In re Catalyst Third-Party Litigation

MEMORANDUM OPINION

(December 16, 2015)

THIS MATTER is before the Court on Third-Party Defendant Haldor Topsoe, Inc.’s (hereinafter, “HTI”) Motion to Dismiss the “Third Amended Complaint”1, filed on August 14, 2015.2 Third-Party Plaintiffs Hess Oil Virgin Islands Corporation (hereinafter, “HOVIC”) and Amerada Hess Corporation (hereinafter, “Hess”, together with HOVIC, “Third-Party Plaintiffs”) filed an Opposition on October 2, 2015. On *18October 30, 2015, HTI filed a Reply pursuant to its stipulation with the Third-Party Plaintiffs for enlargement of time to reply.3

BACKGROUND

In 2005, the plaintiffs in the underlying action filed lawsuits against Third-Party Plaintiffs for, inter alia, injuries sustained from alleged exposure to catalyst while working at HOVIC’s refinery in St. Croix during the period from 1965 to 1998. On February 20, 2009, upon leave from the Court, Third-Party Plaintiffs filed a Third-Party Complaint asserting claims for contribution, contractual indemnification, and breach of contract. The Court subsequently severed the Third-Party lawsuit from the underlying lawsuits. On October 16, 2009, upon further leave from the Court, Third-Party Plaintiffs filed an Amended Third-Party Complaint, asserting claims for contribution, common law indemnification, contractual indemnification, and breach of contract.4 According to the Amended Third-Party Complaint, HTI is “a foreign corporation which was, during the times alleged in these actions, engaged in the business of manufacturing, designing, packaging, selling, leasing and/or distributing catalyst at the HOVIC refinery and was doing business in the U. S. Virgin Islands at all times relevant to these lawsuits.” (Compl. ¶ 10.) Plaintiffs in the underlying lawsuits and Third-Party Plaintiffs settled their dispute and the Court ultimately dismissed the claims of Plaintiffs and Third-Party Plaintiffs with prejudice.

The Summons for HTI was signed and stamped on lune 11, 2015 by the Clerk.5 (Opposition, Exhibit 1.) HTI was served on luly 16, 2015.6 (Id.) In lieu of an answer, HTI filed this instant motion seeking dismissal *19pursuant to Fed. R. Civ. P. 4(m),7 12(b)(2),8 12(b)(4),9 12(b)(5),10 and 12(b)(6),11

DISCUSSION

In its Motion to Dismiss, HTI argued that Third-Party Plaintiffs’ process and service of process upon HTI was insufficient. HTI thus concluded that the Court failed to acquire personal jurisdiction, and the claims against it should be dismissed pursuant to Fed. R. Civ. P. 4(m), 12(b)(2), 12(b)(4), and 12(b)(5).12

(m) Time Limit for Service. If a defendant is not served within 120 days after the complaint is filed, the court — on motion or on its own after notice to the plaintiff — must dismiss the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court mustextend the time for service for an appropriate period. This subdivision (m) does not apply to service in a foreign country under Rule 4(f) or 4(j)(1).

*20A. Timeliness of HTI’s Motion to Dismiss

In its Opposition, Third-Party Plaintiffs argued that HTI’s Motion to Dismiss was untimely and thus, HTI’s arguments are waived. In its Reply, HTI argued that its Motion to Dismiss was timely because under Title 5 V.I.C. § 112(d), HTI has thirty days to file a responsive pleading.13 HTI further argued that, in light of recent decisions from the Supreme Court of the Virgin Islands (hereinafter, the “Supreme Court”), the local statute and not the federal rule should apply. (Reply, p. 2.)

Title 5 V.I.C. § 112 is titled “Substituted Service by Publication” (hereinafter, “Section 112”). Although substituted service by publication is not an issue in this matter, HTI argued that the time limit set forth in Section 112(d) is applicable here. However, Title 1 V.I.C. § 44 instructs that the headings “are made for the purpose of convenient reference and orderly arrangement, and no implication, inference, or presumption of a legislative construction shall be drawn therefrom.” Thus, the Court will look at Title 5 V.I.C. § 112 in its entirety for a legislative construction. Section 112(a) discusses circumstances when the court shall grant an order for service to be made by publication;14 Section 112(b) discusses *21the form of the summons to be published;15 Section 112(c) discusses the procedures necessary to effect service by publication;16 and Section 112(e) discusses the defendant as to whom publication is ordered.17 Without addressing other subsections of Section 112, HTI singled-out *22Section 112(d) and argued that it should be applied broadly in every instance, such as here. But see Corporacion Insular De Seguros v. W. Indies Transp., 22 V.I. 31 (Terr. Ct. 1986) (“One may resort to § 112 only in one of six cases set forth in § 112(b)(l)-(6) . . .”). HTI did not explain why this reading is proper; HTI simply picked a subsection of a statute and applied it out of context. The Court does not find HTI’s reading of Section 112(d) proper. In In re Infant Sherman, the Supreme Court instructed that, “when reviewing a statute, each statutory provision should be read by reference to the whole statute” and that “the statute should be interpreted to give consistent, harmonious and sensible effect to all its parts.” 49 V.I. 452, 463 (V.I. 2008) (internal quotations omitted).

Furthermore, service under Section 112 applies only “when service of the summons cannot be made as prescribed in Rule 4 of the Federal Rules of Civil Procedure . . .”18 Federal Rules of Civil Procedure 4(h) provides two primary means of effecting service on corporations. Fed. R. Crv. P. 4(h). First, a corporation may be served in the same manner as individuals under Rule 4(e)(1). Id. Second, service may be accomplished “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 . . .” Id. There is no indication by Third-Party Plaintiffs that service could not be made upon HTI as prescribed in Federal Rules of Civil Procedure 4 (hereinafter, “Rule 4”).19 See Edward L. Kalik Enterprises v. Seaboard Indus., 20 V.I. 383, 387 (D.V.I. 1983) (“In this case, service could have been made pursuant to Rule 4 and therefore it was error to direct service pursuant to § 112.”).

Moreover, service under Section 112 is only permitted by order of the Court, which is not present here. Chapter 504 of Title 5 of the Virgin *23Islands Code specifically deals with effecting service outside of the Virgin Islands. Namely, Title 5 V.I.C. § 4911, provides in relevant part: “When the law of this territory authorizes service outside this territory, the service, when reasonably calculated to give actual notice, may be made: by personal delivery in the manner prescribed for service within this territory.” HTI never explained why service was allegedly effected pursuant to Title 5 V.I.C. § 112 instead of Title 5 V.I.C. § 4911 and Rule 4 in this matter. Thus, while the Court finds HTI’s argument novel and interesting, for the reasons stated, the Court does not find it persuasive.

The Supreme Court made it clear that “the Federal Rules of Civil Procedure . . . should be invoked only when a thorough review of applicable Virgin Islands statutes, Superior Court rules, and precedents from this Court reveals the absence of any other [applicable] procedure.” Vanterpool v. Gov’t of the V.I., 63 V.I. 563, 576. There are precedents from the Supreme Court regarding motions to dismiss under Federal Rules of Civil Procedure 12 (hereinafter, “Rule 12”). The Court finds the standard of review set forth in said precedents binding and more persuasive than applying a subsection of the local statute out of context.

In Martinez v. Colombian Emeralds, Inc., 51 V.I. 174, 189 (V.I. 2009), the Supreme Court noted that the movant must file the Rule 12(b) motions within the time frame set forth under Rule 12(a). Furthermore, Rule 12(b) motions “must be made before pleading if a responsive pleading is allowed.” Fed. R. Crv. P. 12(b).

In Martinez, the Supreme Court ruled that, when the defendant filed the motion to dismiss out of time, “absent the granting of a proper motion by [defendant] to plead out of time filed with the requisite showing of excusable neglect, no further pleading was permitted by [defendant], and consequently, the filing of a pre-answer motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) was not permitted.” 51 V.I. at 189. Generally, an improperly-filed motion to dismiss should not be entertained by the Court, absent articulated circumstances to justify the Court exercising discretion to accept late motions. Id. at 190 n.12.

Here, HTI was served on July 17, 2015 but HTI did not file its Motion to Dismiss until August 14, 2015, outside of the 21-day time frame permitted under Rule 12(a). HTI did not file a motion for leave to file out *24of time20 with a satisfactory showing of excusable neglect as required by Virgin Islands Superior Court Rule 10(a).21 At that juncture, similar to the defendant in Martinez, absent the Court granting a proper motion by HTI to plead out of time with the requisite showing of excusable neglect, no further pleading was permitted by HTI. See Martinez, 51 V.I. at 189. HTI’s Motion to Dismiss was thereby not permitted.

Accordingly, HTI’s Motion to Dismiss is not properly before the Court. HTI never moved to for an extension to file its Motion to Dismiss out of time and made no showing of excusable neglect. Thus, the Court will not consider HTI’s Motion to Dismiss.

B. Service of Process22

As stated above, pursuant to Virgin Islands Superior Court Rule 27(b), Rule 4 governs the manner of service of process in the Virgin Islands.23 Rule 4 requires that the summons and complaint be served on a defendant within 120 days after the filing of a complaint.24 Here, Third-Party Plaintiffs did not serve HTI until approximately 6 years after the Amended Third-Party Complaint was filed. Third-Party Plaintiffs never filed a request for enlargement of time to complete service after 120 days expired. Thus, service of process was insufficient under Virgin Islands Superior Court Rule 27 and Federal Rules of Civil Procedure 4(m).

While the Court finds that the Third-Party Plaintiffs’ service upon HTI was deficient, the Court does not find HTI to be unduly prejudiced. The Court’s October 9, 2009 Order severed the Third-Party lawsuit from the underlying lawsuits, so HTI would not have been a party privy to *25discovery and settlement discussion of the underlying lawsuits. See, e.g., Abednego v. St. Croix Alumina, LLC, 63 V.I. 153, 183 (V.I. Super. Ct.) (“Once severed, the claims proceed separately as independent actions with separate judgments entered in each.”) (internal quotation marks omitted). Furthermore, there has been minimal movement in this Third-Party lawsuit since its commencement in 2009. Currently, Third-Party Plaintiffs’ Motion for Leave to File a Second Amended Third-Party Complaint is still pending before the Court.25

Under Rule 4(m), the Court has the discretion to dismiss the case or extend the time period for service when there is no showing of good cause.26 See Ross v. Hodge, 58 V.I. 292, 310-11 (V.I. 2013) (“Even if the court finds no good cause exists to warrant an extension, the court must at least consider whether any other factors warrant a discretionary extension.”) Pursuant to Rule 4(m), and given the circumstances of the case, namely, it is still in the early stage of litigation due to minimal movement since its commencement, the Court believes that it is in the interest of justice to grant Third-Party Plaintiffs a brief extension to serve HTI. Accordingly, the Court will grant Third-Party Plaintiffs an additional three weeks to serve HTI.

CONCLUSION

The Court did not consider HTI’s Motion to Dismiss because it is not properly before the Court. Under Federal Rules of Civil Procedure 4(m), even without a showing of good cause, the Court could properly exercise its discretion by extending the time period for service. While the Court finds Third-Party Plaintiffs’ lack of diligence in serving HTI troublesome, in light of the circumstances of the case, the Court is hesitant to deny potentially meritorious claimants their day in court without providing them the opportunity to perfect service. An Order consistent with this Memorandum Opinion will follow.