specifically found that the plaintiff there was not prejudiced since he had an opportunity to file a

motion for reconsideration. /d.

Like the plaintiff in Blaney, Mr. Fadayiro was not prejudiced. He had an opportunity to
have the Bankruptcy Court consider his arguments. In fact, he filed a motion “to Amend or Alter
Judgement” on December 18, 2001, two weeks after the Bankruptcy Court entered its Order
dismissing his complaint. Once again, though, Mr. Fadayiro’s inattentiveness to his own affairs
hurt him. On February 4, 2002, the Bankruptcy Court struck that motion due to Plaintiff's failure
to provide notice and present in the time prescribed by the Bankruptcy Rules.* The fact that the
Bankruptcy Court did not ultimately consider the merits of his motion for reconsideration is
immaterial, particularly here, since it was a direct result of Mr. Fadayiro’s own failure to act.

The fact is, Mr. Fadayiro had the opportunity to have his arguments heard, and that is sufficient

to satisfy the Seventh Circuit’s harmless error standard.

‘Even if Mr. Fadayiro had been diligent regarding his motion to reconsider in the
Bankruptcy Court, it is not clear he would have been able to prevail, Rule 4(m) does permit a
court to extend the amount of time to effect service of process “if the plaintiff shows good cause
for the failure...” Fed.R.Civ.P.4(m). The Seventh Circuit has defined “good cause,” for
purposes of the rule, to mean “a valid reason for delay, such as the defendant’s evading service.”
Coleman y. Milwaukee Bd. of Sch. Dirs., 290 F.3d 932, 934 (7th Cir. 2002). Moreover, the
Seventh Circuit has held that substantial extenuating factors are needed to constitute good cause.
Floyd v. United States, 900 F.2d 1045, 1047 (7th Cir. 1990) (citing “sudden illness or natural
disaster” as examples). Without question, even if Mr. Fadayiro had failed to show “good cause,”
the Bankruptcy Court could have nonetheless exercised its discretion to grant him more time to
perfect service. See Henderson v. United States, 517 U.S. 654, 662-63 (1996) (noting that the
1993 amendments to Rule 4(m) grant courts discretion to enlarge the 120-day period even when
plaintiff fails to show good cause). 1 presume that Judge Squires was aware of this at the time he
issued his Orders. Perhaps if Mr. Fadayiro had followed up on his motion to reconsider, the
Bankruptcy Court would have exercised its discretion in this manner.

5


Rule 7004 of the Federal Rules of Bankruptcy Procedure states that Rule 4(m) of the
Federal Rules of Civil Procedure applies in adversary proceedings. Fed.R.Bankr.P 7004(a).
Rule 4(m) provides, in pertinent part:

Time Limit for Service. If service of the summons and complaint is not made

upon a defendant within 120 days after the filing of the complaint, the court, upon

motion or on its own initiative after notice to the plaintiff, shall dismiss the action

without prejudice as to that defendant or direct that service be effected within a

specified time; provided that if the plaintiff shows good cause for the failure, the

court shall extend the time for service for an appropriate period.

Fed.R.Civ.P. 4(m).

It is clear that Mr. Fadayiro failed to comply with requirements of Rule 4(m),’ and he
does not argue this point. Rather, he argues that the Bankruptcy Court erred by dismissing his
adversary proceeding without first affording him notice. He focuses on the language of the Rule
stating that the court “on its own initiative after notice to the plaintiff, shall dismiss the
action...” Jd. (emphasis added). Mr. Fadayiro contends that he did not receive notice from the
Bankruptcy Court prior to the dismissal, and thus asks me to reinstate his case in the Bankruptcy
Court.

Without question, the plain language of Rule 4(m) requires a court to notify a plaintiff
before dismissing an action for improper service sua sponte. However, the Seventh Circuit holds
that while “the better course is for the district court to give actual notice before entering an order

dismissing the case . .. where the plaintiff was not prejudiced by the lack of notice, the error is

harmless.” Blaney v. West, 209 F.3d 1027, 1032 (7th Cir. 2000). In addition, the Blaney court

>Two hundred cight days elapsed between the filing of Plaintiff's complaint and the
issuance of the Bankruptcy Court’s dismissal Order.

4


In fact, the motion to reconsider was not even Mr. Fadayiro’s only option. The
Bankruptcy Court—consistent with the dictate of Rule 4(m)—dismissed Mr. Fadayiro’s
adversary proceeding without prejudice. Accordingly, Plaintiff—subject, of course, to the
applicable statute of limitations—could have simply re-filed it, effected the necessary service of
process, and proceeded to have the Bankruptcy Judge consider the merits (or lack thereof) of his

complaint.

At bottom, Mr. Fadayiro received notice from the judgment itself and had ample
opportunity after the entry thereof to make his case to the Bankruptcy Court. Accordingly, he
was not prejudiced by the Bankruptcy Court’s failure to notify him before dismissing his

complaint sua sponte.

The decision of the Bankruptcy Court is AFFIRMED.

ENTER:

James B. Zagel
United States District Judge

DATE: January 17, 2007


ams

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

PRINCE ADESEGUN FADAYIRO,
Plaintiff-Appellant,
v. No. 02 CV 2483
Judge James B. Zagel
AMERIQUEST MORTGAGE, CO. fk/a
LONG BEACH MORTGAGE CO.,

Defendant-Appellee.

MEMORANDUM OPINION AND ORDER

This matter is before me on Plaintiff-appellant Fadayiro’s appeal of the Bankruptcy
Court’s December 4, 2001 Order dismissing his adversary proceeding,
I FACTUAL AND PROCEDURAL BACKGROUND

On March 20, 1998—during the course of Mr. Fadayiro’s Chapter 7 Bankruptcy
case—Ameriquest filed a motion to modify the automatic stay with respect to a piece of property
owned by Plaintiff and located at $400 S. Hyde Park Blvd, in Chicago (“Property”). On March
25, 1998, the Bankruptcy Court granted what appears to be a routine modification to the
Automatic Stay."

Thereafter, the Property was foreclosed upon. This upset Mr. Fadayiro, who responded

by filing an adversary proceeding against Ameriquest and a variety of other defendants. His

'The record indicates that Mr. Fadayiro had no equity in the property, that he was not
making payments on the property, and that Ameriquest had no adequate protection. See 11
U.S.C. § 362(d)(2) (2004). Since Mr. Fadayiro filed his case under Chapter 7, Ameriquest only
had to prove that the debtor did not have equity in the property in order to have the stay modified,
2 Norton Bankr. L. & Prac. 2d § 36:47 (2006).


complaint alleged that Ameriquest and the other defendants acted improperly in foreclosing on
the Property.

When filing the adversary complaint, Plaintiff also filed a motion for appointment of
counsel and a motion to direct the clerk to issue summons and serve process. Plaintiff—in what
would become customary—took no action to prosecute either his adversary complaint or any of
the motions that he had filed.

On December 4, 2001, the Bankruptcy Court dismissed Mr. Fadayiro’s adversary
complaint because he failed to serve the defendants with a copy of the summons and complaint
within the time limits imposed by Federal Rule of Bankruptcy Procedure 7004.”

On December 18, 2001, Mr. Fadayiro filed a motion asking the Bankruptcy Court to
reconsider its ruling. In the motion, he argued that if he would have had notice of the Court’s
intent to dismiss his complaint, he would have been able to establish that he was entitled to more
time to serve the complaint because of his “poverty” and the fact that he was in “Federal
custody.”

Though he filed the motion to reconsider, Plaintiff again took no further action to
advance that motion. On February 4, 2002, the Bankruptcy Court struck Plaintiff’s motion to
reconsider “for failure to provide notice and present in the time prescribed by Local Bankruptcy
Rule 402(b) and 402(E)(1).”

Plaintiff then appealed the dismissal of his action to this Court. His appeal to this Court

has endured myriad procedural twists and turns, including my decision to dismiss his

?Federal Rule of Bankruptcy Procedure 7004 incorporates by reference Federal Rule of
Civil Procedure 4.


appeal—again, for failure to prosecute—and the Seventh Circuit Court of Appeals’ decision to
reinstate it.

It is noteworthy that we are still nowhere near a consideration of the substantive merits of
Mr. Fadayiro’s underlying complaint. The Bankruptcy Judge dismissed his original complaint
for, in effect, failure to prosecute. The Bankruptcy Judge struck his motion for reconsideration
for, in effect, failure to prosecute. And I dismissed his appeal for failure to prosecute. Mr.
Fadayiro’s ongoing recalcitrance has taken up years of the Bankruptcy Court’s, this Court’s, and
the Seventh Circuit Court of Appeals’ time. And now, though the Appeals Court has remanded
the case here, the question before me still has nothing to do with the nature of Mr. Fadayiro’s
underlying complaint. The question, rather, is whether the Bankruptcy Court erred in dismissing
his adversary complaint for, in effect, his failure to prosecute it.
I. STANDARD OF REVIEW

A federal district court has jurisdiction, pursuant to 28 U.S.C. § 158 (2006), to hear
appeals from the bankruptcy court. On the appeal, the district court reviews the bankruptcy
court’s factual findings under the clearly erroneous standard and reviews the bankruptcy court’s
legal findings under the de novo standard. See In re A-I Paving and Contracting, Inc., 116 F.3d
242, 243 (7th Cir, 1997).
III. DISCUSSION

The crux of Plaintiff's appeal is that the Bankruptcy Court erred in dismissing his

adversary proceeding without first giving him advance notice.