Motion to unseal entire court record

Federal District Court Opinions

U.S. EX. REL. GOULOOZE v. LEVIT, (Ariz. 10-24-2006) United
States of America, ex. rel. Dr. Martin Goulooze, Relator,
Plaintiff, v. (1) Dr. Michael I. Levit, D.O.; (2) Dr. Thomas
Martens, D.O.; (3) Hands on Multicare P.C.; (4) American
Multicare, LLC, dba Senior Smart Health Care, Defendants.
No. CV 05-1011-PHX-JAT. United States District Court, D.
Arizona. October 24, 2006

ORDER

JAMES TEILBORG, District Judge

Pending before the Court are Specially Appearing
Defendants’ Renewed Motion to Dismiss (Doc. # 33),
Specially Appearing Defendants’ Motion to Unseal Entire
Court Record (Doc. # 34), Relator’s Motion to Allow
Enlargement of Time to Complete Service (Doc. # 37), and
Specially Appearing Defendants’ Motion to Strike Relator’s
“Summons Return Executed” Filed September 26, 2006 (Doc. #
51).

I. FACTUAL BACKGROUND

On April 6, 2005, Dr. Martin Goulooze (“Relator”) filed a
Complaint seeking damages and injunctive relief under the
False Claims Act (“FCA”), 31 U.S.C. § 3729, et seq.
Pursuant Page 2 to Section 3730(b) of the FCA, the
Complaint was filed under seal.[fn1] On March 20, 2006, the
Court ordered Relator to serve Defendants with process by
June 2, 2006. On June 2, 2006, Relator served process on
Dr. Michael Levit, through his “registered agent” Eric C.
Anderson, but Relator failed to serve Hands-On Multicare,
Inc. (“Hands-On”) or American Multi-Care, LLC (“American”)
by the deadline. On June 8, 2006, Relator filed an Amended
Complaint.

On June 23, 2006, Defendants Dr. Levit, Hands-On and
American (“Specially Appearing Defendants”) filed a Special
Appearance and Motion to Dismiss (Doc. # 19). Specially
Appearing Defendants argued therein that the June 2, 2006,
service on Dr. Levit was improper because Dr. Levit never
appointed Mr. Anderson as his registered agent and
otherwise never authorized Mr. Anderson to accept service
of process on his behalf. Specially Appearing Defendants
also argued that Relator failed to serve Hands-On and
American with a copy of the Summons and the Complaint.
However, on June 27, 2006, Relator did serve one copy of
the original Complaint and a summons on “Hands On Multicare
dba Smart HealthCare-American Multi-Care, LLC.”

On July 17, 2006, Specially Appearing Defendants answered
the original Complaint, but therein affirmatively alleged
insufficient process and insufficient service of process
pursuant to Rules 12(b)(4) and 12(b)(5) of the Federal
Rules of Civil Procedure. In a July 18, 2006, ruling on
Specially Appearing Defendants’ motion to dismiss (Doc. #
19) and Relators’ motions for extension of time to serve
(Docs. ## 15, 22, and 23), the Court ordered Relator to
properly serve the Specially Appearing Defendants by August
4, 2006 (Doc. # 30). Relator made unsuccessful attempts to
serve Dr. Levit on July 20 and 26, 2006. On August 8, 2006,
Specially Appearing Defendants filed their Renewed Motion
to Dismiss (Doc. # 33), again seeking dismissal of
Specially Appearing Defendants pursuant to Rules 12(b)(4)
and 12(b)(5) of the Federal Rules of Civil Procedure. On or
about August 15, 2006, Relator sent Page 3 to Specially
Appearing Defendants a copy of the Amended Complaint.
Finally, on September 8, 2006, Relator served on American
Multi-Care, LLC, a copy of the original Complaint and a
summons by certified mail.

II. DISCUSSION

In their Renewed Motion to Dismiss (Doc. # 33), Specially
Appearing Defendants first argue that Dr. Levit should be
dismissed pursuant to Rule 12(b)(5) of the Federal Rules of
Civil Procedure because Relator, on June 2, 2006,
improperly served process upon Eric C. Anderson who was not
appointed as Dr. Levit’s registered agent and who otherwise
was not authorized to accept service on Dr. Levit’s behalf.
Specially Appearing Defendants also argue that Dr. Levit
should be dismissed because despite the Court’s July 18,
2006, Order allowing Relator until August 4, 2006, to
properly serve Dr. Levit, Relator failed to do so. The
Court agrees.

The record shows that, on June 2, 2006, Eric C. Anderson
accepted service of process on behalf of Dr. Levit. The
affidavit of the process server, Kelly J. Curtis, indicates
that Mr. Anderson simply said that “he would accept service
Dr. Michael I. Levit [sic].” However, Dr. Levit, in his own
affidavit, states that he never appointed Mr. Anderson as
his registered agent and did not authorize Mr. Anderson to
accept service of the Complaint and summons on his behalf.
Even if Mr. Anderson’s statement to Mr. Curtis can be
construed as a representation of agency, Arizona law
provides that agency cannot be proven by the acts or
declarations of the purported agent. Cameron v. Lanier, 108
P.2d 579, 580 (Ariz. 1940). Instead, Relator “must prove
affirmatively the authority” of Mr. Anderson to accept
service on behalf of Dr. Levit, by either showing direct
authority or implied authority. Id. Considering Dr. Levit’s
uncontroverted affidavit, Relator has failed to show that
Mr. Anderson had direct or implied authority to accept the
June 2, 2006, service.

The record also show that after the Court gave Relator
until August 4, 2006, to properly serve Dr. Levit, Relator
attempted to serve Dr. Levit on July 20 and 26, 2006. The
affidavit of the process server, Jonathan S. Curtis,
indicates that service was attempted at Dr. Levit’s home,
but access to the home was blocked by a security gate and
no activity was seen Page 4 in or around the home on
either date. While this led Relator to summarily conclude
that Dr. Levit was evading service, the Court disagrees.
Specifically, the Court finds that two failed service
attempts are insufficient to show that Dr. Levit was
evading service, especially considering Dr. Levit’s
affidavit stating he was on vacation outside of the State
of Arizona at the time of the two service attempts.
Further, Relator has offered no reason why he failed to
make any other attempts to serve Dr. Levit, either at home
or work, before August 4, 2006, and why he failed to
request that Dr. Levit waive service of process pursuant to
Rule 4(d) of the Federal Rules of Civil Procedure.[fn2]
Accordingly, pursuant to Rule 12(b)(5) of the Federal Rules
of Civil Procedure, and because Relator has failed to show
good cause for his failure to properly serve Dr. Levit
under Rule 4(e) of the Federal Rules of Civil Procedure
despite additional time to do so, the Court will dismiss
Dr. Levit without prejudice.[fn3]

Next, the Court will dismiss Hands-On without prejudice
pursuant to Rule 12(b)(5) of the Federal Rules of Civil
Procedure because the June 27, 2006, service made on
Hands-On was of the original Complaint, not the Amended
Complaint filed on June 8, 2006. An amended complaint
supersedes the original complaint. Hal Roach Studios, Inc.
v. Richard Feiner and Company, Inc., 896 F.2d 1542, 1546
(9th Cir. 1990). Thus, when Relator served Hands-On with
the original Complaint on June 27, 2006, almost three weeks
after filing the Amended Complaint, Relator served a
superseded complaint, not the controlling complaint. As the
court held in Phillips v. Murchison, 195 F.Supp. 620, 621
(S.D.N.Y. 1961), “serving a superseded complaint with the
summons [is] not a proper service of process.” See also
Page 5 West Coast Theater Corp. v. City of Portland, 897
F.2d 1519, 1529 (9th Cir. 1990) (Rule 4 of the Federal
Rules of Civil Procedure requires service of the filed
complaint); Gilles v. United States, 906 F.2d 1386, 1390
(10th Cir. 1990) (Where an amended pleading supersedes the
original complaint, subsequent service of the superseded
original complaint is improper.); 62B A.Jr.2d Process
§ 140 (“If an amended complaint is filed before
service has been effected, the service of the original
complaint is not sufficient, because that complaint has
been superseded.”).[fn4] Accordingly, pursuant to Rule
12(b)(5) of the Federal Rules of Civil Procedure, and
because Relator has failed to show good cause for his
failure to properly serve Hands-On under Rule 4(h) of the
Federal Rules of Civil Procedure despite additional time to
do so, the Court will dismiss Hands-On without prejudice.

Finally, the Court will dismiss American without prejudice
pursuant to Rules 12(b)(4) and 12(b)(5) of the Federal Rules
of Civil Procedure. First, the June 27, 2006, service Page
6 directed to “Hands On Multicare dba Smart
HealthCare-American Multi-Care, LLC” was insufficient as to
American because the summons was not directed to American
and American was not served with its own copy of the
Complaint, as required by Rules 4(a), 4(b), and 4(c)(1) of
the Federal Rules of Civil Procedure. In fact, Relator
recognized the insufficiency of the service on American by
conceding in the August 30, 2006, Joint Proposed Case
Management Plan that American had not been served with
process.[fn5] Second, the September 8, 2006, service on
American Multi-Care, LLC, was insufficient because it was
effected via certified mail. Relator has cited no rule
allowing service on American via certified mail under the
circumstances of this case and, indeed, there is none.
Further, even if the September 8, 2006, service was
otherwise proper, Relator again delivered a copy of the
original Complaint, not the Amended Complaint, thus
rendering the service insufficient as discussed above.
Accordingly, pursuant to Rules 12(b)(4) and 12(b)(5) of the
Federal Rules of Civil Procedure, and because Relator has
failed to show good cause for his failure to properly serve
American under Rule 4(h) of the Federal Rules of Civil
Procedure despite additional time to do so, the Court will
dismiss American without prejudice.

Because the Court will dismiss Dr. Levit, Hands-On and
American without prejudice, their Motion to Unseal Entire
Court Record (Doc. # 34) will be denied as moot. Further,
Relator’s Motion to Allow Enlargement of Time to Complete
Service (Doc. # 37) also will be denied as moot. Finally,
Specially Appearing Defendants’ Motion to Strike Relator’s
“Summons Return Executed” Filed September 26, 2006 (Doc. #
51), which summons actually was withdrawn by Relator, will
be denied as moot. Page 7

III. CONCLUSION

Based on the foregoing,

IT IS ORDERED that Specially Appearing Defendants’ Renewed
Motion to Dismiss (Doc. # 33) is GRANTED and Dr. Michael
Levit, Hands-On Multicare, Inc. and American Multi-Care,
LLC, are dismissed without prejudice;

IT IS FURTHER ORDERED that Specially Appearing Defendants’
Motion to Unseal Entire Court Record (Doc. # 34) is DENIED
as moot;

IT IS FURTHER ORDERED that Relator’s Motion to Allow
Enlargement of Time to Complete Service (Doc. # 37) is
DENIED as moot; and

IT IS FURTHER ORDERED that Specially Appearing Defendants’
Motion to Strike Relator’s “Summons Return Executed” Filed
September 26, 2006 (Doc. # 51) is DENIED as moot.

[fn1] On July 18, 2006, because the United States failed to
intervene in this action, the Court ordered the Complaint
unsealed and the seal lifted as to all matters occurring
thereafter.

[fn2] In fact, Relator concedes in the August 30, 2006,
Joint Proposed Case Management Plan that Dr. Levit had not
been served with process.

[fn3] As for Relator’s argument that Dr. Levit waived his
right to object to insufficiency of service of process
under Rule 12(b)(5) because he filed an Answer to the
Complaint, the Court notes that Dr. Levit, in his Answer,
affirmatively alleged insufficient process under Rule
12(b)(4) and insufficient service of process under Rule
12(b)(5). Thus, the Court finds that Dr. Levit properly
preserved the defenses under Rule 12(h)(1). And, because
the Answer preserving the defenses also was filed on behalf
of Hands-On and American, the same analysis and conclusion
applies to those two defendants.

[fn4] But see Doe v. Unocal Corp., 27 F.Supp.2d 1174, 1180
(C.D.Cal. 1998), concluding that the original complaint is
only superseded when the amended complaint is properly
served, not when filed. Thus, the Doe court held that
service of an original complaint, after the filing of an
amended complaint, was proper. For a number of reasons, the
Court rejects Doe. First, the Court finds unpersuasive the
rationale for the Doe court’s conclusion, that otherwise
the case would be in a state of suspended animation pending
service of the amended complaint, because absent service of
the original complaint as here the case already is in a
state of suspended animation. Second, the Court is confused
by the Doe court’s contradictory ruling that “[o]nce
plaintiffs served [defendant] with the original complaint .
. . that complaint was immediately superseded by the First
Amended Complaint.” Id. at 1180. If an amended complaint
does not supersede the original complaint until the amended
complaint is served, then how can service of the original
complaint trigger the efficacy of the amended complaint and
the supersedure of the original complaint? Third, the
plaintiffs in the Doe case were farmers from the Tenasserim
region of Burma and had to serve a defendant under the
Hague Convention. The time issues involved in effecting
service under the Hague Convention, which resulted in the
amended complaint being filed prior to service of the
original complaint, are not present in the instant case.
Finally, the Second Circuit case that the Doe court relied
upon, International Controls Corp. v. Vesco, 556 F.2d 665
(2nd Cir. 1977), is factually distinguishable because,
unlike in Doe and in the instant case, the original
complaint in Vesco was served before the amended complaint
was filed. In fact, the Vesco court recognized the import
of such a factual distinction on its contrary conclusion by
distinguishing Phillips v. Murchison, 195 F.Supp. 620
(S.D.N.Y. 1961). See Vesco, 556 F.2d at 669 n. 4. For all
these reasons, the Court rejects Doe.

[fn5] Even if the service was otherwise proper as to
American, Relator’s June 27, 2006, service of the original
Complaint, instead of the Amended Complaint, renders the
service insufficient. Page 1