Ung v. Columbus Extend-A-Suites

          Jolson Magistrate Judge

          OPINION AND ORDER

          JAMES L. GRAHAM UNITED STATES DISTRICT JUDGE

         This matter is before the Court on two motions to dismiss, which arise from plaintiffs' alleged failure to effect service of process on one defendant and from plaintiffs' alleged failure to prosecute their claims against the other defendants.

         I. Background

         Plaintiffs Veng Ung and his sole proprietorship, 1219 Holdings, LLC, brought this action for unlawful eviction relating to a commercial lease. Plaintiffs filed the action on October 22, 2018 in state court against defendants Columbus Extend-A-Suites, Nikon Capital, LLC, Columbus Series, and Sterling Resource Management, Inc. The complaint alleges that plaintiffs entered into a commercial lease with Extend-A-Suites in October 2017. In connection with the lease, plaintiffs purchased securities from Nikon Capital. From the securities holdings, Extend-A-Suites could collect unpaid lease obligations. The complaint, though admitting that plaintiffs defaulted on their rent in March 2018, asserts that Extend-A-Suites and Nikon Capital exceeded their authority under the lease and the security agreement in attempting to evict plaintiffs from the leased property.

         Defendants removed the action to this Court on the basis of diversity jurisdiction. 28 U.S.C. § 1332. Plaintiffs are citizens of Texas, while Extend-A-Suites is a citizen of Ohio, Nikon Capital a citizen of Nevada, and Sterling a citizen of California.

         Shortly after removal, the Clerk of Court issued a notice to plaintiffs' counsel that he was not admitted to practice in the Southern District of Ohio. See Doc. 5. The notice contained information and instructions concerning the Court's Local Rules and admission pro hac vice. Since that point in time, November 28, 2018, plaintiffs have not made any filings or otherwise appeared in this litigation.

         II. Failure to Effect Service of Process on Sterling

         Prior to removal, plaintiffs effected service on defendants Extend-A-Suites and Nikon Capital on October 26 and 29, 2018, respectively. See Doc. 1 at ¶¶ 2-3. However, plaintiffs did not serve defendant Sterling.^[1] Following removal, plaintiffs did not serve Sterling, who now moves to dismiss for failure to effect service. Plaintiffs have not responded to the motion.

         Under Federal Rule of Civil Procedure 12(b)(5), a party may move to dismiss a complaint for insufficient service of process. Rule 4(m) directs that if a defendant is not served within 90 days after the complaint is filed, the court “must dismiss the action without prejudice against that defendant” unless the plaintiff shows good cause for the failure. In cases where a complaint is removed from state court, Rule 4(m) has been interpreted to give plaintiffs 90 days “after the date of removal to complete service.” Medlen v. Estate of Meyers, 273 Fed. App'x 464, 470 (6th Cir. 2008) (citing cases).

         This case was removed from state court on November 16, 2018. The Court notes that plaintiffs were made aware of the service defect at the time of removal, as defendants stated in the removal papers that Sterling had not been served. Even so, plaintiffs have not served Sterling, nor have plaintiffs shown good cause for their failure. Accordingly, Sterling's motion to dismiss the complaint without prejudice is granted.

         III. Failure to Prosecute

         Defendants Extend-A-Suites and Nikon Capital have moved to dismiss for want of prosecution. Dismissal of a claim for failure to prosecute is a measure made available to district courts, but it is reserved for “extreme situations.” Wu v. T.W. Wang, Inc., 420 F.3d 641, 643 (6th Cir. 2005). Under Rule 41, “[i]f the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it.” Fed.R.Civ.P. 41(b). The Rule gives district courts a tool to manage their dockets and avoid “unnecessary burdens on the tax-supported courts and opposing parties.” Schafer v. City of Defiance Police Dep't, 529 F.3d 731, 736 (6th Cir. 2008) (internal quotation marks omitted).

         Because dismissal is a “harsh sanction, ” a district court should dismiss a claim for failure to prosecute only where there is “a clear record of contumacious conduct by the plaintiff” - conduct which “resist[s] authority” and ...