Opinion
5:23-CV-00680-M
03-19-2024
George Slocum, Plaintiff, v. Duke Progress Energy, Defendant.
MEMORANDUM & RECOMMENDATION
ROBERT T. NUMBERS, II UNITED STATES MAGISTRATE JUDGE
Duke Progress Energy asks the court to dismiss George Slocum's Complaint because of issues with service of process and a failure to meet pleading standards. Slocum has not responded to that motion. Because the motion is meritorious, the court should grant Duke's motion.
I. Background
In November 2023, George Slocum, proceeding pro se, filed suit against Duke Progress Energy for breach of contract. Compl. at 2, D.E. 1. The Complaint alleges that, pursuant to the Federal Reserve Act, Slocum sent an application with payment to Duke three times. Id. It contends that “the way to pay a bill is with interest.” Id. And “the [T]ruth in [L]ending [A]ct states that the bank is the borrower and the duties of the bank is (sic) to pay the interest.” Id. Slocum alleges that he “fully performed my bill with the bill of exchange” and gave Duke “my claim to credit, opportunity to cure, and default judgement (sic)” but it did not respond. Id.
As relief, Slocum seeks for his “bill to be set off, all titles, rights, interest, and guaranteed (sic) equity owed to be transfered (sic) to the principals account,” as well as remittance of unearned interest. Id. at 3.
Included as attachments to the Complaint are a “Claim of Credit,” an unexecuted durable power of attorney, an “Opportunity to Cure,” and a “Default Judgement (sic).” D.E. 1-1.
After service, Duke moved to dismiss the Complaint. Mot. to Dismiss, D.E. 13. It alleges that the court lacks personal jurisdiction over it because Slocum failed to obtain sufficient process or make proper service of process. Mem. in Supp. of Mot. to Dismiss at 1, D.E. 14. It also claims that the Complaint fails to state a cognizable claim for relief. Id. As noted above, Slocum filed no response in opposition to the Motion to Dismiss. As discussed below, Duke is entitled to relief. So the court should grant the Motion to Dismiss.
II. Discussion
A. Insufficient Process and Improper Service of Process
Duke asserts both insufficient process and improper service of process. Federal Rule of Civil Procedure 12(b)(4) allows a party to seek dismissal of a claim based on insufficient process. Fed.R.Civ.P. 12. Rule 12(b)(5), on the other hand, deals with dismissal for inadequate service of process. Id.
Motions under Rule 12(b)(4) and 12(b)(5) both implicate a court's personal jurisdiction over a defendant. These provisions are related but distinct. Rule 12(b)(5) “is the proper vehicle for challenging the mode of delivery or the lack of delivery of the summons and complaint.” 5B Charles Alan Wright & Arthur R. Miller, Fed. Practice & Procedure § 1353 (3d ed. 2004) (footnote omitted). Rule 12(b)(4) on the other hand, “concerns the form of the process rather than the manner or method of its service.” Id. So that rule may be invoked to “challenge noncompliance with the provisions of Rule 4(b) or any applicable provision incorporated by Rule 4(b) that deals specifically with the content of the summons.” Id.
1. Insufficient Process
To begin, Duke's motion points out that “Duke Progress Energy” is a non-existent entity. Mem. in Supp. of Mot. to Dismiss at 2 n.2. The entity Slocum intended to name as Defendant, it appears, is Duke Energy Progress, LLC. Id.
A non-existent entity is not subject to suit. Wilson v. Fairfield Inn-Suites Marriott RDU, No. 1:16-CV-899, 2017 WL 11493777, at *1 (M.D. N.C. Mar. 2, 2017) (complaint cannot raise a plausible claim for relief against a non-existent corporation) (citation omitted). Because the Complaint and Summons name a non-existent entity, process is deficient. See Sweeney v. Greenwood Index- J. Co., 37 F.Supp. 484, 487 (D.S.C. 1941), disapproved on other grounds, United States v. A.H. Fischer Lumber Co., 162 F,2d 872 (4th Cir. 1947). When a complaint fails to obtain sufficient process on a defendant, it is subject to dismissal. See Hussein v. Miller, 232 F.Supp.2d 653, 656 (E.D. Va. 2002) (dismissing all claims against a non-existent entity); Stellar Ins. Grp., Inc. v. Cent. Cos., LLC, No. 2:06-CV-11, 2006 WL 2862218, at *4 (W.D. N.C. Sept. 12, 2006), adopted, 2006 WL 2862214 (W.D. N.C. Oct. 3, 2006) (noting that a motion to dismiss is the proper vehicle to challenge a misnomer in naming a corporation in process and pleadings) (citation omitted). So the Complaint may be dismissed for insufficient process.
2. Improper Service of Process
The Federal Rules of Civil Procedure allow a party to seek dismissal of a claim if there has been insufficient service of process. Fed.R.Civ.P. 12(b)(5). Such a motion implicates the court's jurisdiction over the moving party because “[i]n the absence of service of process (or waiver of service by the defendant), a court ordinarily may not exercise power over a party the complaint names as defendant.” Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999). Once a party claims they have been improperly served, “the plaintiff bears the burden of establishing the validity of service pursuant to Rule 4.” O'Meara v. Waters, 464 F.Supp.2d 474, 476 (D. Md. 2006).
To meet that burden, the plaintiff must show that they have done several things. To begin with, the plaintiff must have served the summons along “with a copy of the complaint[.]” Fed.R.Civ.P. 4(c)(1). Next, the plaintiff must show that those documents were served by someone “who 3 is at least 18 years old and not a party” to the action. Id. Rule 4(c)(2). And finally the plaintiff must establish that the service occurred in the appropriate manner depending on the type of defendant named in the complaint. Id. Rule 4(e)-(j).
Assuming that Slocum intended to sue the Duke Energy Progress, Rule 4(h) of the Federal Rules of Civil Procedure governs service of process. That rule explicitly provides for service on a corporation
by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and-if the agent is one authorized by statute and the statute so requires-by also mailing a copy of each to the defendant[.]
Rule 4(h)(1)(A) incorporates the methods of service of process under state law. Fed.R.Civ.P. 4(h)(1)(A). North Carolina law allows service on state agencies in four ways. First, “by delivering a copy of the summons and of the complaint to an officer, director, or managing agent of the corporation or by leaving copies thereof in the office” of such a person or with the person in charge of the office. N.C. Gen. Stat. § 1A-4, Rule 4(j)(6)(a). Second, “by delivering a copy of the summons and of the complaint to an agent authorized by appointment or by law to be served or to accept service of process or by serving process upon such agent or the party in a manner specified by any statute.” N.C. Gen. Stat. § 1A-4, Rule 4(j)(6)(b). Third, one may “mail[] a copy of the summons and of the complaint, registered or certified mail, return receipt requested, addressed to the officer, director or agent to be served as specified in paragraphs a and b.” N.C. Gen. Stat. § 1A-4, Rule 4(j)(6)(c). And fourth, “[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 officer, director, or agent to be served as specified in paragraphs a. and b., delivering to the addressee, and obtaining a delivery receipt.” N.C. Gen. Stat. § 1A-4, Rule 4(j)(6)(d).
Even if Slocum had named an actual entity to obtained sufficient process, he failed to direct the Summons to an officer or agent of Duke. This error subjects his Complaint to dismissal for inadequate service of process.
The Summons identifies “Duke Progress Energy” at a Charlotte, North Carolina address. Summons, D.E. 4. Slocum's affidavit of service states that he sent it by registered mail to the address listed on the Summons. D.E. 5. But the Summons lists no officer, director, or agent. See D.E. 4. So it violates Rule 4(h).
That a party may have actual knowledge of the suit may not rescue a failure to comply with Rule 4's requirements. See Shaver v. Cooleemee Volunteer Fire Dep't, No. 1:07-CV-00175, 2008 WL 942560, at *2 (M.D. N.C. Apr. 7, 2008). (“Service of process is not freestyle, and courts are directed not to overlook procedural deficiencies just because actual notice occurred.”). But Slocum's failure to properly serve Duke does not entitle it to dismissal from this case.
Where a defendant has actual notice of the suit despite imperfect service, “every technical violation of the rule or failure of strict compliance may not invalidate the service of process.” Armco, Inc. v. Penrod-Stauffer Bldg. Sys., Inc., 733 F.2d 1087, 1089 (4th Cir. 1984). “But the rules are there to be followed, and plain requirements for the means of effecting service of process may not be ignored.” Id. And this is true even though Slocum is not represented by an attorney. Brinson v. Fred Smith Co., No. 5:22-CV-197-D, 2023 WL 2614539, at *3 (E.D. N.C. Mar. 23, 2023).
Ultimately, the court has discretion whether to dismiss the action or allow Slocum another chance to properly serve the defendant. See Scott v. Md. State Dep't of Lab., 673 Fed.Appx. 299, 304 (4th Cir. 2016); Cellular Sales of Knoxville, Inc. v. Chapman, No. 1:19-CV-768, 2020 WL 32992, at *3 (M.D. N.C. Jan. 2, 2020). In considering how the court should exercise this discretion, the undersigned is mindful that pro se parties like Slocum receive substantial leeway from courts given their lack of legal training and the other challenges of self-representation.
Yet as discussed below, the Complaint fails to state a claim entitling Slocum to relief. Curing any defects in service of process will not salvage pleading deficiencies in the Complaint. So improper service of process provides a basis supporting dismissal of Slocum's claim. The court should thus grant Duke's motion on this issue.
B. Motion to Dismiss Standard
Under Rule 12 of the Federal Rules of Civil Procedure, the court may dismiss a complaint if it fails to state a claim. Fed.R.Civ.P. 12(b)(6). To withstand a motion to dismiss under Federal Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal quotation marks omitted). The Supreme Court explained that “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). Therefore, while a court must accept all factual allegations contained in a complaint as true, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation omitted).
After Iqbal, a court considering a motion under Rule 12(b)(6) must subject a complaint to a two-part test. First, the court must identify the allegations in the complaint that are not entitled to the assumption of truth because they are conclusory or a mere formulaic recitation of the elements of a claim. Id. at 679. Then, taking the remaining factual allegations as true, the court must determine whether the complaint “plausibly suggest[s] an entitlement to relief.” Id. If, after conducting this two-part analysis, “the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief” Id. (citation and internal quotation marks omitted). Thus, if a party fails to show that it is entitled to relief, the court must dismiss its deficient claims.
Duke argues that the Complaint is subject to dismissal under Rule 12(b)(6) for two reasons. First, although it claims to bring a breach of contract action, the Complaint asserts none of the elements for that cause of action. For a breach of contract claim to survive dismissal under Rule 12(b)(6), a complaint must allege a contract between the plaintiff and defendant, identify the provisions breached, offer facts establishing the breach, and set out the damages resulting from the breach. Johnson v. Cricket Council USA, Inc., 658 F.Supp.3d 276, 282 (E.D. N.C. 2023).
Here, the Complaint offers no such declarations. See Compl, D.E. 1. It fails to allege a contract between Slocum and Duke, and thus cannot point to the provision violated. Id. The Complaint set forth no facts that show the contract was breached. Id. And it identifies no damages resulting from the breach that Slocum claims he suffered. Id. Slocum's failure to sufficiently plead a breach of contract claim subject the Complaint to dismissal.
Second, the Complaint lacks coherence and offers no factual allegations that demonstrate a cognizable claim for relief. It makes disjointed statements that do not infer misconduct. Although it references the Federal Reserve Act and Truth in Lending Act, the Complaint lacks any cohesive factual allegations to establish how these statutes are implicated. Alluding to federal statutes fails to confer federal question jurisdiction. See Interstate Petroleum Corp. v. Morgan, 249 F.3d 215, 219 (4th Cir. 2001). And Slocum fails to explain how his breach of contract claim implicates federal issues. So his Complaint is subject to dismissal because it fails to satisfy the necessary pleading requirements.
Because the Complaint fails to state a claim for relief, dismissal under Rule 12(b)(6) is warranted. So the court should grant Duke's motion on this issue and dismiss the Complaint without prejudice.
III. Conclusion
For the reasons set forth above, the undersigned recommends that the court grant Duke's Motion to Dismiss. D.E. 13.
The Clerk of Court must serve a copy of this Memorandum and Recommendation (M&R) on each party who has appeared here. Any party may file a written objection to the M&R within 14 days from the date the Clerk serves it on them. The objection must specifically note the portion of the M&R that the party objects to and the reasons for their objection. Any other party may respond to the objection within 14 days from the date the objecting party serves it on them. The district judge will review the objection and make their own determination about the matter that is the subject of the objection. If a party does not file a timely written objection, the party will have forfeited their ability to have the M&R (or a later decision based on the M&R) reviewed by the Court of Appeals.