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Hilmon Co. (V.I.) Inc. v. Hyatt Intern.

decided: March 23, 1990.

THE HILMON COMPANY (V.I.) INC., A CORPORATION, APPELLANT
v.
HYATT INTERNATIONAL, HYATT CORPORATION, CRISWELL DEVELOPMENT CORP., MAHOGANY RUN DEVELOPMENT CORP., ARMOUR JOINT VENTURE, LOVENLUND RESORTS, JAMES ARMOUR ENTERPRISES, RICHARD L. SCHULZE, WILLIAM CRISWELL, SHARON CRISWELL, JAMES ARMOUR, HOMER WHEATON, HYATT DEVELOPMENT CORP.



On Motion By Appellees Hyatt International, S.A., Hyatt Development Corp., Hyatt Corporation, and Richard L. Schulze For Costs And Attorneys' Fees, D.C. Civil No. 87-00037. Motion Submitted Pursuant to Third Circuit Rule 11 1. Appeal Submitted Pursuant to Third Circuit Rule 12(6), December, 7, 1989.

Mansmann and Nygaard, Circuit Judges.*fn*

Author: Nygaard

Opinion OF THE COURT

NYGAARD, Circuit Judge.

Four appellees, Hyatt International, S.A.; Hyatt Development Corp.; Hyatt Corporation and Richard L. Schulze ("the Hyatt appellees") petition this court for an award of delay damages pursuant to Fed. R. App. P. 38 because appellant, the Hilmon Company, (V.I.) Inc. ("Hilmon") pursued a frivolous appeal.*fn1 Under Fed. R. App. P. 38, this court has the discretion to award such damages to redress the Hyatt appellees' losses and to sanction Hilmon for bringing a frivolous appeal. In this circuit an appeal is considered frivolous when it is "utterly without merit," Sun Ship, Inc. v. Matson Navigation Co., 785 F.2d 59, 64 (3d Cir. 1986), or without "colorable arguments" raised in support. In re: Hall's Motor Transit Company, 889 F.2d 520, 523 (3d Cir. 1989). Applying this test, we conclude that Hilmon's appeal is frivolous and will award attorney's fees and costs on the appeal to the Hyatt appellees.

I.

Hilmon filed appeals at 89-3675 and at 89-3329 from two district court orders.*fn2 We consolidated the appeals and scheduled them for oral argument on December 7, 1989 in the Virgin Islands. On the morning of December 7th, Attorney Richard P. Farrelly*fn3 requested to speak with the panel in chambers and reported that the attorney of record Emilio T. Gurrola would not be present for oral argument.*fn4

We disposed of both appeals in a memorandum opinion filed on December 22, 1989. In the appeal filed at No. 89-3675, Hilmon, ignoring case law to the contrary, requested that we review an order which denied a Rule 54(b) certification.*fn5 Fed.R.Civ.P. 54. In Saber v. FinanceAmerica Credit Corp., 843 F.2d 697, 702 (3d Cir. 1988), we held that a court of appeals ordinarily has no jurisdiction to review on an interlocutory basis a district court's failure to certify a case for review. Hilmon not only offered no colorable argument to distinguish Saber, it did not even cite Saber. Furthermore, after appellees challenged the appealability of the order, Hilmon responded with further argument on the merits of the appeal, completely ignoring the appealability issue. We dismissed the appeal pursuant to Saber.

In the appeal filed at 89-3329, Hilmon challenged an order which dismissed its case against Hyatt International pursuant to Fed. R. Civ. P. 4(j)*fn6 for failure to effect proper service upon the defendants for over seventeen months. It was undisputed that Hilmon never served Hyatt International. We affirmed.

Rule 4(j) of the Federal Rules of Civil Procedure sets forth the time permitted to effect service of process. Rule 4(j) states:

If a service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint and the party on whose behalf such service was required cannot show good cause why such service was not made within that period, the action shall be dismissed as to that defendant without prejudice upon the court's own initiative with notice to such party or upon motion.

"The 120 day limit to effect service of process, established by Fed.R.Civ.P. 4(j) is to be strictly applied, and if service of the summons and the complaint is not made in time and the plaintiff fails to demonstrate good cause for the delay 'the court must dismiss this action as to the unserved defendant.'" Lovelace v. Acme Markets, Inc., 820 F.2d 81, 84 (3d Cir.) (quoting 128 Cong.Rec. H9848, 9850 (daily ed. Dec. 15, 1982) (emphasis added) reprinted in 1982 U.S. Code Cong. & Admin.News 4434, 4441), cert. denied, 484 U.S. 965, 108 S. Ct. 455, 98 L. Ed. 2d 395 (1987). Moreover, the legislative history provides only one example where an extension for good cause would be permissible, specifically where the defendant intentionally evades service. Lovelace, 820 F.2d at 84.

Notably, Hilmon did not claim either that it effected timely service or that its failure to do so should be excused.*fn7 Instead, Hilmon asserted that the order of dismissal should have been reversed because Hilmon was not given notice by the court before it entered the order and because the ruling should have been stayed pending resolution of a Rule 60(b) motion it had filed. Both arguments were utterly without merit.

The dismissal was upon motion by Hyatt International, based in part on Hilmon's failure to effect service; Hilmon had answered the motion, it was contested; and, Hilmon was on notice that it faced dismissal pursuant to Rule 4(j). Further, the court first quashed Hilmon's attempted service without dismissal. This gave Hilmon an additional four months to serve Hyatt International -- yet Hilmon still did nothing. When the court ruled on Hilmon's 60(b) motion and ...


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