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Kajla v. U.S. Bank N.A.

United States District Court, D. New Jersey

March 27, 2019

AJAY KAJLA, Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR CREDIT SUISSE FIRST BOSTON MBS ARMT 2005-8, WELLS FARGO, N.A., PHELAN HALLINAN DIAMOND & JONES PC, Defendants.

          OPINION

          ANNE E. THOMPSON, U.S.D.J.

         INTRODUCTION

         This matter comes before the Court on remand from the U.S. Court of Appeals for the Third Circuit for the limited purpose of determining whether Defendant Phelan Hallinan Diamond & Jones PC (“Phelan”) was served with the Complaint. (Remand at 2, ECF No. 25.) The Court conducted an evidentiary hearing on March 21, 2019. (ECF No. 33.) After considering all evidence presented, the Court concludes that Defendant Phelan was not served with the Complaint.

         BACKGROUND

         I. Proceedings Prompting Need for Evidentiary Hearing

         The underlying action stems from an allegation that Defendant Phelan, among others, engaged in a fraudulent scheme to deprive Plaintiff Ajay Kajla (“Plaintiff”) of his home by unlawfully assigning his mortgage and note and then foreclosing on it without standing to do so; Plaintiff seeks to prevent a sheriff's sale of his home. (Compl. ¶¶ 3.24, 52-65, ECF No. 1.) On March 1, 2018, the Court granted the Motion to Dismiss brought by Defendants U.S. Bank National Association and Wells Fargo, N.A. (ECF Nos. 15-16.) Plaintiff appealed this decision on March 30, 2018. (ECF No. 19.) On August 13, 2018, while the appeal was still pending, the Court dismissed Defendant Phelan from the action because Defendant Phelan had never appeared, Plaintiff had not moved for entry of default or default judgment, and Plaintiff had failed to prosecute pursuant to Local Civil Rule 41.1(a). (ECF No. 24.)

         On September 18, 2018, the Third Circuit advised Plaintiff that “[i]t [was] unclear from the District Court docket whether [Defendant Phelan] was ever served with the [C]omplaint” and ordered Plaintiff to “file a written response addressing whether this party was served and how service affects jurisdiction in this matter.” (Show Cause Order at 1, Court of Appeals Docket No. 18-1718 (Sept. 18, 2018).) On October 8, 2018, Plaintiff's counsel, Joshua Thomas, responded:

[T]here were actually 2 times [Defendant] Phelan was served in the underlying case . . . . I personally hand delivered the [C]omplaint and the emergency motion for temporary restraining order on October 26 [sic], 2017. Ultimately, after several email communications from opposing counsel in the matter, I sent it to a process server to be served again, and it ultimately was served on or about November 2, 2017.

(Pl.'s Resp. at 1, Court of Appeals Docket No. 18-1718 (Oct. 8, 2018).) Mr. Thomas also attached an affidavit of service purporting to show that Defendant Phelan was served on November 2, 2017 at 11:00 AM (“Plaintiff's Proffered Affidavit”). (Ex. A, Court of Appeals Docket No. 18-1718 (Oct. 8, 2018); see also Pl.'s Ex. 5.)

         On December 4, 2018, Defendant Phelan filed a letter to the Third Circuit in response. (Def.'s Letter, ECF No. 25-1.) Defendant Phelan alleged that Plaintiff's Proffered Affidavit “is a forgery, falsely appearing to show that [Defendant Phelan's] attorney Brian Yoder, Esq., was served with the District Court Complaint on November 2, 2017.” (Id. at 2.) Mr. Thomas filed a response on January 9, 2019 (ECF No. 25-3) and Defendant Phelan filed a reply on January 14, 2019 (ECF No. 25-4). On February 27, 2019, the Third Circuit remanded this case to this Court “for the limited purpose of determining whether [Defendant Phelan] was served with the [C]omplaint and addressing the allegations raised by counsel regarding service.” (Remand at 1.) On March 21, 2019, this Court conducted an evidentiary hearing to answer the Third Circuit's question. Counsel for Plaintiff, Joshua Thomas, and counsel for Defendant Phelan, Kenneth Goodkind, presented the following evidence.[1]

         II. Facts Surrounding Service of Process

         A. Plaintiff's Evidence

         Plaintiff contends that Defendant Phelan waived service of process and, alternatively, that he effected proper service on Defendant Phelan. First, on October 25, 2017, [2] Mr. Thomas received an automatically generated email from the CM/ECF system notifying him that deadlines had been scheduled for Plaintiff's Motion for Temporary Restraining Order. (Pl.'s Ex. 1.) Mr. Thomas then forwarded this email-with no message other than Mr. Thomas's signature block- to Elizabeth Yorty and Meghan Hilyard, employees of Defendant Phelan. (Id.) Ms. Yorty, a paralegal, responded, “We're waiting for our client to confirm who will be handling this matter. Feel free to forward me any additional notices received.” (Id.) Mr. Thomas argues that this response, sent and received on October 25, 2017, constituted a waiver of service of process.

         Second, on October 30, 2017, Mr. Thomas sent an email to Status, LLC (“Status”), a third-party process server, requesting that Status serve Defendant Phelan at 400 Fellowship Road, Suite 100, Mount Laurel, N.J. 08054. (Pl.'s Ex. 3.) On that same day, Status responded to Mr. Thomas by email that it had received Mr. Thomas's request and that it “will process for service.” (Pl.'s Ex. 4.) Mr. Thomas offers Plaintiff's Proffered Affidavit purporting to show that Sharon McCabe Villa served Defendant Phelan on November 2, 2017 at 11:00 AM at the Mount Laurel address. (Pl.'s Ex. 5.)

         B. Defendant ...


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