UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In re: MARK LOCKWOOD RICHARDS,

Debtor.

KENNETH F. DAVIES,

Plaintiff-Appellant,

v.

No. 95-1374

E. L. RICHARDS,

Defendant-Appellee,

and

MARK LOCKWOOD RICHARDS,

Defendant,

UNITED STATES TRUSTEE,

Party in Interest.

Appeal from the United States District Court

for the District of Maryland, at Baltimore.

Marvin J. Garbis, District Judge.

(CA-94-2958, BK-91-5029-5-JS)

Argued: May 6, 1996

Decided: January 25, 1999

Before WIDENER and NIEMEYER, Circuit Judges, and

PHILLIPS, Senior Circuit Judge.

_________________________________________________________________

Reversed by unpublished opinion. Judge Widener wrote the opinion,

in which Judge Niemeyer and Senior Judge Phillips joined.

_________________________________________________________________
COUNSEL

ARGUED: Frederick Lewis Kobb, WRIGHT, CONSTABLE &

SKEEN, Baltimore, Maryland, for Appellant. Orbie R. Shively,

GEORGE W. LIEBMANN, P.A., Baltimore, Maryland, for Appellee.

ON BRIEF: Tracey D. King, WRIGHT, CONSTABLE & SKEEN,

Baltimore, Maryland, for Appellant. George W. Liebmann, GEORGE

W. LIEBMANN, P.A., Baltimore, Maryland, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

WIDENER, CIRCUIT JUDGE:

This appeal arises from an adversary proceeding in the chapter 11

bankruptcy case of Mark Lockwood Richards between plaintiffappellant Kenneth F. Davies and the debtor and defendant-appellee

Elzie Lockwood Richards, the debtor's father. The sole question is

whether the bankruptcy court abused its discretion when it decided

that plaintiff Davies failed to show good cause to extend the period

in which to serve defendant Elzie Lockwood Richards. The district

court answered this question in the negative. We reverse.

Mark Richards filed a chapter 7 bankruptcy petition on August 5,

1991 and a trustee was appointed on August 10, 1991. The case was

later converted to a chapter 11 proceeding and plaintiff Kenneth F.

Davies was appointed as examiner to investigate Mark's1 transfer to

his father, Elzie, of $119,247.19, the proceeds of Mark's sale in 1990

of real estate in Delaware which Mark acquired from his father in 1982.2

_________________________________________________________________

1 We may refer to parties who share a common surname by their first

names.

2 The record does not reveal the identity of the grantee to whom Mark

conveyed the property in 1990. Mark testified at deposition that Elzie

was living on the property in 1990.

 2
Because 11 U.S.C. § 546(a) bars actions to set aside fraudulent

transfers not commenced within "two years after the appointment of

a trustee under Section 702" of the code, the statute of limitations for

challenging the transfer expired on August 10, 1993. Davies mailed

a letter dated July 28, 1993, however, to Elzie requesting his agreement to waive certain defenses3 to a fraudulent transfer action.4 Elzie

signed the agreement on July 30, 1993 and returned it to Davies. In

the agreement, Elzie acknowledged that "you [Davies] have been

appointed as an Examiner in the bankruptcy case filed by my son

. . . [and] are reviewing the transfer from my son to me of the proceeds from the sale of real estate in Delaware by check dated November 16, 1990 in the amount of $119,247.19 endorsed[by Mark] to

me." Elzie agreed to waive the statute of limitations defense for "an

action against me arising out of the transfer of the Delaware property

or the transfer of the proceeds of sale to me, including but not limited

to an action to recover the proceeds transferred to me, until October

31, 1993." Plaintiff Davies filed an adversary complaint naming Elzie

as a defendant on October 29, 1993, thereby commencing the 120 day

period in which Fed. R. Civ. P. 4 requires service to be accomplished.

A summons was issued on November 1, 1993.

Bankruptcy Rule 7004(b)(1) provides service may be effected upon

an individual simply by "mailing a copy of the summons and complaint to his dwelling house or usual place of abode," so on November

8, 1993, Davies mailed process to the last address Davies had in his

files for Elzie Richards, 8311 Dawn Court, Ellicott City, Maryland,

which was also Mark Richard's residence, and had been for six and

one-half years before February 24, 1994. The envelope containing

process was, in fact, addressed to Mark, who was also named as a

party in the voluntary or fraudulent transfer complaint, but the summons inside clearly stated it was issued for Elzie. On November 9,

1993, Mark's attorney returned the summons and complaint to

Davies, along with a letter stating that neither Mark nor his attorney

_________________________________________________________________

3 In the agreement Elzie waived"any defense of the statute of limitations, estoppel, laches or other defense in which I assert that any action

is not timely filed."

4 The record does not reveal the address to which Davies mailed this

letter to Elzie. It is undisputed, however, that Elzie received and signed

the agreement.

 3
were authorized to accept service for Elzie. Davies investigated, but

neither telephone books nor directory assistance disclosed a listing for

Elzie at the Ellicott City address, and neighbors in the area stated they

did not know Elzie's location. Davies then inquired of attorneys representing Mark's creditors. During a deposition taken by the creditors,

Mark testified his father lived in Tennessee, but Mark did not remember Elzie's address. He also did not know with certainty his father's

first name. Additional information in the hands of the creditors indicated Elzie might have been purchasing property in Sparta, Tennessee. In the July 30, 1993 agreement to waive defenses, however, Elzie

gave an address in Chicago, Illinois. Later information Davies

received from a creditor's attorney suggested Elzie was living in Florida. Directory assistance inquiries in all of these locations proved

unfruitful. Davies hired a process server and stated to the bankruptcy

court that he attempted unsuccessfully to serve Elzie several times at

an address in either Chicago or Nashville. Davies then sought credit

bureau reports in the names of Elzie Lockwood Richards or E. Lockwood Richards, but no records could be found under either name.

Davies also claims to have searched driving records to no avail.

Davies then sought Elzie's address by taking Mark's deposition.

Davies represents in his brief, and Elzie does not deny, that Mark

requested delays in the scheduling of the deposition which Davies

complied with.5 At oral argument, counsel for Davies stated, without

contradiction, that Mark's deposition had been scheduled for two

months in advance when Mark began to interpose delays. Davies

finally deposed Mark on Thursday, February 24, 1994, two days

before the expiration of the 120-day service period on February 26,

1994.

In the February 24 deposition, Mark provided an address and tele-

_________________________________________________________________

5 Counsel for Davies also represented to the bankruptcy court that

scheduling difficulties delayed the determination of Elzie's address. We

note that in the deposition taken by the creditors, Mark's counsel

objected to questions about Elzie's whereabouts and Mark failed to provide specific information concerning his father's location. Davies also

represented to the bankruptcy court that Mark's counsel refused to provide Elzie's address when it was requested at the bankruptcy court's

original pretrial conference.

 4
phone number for Elzie in Wilmington, Delaware. Mark disclosed, in

answer to the question of where Elzie had been living before the Wilmington residence, "He was -- well, he's been very sick, so he's been

living with a couple of different people while he was being taken care

of prior to that." Mark also revealed that his father had been living

with him during November 1993, the month during which Davies

attempted to serve Elzie at Mark's address:

Q:6 Okay. Was he ever living with you?

A: He was with me in November of 1993.

Q: Until how long?

A: Until just after Thanksgiving.7

Process was reissued and Davies served Elzie at the Wilmington

address on March 14, 1994, sixteen days after the expiration of the

120-day period.

Elzie moved the bankruptcy court to dismiss the fraudulent or voluntary transfer complaint for failure of service. Davies did not move

for an enlargement, but filed a response relating the difficulties of

locating Elzie described above to show cause for the failure to serve

within 120 days. At a hearing solely for argument on the motion, the

bankruptcy court held:

[M]ore had to be done than what was done in this case, and

one of the things that had to be done was within the 120-day

period during which service had to be made, the plaintiff

had to file a motion to extend the time and set forth the reasons why service has not been made.

Although the district court recognized that no motion was required to

_________________________________________________________________

6 Counsel for plaintiff Davies.

7 Counsel for Davies then asked whether Elzie knew he had been

named as a party in this suit. After objection by his counsel, Mark testified, "At this point I'm not sure."

 5
extend the period for service, and no other reason was given by the

bankruptcy court, it nevertheless affirmed on the parties' briefs, without argument. The court observed there was no "concrete evidence"

to support the contention that Elzie had attempted to evade service

and based its decision to affirm on the fact that the only actions to

locate Elzie for which Davies stated a date in his memorandum took

place in November, 1994 and Davies did not serve Elzie until 18 days

after obtaining his address. The district court recognized that the

efforts of the bankruptcy creditors, in whose interest Davies was acting, to recover the $119,247.19 transferred to Elzie might be barred

if the suit were dismissed, but it considered this factor in isolation and

concluded "this fact alone does not preclude dismissal." Likewise, the

court accorded no weight in its decision to the fact that Elzie would

not be prejudiced by an extension of the time for service. See 4A

Wright, Miller and Kane, Federal Courts, 1998, § 2699.

Davies noted his appeal to this court. We review a decision to dismiss the plaintiff's action for untimely service under the same standard employed by the district court, abuse of discretion. Shao v. Link

Cargo (Taiwan) Ltd., 986 F.2d 700, 708 (4th Cir. 1993). Davies contends that the bankruptcy court erred as a matter of law in concluding

a motion was required to extend the time for service. We agree, as did

the district court. Bankruptcy Rule 7004(a) makes the provisions of

Rule 4 of the Federal Rules of Civil Procedure applicable to adversary

proceedings. Bankruptcy Rule 7004(g), however, provides that "[t]he

subdivisions of Rule 4 Fed. R. Civ. P. made applicable by these rules

shall be the subdivisions of Rule 4 Fed. R. Civ. P. in effect on January

1, 1990, notwithstanding any amendment to Rule 4 Fed. R. Civ. P.

subsequent thereto." Fed. R. Bankr. P. 7004(g)(West supp. 1996).

Thus, while the 1993 amendments to the federal civil procedure rules

added a new subdivision governing time limits for service - subdivision 4(m) - the provisions of former subdivision 4(j) are applicable in

this case.

By its terms, subdivision 4(j) explicitly provides that a court must

determine whether good cause exists for a party's failure to timely

serve before the court can dismiss the action. Shao, 986 F.2d at 708.

It does not require a motion for extension to be filed before good

cause can be shown. 1 Moore's Federal Practice § 4.82[1] (3d Ed.

1998). While the better practice is to move for an extension, because

 6
the rule imposes no requirement that plaintiff seek an extension, we

conclude as did the district court that the bankruptcy court erred in

holding that a motion was required.

That conclusion does not, of itself, dispose of the question of

whether plaintiff is entitled to relief. Davies remains burdened to

demonstrate good cause, that is, a good reason for the untimely service, and guidance on the circumstances that demonstrate that relief

is appropriate is contained in the advisory comment to new subdivision 4(m) of Rule 4. We have previously recognized that new subdivision 4(m) is substantively identical to its predecessor, subdivision

4(j). Mendez v. Elliot, 45 F.3d 75, 78 (4th Cir. 1995). The advisory

committee's note illustrates situations in which relief is appropriate

under either subdivision:

The new subdivision explicitly provides that the court shall

allow additional time if there is good cause for the plaintiff's

failure to effect service in the prescribed 120 days, and

authorizes the court to relieve a plaintiff of the consequences of an application of this subdivision even if there

is no good cause shown. Such relief formerly was afforded

in some cases, partly in reliance on Rule 6(b). Relief may

be justified, for example, if the applicable statute of limitations would bar the refiled action, or if the defendant is

evading service or conceals a defect in attempted service.

Fed. R. Civ. P. 4(m) Advisory Committee's note.

In the context of a chapter 11 bankruptcy proceeding, the Supreme

Court articulated the factors to be weighed in granting relief from a

filing deadline on grounds of excusable neglect in Pioneer Investment

Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380

(1993). The gist of the decision is that "the determination is at bottom

an equitable one, taking account of all relevant circumstances surrounding the party's omission." 507 U.S. at 395.

The relevant circumstances of this chapter 11 proceeding persuade

us that the appropriate exercise of the bankruptcy court's discretion

required it to extend the Rule 4(j) time limit to authorize plaintiff's

16 day delinquency in effecting service.

 7
First, the fraudulent transfer involves a substantial sum of money,

$119,247.19, the loss of which, if the money should have been property of the estate, would work a significant forfeiture on Mark's creditors.

Second, the circumstantial evidence overwhelmingly suggests that

Elzie attempted to evade service. Elzie's July 30, 1993 letter agreement waiving defenses to the fraudulent transfer action informed him

it was likely he would be named as a defendant in such a suit. In signing the letter agreement, Elzie listed his address as Chicago. In the

deposition taken by the creditors, Mark testified that Elzie lived in

Tennessee. Nothing else in the record, however, demonstrates that

Elzie ever lived in either location or, if he did, that he left either postal

or telephone forwarding instructions that plaintiff could have discovered. It is beyond dispute that Davies' initial attempt at mail service

on November 8, 1993 gave Mark actual notice that both he and Elzie

were named as defendants in the fraudulent transfer action. Mark testified that Elzie did live with him in November, 1993, and that Elzie

did not move out until after Thanksgiving, well after the date when

Mark learned that service was being sought on Elzie. Mark testified

that Elzie then lived "with a couple of different people," during the

remaining period for service, changing residences because he was

"very sick." Again, however, the record contains no evidence documenting Elzie's actual whereabouts or the medical reasons that necessitated his moves, and, so far as this record is concerned, Elzie left

no forwarding information when he changed locations. Since the

"verification of motions by affidavit is the general practice," Switzer

Bros. Inc. v. Byrne, 242 F.2d 909, 912 (6th Cir. 1957), in an equitable

determination governed by the court's discretion in chapter 11, a

party who allows the record to remain silent on a material issue when

the circumstances strongly favor his opponent gives the court no

grounds to resist an inference against him. See Vodusek v. Bayliner

Marine Corp., 71 F.3d 148, 155 (4th cir. 1995); Wigmore on

Evidence, Chadbourn Ed. 1979, § 285.

Third, the circumstances also suggest the possibility that Davies

initial service was valid, and the probability that Elzie had actual

notice of the suit on November 8 or 9, 1993, and that this fact was

concealed because the envelope containing process was addressed to

Mark. Service in bankruptcy is not governed entirely by Fed. R. Civ.

 8
P. 4. Rather, Bankruptcy Rule 7004(b)(1) allows for mail service to

the defendants "dwelling house or usual place of abode" without the

requirement, imposed by subdivision 4(c)(2)(C)(ii) of former Rule 4,

for the defendant to return acknowledgment of service. See Fed. R.

Bankr. P. 7004(a) & (b)(1); Fed. R. Civ. P. 4(c)(2)(C)(ii) (1990). A

"dwelling house or usual place of abode" may be one of many residences visited periodically by the person to be served. National

Development Company v. Triad Holding Corp., 930 F.2d 253, 256-

258 (2d Cir. 1991), cert. denied, Khashogi v. National Development

Co., 502 U.S. 968 (1991). In particular, it may be a residence visited

occasionally and titled in the name of the son of the person to be

served, where the person to be served travels and does not hold title

to other property in his own name. In re Premium Sales Corp., 182

B.R. 349, 351-52, 354 (Bankr. S.D. Fla. 1995).

Mark did not state in his deposition precisely when Elzie's stay

with him ended. As of November 8 and 9, however, plaintiff Davies

clearly found Mark's Ellicott City address to be the correct address

for Elzie. In the letter returning process to Davies, Mark's counsel did

not state that he knew whether Elzie was or was not living with Mark

when service was attempted, but only that neither counsel nor Mark

was authorized to accept service for Elzie.

In this case, the record shows that Elzie was living with his son,

Mark, on the critical dates of November 8 and 9, 1993, and that on

the 8th or 9th Mark received the summons and complaint suing both

himself and Elzie for the voluntary or fraudulent conveyance of

$119,247.19, plus interest. The district court apparently felt that the

half denial of Mark that he discussed the complaint with his father

and the denial of authority to accept service, which amounted to little

or nothing more than a confession and avoidance, was a sufficient

reason to find that good cause had not been shown or that Elzie was

not avoiding service of process. We do not. Even if this is considered

a fact finding, we are of the definite and firm conviction that a mistake has been committed. See United States v. Gypsum Co., 333 U.S.

364, 395 (1948); Bankruptcy Rule 7052 makes applicable Fed. R.

Civ. P. 52.

Finally, the nature of the fraudulent or voluntary conveyance

action, challenging the conveyance of real property and negotiation of

 9
a check, suggests that much of the evidence in that action will be

documentary.8 There is no showing that allowing the action to proceed despite the 16 day delay in service will prejudice the defendant's

defense in a trial on the merits or adversely effect the ability of the

bankruptcy court to conduct a fair proceeding. While we agree with

the bankruptcy court that more could have been done to attempt to

ensure timely service, it cannot be questioned that plaintiff acted in

good faith and the difficulties plaintiff encountered in effecting service were largely due to defendants' own actions. We thus conclude

that the bankruptcy court abused its discretion in holding the service

invalid.

The decision of the district court is accordingly

REVERSED.

_________________________________________________________________

8 The documentary evidence recited in plaintiff's complaint, a 1982

deed evidencing a conveyance from Elzie to Mark and a check drawn on

a law firm's trust account in the amount of the sale, payable to Mark and

endorsed to Elzie, suggests a likelihood of success on the merits, absent

circumstances not argued here.

 10