Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-01401/USCOURTS-cand-3_15-cv-01401-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 28:1441 Petition for Removal- Racketeering (RICO) Act

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UNITED 

STATES 

DISTRICT 

COURT

For the Northern District of California

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1

 Record citations are to documents in the Electronic Case File (“ECF”); pinpoint citations

are to the ECF-generated page numbers at the top of the documents

2

 In cases originally filed in state court but removed to federal court (like this one), federal

law governs service of the summons and complaint on parties added after removal. 28 U.S.C. §

No. 3:15-cv-01401 LB

ORDER

UNITED 

STATES 

DISTRICT 

COURT

U

For the Northern District of California

NITED 

STATES 

DISTRICT 

COURT

For the Northern District of California

UNITED STATES DISTRICT COURT

Northern District of California

San Francisco Division

STEVE SHUBIN, et al.,

Plaintiffs,

v.

FARINELLI FINE ANTIQUES CORP., et al.,

Defendants.

_____________________________________/

No. C 15-01401 LB

ORDER DENYING DEFENDANTS’

REQUEST FOR ENTRY OF

DEFAULT AGAINST SHAUL

HAROSH

[Re: ECF No. 26]

Steve Shubin and Kathy Shubin sued two individuals—Dorian Lisbona and Efraim Shoua—and

two entities—Farinelli Fine Antiques Corporation and Shoua Lisbona LLC—for fraud-related

claims arising out of the Shubins’ purchases of art and antiques, which the Shubins allege are fake.

(Complaint, ECF No. 1 at 6-46.1

) The defendants answered the Shubins’ claims and also filed

counterclaims against the Shubins and another individual, Shaul Harosh. (Answer, ECF No. 4;

Counterclaims, ECF No. 6.) The defendants say they served Mr. Harosh by mail on April 29, 2015,

pursuant to Federal Rule of Civil Procedure 5(b)(2)(c).2

 (Request for Entry of Default, ECF No. 26;

Case 3:15-cv-01401-LB Document 29 Filed 05/29/15 Page 1 of 4
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COURT

For the Northern District of California

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1448; Fed. R. Civ. P. 81(c); Wallace v. Microsoft Corp., 596 F.3d 703, 706 (10th Cir. 2010). Mr.

Harosh was added to this action by the defendants’ counterclaims, which were filed after removal,

so federal law governs service on him.

No. 3:15-cv-01401 LB

ORDER 2

see Proof of Service, ECF No. 16.) Mr. Harosh has not responded to the counterclaims against him,

so defendants now ask the Clerk of the Court to enter his default. (Request for Entry of Default, ECF

No. 26.) 

It is true that Rule 5 allows a defendant to serve counterclaims against an opposing party who is

already in the action (such as the plaintiff) by regular mail. Fed. R. Civ. P. 5(b)(c) (“A paper is

served under this rule by: . . . mailing it to the person’s last known address—in which event service

is complete upon mailing.”); see Fed. R. Civ. P. 5(a)(1)(B) (“a pleading filed after the original

complaint” must be filed under Rule 5). The problem here, though, is that Mr. Harosh is not the

traditional counter-defendant like the Shubins are. Mr. Harosh was not a party to this action until the

defendants named him in their counterclaims, so their counterclaims against him are akin to an

original complaint, and service of an original complaint and summons is governed by Rule 4, not

Rule 5. Indeed, summonses are not among the “papers” listed as being covered by Rule 5’s service

requirements. And a leading treatise states that the procedure for issuance and service of a summons

on a counterclaim against a newly-named party is the same as that for a summons on an original

complaint. See Cal. Prac. Guide: Fed. Civ. P. before Trial § 8:1264 (The Rutter Group 2015). Thus,

given that Rule 5 is limited to service on existing parties and Rule 4 covers service on new parties,

the court concludes that the defendants’ attempt to serve Mr. Harosh by regular mail failed.

Nor does the defendants’ mailing comply with other permissible methods of service. Rule 4(e)

governs service on individuals. It states:

(e) Serving an Individual Within a Judicial District of the United States. Unless

federal law provides otherwise, an individual--other than a minor, an incompetent

person, or a person whose waiver has been filed--may be served in a judicial district

of the United States by:

(1) following state law for serving a summons in an action brought in courts of

general jurisdiction in the state where the district court is located or where service

is made; or

(2) doing any of the following:

(A) delivering a copy of the summons and of the complaint to the individual

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No. 3:15-cv-01401 LB

ORDER 3

personally;

(B) leaving a copy of each at the individual's dwelling or usual place of abode

with someone of suitable age and discretion who resides there; or

(C) delivering a copy of each to an agent authorized by appointment or by law

to receive service of process.

Here, the defendants did not deliver a copy of the summons and complaint to Mr. Harosh personally;

leave a copy of the summons and complaint at Mr. Harosh’s dwelling or usual place of abode with

someone of suitable age and discretion who resides there; or deliver a copy of the summons and

complaint to any agent of Mr. Harosh’s. That means the defendants did not comply with Rule

4(e)(2). 

Rule 4(e)(1), though, says that the defendants can serve Mr. Harosh in accordance with

California law. They did not, however. California law allows for five basic methods of service: (1)

personal delivery to the party, see Cal. Civ. Proc. Code § 415.10; (2) delivery to someone else at

party’s usual residence or place of business with mailing afterward (i.e., “substitute service”), see

Cal. Civ. Proc. Code § 415.20; (3) service by mail coupled with acknowledgment of receipt, see Cal.

Civ. Proc. Code § 415.30; (4) service on persons outside the state by certified or registered mail with

return receipt requested, see Cal. Civ. Proc. Code § 415.40; and (5) service by publication, see Cal.

Civ. Proc. Code § 415.50. Here, the defendants say they mailed the summons and complaint to Mr.

Harosh. California Civil Procedure Code § 415.30 sets forth the requirements for service by mail. It

states:

(a) A summons may be served by mail as provided in this section. A copy of the

summons and of the complaint shall be mailed (by first-class mail or airmail, postage

prepaid) to the person to be served, together with two copies of the notice and

acknowledgment provided for in subdivision (b) and a return envelope, postage

prepaid, addressed to the sender.

(b) The notice specified in subdivision (a) shall be in substantially the following

form:

. . .

(c) Service of a summons pursuant to this section is deemed complete on the date a

written acknowledgment of receipt of summons is executed, if such acknowledgment

thereafter is returned to the sender.

(d) If the person to whom a copy of the summons and of the complaint are mailed

pursuant to this section fails to complete and return the acknowledgment form set

forth in subdivision (b) within 20 days from the date of such mailing, the party to

whom the summons was mailed shall be liable for reasonable expenses thereafter

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No. 3:15-cv-01401 LB

ORDER 4

incurred in serving or attempting to serve the party by another method permitted by

this chapter, and, except for good cause shown, the court in which the action is

pending, upon motion, with or without notice, shall award the party such expenses

whether or not he is otherwise entitled to recover his costs in the action.

(e) A notice or acknowledgment of receipt in form approved by the Judicial Council

is deemed to comply with this section.

Cal. Civ. Proc. Code § 415.30 (emphasis added). The proof of service the defendants’ filed does not

say whether the counterclaims and summons were mailed in a way that required Mr. Harosh to

acknowledge receiving the counterclaims and summons or whether Mr. Harosh in fact

acknowledged receipt. Without those things, the mailing is not sufficient. Accordingly, the court

finds that Mr. Harosh has not been properly served with the counterclaims and summons. The court

therefore denies the defendants’ request for entry of default against him.

IT IS SO ORDERED.

Dated: May 29, 2015 _______________________________

LAUREL BEELER

United States Magistrate Judge

Case 3:15-cv-01401-LB Document 29 Filed 05/29/15 Page 4 of 4