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Farmland Partners Inc. v. Fortunae

United States District Court, D. Colorado

June 11, 2019

ROTA FORTUNAE, whose true name is unknown, and JOHN/JANE DOES 2-10, whose true names are unknown, Defendants.



         This matter is before the Court on Defendant Rota Fortunae's (“Rota”) Motion to Reconsider Order Granting Substituted Service of Fictitious Defendants John/Jane Does 2-10 [#72] (the “Motion”). Defendant Rota[1] initially filed the Motion in Denver District Court on August 30, 2018. After the case was removed, Defendant Rota re-filed the Motion in this Court on March 14, 2019, separately from its Notice of Removal [#1]. In adjudicating the Motion, the Court has reviewed the entire case file, the applicable law, and the following briefs: (1) Plaintiff's Response [#73] in opposition to the Motion; (2) Rota's Reply [#74] in support of the Motion; (3) Plaintiff's Supplemental Response [#77]; and (4) Rota's Supplemental Reply [#78]. Being fully advised in the premises and for the reasons stated below, the Motion [#72] is GRANTED.

         I. Procedural Background

         Plaintiff initiated this action against Defendants on July 23, 2018, in Denver District Court. Compl. [#3]. In short, Plaintiff alleges that Defendants conspired to publish false, misleading, and defamatory statements regarding Plaintiff's company in an attempt to profit from Plaintiff's declining stock price in what is known as a “short and distort” scheme. Id. at 1-7. The Complaint asserts claims for defamation/defamation by libel per se, disparagement, intentional interference with prospective business relations, unjust enrichment, deceptive trade practice in violation of the Colorado Consumer Protection Act, and civil conspiracy. Id. at 7-12.

         On August 13, 2018, the Denver District Court granted Plaintiff's request to serve Defendant Rota by substituted service through his former counsel, Matthew Mitzner (“Mitzner”). Order Granting Plaintiff's Motion to Allow Substituted Service [#1-4]. Subsequently, Plaintiff served Rota through Mr. Mitzner on August 16, 2018. See Proof of Service of Rota [#1-3].

         On August 28, 2018, Plaintiff moved to effect substituted service on Defendants John/Jane Does 2-10 (the “Doe Defendants”)[2] by filing its Motion to Allow Substituted Service [#1-6] (the “Motion for Substituted Service”). In the Motion for Substituted Service, Plaintiff explained that it had conferred with Rota's current counsel, John Chanin (“Chanin”), regarding service on the Doe Defendants. [#1-6] at 3. According to Plaintiff, Mr. Chanin declined Plaintiff's request to accept service on behalf of the Doe Defendants and informed Plaintiff “that he was not authorized to accept such service.” Id. For that reason, Plaintiff sought an order from the Court permitting Plaintiff to serve the Doe Defendants pursuant to Colorado Rule of Civil Procedure 4(f) by delivering process to Mr. Chanin. Id.

         On the following day, August 29, 2018, the Denver District Court granted Plaintiff's Motion for Substituted Service. Order Granting Plaintiff's August 28, 2018, Motion to Allow Substituted Service [#1-7] (the “State Court Order”). Accordingly, Plaintiff delivered service to Mr. Chanin and filed its Proof of Service [#15-10] with respect to the Doe Defendants on August 30, 2018.

         That same day, August 30, 2018, Rota filed the instant Motion [#72] in state court requesting that the state court reconsider its order granting Plaintiff's Motion for Substituted Service [#1-6]. The Denver District Court ordered the parties to submit expedited briefing on Rota's Motion on August 31, 2018. Pursuant to the expedited briefing schedule, Plaintiff filed its Response [#73] on September 7, 2018, and Defendant filed his Reply [#74] on September 11, 2018. Before the state court could rule on the Motion [#72], however, Rota removed the case to this Court on September 14, 2018, leaving the Motion unresolved.

         Rota's Notice of Removal [#1] attached, among other things, the Motion, the relevant briefing, and the register of actions for the state court proceedings. [#1-8]; [#1-9]; [#1-10]; [#1-11]. However, the Motion was not separately filed on the docket in this case to indicate that it was pending before this Court until March 14, 2019. See D.C.COLO.LCivR 81.1(b) (“No later than 14 days after the filing of the notice of removal, the removing party shall file a current docket sheet (register of actions) and shall separately file each pending motion, petition, and related response, reply, and brief.”). Subsequently, Plaintiff filed its Supplemental Response [#77] regarding the Motion on March 20, 2019, and Rota filed his Supplemental Reply [#78] on April 3, 2019.

         In the Motion, Rota primarily contends that the substituted service on the Doe Defendants permitted by the State Court Order [#1-7] was inappropriate because the Doe Defendants “are purely fictitious” and simply do not exist. Motion [#72] at 2. According to Rota, because the Doe Defendants do not exist, Mr. Chanin cannot be reasonably calculated to give those defendants actual notice of this suit. Id. In Plaintiff's Response, Plaintiff argues that Rota fails to allege a manifest error of fact or law that clearly mandates reconsideration of the State Court Order and that Rota has failed to refute the validity of substituted service established by Plaintiff's Motion for Substituted Service [#1-6]. Response [#73] at 2, 5. Plaintiff's Supplemental Response further argues that recent factual admissions by Rota confirm that substituted service on the Doe Defendants via Mr. Chanin was appropriate. Pl.'s Supplemental Response [#77] at 1. Rota counters this point, arguing that “[n]one of the so-called new ‘factual admissions' . . . retroactively render substituted service via Mr. Chanin proper.” Rota's Supplemental Reply [#78] at 1.

         II. Authority to Review the State Court Order and Standard of Review

         As an initial matter, the parties do not address Rota's standing to challenge the State Court Order [#1-7] which, as explained above, concerned service of process on the Doe Defendants, not on Rota.[3] Rota seeks to vacate the State Court Order and deny Plaintiff's Motion for Substituted Service [#1-6]. Motion [#72] at 4. Therefore, Rota effectively seeks to quash the service already completed on the Doe Defendants under the Colorado Rule of Civil Procedure which permits substituted service. See Colo. R. Civ. P. 4(f) (“Service shall be complete on the date of delivery to the person deemed appropriate for service.”). Generally, “[a] party may object to personal jurisdiction or improper service of process only on behalf of himself or herself, since the objection may be waived.” Burnett v. Country Mut. Ins. Co., No. 12-cv-0019-SLC, 2013 WL 12234282, at *6 (W.D. Wis. May 3, 2013) (quotation omitted) (collecting cases); see also 5B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1353 (3d ed.) (noting that “the defense of insufficient service of process is personal”).

         Nevertheless, “[a]fter removal, the federal court takes the case up where the State court left it off.” Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers Local No. 70 of Alameda Cty., 415 U.S. 423, 436 (1974) (internal citation omitted). “All injunctions, orders, and other proceedings had in such action prior to its removal shall remain in full force and effect until dissolved or modified by the district court.” 28 U.S.C. § 1450. “A prior state court order in essence is federalized when the action is removed to federal court, although the order ‘remains subject to reconsideration just as it had been prior to removal.'” Laney ex rel. Laney v. Schneider Nat'l Carriers, Inc., 259 F.R.D. 562, 564 (N.D. Okla. 2009) (quoting Resolution Trust Corp. v. Northpark Joint Venture, 958 F.2d 1313, 1316 (5th Cir. 1992)). “Thus, a federal court is free to reconsider a state court order and to treat the order as it would any interlocutory order it might itself have entered.” Id. (citing Nissho-Iwai American Corp. v. Kline, 845 F.2d 1300, 1303 (5th Cir. 1988)); see also 14C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3738 (Rev. 4th ed.) (“The federal court thus may redetermine, for example, the propriety of state-court orders concerning the sufficiency of process, and even may reconsider a default judgment entered by the state court prior to the removal, if the removal notice has been filed within the time period specified in the removal statute.”). Finally, “the state court order is not entitled to deference in federal court and because federal procedure governs the enforcement of a prior state court order removed to federal court, the federal court should ensure that the order is consistent with the federal rules[.]” Id. at 565 (citation omitted).

         Accordingly, the Court finds that it may reconsider the State Court Order [#1-7] “based on the court's inherent power to review its [own] interlocutory orders.”[4]Ferluga v. Eickhoff, 236 F.R.D. 546, 549 (D. Kan. 2006); see Wagoner v. Wagoner, 938 F.2d 1120, 1122 n.1 (10th Cir. 1991) (“Thus, plaintiff's January 17, 1990, motion for reconsideration was nothing more than an interlocutory motion invoking the district court's general discretionary authority to review and revise interlocutory rulings prior to entry of final judgment[.]”); Hauff v. Petterson, 755 F.Supp.2d 1138, 1145 (D.N.M. 2010) ...

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