LAS VEGAS (CN) - A U.S. financial services company lost its bid to sue a Canadian technology firm for fraud after failing to provide service of summons.
Panliant Financial Corp.'s fraud complaint against ISee3D was dismissed on Jan. 16 under the statute of limitations.
U.S. District Court Judge Philip M. Pro did not give Nevada-based Panliant leave to amend the complaint.
ISee3D is a Canadian company that owns several patents and specializes in technology that provides a 3D image from a single lens.
Panliant accused ISee3D and two of its board members of RICO violations, fraud, misrepresentation, unjust enrichment and breach of fiduciary duties. The August 2012 lawsuit arose from a consulting contract between ISee3D and Panliant.
Pro in December 2014 denied a motion by Panliant seeking an $11.86 million judgment against ISee3D and other defendants after a federal court clerk entered a default judgment for not responding to the complaint.
Pro vacated the default entry when he denied the motion for the $11.86 million judgment, ruling that Panliant did not serve ISee3D until 185 days after the court-imposed Aug. 5, 2013, deadline. Panliant did not ask for an extension to serve the defendants, Pro said.
Pro ordered Panliant to show cause why he should not dismiss the complaint against ISee3D due to Panliant's failure to serve summons before the deadline or to ask for an extension.
Panliant provided Pro with affidavits showing its former attorney withdrew from the case about a month before the deadline, and its new counsel had trouble learning the status of the service of summons.
In the affidavits, Panliant's current attorney, Allyson R. Noto, said there is "good cause" for not providing service of summons, because "I had no information available prior to the expiration of the deadline" showing service of summons had not been done, Pro wrote.
Noto said she tried to serve ISee3D via FedEx, but the company's legal counsel refused to accept it at ISee3D's last known address, according to Pro.
Noto told Pro she eventually hired a process server, who served the summons and amended complaint "by mail slotting them" at the address listed for ISee3D on its corporate profile on file with Corporations Canada.
Noto also said the delay in providing service of summons did not prejudice ISee3D "because it has had ample time to participate in the lawsuit, but has failed to do so."
Noto said that dismissal would cause Panliant to "suffer severe prejudice" due to the expiration of statutes of limitation.
But because Panliant did not serve defendants by the deadline, Pro says, Panliant bears the burden of showing "good cause," which the court determines on a "case by case" basis.
"Generally, good cause is equated with diligence," Pro wrote. "Additionally, a serving party may need to show that the party to be served received actual notice of the lawsuit, the party to be served would suffer no prejudice, and the serving party would be severely prejudiced if the complaint is dismissed."
Pro said Panliant twice asked for and received extensions to provide service of summons, and missed the final deadline by 185 days. There is no proof ISee3D was served, Pro wrote, so he can't evaluate whether it knew about the lawsuit.
Although Panliant showed it would be prejudiced if its complaint against ISee3D were dismissed, Pro says it has not proven diligence in serving the defendant.
Pro denied a motion by Panliant to extend the service of summons deadline a third time and dismissed the case against ISee3D.
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