United States District Court, W.D. North Carolina, Asheville Division
Cogburn Jr., United States District Judge.
MATTER is before the Court on a Partial Motion to
Dismiss Amended Complaint (Doc. No. 26), which was filed by
Defendant Nationstar Mortgage LLC as successor-in-interest to
Seterus, and which Defendant JP Morgan Chase joins in part
(Doc. No. 29). For reasons that follow, the Court denies the
following facts are taken from Plaintiffs' Amended
Complaint and are assumed true for this motion. In June 2005,
non-party Dennis Neighbor executed a Promissory Note, by
which he agreed to repay a home mortgage loan in the amount
of $172, 350.00, plus interest. As security, Dennis Neighbor,
as well as Plaintiffs Pamela Neighbor and Naomi Quillen,
executed a Deed of Trust granting the lender and its
successors and assigns a security interest in a home located
at 15 Country Road in Hendersonville, North Carolina. (Doc.
No. 10 ¶ 7).
March 2010, the Country Road home was destroyed by an
explosion. (Id. ¶ 9). Before, the home
“was in pre-foreclosure, ” so an
“investigation was done to determine the cause of the
explosion.” (Id. ¶¶ 10-11).
Allegedly, the “investigation concluded that Plaintiffs
were innocent and were completely clear of any liability for
the destruction of the house.” (Id. ¶
the explosion, Plaintiffs learned that the remaining balance
on the mortgage loan was $158, 055.00. (Id. ¶
13). Plaintiffs claim their insurer sent payment for that
amount in October 2010 to Diamont & Associates, who
forwarded the amount “to Defendant.”
(Id. ¶ 15). Plaintiffs assert that this payment
“satisfied the mortgage debt Plaintiffs owed to
Defendant.” (Id. ¶ 16).
the supposed payoff, “Defendant initiated [home]
foreclosure proceedings” on January 15, 2013.
(Id. ¶ 17). Plaintiffs maintain they were
“unaware of these proceedings” because
“they no longer lived at the property” and
believed the mortgage was “satisfied three years
prior.” (Id. ¶¶ 18-19). Purportedly,
“[o]n January 23, 2013, an Order Permitting Foreclosure
was filed [with] the Henderson County Clerk of Court”
and on September 4, 2015, the home “was sold on the
courthouse steps.” (Id. ¶¶ 20-21).
Then, “[o]n October 29, 2015, a final report and
account of Foreclosure Sale was filed with the [clerk] for
Plaintiffs' property.” (Id ¶ 22).
October 29, 2018, Plaintiffs filed this lawsuit against
Defendant JP Morgan Chase in the Superior Court of Henderson
County, North Carolina. (Doc. No. 1). Defendant JP Morgan
Chase removed the action to this Court on December 13, 2018.
(Id.). On February 26, 2019, Plaintiffs filed an
Amended Complaint, which named Seterus as a defendant for the
first time. (Doc. No. 10). Plaintiff served Seterus with a
summons and a copy of the Amended Complaint on June 10, 2019
by certified mail to Seterus's registered agent. (Doc.
Nationstar moves to dismiss the Amended Complaint on two
grounds. First, Nationstar moves to dismiss the entire
complaint for insufficient service of process. See
Fed.R.Civ.P. 12(b)(5). Nationstar contends that service was
insufficient because Plaintiffs failed to serve it with a
summons within 90 days of filing the Amended Complaint. (Doc.
No. 27 at 12). Second, Nationstar moves to partially dismiss
the Amended Complaint because it fails to state a claim upon
which relief can be granted. See Fed.R.Civ.P.
12(b)(6). Specifically, Nationstar argues the complaint
reveals that Plaintiffs' claims are time-barred. (Doc.
No. 27 at 1). Defendant JP Morgan Chase joins the latter
contention. (Doc. No. 29). The Court rejects each argument in
Insufficient Service of Process
a federal court may exercise personal jurisdiction over a
defendant, the procedural requirement of service of summons
must be satisfied.” Omni Capital Int'l v.
Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). The
purpose of service “is to give notice to the
defendant.” Scott v. Maryland State Dep't of
Labor, 673 Fed.Appx. 299, 304 (4th Cir. 2016) (quoting
Karlsson v. Rabinowitz, 318 F.2d 666, 669 (4th Cir.
1963)). As such, “[w]hen the process gives the
defendant actual notice of the pendency of the action,
[service] rules, in general, are entitled to a liberal
construction.” Armco v. Penrod-Stauffer Bldg.
Sys., 733 F.2d 1087, 1089 (4th Cir. 1984); see also
Torres v. Oakland Scavenger Co., 487 U.S. 312, 316
(1988) (noting “‘mere technicalities' should
not stand in the way of consideration of a case on its
merits”). Still, “actual notice” is not the
controlling standard. Mining Energy v. Office of
Workers' Comp., 391 F.3d 571, 576 (4th Cir. 2004).
Service “rules are there to be followed, and plain
requirements for the means of effectuating service of process
may not be ignored.” Armco, 733 F.2d at 1089.
Rule of Civil Procedure 4 sets forth the formal requirements
for the issuance of a summons and for service of process in
proceedings brought in federal court. Where a defendant
alleges a defect in service, the plaintiff bears the burden
of demonstrating that the procedure used to perfect service
complied with the requirements of Rule 4. See Mann v.
Castiel, 681 F.3d 368, 372 (D.C. Cir. 2012);
Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir.
4(m) requires a plaintiff to serve a summons and complaint on
each defendant within 90 days of filing a complaint. If a
plaintiff fails to timely serve a defendant, the Court
“must dismiss the action without prejudice against that
defendant or order that service be made within a specified
time.” Fed.R.Civ.P. 4(m). Where a plaintiff
demonstrates “good cause” for failing to timely
serve a defendant, the Court “must extend the time for
service for an appropriate period.” Id. But
“even if there is no good cause shown, ”
“[district] courts have been accorded discretion to
enlarge” the period for service. Henderson v.