# FILED

MAR 30 2021

SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 

### NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: CHRISTINA STACEYMARIE HILLYER , Debtor

. BAP No. NV

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Bk. No. 2: 2 0

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Adv. No. 2:20

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MEMORANDUM * SSA ARCHITECTURE ; SMAL L ST UDI O ASSOCIATES, LLC ; KEN SMALL , Appellant s , v. CHRISTINA STACEYMARIE HILLYER , Appellee.
Appeal from the United States Bankruptc y Court for the District of Neva da Bruce T. Beesley , Bankruptcy Judge, Presiding

Before: T AYLOR , L AFFERTY , and B R AN D , Bankruptcy Judges.

* This disposition is n ot app r opr i a te for pu b lic ati on. Although it may be cit ed fo r whatever persuasive value it may ha ve, see Fed. R. App. P. 32.1, it has no precedential valu e, see 9th Cir. BAP R ule 8024

- 1.2 I. INTRODUCTION SSA Architecture, Small Studio Associates, LLC , and Ken Small ( collec t ively, “ SSA ”) appeal from the bankruptcy court ’ s order dism i ssing their adversary proceeding against chapter 7 1 debtor Christina Stacey m ari e
H i l lyer for SSA ’ s failure to effect service of the summons and complaint.
W e AFFIRM

. II. FACTS 2
A

. The bankruptcy case and adversary proceeding In January of 20 20, Hillyer f i l ed a petition for c hapter 13 relief. T he

case was subseque ntly converted to cha p t e r 7

. T he f irst § 341(a) m eet ing of creditors in the converted case was scheduled for April 1, 2020 , making June 1 , 20 20 the last day for creditors t o file a § § 523(a) (2) , ( 4 ) , or (6) complaint by operation of Rules 1019(2 ) ( A) , 40 0 7 ( c ) , and 90 06(a) (1)(C)

. T h e bankruptcy court also set May 14, 2020 , as the deadline for general c reditors to file a proof of claim

. On March 19, 2020, SSA filed its only adver sar y c ompl a i nt against
H illyer. It allege d cause s of ac tion based on contract, tort, and Civil R I C O
pur suan t to the Ne vada Ci vil RI CO Act s . It prayed for in junctive rel ief to

1 Unless specifie d otherwise, all cha pter and section references are t o the B ank r u ptcy Code , 1 1 U. S.C. §§ 101

- 1532, al l “ Rul e” re ferences a re to the Federal Ru les of Bankrupt cy Procedure , and all “Civil Rule” references are to the Federal Rul e s of Civi l Procedure

2 We exer c i se our discretion to take j udicial notice of docume nts el e ctr o n ically fi l ed in the bankruptcy court ’ s doc kets

. See Atwood v. Chase Manhattan Mor tg. Co. (In re At wood) , 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).3 prevent Hillyer from competing with it , v arious damages , and attorney ’ s fees and costs

. But the complai n t did not include a cause of action under § 523 , and its prayer for relief did n ot s eek a determinati on of nondischargeability.
SSA did not file a proof of claim by the claim s bar date

. T h e ch a pt er 7 t r ustee filed a report of no distrib ution on M ay 7, 202 0 , and the bank ruptcy court entered an order of discharge on June 22, 2 020

. B. H illy er ’ s motion to dismiss the adversary p roceeding for insufficient service of process
On Ma rch 20, 2020 , t h e b ankruptc y cou rt issued a summons in the
adver s ary proceed ing

. T h e ninety

- day period under Civil Ru l e 4(m) , made applicable by Rul e 7 004 (a)(1), i n wh ich SSA was required to effect service
of the summons and complaint , expired on June 18, 202 0

. On J une 22, 2020, Hillyer filed a motion to dismiss the complain t for
i nsuff i c ient service of process under Civil Ru le 12(b)(5), made applicable b y Rule 70 12 (b) ( “Motion ”)

. SSA opposed t he Motion

. It c ontended th a t it had served the summons and complaint on Hillyer

. I n support of this con tention, however, it attached a declaration i n w hich its counsel ’ s employ ee stated
tha t s he ha d serv ed the complain t on Hill yer ’ s counsel by first class mail on A pril 30, 2 0 20. The declaration made no mention of any service of the

summons on Hill ye r ’ s counsel

. No r did it ment ion a ny ser vi c e of the

s u mmons or complaint on Hillyer

.4 S SA a ls o argued that go od c ause exi s ted t o exten d the deadline to
serve the sum mons and comp laint because it believed that it effectuated

serv ice when it mailed the c omplaint to Hi llyer ’ s counsel. It further argued
that the r e was no prejudice to H il ly er for an y failure to se r ve the s u mmons and complaint beca use , it alleged, her counsel re ceiv ed ac tual not ice of the complaint long be f ore the t ime for service elapsed

. According to SSA , Hillyer ’ s counsel referenced the complain t during a se ssion of t he § 341 (a) meeting o f credito r s

. In reply t o the oppositi on to th e M otion , Hillyer poi nted out t hat the
d eclaration filed in support of the opposition o nly evidenced service of the complai nt o n her c ou nsel

. She argued that even i f h e r co u nsel had actual
kn owledge of the adversary proceeding, such knowledge could not be
im puted to her a nd woul d not ex cuse comp liance with Rule 7004 and Civil Rule 4(m)

. The bankruptcy court held a hearing on the M otion , which SSA d id
not attend. Thereaf t e r , the bankrupt cy c o urt enter ed an order : (1) fi nding that the summons and comp laint ha d not been served on Hillyer ; ( 2) findin g that SSA had not demonstr ated cause to extend the service
deadline ; and (3) granting the Mo tion

. This appeal followed

. II I. J U R ISDICTION The bankruptcy court h ad jurisdicti on under 28 U.S.C. §§ 1334 and5 15 7(b) (2 ) ( B)

. W e have jurisdiction under 28 U .S .C

. § 158. 3
IV

. ISSUE
Did the bank ruptcy c o urt abu se its discretion in dism i ssi ng the
adv e rsary proceeding for insufficient servic e of process ?
V. STAN DARD O F REVIEW
We review the bankruptcy court ’ s order dismis sing the adversary proceeding for failure t o pro perly serve the summons and com plaint f o r an abuse of discretion. Oyama v . S heehan ( In re Sheehan ) , 253 F.3d 507, 511 (9th Cir. 2 001)

. The bankruptcy cou rt abuses its discretion if it applie s the
wrong legal standard or its findings are illogical, imp lausi ble, or without support in the record. S ee TrafficSch ool.com, Inc. v. E d r ive r Inc. , 65 3 F.3d 820, 832 (9th Cir. 2011). We may a f f irm on any ground fair ly supported by the record

.

3 The or der on appeal , which dismissed the a dversary proceeding without prejudice , was a final order, not an interloc uto ry order. An order granting d ismissal is final and appealable “ if it (1 ) is a full adjudication of the issues, and (2) clearly evidences the judge ’ s intent ion that it be the cour t ’ s final act in the matter.” Nat ’ l Distrib

. Agency v. Nationwide Mut. Ins. Co

. , 117 F.3d 432, 433 (9th Cir . 1997) ( intern al citation and quotation

m a r ks omitted ). On the face of the complaint and as characterized by SSA in brief ing and during or al argumen t , the complaint strictly sought mone tary damages and injunctive relief und er sta te law claims. A s explaine d infra , SSA ’s continued pur suit of da mage s a gainst the estate is now ba rred b y the bankru ptcy discharge and S SA ’s failure to file a proof of claim

. A n d the injunctive relief SSA sought aga inst Hillyer can and should be reso lve d i n state court

. Therefore, the dismissal w as , in effect , “ with prejud ice

. ” See Montes v. United States , 37 F.3d 1347, 1350 (9th Cir. 1994 ) ( “ [T] he effect of a dismissal without p rejudice may be to end the litigation in the court involved, but not to a ct as an adjudication on the mer its or to bar the filing of a similar acti on in another court. In such a case, the dismissa l wo u ld be final an d appealable. ” ( inte rnal citation and q u o tation ma rks omitted ) ).6 Leavitt v. Soto (In re Leavit t) , 171 F.3d 1219, 1223 (9 th Cir. 1999).
VI

. DIS CUSSION
Rule 7004 sets forth th e procedure for serving a summons in an

a d ver sary proce e ding. I f jurisdiction is consistent with t he Constitution and
laws of the U nited Sta tes , personal jurisdiction over a def endant m ay be
ob tained by servi ng a s ummons or f ilin g a waiver of service in accordance
with R ule 7004 and the subdivisions of Civil Ru le 4 made applicable to adversary proce e d i ngs

. R ule 7004( f )

. W hen the defendant is a debt or in an open bankruptcy case , s ervice o f the su mmons may be made through first
cl as s mail postage prepaid “ by mailing a cop y of the summon s and complaint to the debto r a t the addr ess shown in the petition o r to such other address as the debtor may designate in a filed writing. ” Rule
700 4(b)(9). In addi tion, if the debtor is represent ed b y an attorney , then
service must also be m ade o n the de btor ’ s attorne y by means aut horized
under Civil Rule 5(b)

. Rule 7004 ( g )

. Rule 7004(a) incorporates Civil Rule (4)(m), which provides in
per tinent par t that : [i] f a defendant is not served within 90 days after the complaint is filed, the c o urt

-- on motio n or on its own after noti ce to th e plaintif f

-- must dismiss the a ction w i t hout prejudice against that defendant or order that service be made within a sp ecified time

. But if the plaintiff shows good ca use for the failure, the court must exte n d th e time for service for an appropriat e peri od

.
Civil Rule (4)(m)

.7 SS A asserts tha t the bankruptcy court erred in determining that SSA
failed to serve Hillyer wi th the sum mons and complaint

. But the only
evidenc e before the bankruptcy co u r t a nd on appe al establishes the contrary

. S SA neither argued nor present e d any evi dence that it tim e l y mailed a co py of the summons and complaint to Hill y e r as required by
Rule 700 4(b) and Civil Rule 4(m). Nor did i t pres ent any ev idence that it mailed a copy of the summons to Hillyer ’ s counsel in compliance with R ule
7004 ( g). T hus, there is no merit to S SA ’ s argu ment that the bankruptcy

court improperl y det ermined th at SSA failed t o tim ely serv e Hillyer.
While n ot challe n ged on appeal, we note that the bankruptcy court
also properl y determined that SSA did not d emonstra t e that good c a use existed for its n on compliance w ith R ule 7004 and Civil R u le 4(m)

. SSA ’ s
i gno rance of s ervice rul es “ a nd half

- hearted attempts t o serve th e defendant do not constitute good cause [

. ] ” Cartage Pac. , Inc. v. Waldner ( In
re Waldner ) , 183 B.R. 879, 8 82 ( 9th Cir. BAP 1995)

. Tho u g h good caus e h ad not been shown , t he bankruptcy court ha d
broad discretion to e xtend th e perio d for servic e

. E faw v. Wil liams , 473 F. 3d 1038, 1041 (9th Cir. 2007) ; In re Sheehan , 253 F.3d at 513

. There is no spec ific
test for a bankruptcy court to employ i n determin ing whether to exercis e
its discretio n

. A mong other things , it “ may c onsid er factors ‘ like a statute of
limita t ions bar , prejudice to the defendant , actual notice of a lawsuit, and
eventual service. ’ ” E faw , 473 F.3d at 1041 (quoting Tro xell v. F e dders of N. Am., Inc. , 160 F.3d 3 8 1, 383 (7th C ir. 1998) )

. Admittedly, the reco rd do es not8 indicate that Hilly er suff ere d meaningful prejudice by SSA’s delay in
service

. Nevertheless , and c ontrary to S SA ’ s ur ging , t he facts of thi s case clearly did not r e q uire t he exercise of discretion t o ex tend the s ervice period under Civil Rule 4 (m).
S SA did not artic ulate a ny cogni za ble prejudice before the bankruptcy court or us

. H ad the bankruptcy c ourt granted SSA an

ext ension of time to serv e Hillyer , Hillyer ’ s d ischarge wou ld have

never t hel es s enjoined SSA from c ontin uing to seek damages a gains t h er

. See § 5 24(a)(2). In addition, SSA would not be entitled to a distribution from the bankruptcy estate on its cla ims because it failed to file a proof of
claim and b e c ause the chapter 7 tr u ste e i ssue d a r eport of no distribution

. Thus, SSA would be li mit ed to its p ursuit of in junctive r elief

. And as to injunc tive relief cl aim s, the majority of court s hold that
these claims survive dis charge ; Hillyer does not dispute t h at SSA can refile , presumably in the state court, to seek such relief

. See Kenn edy v . M edicap
Pharm a cie s , Inc

. , 2 67 F3d 49 3, 497

- 98 (6th Cir. 2001) ; In re Udell , 18 F.3d 403 , 408

- 09 (7th Cir. 1994) ; Dent Wizard Int ’ l C orp. v. Brown ( In re B rown ) , 237 B.R

. 740, 745 (Bankr. C.D. Cal. 1 999)

. We also note that SSA did not assert that its cla ims w ould be bar r ed by a s tat ute of limitations foll owing a dismissal o f the a dversary proceeding

. But e ven in such a ca se , the requirements of “ [ Ci v il ] R ule 4(m)

are not a l tered by the intervention of a time bar that precludes refiling , ”
such that the ban kruptcy cou r t ’ s aut hority to dismiss the complaint would9 be e liminated

. Herrero v. Guzman ( In re Guzman ) , No. CC

- 10

- 1013

- HDMk , 2 010 WL 62599 9 4, at * 5 ( 9th Ci r. BAP Sept. 2 0 , 2010) ; s ee also Guerrero v.
Baca , No. 03

- 57203 , 154 F. App ’ x 601 (9th Cir. 200 5 ) ; Deluxe Mktg., Inc. v.
Deluxem arketingincscam.wordpress.com , No. CV

- 13

- 0 2144

- PHX

- SPL, 2014 WL 4162270, at *5 ( D. Ariz. Aug. 20, 2014)

. SSA has waived any such prejudice
arg u m ent, and it would not be dispositive if raised. Finally , w e disa g ree wit h SSA th at it established tha t Hillyer r eceiv e d a copy of the complaint or otherwis e received actual notice of the adversary proceeding. H illyer stated in a decl a ration that she nev e r received service of the complaint , and S SA only submitted eviden c e t h at it
mai led the complaint to Hi llyer ’ s cou nsel. A defendant “ could not be presumed to have actual notice merely because the complaint was se rved on his attorney.” I n re Sheehan , 253 F

. 3 d at 512 n.5

. And n otice or aware ness is only part of the equation; i t i s be yon d d oubt that the bank ruptc y court never acquired jurisdiction over H illyer in the adversary procee ding
becaus e SSA never served the summons. Indeed , S SA did not serve Hillyer

e v en after it became a w are of the def e cts in it s service attempt.
Based on th e f oregoing, we disc ern no ab use of discretion in t he bankruptcy court ’ s dismissal of the adversar y proceedi n g for failure to properly serve the summons and complaint

. VII. C O NCL U S ION According ly, we AFFIRM.