IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 08-30114

STANLEY A. MILLAN

Plaintiff-Appellant

v.

USAA GENERAL INDEMNITY COMPANY, also known as USAA GIC

Defendant-Appellee

Appeal from the United States District Court 

for the Eastern District of Louisiana

Before JOLLY, BARKSDALE, and HAYNES, Circuit Judges.

HAYNES, Circuit Judge:

Stanley Millan appeals the district court’s order dismissing his claims for

failing to effect timely service on the proper defendant under FED. R. CIV. P.

4(m). Although the district court’s dismissal was without prejudice, both parties

agree that the running of the applicable statute of limitations likely bars Millan

from refiling his claims. Because the record does not support dismissal of

Millan’s claims under the heightened standard of review applicable to effective

dismissals with prejudice, we reverse and remand as described below.

I. FACTS

United States Court of Appeals

Fifth Circuit

F I L E D

October 16, 2008

Charles R. Fulbruge III

Clerk
No. 08-30114

1

It appears to be disputed exactly which entity Millan dealt with in the pre-suit

negotiations. Appellee suggests it was USAA GIC, and the district court’s opinion used the

name “USAA GIC.” Millan, however, argues that he dealt with USAA and that USAA’s

involvement in the pre-suit negotiations is one of the reasons he initially sued the wrong

entity. No evidentiary hearing was conducted, and the district court did not purport to make

findings of fact on these issues. The district court’s opinion cites some facts not supported by

the evidence in the record. For example, it states that USAA GIC sent a check to Millan,

whereas Millan filed a copy of the check stub and check showing the payor as “United States

Automobile Association [USAA].” We use the version of the facts supported by uncontradicted

evidence.

2 While service under state law is one method of service under the Federal Rules of Civil

Procedure, it is not the only one. No one addressed, so we do not, whether service upon CT

Corporation was proper underFed. R. Civ.P. 4(h)(1)(B), allowing service upon “any other agent

authorized by appointment or by law.” (emphasis added).

2

In August 2005, Millan obtained a StandardFlood InsurancePolicy for his

residence issued by USAA General Indemnity Corporation (USAA GIC) under

the National Flood Insurance Program. Hurricane Katrina damaged Millan’s

residence later that month. Millan attempted to resolve his claim with USAA,1

a company division of USAA GIC but not the issuer of Millan’s flood policy, but

USAA denied Millan’s proof of flood loss. Millan appealed USAA’s denial to

FEMA, which granted Millan’s request in part, recommending that “USAA”

review Millan’s flood claim and use rates from Home Building Association of

New Orleans to calculate his loss. At some point, Millan received a check from

USAA, but he contended it was inadequate and returned it. Nothing suggests

that USAA or USAA GIC took any other action with respect to Millan.

On May 18, 2007, Millan, a practicing attorney, filed a pro se suit against

USAA alleging breach of contract and a number of other claims. On August 24,

2007, Millan attempted to serve USAA via CT Corporation, but the service was

returned unexecuted because, under Louisiana law, the Louisiana Secretary of

State serves as the agent for service of process for foreign insurers. LA. REV.

STAT. ANN. § 22:1253. Millan alleges thatinformation on the Secretary of State’s

website led him to believe that CT Corporation served as USAA’s agent for

service of process.2
No. 08-30114

3 The language of Rule 4 was amended as part ofthe general restyling ofthe Civil Rules

effective December 1, 2007. The changes to Rule 4(m) have no bearing on the issues in this

appeal. 

3

On September 6, 2007, the district court issued an order that Millan

interpreted to extend the time for filing service until October 9, 2007. The order

reads in full:

A review of the record indicates that no service of the complaint has

been made upon the defendant(s).

Rule 4(m) of the Federal Rules of Civil Procedure provides:

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.3

Accordingly;

IT IS ORDERED that on or before October 9, 2007, plaintiff shall

file into the record the return of service of process that has been

effected on the defendant(s). Failure to do so will result, without

further notice, in the DISMISSAL of any unserved defendants.

Thereafter, Millan attempted service on USAA through the Louisiana Secretary

of State, but the service was returned unexecuted because Millan failed to pay

the proper fee. Millan corrected this error on September 21, 2007, timely serving

USAA under his interpretation of the district court’s September 6, 2007 order,

but four days after the 120-day deadline for service under Rule 4(m). It is

undisputed that Millan filed the return of service by the order’s October 9

deadline.

USAA GIC entered the case and sought dismissal of Millan’s claims on a

number of grounds, including failure to effectuate service by the Rule 4(m)

deadline of September 17, 2007. Millan opposed the motion, arguing that the
No. 08-30114

4 The district clerk’s delay in entering the amended complaint into the record caused

the district court’s misapprehension that Millan had not filed an amended complaint.

4

district court’s September 6, 2007 order extended the service deadline to October

9, 2007, and, alternatively,thatthe ambiguous nature ofthe order created “good

cause”for a four-day extension. On November 6, 2007, USAA GIC served a reply

brief, arguing for the first time that Millan sued and failed to timely serve the

correct USAA entity, namely USAA GIC. In an attempt to cure this defect,

Millan filed, on November 16, 2007, an amended complaint naming the proper

defendant, USAA GIC.

On November 20, 2007, the district court entered an order dismissing

Millan’s complaint without prejudice on the ground that Millan had not shown

“good cause”for failing to timely effect service. In response to Millan’s argument

that his amended complaint naming USAA GIC should relate back to his

original complaint,the district courtfound that Millan had notfiled an amended

complaint.4

Within the requisite ten-day period, Millan filed a motion to amend or

alter the district court’s judgment under FED. R. CIV. P. 59(e), arguing that

significant confusion as to the proper identity of the defendant led him to

erroneously sue USAA instead of USAA GIC. The district court denied Millan’s

motion, holding that regardless of Millan’s recent remedial action in filing an

amended complaint naming USAA GIC, Millan’s failure to sue and serve the

proper party for six months warranted dismissal of his complaint. Millan’s

claims are before this Court.

II. DISCUSSION

USAA GIC’s motion to dismiss initially rested on one defect – the failure

to serve any defendant within the 120 days prescribed by Rule 4(m). In its reply,

it raised a separate defect – when Millan did serve someone, he served an

improper defendant, USAA. Thus, USAA GIC argues to this Court, Millan both
No. 08-30114

5 The parties agree that the limitations period of 42 U.S.C. § 4072 would likely bar

Millan from refiling his claims.

5

failed to effectuate timely service and failed to sue the proper defendant. We

address each issue in turn. 

On the question of whether service on USAA was timely, Millan argues

that the district court’s September 6, 2007 order established “good cause” under

Rule 4(m) mandating a four-day extension for service because the order either

extended the deadline for service until October 9, 2007, or, alternatively, the

order can be read reasonably to grant such an extension. 

A. Service as to USAA

Rule 4(m) permits a district courtto dismiss a case without prejudice ifthe

plaintiff fails to serve the defendant within 120 days of filing the complaint.

Thompson v. Brown, 91 F.3d 20, 21 (5th Cir. 1996). If, however, the plaintiff can

establish good cause for failing to serve the defendant,the court must extend the

time for service. Id. Even if the plaintiff lacks good cause, the court has

discretionary power to extend the time for service. Id. A discretionary extension

may be warranted, “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 (1993).

Assuming arguendo that Millan cannot show good cause, we find that the

district court erred in refusing to grant Millan additional time for service under

the discretionary provisions of Rule 4(m). Millan argues, and USAA GIC agrees,

that where the applicable statute of limitations likely bars future litigation, a

district court’s dismissal of claims under Rule 4(m) should be reviewed under the

same heightened standard used to review a dismissal with prejudice.5 See

Boazman v. Econ. Lab., Inc., 537 F.2d 210, 213 (5th Cir. 1976) (“where the

dismissal is without prejudice, butthe applicable statute of limitations probably

bars further litigation, the standard of review of the District Court’s dismissal
No. 08-30114

6 Our Court recently issued an unpublished (and, therefore, not binding) opinion

seeming to apply a more stringent analysis of the plaintiff’s conduct than this standard of

review suggests to a Rule 4(m) dismissal. Newby v. Enron Corp., No. 06-20658, 2008 U.S. App.

LEXIS 14041, at *12-*13 (5th Cir. July 2, 2008) (unpublished). However, that case involved

particularly egregious facts where the plaintiff, unlike this one, never attempted servicewithin

6

should be the same as is used when reviewing a dismissal with prejudice.”). We

have recognized that dismissal with prejudice “is an extreme sanction that

deprives a litigant ofthe opportunity to pursue his claim.” Gonzalez v. Firestone

Tire & Rubber Co., 610 F.2d 241, 247 (5th Cir. 1980). Consequently, this Court

has limited district courts’ discretion to dismiss claims with prejudice. See Price

v. McGlathery, 792 F.2d 472, 474 (5th Cir. 1986). A district court’s “dismissal

with prejudice is warranted only where ‘a clear record of delay or contumacious

conduct by the plaintiff’ exists and a ‘lesser sanction would not better serve the

interests of justice.’” Gray v. Fid. Acceptance Corp., 634 F.2d 226, 227 (5th Cir.

1981) (quoting Durham v. Fla. East Coast Railway Co., 385 F.2d 366, 368 (5th

Cir. 1967), and Brown v. Thompson, 430 F.2d 1214, 1216 (5th Cir. 1970)).

Additionally, where this Court has affirmed dismissals with prejudice, it has

generally found at least one of three aggravating factors: “(1) delay caused by

[the] plaintiff himself and not his attorney; (2) actual prejudice to the defendant;

or (3) delay caused by intentional conduct.” McGlathery, 792 F.2d at 474. 

Millan and USAA GIC agree that dismissal of Millan’s claims will likely

have the effect of dismissal with prejudice and thus should be reviewed under

this heightened standard. Although the heightened standard of review is

generally applied to dismissals for failure to prosecute after the defendant has

been served, we have also used it to review dismissals for failure to prosecute

where the underlying basis was untimely or insufficient service. Sealed

Appellant v. Sealed Appellee, 452 F.3d 415, 416-18 (5th Cir. 2006); Porter v.

Beaumont Enters. & Journal, 743 F.2d 269, 271-72 (5th Cir. 1984); Veazey v.

Young’s Yacht Sale & Serv., Inc., 644 F.2d 475, 476-77 (5th Cir. 1981).6 We fail
No. 08-30114

the 120 days and failed to attempt service for more than 1,000 days. Id. at *11. Even if Newby

were binding, it is inapposite here.

7

to see any principled reason why a district court’s dismissal of claims due to a

delay between filing and service should be subjected to a lower standard of

review merely because the district court characterizes the delay as a failure to

timely or properly serve the defendant, as opposed to a failure to prosecute.

Indeed, the heightened standard of review is to be applied to the “equivalent” of

a Rule 41(b) dismissal. Berry v.CIGNA/RSI-CIGNA, 975 F.2d 1188, 1190 (5th

Cir. 1992). Accordingly, we apply that standard to review the district court’s

dismissal of Millan’s claims under Rule 4(m).

1. Clear record of delay or contumacious conduct

This Court has recognized that “delay which warrants dismissal with

prejudice must be longer than just a few months; instead, the delay must be

characterized by ‘significant periods of total inactivity.’” McNeal v.Papasan, 842

F.2d 787, 791 (5th Cir. 1988) (quoting John v. Louisiana, 828 F.2d 1129, 1131

(5th Cir. 1987)). Our precedents have generally reserved dismissals with

prejudice for “egregious and sometimes outrageous delays.” Rogers v. Kroger

Co., 669 F.2d 317, 321 (5th Cir. 1982). “In short, these are cases where the

plaintiff’s conduct has threatened the integrity of the judicial process, often to

the prejudice of the defense, leaving the court no choice butto deny that plaintiff

its benefits.” Id.

We do not perceive a clear record of delay in this case. Millan served

USAA four days after the Rule 4(m) deadline for service, after making two

attempts at service within the 120 days.

Likewise, the record does not establish that Millan’s delays in effecting

service resulted from contumacious conduct. We have recognized that “it is not

a party’s negligence–regardless of how careless, inconsiderate, or

understandably exasperating–that makes conduct contumacious; instead it is
No. 08-30114

8

the ‘stubborn resistance to authority’ which justifies a dismissal with prejudice.”

McNeal, 842 F.2d at 792 (quoting John, 828 F.2d at 1131-32); see also Gray, 634

F.2d at 227-28 (finding delay caused by plaintiff’s negligent, but not

contumacious conduct, insufficient to warrant dismissal with prejudice).

Millan’s conduct, while certainly negligent, cannot be characterized as

contumacious. Indeed, Millan complied with the district court’s order by filing

the return of service upon USAA into the record by October 9, 2007. The court

then issued an order in the case to “pass for 30 days; obtain answer or default,”

suggesting that the court believed Millan had complied with its order. This

conduct is far short of “contumacious.” 

2. Aggravating Factors

Further, the record in this case does not contain any of the three

aggravating factors listed above. First, arguably the delay in this case resulted

from Millan’s actions in his capacity as a lawyer, rather than in his capacity as

a litigant. Second, the only potential prejudice identified by USAA GIC is that

of having to defend the case on its merits and the possibility of someone having

to pay damages to Millan. That is not the sort of prejudice that requires

dismissal. Finally, as mentioned, the delay in this case resulted from Millan’s

negligence; no evidence shows intentional misconduct. 

B. Service as to USAA GIC

USAA GIC, of course, was not “served” in the sense of receiving a

summons with its name on it until more than a month after even the October 9

date in the district court’s order and approximately two months after the Rule

4(m) deadline. USAA GIC’s original motion to dismiss made no mention of the

alleged misnomer; instead, it treated the service as if it were service on USAA

GIC and attacked only the delay in initial service. It also made a number of
No. 08-30114

9

substantive arguments about the merits of the case, not pertinent here. It was

only in USAA GIC’s reply brief, served November 6, 2007,that USAA GIC stated

that the wrong entity had been served. Shortly after that document was filed,

on November 16, 2007, Millan filed an amended complaint naming the proper

defendant, USAA GIC. While we have recognized that delays occurring between

filing and service are more serious than those occurring following service,Porter,

743 F.2d at 272, here, USAA GIC received notice of Millan’s claims just days

after the Rule 4(m) deadline when Millan served USAA. This fact is evidenced

by USAA GIC’s appearance on behalf of USAA shortly after Millan served

USAA. These facts do not establish a clear record of delay and, indeed, suggest

the opposite. See Callip v. Harris County Child Welfare Dep’t, 757 F.2d 1513,

1519-21 (5th Cir. 1985) (clear record of delay where plaintiff missed nine

deadlines over two and one-half years); Morris v. Ocean Sys., Inc., 730 F.2d 248,

252 (5th Cir. 1984) (holding that court “exceeded its well-defined discretion” in

dismissing for failure to prosecute when only eight months elapsed from date of

the first status conference to the date of its dismissal).

The district court’s original order reflected an incorrect belief that no

amended complaint naming the proper defendant had been filed. Upon motion

for reconsideration, the court noted the filing of the amended complaint but

concluded that Millan did not show “good cause.” The district court did not

consider the factors outlined above. Nor did it analyze any of the issues raised

by USAA GIC’s failure to raise this issue sooner. It did not analyze the

substantial evidence filed by Millan suggesting that USAA GIC caused the

confusion as to the proper party by repeatedly sending materials under the

USAA name. Indeed, USAA GIC’s original motion to dismiss actually stated

that it was served and then focused on the four-day delay discussed above.

Because the district court had already determined that the original service of

process was untimely served, it did notfully consider the issues presented by the
No. 08-30114

10

amended complaint. We decline to address these issues for the first time on

appeal. Instead, we remand for consideration of all factors under FED. R. CIV.

P 15(c) in view of our holding that the original service delay on USAA did not

justify dismissal and in view of the authorities cited above.

III. CONCLUSION

Accordingly, we REVERSE and REMAND for further proceedings

consistent with this opinion.