United States Court of Appeals
Fifth Circuit
F I L E D
In the July 1, 2005
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
_______________
m 04-50971
_______________
STEPHANIE GOETZ,
INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED;
KEVIN MCGILL,
INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
Plaintiffs-Appellees,
VERSUS
SYNTHESYS TECHNOLOGIES, INC., ET AL,
Defendants,
ENRIQUE F. GITTES,
ALSO KNOWN AS HARRY GITTES,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Western District of Texas
______________________________
Before GARWOOD, SMITH, and CLEMENT, house in Southampton2 and an apartment in
Circuit Judges. Manhattan. Both of the properties are
reflected in public records, and his name and
JERRY E. SMITH, Circuit Judge: address for the Southampton residence appear
in that town’s telephone directory. Gittes
In this appeal, we confront the res nova states that when he visits New York State, he
issue in this circuit regarding the application of usually stays at the Southampton house.
New York’s method of substituted service
known as “nail-and-mail,” N.Y. C.P.L.R. On the other hand, Gittes rarely stays at the
§ 308(4). The district court, finding that ser- apartment and does not conduct business from
vice was proper because the statute was prop- it, and only occasionally stays there if he is in
erly applied and service did not violate due New York City at night. He asserts that mont-
process, rejected defendant Enrique Gittes’s hs go by between visits to the apartment, and
motion under Federal Rule of Civil Procedure if he does stay, it is only for one or two nights.
60(b)(4) to set aside a default judgment. We He does not hold the apartment out as his
reverse and remand, concluding that the dis- residence; it is not listed on his driver’s license
trict court erred in finding that the due dili- or any bank account, and he does not use it as
gence requirement of the statute was satisfied a regular mailing address, although he some-
where the plaintiff class failed to make even a times has mail forwarded there if he knows he
single attempt at personal service at a known will stopping by soon. A cleaning woman has
in-state residence. keys to the apartment and comes weekly to
water the plants and to tidy the apartment but
I. does not forward mail.
The plaintiffs, former employees of
Synthesys Technologies, Inc. (“STI”), sued to The Southampton address was included as
recover unpaid wages and overtime compen- the only address in the complaint as a location
sation pursuant to the Fair Labor Standards where the defendant “may be served with pro-
Act, 29 U.S.C. §§ 201 et seq., with supple- cess.” This was repeated verbatim in each of
mental claims under Texas law against STI and four amended complaints.
many of its officers/directors, including
Enrique Gittes, the chairman of the board. The plaintiffs first attempted to serve Gittes
According to Gittes’ uncontested affidavits,1 in person at a business address, but it turned
he is a United States citizen who resides in out to be vacant. They then made two failed
Europe. He visits New York occasionally and attempts to serve him there at the Manhattan
owns two pieces of property in that state: a apartment and tried to serve him through certi-
fied mail, but that summons was returned as
unclaimed. After a motion for substituted
service was granted, four more attempts were
made to serve Gittes at the Manhattan apart-
1
ment at different times of the day and different
In connection with his rule 60(b)(4) motion,
Gittes filed two affidavits. Plaintiffs have not
placed anything in the record to dispute assertions
2
that Gittes makes that are relevant to the disposi- Southampton is on Long Island, approxi-
tion of this case on appeal. mately 100 miles from New York City.
2
days of the week. Finally, a process server af- Plaintiffs assert that Gittes was properly
fixed a summons and complaint to the front served in compliance with Federal Rule of
door of the Manhattan apartment address and Civil Procedure 4(e)(1), which allows for
completed service pursuant to N.Y. C.P.L.R. service “pursuant to the law of the state . . . in
§ 308(4) by mailing another copy to that ad- which service is effected.” They claim that
dress, following the technicalities specified by they legally served Gittes in New York under
the statute. section 308(4) of the New York Civil Practice
Law and Rules (“CPLR”). In his rule 60(b)(4)
Gittes did not timely answer or otherwise motion, Gittes challenges the propriety of the
defend the lawsuit, and a no-answer default service as being defective under New York
judgment was brought against him. Gittes law and invalid because it violates his due pro-
brought a motion to vacate the default judg- cess rights under the Fourteenth Amendment.
ment on the basis that the court lacked per-
sonal jurisdiction over him based on improper New York’s statute describing proper
service, under Federal Rule of Civil Procedure methods for service of process, N.Y. C.P.L.R
60(b)(4). The district court denied the motion, § 308, provides, in relevant part:
which is the subject of this appeal.
Personal service upon a natural person shall
II. be made by any of the following methods:
An order denying a rule 60(b)(4) motion to
set aside a judgment as void for want of per- 1. by delivering the summons within the
sonal jurisdiction is reviewed de novo. See state to the person to be served; or
Carter v. Fenner, 136 F.3d 1000, 1005 (5th
Cir. 1998). We review the district court’s 2. by delivering the summons within the
findings of fact underlying its disposition of a state to a person of suitable age and discre-
rule 60(b)(4) motion for clear error.3 tion at the actual place of business, dwell-
ing place or usual place of abode of the
III. person to be served and by either mailing
A rule 60(b)(4) motion allows a party to re- the summons to the person to be served at
ceive relief from a final judgment, order, or his or her last known residence or by mail-
proceeding if the underlying judgment is void. ing the summons by first class mail to the
Gittes asserts that the default judgment is void person to be served at his or her actual
and he is entitled to rule 60(b)(4) relief be- place of business . . .
cause he was never properly served.4
...
3
See Cleere Drilling Co. v. Dominion Explo- 4. where service under paragraphs one and
ration and Prod., Inc., 351 F.3d 642, 645 (5th Cir. two cannot be made with due diligence, by
2003) (noting that all district court factual findings
are reviewed for clear error).
4 4
Recreational Props., Inc. v. Southwest Mort- (...continued)
gage Serv. Corp., 804 F.2d 311, 314 (5th Cir. parties because of insufficient service of process,
1986) (“If a court lacks jurisdiction over the the judgment is void and the district court must set
(continued...) it aside.”)
3
affixing the summons to the door of either Gittes first challenges the lawfulness of the
the actual place of business, dwelling place “nail-and-mail” service on the ground that the
or usual place of abode within the state of plaintiffs failed to fulfill their statutory duty
the person to be served and by either mail- first to exercise “due diligence” to satisfy ser-
ing the summons to such person at his or vice under § 803(1) or (2).7 The plaintiffs
her last known residence or by mailing the have the burden to show that they satisfied
summons by first class mail to the person to their duty to exercise due diligence.8 It is well-
be served at his or her actual place of busi- settled that this requirement is to be “strictly
ness . . . observed, given the reduced likelihood that a
summons served pursuant to that action will be
N.Y. C.P.L.R § 308. received.”9 “The intensive judicial scrutiny of,
and the abundance of case law on, substituted
Gittes was served under subsection (4), service and what constitutes ‘due diligence’ .
which is colloquially known as “nail-and-mail . . indicates that a plaintiff who resorts to
service.” It is a disfavored method of service CPLR 308(4) should be prepared to make a
in New York; under the plain text of the stat- detailed showing of the efforts constituting
ute, a plaintiff is required to exercise “due dili- due diligence, inasmuch as rigid adherence to
gence” to complete service either through per- the requirement of due diligence is ex-
sonal delivery or through a combination of pected.”10 Although rigid adherence is re-
leaving the summons with a competent person quired, the caselaw contains very few bright-
at the defendant’s residence or place of busi- line rules about when “due diligence” is and is
ness, combined with mailing a copy of it to his not satisfied, and reviewing courts look to the
last known address or actual place of busi-
ness.5 The New York Court of Appeals
7
(which is the state’s highest court) has con- Silber v. Stein, 731 N.Y.S.2d 227, 228 (N.Y.
strued the statutory requirements for § 308(4) App. Div. 2001) (“It is well settled that ‘nail and
service strictly, having noted that “liberaliza- mail’ service pursuant to CPLR 308(4) may be
tion of the requirements for service would jeo- used only where personal service under CPLR
pardize the primary statutory purpose of en- 308(1) and (2) cannot be made with ‘due dili-
suring that defendants receive actual notice of gence.’”).
the pendency of litigation against them.”6 8
See State Higher Educ. Servs. Corp. v. Cacia,
652 N.Y.S.2d 883 (N.Y. App. Div. 1997) (noting
that plaintiff has the burden of showing due dili-
gence for the purposes of N.Y.C.P.L.R. § 308(4)).
5
See N.Y. C.P.L.R. § 308(4); City of New York
9
v. Chem. Bank, 470 N.Y.S.2d 280, 284 (N.Y. Sup. Lemberger v. Khan, 794 N.Y.S.2d 416 (N.Y.
Ct. 1983) (“‘Nail and mail’ service requires affixa- App. Div. 2005); see also Reed Holdings, Inc. v.
tion of the summons to the door of the defendant’s O.P.C. Corp., 122 F.R.D. 441, 443 (S.D.N.Y.
place of business, dwelling or place of abode, plus 1988) (collecting New York state court decisions).
mailing and filing, and proof that personal delivery
10
or ‘deliver and mail’ substituted service cannot be Jack B. Weinstein, Harold L. Korn & Arthur
made by ‘due diligence.’”) R. Miller, CPLR 308(4): Nailing and Mailing
Authorized Where Service Under Subd. (1) and
6
Feinstein v. Bergner, 397 N.E.2d 1161, 1164 (2) Cannot Be Made with Due Diligence, NEW
(N.Y. 1979). YORK CIVIL PRACTICE: CPLR P 308.14 (2004).
4
totality of the circumstances to determine Gittes does not dispute that plaintiffs at-
whether the service was “reasonably calculated tempted to serve him at the Manhattan apart-
to give the defendant notice.”11 ment and at the Park Avenue business address
as described above, but he argues that plain-
The district court found that plaintiffs sat- tiffs failed to exercise “due diligence” because
isfied their burden to demonstrate that they they only attempted to serve him at the Man-
fulfilled the “due diligence” requirement be- hattan apartment, a location where Gittes
cause before they resorted to “nail-and-mail” claims that he only stayed for overnight stays
service under § 803(4), they made numerous very infrequently, while making no attempts to
attempts to effect personal service under serve him at his more permanent Southampton
§ 803(1) by stopping by the Manhattan apart- address, a location he alleges plaintiffs were
ment on at least seven different occasions at aware of.13
different times and on different days of the
week; made one attempt at Gittes’s business New York courts have repeatedly found
address (although that location turned out to that due diligence is absent where the plaintiffs
be vacant), and one attempt through certified have failed to make any attempts to perform
mail (which failed because it was returned as service at known addresses.14 The record
unclaimed). A handful of New York courts
have found “due diligence” to be satisfied
where service is attempted on repeated occa- 12
(...continued)
sions at multiple locations.12 also Matos v. Knibbs, 588 N.Y.S.2d 911 (N.Y.
App. Div. 1992) (same).
11 13
Hanover New England v. MacDougall, 608 Plaintiffs aver that this argument is waived by
N.Y.S.2d 561, 561-62 (N.Y. App. Div. 1994) Gittes for failure to raise it below. We refrain from
(“There is no rigid standard by which the due dili- finding the argument waived; although plaintiffs
gence requirement is measured, and whether a par- are correct to note that Gittes did not raise this
ty has satisfied that requirement will necessarily argument in his initial motion to vacate the default
depend upon the facts of each case.”); Hochhauser judgment, the district court responded to this
v. Bungeroth, 578 N.Y.S.2d 170 (N.Y. App. Div. argument in its order denying relief. Although the
1992) (“No rigid rule has been prescribed for issue was admittedly raised in a muddled fashion,
determining whether ‘due diligence’ has been the fact that the district court was able to rule on
exercised in attempting to effect service so as to the issue is sufficient for us to consider it raised,
permit the use of substituted service pursuant to even in a refined form on appeal. In re Liljeberg
CPLR 308, subd. 4 . . . .”). Enters., 304 F.3d 410, 427 n.29 (5th Cir. 2002)
(“[A]n argument is not waived on appeal if the
12
See, e.g., Hanover New England, 608 argument on the issue before the district court was
N.Y.S.2d at 562 (finding that the plaintiff exer- sufficient to permit the district court to rule on it.”)
cised due diligence by attempting to serve defen-
14
dant at his residence on three different occasions at See, e.g, McNeely v. Harrison, 617 N.Y.S.2d
different times of day and by inquiring neighbor 879 (N.Y. App. Div. 1994) (finding lack of due
about the defendant’s place of employment); see diligence where plaintiff failed to attempt serving
also Hochhauser, 578 N.Y.S.2d at 170 (finding the defendant at known business address);
that three attempts at service at different times of Schwartzmann v. Musso, 607 N.Y.S.2d 953 (N.Y.
day was sufficient to establish due diligence); see App. Div. 1994) (finding no due diligence where
(continued...) (continued...)
5
plainly demonstrates that the plaintiffs had Plaintiffs claim that the cases cited by
actual knowledge of Gittes’s Southampton Gittes, for the proposition that the due dili-
address, which was specifically articulated in gence requirement is not satisfied where the
the complaint as the proper place to serve plaintiff does not attempt service at a known
him.15 In addition, plaintiffs had knowledge of address, are distinguishable because they either
the address from the deposition of Michael involve no attempts to serve a defendant at a
Fleischhauer, the President and Chief Operat- known business address, or involve no at-
ing Officer of STI, who indicated that Gittes tempts to serve a defendant at any known res-
owned two places in New York, including the idence. We reject this argument and rather
Southampton home.16 read the cases broadly because of New York’s
strong commitment to strict observance of the
due diligence requirement.17 Distinguishing
14
(...continued) the cases cited by Gittes on the narrow
plaintiff only attempted to serve defendant at grounds argued by plaintiffs would ignore our
apartment building he owned but did not live at, duty to look to the totality of the circumstanc-
and no attempts made at residence listed in tele-
es to see whether service was reasonably cal-
phone directory); Pizzolo v. Monaco, 588
N.Y.S.2d 910 (N.Y. App. Div. 1992) (finding no
due diligence where plaintiff made no attempts to
serve defendant at place of his employment, which
was “easily ascertainable from the complaint it-
16
self”); Burkhardt v. Cuccuzza, 438 N.Y.S.2d 594, (...continued)
596 (N.Y. App. Div. 1981) (finding no due dil- the specific address of the house, because the
igence where plaintiff made no attempt to serve record contains pleadings submitted by the plain-
defendant at address noted on police accident tiffs that specifically mention the exact address.
report).
Moreover, assuming arguendo that plaintiffs
15
Curiously, although nothing in the record in- only first learned of the Southampton address at
dicates that service was attempted at the South- this deposition, it would not have absolved them
ampton address, it was later cited as the proper from the obligation to attempt to perform some
address when plaintiffs sought to collect on their investigation into the location of the residence as
default judgment; the petition for issuance of a part of their due diligence inquiry; New York
turnover order filed in federal district court indi- courts have found that a plaintiff failed to satisfy
cated that Gittes “may be served at his residence at due diligence where it fails to attempt to serve the
354 S. Main Street, Southhampton [sic], New defendant at an address that could be easily ascer-
York” and an execution against the Southampton tainable with little investigation, such as through
house, also filed in federal court, listed the house as the telephone book. See, e.g., Schwartzmann, 607
Gittes’s“address” and “last known address.” N.Y.S.2d at 953. Such is the case hereSSthe un-
controverted deposition testimony of Gittes indi-
16
The district court found that the plaintiffs did cated that his Southampton address is publicly
not have to serve Gittes at the Southampton ad- listed in the telephone directory.
dress because they were not aware of the address,
17
given that Fleischhauer was unable to provide a Lemberger, 794 N.Y.S.2d at 416 (stating that
specific address during his deposition. It was the due diligence requirement is to be “strictly
clearly erroneous for the district court to make a observed, given the reduced likelihood that a sum-
factual finding that plaintiffs had no knowledge of mons served pursuant to that action will be re-
(continued...) ceived.”)
6
culated to give notice.18 As in each of the cas-
es cited by Gittes, the instant plaintiff class
failed to take the simple step of making a sin-
gle attempt at service to a known in-state lo-
cation before resorting to disfavored nail-and-
mail service.19
REVERSED and REMANDED.
18
See Hanover New England, 608 N.Y.S.2d at
561-62.
19
See Sartor v. Utica Taxi Ctr., Inc., 260 F.
Supp.2d 670, 677 (S.D.N.Y. 2003) (“[T]he due
diligence requirement refers to the quality of the
efforts made to effect personal service, and cer-
tainly not to their quantity or frequency.”) (citing
Barnes v. City of New York, 416 N.Y.S.2d 52 , 54
(N.Y. App. Div. 1979); Cooney v. East Nassau
Med. Group, 528 N.Y.S.2d 364, 368 (N.Y. App.
Div. 1988)). Because we conclude that service
was defective under the New York statute, we do
not reach the issue of whether service in this case
violated due process.
7