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Cessna Finance Corporation v. Vywb, LLC

United States District Court, Tenth Circuit

November 13, 2013

CESSNA FINANCE CORPORATION, Plaintiff,
v.
VYWB, LLC and PARMJIT S. PARMAR, Defendants.

MEMORANDUM AND ORDER

SAM A. CROW, District Judge.

The plaintiff Cessna Finance Corporation ("Cessna") filed a two-count petition in the District Court of Sedgwick County, Kansas, to recover amounts due from the defendant VYWB, LLC on two notes and amounts due from the defendant Parmjit S. Parmar ("Parmar") on two guaranties. The defendant Parmar filed a notice of removal on August 22, 2013, in which he asserts that not until July 23, 2013 did he receive notice of the state court action or receive notice of the state court summons and petition. (Dk. 1, ¶¶ 13 and 14). In his attached affidavit, Parmar avers that while Cessna's return on service shows delivery to his residence on June 25, 2013, he was not at his residence on this day nor was anyone there who was authorized to act as his agent. (Dk. 1-4, ¶¶ 3 and 6). Parmar further avers that he first learned on July 23, 2013, of the United Parcel Service ("UPS") package left at his residence in his absence and immediately directed that the package be opened. Id. at ¶ 7. At which time, he was made aware of Cessna's documents making legal claims against him. Id. at ¶ 8. Thus, Parmar asserts his notice of removal was filed within the 30 day-period required in 28 U.S.C. § 1446(b). (Dk. 1, ¶ 18).

The plaintiff Cessna moves to have the action remanded arguing that Parmar's notice was untimely filed more than 30 days "after the initial pleading was received through service of process." (Dk. 12, p. 1). Cessna's counsel's legal secretary avers she caused a copy of Cessna's filed summons and petition "to be given to the United Parcel Service for Ground Service delivery" and "requested email notifications and delivery confirmation with adult signature required." (Dk. 12, p. 7, Ex. A). Cessna's counsel signed the "Return on Service" and attached the UPS electronic receipt showing the petition and summons were delivered to Parmar's residence at "19 Colts Gait Ln, Colts Neck, New Jersey" and an adult, "PAFMAR" signed for it. (Dk. 1-2, pp. 3-6). Thus, Cessna's attorney certified that he had served the "Petition and Summons upon Parmit S. Parmer, individually, and as a member of VYWB, LLC, by United Parcel Service Ground Delivery on June 25, 2013." (Dk. 1-2, pp. 3).

As noted, § 1446(b) requires the notice of removal to "be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading..., or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court..., whichever period is shorter." The Supreme Court has construed § 1446(b) as requiring formal service and not "mere receipt." Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999). Notably, the Court looked to state law on the question of "formal service, " but it remarked that § 1446(b) was intended to cure some disparate state practices and "[t]o ensure that the defendant would have access to the complaint before commencement of the removal period." Id. at 351, 353.

Having limited jurisdiction, federal courts employ a presumption "against removal jurisdiction." Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir.), cert. denied, 516 U.S. 863 (1995). The party seeking removal is given the burden to show the propriety of removal and the existence of removal jurisdiction. Ortiz v. Biscanin, 190 F.Supp.2d 1237, 1241 (D. Kan. 2002); see McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Baby C v. Price, 138 Fed.Appx. 81, 83-84, 2005 WL 1377812 at *2 (10th Cir. 2005). Federal courts strictly construe removal statutes and resolve all doubts in favor of remand. See Ortiz v. Biscanin, 190 F.Supp.2d at 1241. The failure to file a notice of removal within the statutory requirement of thirty days renders the removal defective and results in remanding the case to the state court. Huffman v. Saul Holdings Ltd. Partnership, 194 F.3d 1072, 1077 (10th Cir. 1999); First Nat. Bank & Trust Co. in Great Bend v. Nicholas, 768 F.Supp. 788, 790 (D. Kan. 1991). Thus, it rests with the defendant to demonstrate that his notice of removal was filed within the statutory thirty-day period. As summarized above in the opening paragraph, the defendant Parmar asserts and avers that he was not aware of and did not receive notice of the summons and petition until July 23, 2103, and that he filed his notice of removal within 30 days thereafter.

The plaintiff Cessna s motion for remand does not contest the facts stated in Parmar's notice of removal. Namely, Cessna does not challenge Parmar's averments that neither he nor any authorized agent signed for the UPS delivery on June 25, 2013. Cessna leaves uncontroverted Parmar's averment that he was not aware of Cessna's lawsuit before July 23, 2103, when the UPS package was opened and its contents were identified to him. Instead, Cessna's position is that service under K.S.A. 60-303(c) is "deemed perfected upon delivery of the mail, addressed to the person to be served, regardless of whether the defendant actually signs for the package or personally accepts deliver." (Dk. 12, p. 5)(italics and bolding deleted). Thus, Cessna's motion to remand is based exclusively on the proposition that Kansas law regards the service by return receipt delivery complete upon the arrival of the summons and complaint at Parmar's residence without regard for whether the summons and complaint were received by the addressee or an authorized agent. Cessna seeks remand arguing that neither Parmar nor his authorized agent need to receive the return receipt delivery to trigger the 30-day removal.

The defendant Parmar counters that service under K.S.A. § 60-303(c) requires delivery of the summons and petition to Mr. Parmar and that the electronic return receipt fails to identify a specific person having received the delivery on June 25, 2013. The defendant avers that neither he nor an authorized agent received the delivery at his residence on June 25, 2013, and that no person named "Parmar" was at his residence on that day. (Dk. 14-2). Against his affidavit, the defendant Parmar challenges the electronic return receipt as insufficient proof of valid service, because the receipt fails to specify the identity of the person receiving delivery. The defendant Parmar also contends that service of process by return receipt delivery must be "to the party addressed." K.S.A. § 60-303(c)(1). The authorities cited by the plaintiff for delivery effective upon arrival at the residence are distinguishable based on the statutory terms and on the facts involved.

The court's analysis begins with the actual terms of the applicable Kansas statutes. Because plaintiff was serving the defendant Parmar at his residence in New Jersey, the first statute to consider is K.S.A. 2012 Supp. § 60-308(a)(2)(B), which provides in relevant part:

The service of process must be made:... (B) by a party or the party's attorney pursuant to subsection (c) of K.S.A. 60-303, and amendments thereto. No order of a court is required. The server must file an affidavit or declaration pursuant to K.S.A. 53-601, and amendments thereto, or any other competent proof, stating the time, manner and place of service. The court may consider the affidavit, declaration or any other competent proof in determining whether service has been properly made.

The plaintiff Cessna asserts it relied on the service of process available in K.S.A. 2012 Supp. § 60-303(c), and its return receipt delivery provisions which read:

(c) Service by return receipt delivery. (1) Service of process may be made by return receipt delivery, which is effected by certified mail, priority mail, commercial courier service, overnight delivery service or other reliable personal delivery service to the party addressed, in each instance evidenced by a written or electronic receipt showing to whom delivered, the date of delivery, the address where delivered and the person or entity effecting delivery.
(2) The sheriff, party or party's attorney must give to the person or entity effecting delivery a copy of the process and petition or other document in a sealed envelope, with postage or other delivery fees prepaid, addressed to the person to be served in accordance with K.S.A. 60-304, and amendments thereto.
(3) Service of process is obtained under K.S.A. 60-203, and amendments thereto, upon the delivery of the sealed envelope.
(4) After service and return of the return receipt, the sheriff, party or party's attorney must execute and file a return of service. The return of service must state the nature of the process, to whom delivered, the date of delivery, the address where delivered and the person or entity effecting ...

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