A.2d (2002)
`
`KeyCite Yellow Flag - Negative Treatment
`Distinguished by Mobile Diagnostic Group Holdings, LLC v. Suer,
`Del.Ch., March 24, 2009
`
`
`
`2002 WL 1271681
`Only the Westlaw citation is currently available.
`
`UNPUBLISHED OPINION. CHECK
`COURT RULES BEFORE CITING.
`
`Court of Chancery of Delaware.
`
`HOVDE ACQUISITION, LLC, a Nevada Limited
`Liability Company, and B & I Lending, LLC, a
`Delaware Limited Liability Company, Plaintiffs,
`v.
`Michael R. THOMAS, and the Bank Network,
`Inc., a Georgia Corporation, Defendants.
`
` | Submitted: May
`No. CIV.A. 19032.
`10, 2002.
` | Decided: June 5, 2002.
`
`Attorneys and Law Firms
`
`Lisa A. Schmidt, Esquire, Brock E. Czeschin, Esquire,
`Richards, Layton & Finger, Wilmington, Delaware,
`Attorneys for Plaintiffs.
`
`John H. Newcomer, Esquire, Montgomery, McCracken,
`Walker & Rhoades, Wilmington, Delaware; L. Matt Wilson,
`Esquire, the Wilson Law Firm, Atlanta, Georgia, Attorneys
`for Defendants.
`
`MEMORANDUM OPINION
`
`LAMB, Vice Chancellor.
`
`I.
`
`*1 This is an action for declaratory judgment relating to
`the contractual and fiduciary duties of defendant Michael R.
`Thomas (“Thomas”) with regard to plaintiff B & I Lending,
`LLC (“B & I”), a Delaware limited liability corporation. Also
`named as a defendant on the contract claim is The Bank
`Network, Inc. (“TBN”), a Georgia corporation controlled by
`Thomas. The defendants filed a motion, pursuant to Court of
`Chancery Rule 12(b), to dismiss on the basis of, among other
`things, insufficiency of service of process.
`
`The plaintiffs did not manage to serve defendant Thomas
`correctly until seven months after filing the complaint and
`they have still not managed to serve defendant TBN correctly
`after ten months of trying. The defendants maintain that, in
`TBN's case, service cannot be properly effected and, with
`respect to both defendants, any service after December 31,
`2001 should be time barred. This court finds that it can order
`a special method of service on TBN and it will allow service
`on both defendants to relate back to the date of the original
`attempt. With regard to the issue of the claim being time
`barred, the court finds that the defendants are relying on the
`indemnification section of the contract when the complaint
`alleges a breach of contract. Three years is the proper time
`period for bringing a breach of contract claim and therefore,
`given the ability of the plaintiffs to relate back to August
`2001, neither claim is time barred.
`
`II.
`
`Before December 31, 1998, B & I had two members,
`Mortgage Management, LP (“MMLP”), a Tennessee limited
`partnership that owned two-thirds of the membership interest
`of B & I, and TBN, which owned the other one-third.
`Effective as of December 31, 1998, B & I, MMLP, TBN and
`plaintiff Hovde Acquisition LLC (“HACQ”) entered into the
`Membership Purchase Agreement (“Purchase Agreement”).
`Pursuant to the Purchase Agreement, HACQ purchased
`MMLP's membership interest in B & I. The Purchase
`Agreement contains the following choice of law provision:
`
`Section 11.10 Choice of Law. This
`Agreement and each and every related
`document is to be governed by, and
`construed in accordance with, the
`internal laws of the State of Delaware.
`All parties hereto consent to the
`jurisdiction of the courts of the State
`of Delaware, State and Federal. All
`parties waive the right to assert that
`such venue is forum non-conveniens. 1
`
`1
`
`Purchase Agreement § 11.10.
`
`The Purchase Agreement further provides that:
`
`Section 11.1 Notices. All notices,
`consents and approvals required by
`this Agreement shall be in writing and
`
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`Lannett Holdings, Inc. LAN 1033
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`Hovde Acquisition, LLC v. Thomas, Not Reported in A.2d (2002)
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`shall be either personally delivered ...
`or sent by United States mail, certified
`with return receipt requested, properly
`addressed and with the full postage
`prepaid. 2
`
`2
`
`Id. § 11.1.
`
`Employment Agreement was to be “construed and enforced
`in accordance with the laws of the State of Georgia” 10 and
`lists the notice address for Thomas as 3553 Peachtree Road,
`Suite 1130, Atlanta, GA 30326. 11 It also indicates that a copy
`of any notice should be sent to 3053 Andrews Drive, Atlanta,
`GA 30305, 12 Thomas's home address.
`
`This provision then lists an address for each party, as well as
`a delivery address for a copy of each notice. 3 For TBN, the
`delivery address is 3553 Peachtree Road, Suite 1130, Atlanta,
`GA 30326, and the Purchase Agreement further provides that
`a copy of any notice should be sent to Thomas at the same
`address. 4
`
`9
`
`10
`
`11
`
`3
`
`4
`
`Id. § 11.1.
`
`Id. § 11.1.
`
`*2 Effective as of January 1, 1999, TBN and HACQ
`entered into the Operating Agreement for B & I (“Operating
`Agreement”). The Operating Agreement provides that the
`initial Board of Managers shall consist of three people:
`Thomas, representing TBN, Irving Beimler (“Beimler”),
`representing HACQ, and a mutually agreed upon third
`party. 5 The Operating Agreement also provides that the
`Chief Executive Officer should manage the day-to-day
`operation of B & I. 6
`
`5
`
`6
`
`Operating Agreement § 3.1.
`
`Id. (stating that “the Chief Executive Officer shall have
`the power to make and execute contracts on behalf of the
`Company and to delegate such powers to others”).
`
`The Operating Agreement stipulates that it is “governed by,
`construed under, and enforced and interpreted in accordance
`with the laws of the State of Delaware” 7 and lists the location
`of B & I's principal place of business as 3553 Peachtree Road,
`Suite 1130, Atlanta, GA 30326. 8
`
`7
`
`8
`
`Id. § 15.7.
`
`Id. § 2.4.
`
`Finally, effective as of December 31, 1998, B & I entered into
`the Employment Agreement with Thomas (“Employment
`Agreement”). In accordance therewith, Thomas was to hold
`the offices of Chairman, President and Chief Executive
`Officer of B & I for the four-year term of that contract. 9 The
`
`Employment Agreement § 1(b). The combination of the
`Operating Agreement § 3.1 and Employment Agreement
`§ 1(b) effectively creates the situation in which Thomas
`is managing the day-to-day operation of B & I.
`
`Id. § 12.
`
`Id. § 14 (Apparently, some of the agreements have
`a typographical error relating to the street address.
`The Purchase Agreement and the Operating Agreement
`list the street number as 3553, but the Employment
`Agreement lists the street number as 3353. Additionally,
`the defendants' Consolidated Opening Brief refers to the
`street number as 3353. Regardless of which is the correct
`number, the parties seem to agree that the location being
`discussed is the same).
`
`12
`
`Id. § 14.
`
`A. The Dispute
`The plaintiffs' complaint alleges that, beginning in the fall of
`2000, they became aware of B & I's deteriorating financial
`condition, which they blame on Thomas not properly
`accounting
`for capital contributions, misappropriating
`company funds for personal use, and making unsound loans.
`At the December 5, 2000 meeting of the board, the plaintiffs
`voted to accept Thomas's “resignation” as Chairman. Thomas
`disputed that he had resigned as Chairman and said that he
`would not do so. The parties spent the next several months
`arguing over control of B & I, whether or not payments to
`Thomas were authorized, and whether or not either party
`would provide B & I with additional funding.
`
`The board met again on April 16, 2001, and gave Thomas
`a letter (“Termination Letter”), removing him as Chairman
`pursuant to the Operating Agreement and terminating his
`employment pursuant to the Employment Agreement. The
`board also informed Thomas that it had authorized suit against
`him. Nevertheless, in order to proceed with ongoing efforts
`to sell B & I, the parties entered into a standstill agreement
`(“Standstill Agreement”) that, among other things, excluded
`Thomas from B & I's principal place of business, as follows:
`
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`Hovde Acquisition, LLC v. Thomas, Not Reported in A.2d (2002)
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`6. No Entry on B & I Premises:
`Thomas agrees that neither he nor
`any person acting on his behalf will
`enter the B & I premises at any time
`without the express prior permission
`in each instance of Irving R. Beimler,
`the Acting CEO of B & I, and
`then only subject to such conditions
`and/or limitations as Beimler may
`establish. 13
`
`13
`
`Standstill Agreement § 6. Since B & I's principal place of
`business is located at the same address as TBN, Thomas
`was effectively excluded from receiving any mail that
`was sent to TBN at the delivery address required by the
`Purchase Agreement.
`
`*3 The efforts to sell B & I resulted in a merger that closed
`in late June 2001.
`
`Plaintiffs began this action on August 1, 2001, and attempted
`to serve Thomas, pursuant to 6 Del. C. § 18-105, Delaware's
`service of process statute for domestic limited liability
`companies. Plaintiffs initially attempted to serve TBN (which
`is sued for breach of the Purchase Agreement) in two different
`ways. First, plaintiffs served TBN by hand delivering a copy
`of the summons and complaint to The Corporation Trust
`Company (“CT”) at its offices in Wilmington, Delaware. CT
`is the registered agent for B & I. Second, they sent process by
`certified mail, return receipt requested, to TBN and to Thomas
`in his capacity as TBN's registered agent. The mail was sent
`to both defendants at the address of B & I's office in Atlanta,
`Georgia that appears in the notice section of the Purchase
`Agreement. This is the same address from which Thomas was
`expressly excluded in the Standstill Agreement. Neither of
`these methods of service expressly relied on any provision
`of Delaware law governing the service of process on foreign
`corporations.
`
`There is no record that any of these efforts at service resulted
`in actual notice to Thomas or TBN. Nevertheless, it is
`conceded that both of them received actual notice of the
`existence of this action as a result of proceedings in a related
`action initiated by them in Georgia state court. As a result,
`on September 5, 2001, Thomas and TBN moved to quash
`service.
`
`Plaintiffs somewhat belatedly realized that service of process
`on Thomas should have been made pursuant to 6 Del. C.
`
`§ 18-109, Delaware's implied consent statute for serving
`managers of limited liability companies, not Section 18-105.
`They then re-served Thomas in accordance with the correct
`provision on March 5, 2002. Also recognizing that their
`efforts to serve TBN were defective, plaintiffs attempted to re-
`serve TBN under the long-arm service provisions of Section
`3104 by personally serving the Delaware Secretary of State
`on October 23, 2001 and February 12, 2002. Nevertheless,
`there is no record that the October 23 service was followed
`by the notification by registered mail prescribed in 10 Del.
`C. § 3104(d). The record as to the February 12 service
`is also unclear. The docket does contain an affidavit of
`mailing showing that, on February 15, 2002, a copy of the
`summons and complaint was mailed to TBN c/o Thomas
`at Thomas's home address and that Thomas received this
`mailing on February 25, 2002. Nevertheless, the affidavit
`does not indicate whether or not this mailing was done to
`comply with Section 3104 or for some other reason.
`
`III.
`
`Although there is no question that both Thomas and TBN
`received actual notice of this proceeding shortly after it was
`filed, 14 they both moved on September 5, 2001 to quash
`service of process. Because there is no real dispute about the
`ineffectiveness of the service to date on TBN, the motion will
`be granted as to it. By contrast, because Thomas concedes
`that he was properly served on March 5, 2002, the motion
`to dismiss for ineffectiveness of service of process will be
`denied.
`
`14
`
`The defendants acknowledge that they have received
`actual notice, a copy of which was attached to a
`pleading in a related action in Georgia that has since
`been dismissed. Transcript of April 25, 2002 Argument
`(“Tr.”) at 21.
`
`*4 The remaining areas of dispute are whether there is
`any available method to effect service of process upon TBN
`and the timeliness of the claim asserted in Count I of the
`Complaint against both TBN and Thomas for breach of the
`Purchase Agreement. TBN argues that neither 10 Del. C. §
`3104, the general long-arm statute, nor any other recognized
`method is available to effect serve on it. Plaintiffs do not
`contest the inapplicability of Section 3104 but suggest that
`some other mode of service can be utilized to give effect to
`the consent to jurisdiction provision found in the Purchase
`Agreement.
`
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`

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`Hovde Acquisition, LLC v. Thomas, Not Reported in A.2d (2002)
`
`TBN also argues that, even if a method to effect service were
`available, the court should not permit re-service on it because
`the only claim alleged against it (Count I for breach of the
`Purchase Agreement) is time barred. This argument consists
`of two propositions. First, TBN posits that claims under the
`Purchase Agreement are subject to a two-year contractual
`limitation period that expired at the end of 2000. Thus, the
`claim against TBN was time barred even if measured by the
`date of filing, August 1, 2001. Second, assuming a normal
`three-year statute of limitations is applied to the contract-
`based claim asserted in Count I, TBN argues that any such
`claim is now time barred because more than three years have
`passed and the summons and complaint have still not been
`served on it. In this connection, TBN maintains that, even
`if there is a method available to serve it, the court should
`not permit re-service because plaintiffs' failure to effectuate
`timely service in the ten months since the complaint was filed
`was due to a lack of diligence, and is not excused by good
`cause. Thomas joins this argument. Although service has been
`accomplished on Thomas, that did not occur until March 5,
`2002, more than seven months after the complaint was filed.
`
`A. Service of Process on TBN
`TBN consented to suit in Delaware in the Purchase
`Agreement. Similar provisions consenting to jurisdiction over
`disputes arising out of commercial contracts are common and
`will be enforced by the courts of this state. 15 The problem
`presented is that the contract does not expressly include a
`consent to service of process issued by Delaware courts nor
`does it prescribe the manner of such process. 16
`
`15
`
`16
`
`Elf Atochem N. Am., Inc. v. Jaffari, 727 A.2d 286
`(Del.1999); see also, Donald J. Wolfe & Michael A.
`Pittenger, Corporate and Commercial Practice in the
`Delaware Court of Chancery § 5-4(a), at 5-46 to 5-47
`(2001).
`
`The same is true of Thomas; however, in his case, service
`of the complaint may be effected pursuant to 6 Del.
`C. § 18-109. Since the claim asserted for breach of
`the Purchase Agreement in Count I arises out of the
`same nucleus of operative facts underlying the claims
`relating to Thomas's activities as a manager of the B
`& I, that form of service is adequate to obtain personal
`jurisdiction over Thomas as to Count I. Cf. Manchester
`v. Narragansett, Inc., Del. Ch., C.A. No. 10822, mem.
`op. at 10, Chandler, V.C. (Oct. 18, 1989) (“Given the
`fact that the individual defendants are all employees,
`shareholders, officers, and directors of corporation, it
`
`would be artificial to distinguish their actions as having
`been taken in different guises when, as directors, they
`control the corporation. In that capacity, they should
`expect to answer in a Delaware court for the contract
`actions related to Plaintiff's breach of fiduciary duty
`claims.”); see also, Wolfe § 3-5(a), at 3-61 at nn. 361-2.
`
`In Chrysler Capital Corp. v. Woehling, the District Court
`held that by contractually consenting to personal jurisdiction,
`a party may also be found to have implicitly consented
`to venue. 17 The court implied a venue term in a consent
`to jurisdictional provision because that provision would be
`useless without it. 18 This same reasoning may be applied
`here to imply a term consenting to service of process.
`Without the ability to serve process, TBN's express consent
`to Delaware jurisdiction and venue found in the Purchase
`Agreement would be equally useless. The parties to the
`Purchase Agreement expressly intended that litigation arising
`out of that contract should take place in this state. Those
`parties must have reasonably expected to be served by some
`method of service that is appropriate under Delaware law.
`The question then is how such service can be effected since
`TBN is neither found in Delaware nor subject to service under
`Delaware's general long-arm service statute.
`
`17
`
`18
`
`Chrysler Capital Corp. v. Woehling, 663 F.Supp. 478,
`481 (D.Del.1987).
`
`Id. at 481.
`
`*5 It makes sense to first examine the notice provision of
`the Purchase Agreement to see if it provides a permissible
`method for serving process relating to this suit. It provides
`that notice to TBN be sent to B & I's office, with a copy to
`Thomas at that same address. Obviously, neither address is
`adequate for service of process on TBN since TBN maintains
`no presence at that address and Thomas, who is TBN's
`registered agent, was excluded from that address by the terms
`of the Standstill Agreement. Nor is there any evidence that the
`notice provision of the contract was ever amended or updated.
`Thus, the court concludes that the notice provision of the
`contract does not provide a useful means of serving process.
`
`Under Court of Chancery Rule 4(d)(7), this court has the
`power to enter “[a]n order directing another or an additional
`mode of service of a summons in a special case ....” 19
`Since TBN expressly consented to the exercise of this court's
`personal jurisdiction over it in all actions arising under the
`Purchase Agreement and there is no other available method
`of service prescribed by statute or rule, this would appear
`to be an appropriate “special case” in which to fashion an
`
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`Hovde Acquisition, LLC v. Thomas, Not Reported in A.2d (2002)
`
`order providing for “another or additional mode of service of a
`summons” on TBN. Here, the record reflects that Thomas acts
`as the registered agent for TBN and that he can be served at his
`home address. Because TBN consented to the jurisdiction of
`this court, there can be no substantial constitutional objection
`to service of process in this manner, which is well suited to
`give TBN actual notice of the pendency of this action. 20
`
`19
`
`20
`
`DEL. CH. CT. R. 4(d)(7).
`
`As the court in Chrysler explained:
`settled
`“[i]t
`is well
`can
`that
`a
`party
`consent to the personal
`jurisdiction of a court.
`Unlike
`the requirement
`that federal courts have
`subject matter jurisdiction,
`which flows from
`the
`Article III limitations on
`federal judicial power and
`thus cannot be waived,
`the personal jurisdiction
`requirement is based on
`individual liberty interests
`protected by
`the due
`process clause and thus
`can
`be waived
`by
`any
`legal arrangement
`that
`demonstrates
`a
`party's
`expressed
`or
`implied consent to that
`jurisdiction.”
`663 F.Supp. 481 (citations omitted).
`
`Thus, unless TBN succeeds in its argument that the court
`should not allow re-service due to plaintiffs' dilatory conduct,
`the court will enter an order permitting plaintiffs to re-serve
`TBN pursuant to the special provisions of Rule 4(d)(7).
`
`B. Statute of Limitations Issues
`Defendants suggest that Count I was subject to a two-
`year contractual limitations period. Paragraph 9 of the
`Purchase Agreement provides a mechanism for the assertion
`of claims for indemnification by parties to the contract
`for damages for breach of any representation or warranty
`made therein. Pursuant to paragraph 9 .4, “the right of the
`parties to seek indemnification ... shall survive for two (2)
`years from the date of the Closing.” 21 Obviously, to have
`been timely, any contractual claim for indemnification for
`
`breach of a representation or warranty needed to have been
`filed by December 31, 2000. Nevertheless, paragraph 9.1
`expressly preserved plaintiffs' other remedies, as follows:
`“[n]otwithstanding the foregoing right of indemnification, in
`the event of any default hereunder by any of the members or
`B & I, Hovde may avail itself of any and all rights or remedies
`available to it either at law or equity ....” 22 Plaintiffs argue
`that this clause preserved any claim they have for breach
`of contract under common law, including one based on the
`representations and warranties in the contract, which claim
`is subject to the general three-year limitations period found
`in 10 Del. C. § 8106. A review of the complaint shows that
`plaintiffs attempt to state a claim for breach of contract apart
`from the indemnification mechanism found in paragraph 9
`of the Purchase Agreement. For the purposes of this motion,
`the court will assume, without deciding, that such a claim is
`properly alleged and that the limitations period for asserting
`such a claim ran until the end of 2001.
`
`21
`
`22
`
`Purchase Agreement § 9.4.
`
`Id. § 9.1.
`
`*6 Thus the dispositive issue is whether the plaintiffs,
`despite their failure to effect service of process on TBN in
`the ten months since this action was filed, should be allowed
`to send a newly authorized service that would relate back to
`the August 1, 2001 filing date. For the reasons that follow,
`the court concludes that they should, assuming the newly
`authorized service is promptly effectuated.
`
`The rules of this court prescribe no definite time limit for
`effecting service of process. 23 Other courts, however, have
`instituted by rule a 120-day limit for service of process. 24
`If the plaintiff fails to serve within 120 days, courts have
`used a good cause standard to determine if the court should
`allow a time extension. 25 Without the benefit of a fixed time
`period, this court will look to the actions of both parties in
`order to determine if service of process has been made in a
`timely manner. In particular, the court will consider whether
`the failure to make service is the result of dilatory conduct
`on the part of the person obliged to make service, whether
`the party to be served received actual notice of the suit and
`whether the failure to make timely service has resulted in
`prejudice.
`
`23
`
`See DEL. CH. CT. R. 4.
`
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`Hovde Acquisition, LLC v. Thomas, Not Reported in A.2d (2002)
`
`24
`
`25
`
`The federal courts have a 120-day limit. FED. R. CIV.
`P. 4. Additionally, the Delaware Superior Court has the
`same 120-day limit. DEL. SUPER. CT. R. 4(j).
`
`See, e.g., Motsinger v. Flynt, 119 F.R.D. 373, 375 (M.D.
`N . C.1988).
`
`The court's primary focus in determining the good cause
`standard should be the actions of the party obliged to make
`service. 26 That person needs to use “[a]t the very least ...
`some showing of reasonable diligence.” 27 Furthermore,
`when such a person chooses to defend the validity of defective
`service instead of re-serving, he runs the risk of having his
`claims time barred. 28 “In determining good cause a court
`need not consider the fact that a dismissal without prejudice
`may be tantamount to a dismissal with prejudice because of
`statute of limitation problems.” 29
`
`26
`
`27
`
`28
`
`29
`
`MCI Telecomms. Corp. v. Teleconcepts, Inc., 71 F.3d
`1086, 1097 (3d Cir.1995).
`
`Bachenski v. Malnati, 11 F.3d 1371, 1377 (7th Cir.1993)
`(quoting Tso v. Delaney, 969 F.2d 373, 377 (7th
`Cir.1992)).
`
`See Adams v. AlliedSignal Gen. Aviation Avionics, 74
`F.3d 882, 887-8 (8th Cir.1996).
`
`Motsinger, 119 F.R.D. at 375 n. 2 (citing Lovelace v.
`Acme Markets, Inc., 820 F.2d 81, 84 (3d Cir.1987)).
`
`Here, the plaintiffs initially attempted to effect service by
`delivering a copy to B & I's registered agent in Delaware
`and by mail, relying on the Purchase Agreement to provide
`them with a mailing address. They relied on that address
`notwithstanding the fact that they had actual knowledge that
`neither Thomas nor TBN could be found at the address listed
`in the Purchase Agreement. The plaintiffs argue that the mail
`was “forwarded,” but there is no proof of such fact in the
`record. Although they knew Thomas's home address, they did
`not send an additional service copy to him at that address,
`either in his personal capacity or as registered agent for TBN.
`
`After the motions to quash were filed on September 5, 2001,
`the plaintiffs waited until October 23 to attempt service
`on TBN under Section 3104. As previously discussed, that
`service was defective for two reasons. First, Section 3104
`has no application to this matter. Second, the record does not
`show that all the steps necessary to effect service under that
`statute were followed. Other attempts undertaken in 2002 to
`serve TBN were also defective. Similarly, plaintiffs did not
`
`properly serve Thomas under Section 18-109 until March 5,
`2002, more than seven months after filing the complaint.
`
`*7 The plaintiffs' actions (or lack thereof) might not satisfy
`the good cause standard for late service in jurisdictions that
`impose a 120-day time limit. 30 However, this court has not
`fixed a time limit by rule and, in the interest of justice, will
`look to other factors to decide whether or not to exercise
`its discretion to permit re-service more than 120 days after
`filing of a complaint. In this case, the court concludes that
`plaintiffs' dilatory efforts to effect service are outweighed
`by the mitigating factors of actual notice and the lack of
`prejudice.
`
`30
`
`“Neither actual notice nor absence of prejudice to
`the defendant provides an adequate basis for excusing
`noncompliance with Rule 4(m), unless plaintiff has
`diligently attempted to complete service.” Mused v. U.S.
`Dept. of Agric. Food & Nutrition Serv., 169 F.R.D. 28,
`34 (W.D.N.Y.1996) (citing MCI Telecomms. Corp. v.
`Teleconcepts, Inc., 71 F.3d 1086, 1097 (3d Cir.1995)
`(“absence of prejudice alone can never constitute good
`cause to excuse late service”), cert. denied, 519 U.S. 815,
`117 S.Ct. 64, 136 L.Ed.2d 25 (1996); In re City of Phila.
`Litig., 123 F.R.D. 512, 514 (E.D.Pa.1988) (“Neither
`actual notice of the action nor absence of prejudice to
`the defendant is alone sufficient to support a finding of
`‘good cause’ under the Rule; plaintiff must demonstrate
`diligence in attempting to complete service.”)) (some
`citations omitted).
`
`Actual knowledge of the claim and lack of prejudice are two
`factors to be considered when a court decides whether or not
`to dismiss in circumstances that will preclude re-filing. 31
`The defendants admit they received actual notice through a
`related action in Georgia. They also admit that they have
`not been prejudiced by the delayed service of process. 32
`Under the current circumstances, the court is satisfied that it
`should not dismiss the complaint, but rather quash service of
`process on TBN and allow re-service on the terms discussed
`earlier in this opinion. Thus, assuming prompt service on
`TBN, the court will regard August 1, 2001 as the appropriate
`date for measuring the limitations period governing Count I
`of the complaint. Finally, because service of process has been
`effected on Thomas as to which no objection is raised, his
`motion to quash will be denied.
`
`31
`
`See O'Keefe v. St. Lawrence & Atl. R.R. Co., 167 F.R.D.
`30, 33 (D.Vt.1996).
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`6
`
`

`
`Hovde Acquisition, LLC v. Thomas, Not Reported in A.2d (2002)
`
`32
`
`Tr. at 21.
`
`IV. CONCLUSION
`
`For the foregoing reasons, the motion to quash service on
`TBN is GRANTED; furthermore, the defendants' motion to
`dismiss with regard to Count I is DENIED. Additionally,
`plaintiffs are grant leave to re-serve TBN, under Rule 4(d)(7),
`by registered mail addressed to Thomas, as TBN's registered
`
`agent, at his home address. Plaintiffs should also serve an
`additional copy of a summons and the complaint by registered
`mail addressed to TBN at its principal place of business, if
`known.
`
`IT IS SO ORDERED.
`
`All Citations
`
`Not Reported in A.2d, 2002 WL 1271681
`
`End of Document
`
`© 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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`7