United States District Court, M.D. North Carolina
NORTH CAROLINA MUTUAL LIFE INSURANCE COMPANY, a North Carolina Corporation, Plaintiff,
STAMFORD BROOK CAPITAL, LLC a Delaware limited liability company, et al. Defendants.
MEMORANDUM OPINION AND ORDER
LORETTA C. BIGGS UNITED STATES DISTRICT JUDGE
North Carolina Mutual Life Insurance Company
(“NCM”) brings this action against several
corporate and individual defendants for claims related to
alleged mismanagement and misappropriation of trust assets.
(ECF No. 97.) Eleven of NCM’s claims are directed at
Defendant David Wasitowski
(“Wasitowski”). (Id.) Wasitowski moves
to dismiss the claims against him for insufficient service of
process and improper venue. (ECF No. 150 at 1.) In the
alternative, Wasitowski asks this Court to transfer this
action to the Southern District of New York, pursuant to 28
U.S.C. § 1404(a). (Id.)
reasons that follow, Wasitowski’s motion and request to
transfer will be denied.
claims against Wasitowski constitute only a portion of a
large and protracted case. To address the issues at hand, a
full rendition of the case’s allegations and procedural
history is unnecessary; instead, the Court relays only those
details important to its consideration of Wasitowski’s
motion and request to transfer.
filed its original complaint on September 23, 2016. (ECF No.
1.) On August 2, 2018, NCM filed an amended complaint naming,
for the first time, Wasitowski as an additional defendant.
(ECF No. 97.) To briefly summarize the allegations in the
amended complaint, NCM “entrusted Defendants, ”
including Wasitowski, “with safekeeping and properly
investing approximately $34, 000, 000 of its assets”
(the “Trust Assets”) in April of 2015.
(Id. at 3; 6–8.) Under the relevant management
agreements, (ECF Nos. 1-1 at 2; 1-2 at 3), investment of the
Trust Assets was supposed to be limited to certain
“Eligible Assets”-cash or securities which
complied with the insurer investment requirements outlined in
N.C. Gen. Stat. § 58-7-173. (ECF No. 97 ¶ 27.)
However, rather than properly invest the Trust Assets, NCM
alleges that Defendants “engaged in a concerted
fraudulent scheme to transfer [NCM]’s assets into
improper investments”-ineligible financial vehicles
which they owned or controlled-“and to convert such
assets for their own benefit.” (See Id . at
amended complaint characterizes Wasitowski, along with
Defendants Michael Flatley, Bradley Reifler, and Steven D.
Fickes, as the perpetrators of this alleged scheme.
(See, e.g., id. ¶¶ 34,
37, 40.) Of special relevance to the motion currently before
the Court, NCM alleges that “[o]n or about December 17,
2014, Wasitowski, Flatley, and Fickes traveled to Durham,
North Carolina in order to meet with senior executives of
[NCM]” and “persuade” them to make
reinsurance changes that would allow Defendants to
“gain access to, and control over, the Trust
Assets.” (Id. ¶ 37.)
record shows the following related to service of the amended
complaint on Wasitowski: On August 13, 2018, a summons was
issued for Wasitowski at his last known address, 39 Fairmont
Road West, Califon, New Jersey (the “Califon
residence”). (ECF No. 99-1.) Two days later, on August
15, NCM had copies of the summons and amended complaint
delivered to the Califon residence via Federal Express (the
“First Service”). (ECF No. 104 ¶ 3(ii).)
Although the delivery was addressed to David Wasitowski, an
individual named “E. Witkinski” appears to have
signed for the documents. (ECF No. 104-2 at 1.) Wasitowski
claims not to know anyone by the name of “E.
Witkinski.” (ECF No. 168-1 ¶ 5.)
Califon residence is owned by Wasitowski’s wife, Olha
Wasitowski. (ECF Nos. 160-1 ¶ 5; 168-1 ¶ 3.)
Although he lived at the Califon residence until July 31,
2018, Wasitowski avers that he has lived at a different
location-5 Laga Court, Ringoes, New Jersey (the
“Ringoes residence”)-since August 1, 2018. (ECF
152 ¶ 2.) Wasitowski neither confirms nor denies
actually receiving the summons and complaint that were sent
to the Califon residence. (See ECF Nos. 152, 168-1.)
August 2018, Wasitowski-who reports to have been
“shocked to learn that [he] had been named a
defendant”-reached out to attorney Greg Smith
(“Smith”) to discuss how to respond to the
amended complaint. (ECF Nos. 152 ¶ 12; 153 ¶ 4.)
Smith agreed to represent Wasitowski for the “limited
purpose of exploring” a potential out-of-court
resolution to NCM’s claims against him. (ECF No. 153
¶ 5.) To that end, Smith contacted NCM’s counsel
on August 27 to initiate negotiations. (Id. ¶
issues of effective service and time to respond to the
amended complaint were discussed throughout the
parties’ dialogue. While NCM claims that it
“never agreed that it had not obtained proper
service” via the First Service to the Califon
residence, it “did agree to hold off on moving forward
with the lawsuit” against Wasitowski while negotiations
were ongoing. (ECF No. 160-2 ¶ 6.) Wasitowski, calling
the First Service “purported, ” (ECF No. 153
¶ 7), insisted that he needed “at least 60 days,
and preferably 90 days, to respond to the amended
complaint.” (ECF No. 168-2 ¶ 5.) Thus, the parties
conducted themselves as follows: NCM never conceded that the
First Service was ineffective, but expressed a willingness to
delay the effective date of service during negotiations;
Wasitowski never acknowledged that the First Service was
sufficient, but displayed a full awareness of the claims
against him and hoped to extend his time to respond.
between the parties ultimately proved unsuccessful. (ECF No.
160-2 ¶ 8.) On October 12, Smith contacted NCM to ask
“what [NCM was] thinking concerning service of the
complaint.” (ECF No. 153 ¶ 13.) NCM did not
respond until November 28. (Id. ¶ 14; ECF No.
160-2 ¶ 9.) At that point, however, Wasitowski
“was in no mood to do NCM any favors” and,
believing that “NCM had failed to serve him in a timely
manner, ” refused to agree on a date by which he would
be required to respond to the amended complaint. (ECF Nos.
153 ¶ 15; 160-2 ¶ 10.) “Out of an abundance
of caution, and to avoid any argument regarding improper
service, ” (ECF No. 160-2 ¶ 11), NCM caused
Wasitowski to be personally served at his place of work on
December 7 (the “Second Service”)-127 days after
the filing of the amended complaint. (ECF Nos. 144 ¶ 4;
now moves to dismiss NCM’s claims on the bases of
insufficient service of process and improper venue. (ECF No.
150.) If this Court declines to dismiss NCM’s claims,
Wasitowski requests that this action be transferred to the
Southern District of New York. (Id.)
SERVICE OF PROCESS
motions to dismiss brought pursuant to Federal Rule of Civil
Procedure 12(b)(5), the plaintiff bears the burden of
establishing that service of process has been performed in a
manner that satisfies the requirements of Rule 4 of the
Federal Rules. See Elkins v. Broome, 213 F.R.D. 273,
275 (M.D. N.C. 2003). The Court may construe the elements of
Rule 4 liberally if it is clear that a defendant had actual
notice of the pending suit. Karlsson v. Rabinowitz,
318 F.2d 666, 668 (4th Cir. 1983). Still, while purely
“technical” violations may not invalidate service
of process, “the rules are there to be followed, and
plain requirements for the means of effecting service of
process may not be ignored.” Armco, Inc. v.
Penrod-Stauffer Bldg. Sys., Inc., 733 F.2d 1087, 1089
(4th Cir. 1984).
recap the service-related events outlined above: NCM first
attempted to serve Wasitowski by Federal Express on August
15, 2018. (ECF No. 104 ¶ 3(ii).) Thereafter, the parties
entered into negotiations for several months, wherein both
the effective date of service and the time allotted to
respond were recurring points of discussion. (See
ECF Nos. 153, 160- 2, 168-2). Then, on December 7, 2018,
Wasitowski was indisputably served in person. (ECF Nos. 144
¶ 4, 144-1.) Wasitowski contends that process was
insufficient because the First Service was invalid and the
Second Service, though otherwise proper, was untimely. (ECF
No. 151 at 8–11).
explained below, this Court retains some doubt as to the
effectiveness of the First Service. However, in keeping with
the Fourth Circuit’s “strong preference that
[claims] be decided on their merits, ” Aikens v.
Ingram, 652 F.3d 496, 523 (4th Cir. 2011), this Court
will exercise its discretionary authority under Rule 4(m) and
extend the time to serve the amended complaint up to and
including December 7, 2018, the date when Wasitowski was
Sufficiency of the First Service
Federal Rule of Civil Procedure 4(e)(1) permits a plaintiff
to serve a defendant by “following state law for
serving a summons . . . in the state where the district court
is located.” Fed.R.Civ.P. 4(e)(1). Under North Carolina
law, service may be executed “[b]y depositing with a
designated delivery service authorized pursuant to 26 U.S.C.
§ 7502(f)(2) a copy of the summons and complaint,
addressed to the party to be served, delivering to the
addressee, and obtaining a delivery receipt.” N.C. R.
Civ. P. 4(j)(1)(d). The parties do not dispute that Federal
Express is a “designated delivery service.” Nor
is there any contention that the First Service delivery was
addressed to the wrong party. The parties do ...