                              In the

 United States Court of Appeals
               For the Seventh Circuit

No. 06-3917

U NITED STATES OF A MERICA,
                                                     Plaintiff-Appellee,

                                  v.

LAWRENCE J. LIGAS,
                                                 Defendant-Appellant.




             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
          No. 04 C 930—James F. Holderman, Chief Judge.



    A RGUED D ECEMBER 3, 2007—D ECIDED D ECEMBER 1, 2008




 Before BAUER, EVANS, and SYKES, Circuit Judges.
  SYKES, Circuit Judge. Lawrence Ligas appeals the district
court’s grant of summary judgment to the government for
$319,883.60 in unpaid taxes, interest, and penalties. Al-
though Ligas raises multiple arguments in support of
reversal, we need only consider one: lack of personal
jurisdiction. The government never properly served Ligas.
2                                                 No. 06-3917

It sought multiple extensions of time to effectuate service,
asserting that if the case was dismissed for lack of personal
jurisdiction, it could not be refiled because the statute of
limitations had expired. After giving the government nearly
a year to serve Ligas, the district court dismissed the govern-
ment’s complaint for failure to serve process as required
under Rule 4 of the Federal Rules of Civil Procedure.
  Because the government had imposed two liens on Ligas’s
property, Ligas subsequently asked the court to extinguish
the liens. The district court treated Ligas’s motion as a
request for affirmative relief that waived his prior objection
to personal jurisdiction and on that basis reinstated the
government’s complaint. That was an error. Although
jurisdictional defenses may be waived, Ligas’s motion to
quash the tax liens was not inconsistent with his jurisdic-
tional objection, which he continuously maintained and on
which he prevailed when the district court dismissed the
case under Rule 4(m). The government’s tax liens were only
valid if the government obtained a judgment against Ligas;
removing them was a consequence of and consistent with
the dismissal, since the government had maintained that the
suit could not be refiled. Ligas’s motion to quash was not a
voluntary submission to the court’s jurisdiction, so there
was no basis to reinstate the government’s complaint.
Accordingly, we reverse and remand with instructions to
dismiss.


                       I. Background
  This case stems from Lawrence Ligas’s failure to pay more
than $300,000 in taxes, interest, and penalties. Between 1988
No. 06-3917                                                    3

and 1990, Ligas reported that he owed $26,134 in individual
federal income tax, but he did not submit payment when he
filed his tax returns. In addition, Ligas was the president,
sole stockholder, and director of L.J. Ligas, Inc., an electrical
contracting company, and it, too, owed back taxes. More
specifically, the company failed to pay $88,314 in income
and FICA taxes it claimed it withheld from employee
paychecks in the final three quarters of 1987 and the first
quarter of 1988. In 1991 the Internal Revenue Service
determined that Ligas was a responsible person of a
corporation that willfully failed to pay taxes under I.R.C.
§ 6672 and assessed a penalty against him. When Ligas
failed to pay these assessments, federal tax liens automati-
cally attached to his property under I.R.C. § 6321. Although
the IRS accidently released the liens in 2001, they were
reinstated in 2003. As of 2005, the government calculated
that Ligas owed $319,883.60.
  On February 6, 2004, just before the 10-year statute of
limitations expired, the government filed a complaint
seeking to reduce to judgment the unpaid assessments of
federal income taxes and the § 6672 penalty. Although Ligas
received a copy of the complaint and summons in the
mail, he refused to waive personal service of process. The
government thus embarked on an unsuccessful 15-month
effort to serve Ligas. When the government initially encoun-
tered difficulty serving Ligas within the normal 120-day
period, it asked the district court for additional time.
The district court granted two extensions of time to serve
Ligas and on September 9, 2004, authorized service by
publication as permitted by Rule 4(e)(1) and 735 Ill. Comp.
Stat. 5/2-206.
4                                                No. 06-3917

  In late 2004 the government missed two obvious chances
to accomplish service. Following the district court’s Septem-
ber 9 order authorizing service by publication, IRS agents
left a copy of the summons and complaint at Ligas’s
residence, claimed service by publication was perfected,
and moved for default judgment when Ligas did not answer
the complaint. Appearing for the limited purpose of
challenging the sufficiency of process, Ligas asked the court
to vacate the September 9 order and quash the service by
publication. At a hearing on December 7, 2004, the district
court concluded that the government had not complied with
the requirements of 735 Ill. Comp. Stat. 5/2-206 and quashed
the service by publication. The court then invited the
government to personally serve Ligas right then and there;
he was present in court, having appeared pro se for the
hearing. The government’s attorney did not have a copy of
the summons and complaint, however, and the opportunity
was lost. The court gave the government a third exten-
sion—until January 19, 2005—to serve Ligas.
  On January 31, 2005—after the third extension of time had
expired—the government asked for a fourth extension. On
March 1, 2005, the court granted the government’s request
and authorized service under Rule 4(e)(1) and 735 Ill. Comp.
Stat. 5/2-203.1, which allows a court to order service “in any
manner consistent with due process.” The district court
permitted the government to serve Ligas under section 5/2-
203.1 by posting a copy of the complaint and summons on
the door to Ligas’s home, mailing copies of the complaint
and summons to Ligas’s home by first-class and certified
mail, and by faxing the complaint and summons to the
number listed on Ligas’s pro se appearance form.
No. 06-3917                                                      5

   Ligas asked the court to reconsider the March 1 order (this
time he was acting through an attorney), and the district
court agreed. Two intervening developments persuaded the
court to vacate its order. First, Labe Bank, which held a
mortgage on Ligas’s property and was added as a
codefendant, had filed and successfully served a third-party
complaint by using the sheriff’s department to personally
serve Ligas at his home.1 Second, one of the private process
servers the government used could not provide evidence of
its pre-2005 attempts to serve Ligas. The district court was
troubled by the fact that the government had not used
federal or state agencies to try to serve process and instead
relied on “seemingly inept process servers.” Taken together,
these developments convinced the court that the govern-
ment had not diligently attempted to serve Ligas, had not
shown good cause for its failure to serve Ligas, and was not
entitled to a fourth extension of time. On May 17, 2005, the
district court dismissed the complaint for failure to serve
Ligas within the period of time prescribed by Rule 4(m).
The dismissal was without prejudice, but the government



1
   While the government was trying to serve Ligas, it amended its
complaint to add Labe Bank as a defendant. Labe Bank held the
mortgage on Ligas’s Chicago home, and the government wanted
to foreclose its liens against Ligas’s home. The bank filed a
counterclaim against the United States to establish the priority of
its lien and a third-party complaint against Ligas to foreclose its
mortgage. On February 28, 2005, the bank successfully used a
sheriff’s deputy to personally serve Ligas at his home. The details
of the bank’s actions against the government and Ligas are
otherwise irrelevant for purposes of this appeal.
6                                                No. 06-3917

had represented in its motions for extension of time that it
could not refile the complaint because the statute of limita-
tions had run.
  Ligas immediately (that very same day) moved the court
to quash the federal tax liens against his property. (This was
not the first time Ligas had requested such relief; he had
asked the court to remove the liens in his brief opposing the
government’s fourth request for an extension of time.) The
government responded with a cross-motion asking the court
to reconsider its May 17 order dismissing the complaint. In
the government’s view, when Ligas asked the court to
extinguish the liens, he waived any objection to service of
process and consented to personal jurisdiction.
  In another about-face, the district court agreed. Constru-
ing Ligas’s motion to quash the liens as a waiver of his
previous objections to personal jurisdiction, the court
vacated the dismissal order, reinstated the government’s
complaint, and denied the motion to quash. The case
proceeded to discovery, and the district court eventually
granted the government’s motion for summary judgment
and ordered Ligas to pay $319,883.60 in back taxes, interest,
and penalties. This appeal followed.


                        II. Analysis
  A district court may not exercise personal jurisdiction
over a defendant unless the defendant has been properly
served with process, see Murphy Bros., Inc. v. Michetti Pipe
Stringing, Inc., 526 U.S. 344, 350 (1999), and the service
requirement is not satisfied merely because the defendant
No. 06-3917                                                  7

is aware that he has been named in a lawsuit or has received
a copy of the summons and the complaint, see McMasters v.
United States, 260 F.3d 814, 817 (7th Cir. 2001). Acceptable
methods for service of process are specified in Rule 4 of the
Federal Rules of Civil Procedure; the preferred approach is for
the plaintiff to mail the defendant a copy of the complaint
and summons and obtain a waiver of personal service from
the defendant under Rule 4(d). But if the defendant does not
waive service and if no federal statute otherwise supplies a
method for serving process, then Rule 4(e)’s list of methods
is exclusive: personal service (Rule 4(e)(2)(A)); leaving a
copy of the complaint and summons at the defendant’s
“usual place of abode” with someone of suitable age and
discretion who resides there (Rule 4(e)(2)(B)); delivering a
copy of the complaint and summons to an agent authorized
to accept service (Rule 4(e)(2)(C)); or any other manner of
serving process permitted by the law of the state where the
district court sits (Rule 4(e)(1)).
  Rule 4(m) generally requires a plaintiff to serve process
within 120 days, but a plaintiff may move for additional
time to serve the defendant. If the plaintiff shows good
cause for his failure to accomplish service within the
designated period of time, then the district court must grant
an extension. United States v. McLaughlin, 470 F.3d 698, 700
(7th Cir. 2006). If the plaintiff cannot show good cause, then
the decision to grant an extension is left to the discretion of
the district court. Henderson v. United States, 517 U.S. 654,
662-63 (1996). When a plaintiff fails to serve process within
the period of time prescribed by the federal rules, Rule 4(m)
requires the district court to dismiss the complaint without
prejudice.
8                                                  No. 06-3917

  The civil procedure rules also specify the manner by
which a defendant may object to a plaintiff’s failure to serve
process. Under Rule 12(b) a defendant may move for
dismissal based on the court’s lack of personal jurisdiction,
the insufficiency of process, or the insufficiency of service of
process. FED. R. CIV. P. 12(b)(2), (4)-(5). However, unlike
subject-matter jurisdiction, these objections can be waived.
See Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456
U.S. 694, 703 (1982). For example, if a defendant does not
object to the manner in which he was served in his answer
or his first motion to the court (whichever occurs first), he
waives the objection. FED. R. CIV. P. 12(h)(1). Similarly, a
defendant who properly raises a jurisdictional defense can
nevertheless waive the defense by his subsequent conduct.
See Compagnie des Bauxites, 456 U.S. at 702-07; Trs. of Cent.
Laborers’ Welfare Fund v. Lowery, 924 F.2d 731, 732-33 (7th
Cir. 1991).
  In this case, the district court correctly dismissed the
government’s complaint under Rule 4(m) for failure to serve
Ligas within the designated—and here, much ex-
tended—time period. However, the court thereafter re-
versed course and reinstated the complaint based on Ligas’s
request to extinguish the tax liens, which the judge treated
as a waiver of Ligas’s previous objections to personal
jurisdiction. We review the district court’s decision to
reconsider and vacate the dismissal order for an abuse of
discretion. See Deere & Co. v. Ohio Gear, 462 F.3d 701, 706
(7th Cir. 2006). “A district court by definition abuses its
discretion when it makes an error of law,” Koon v. United
States, 518 U.S. 81, 100 (1996), and here, the court committed
No. 06-3917                                                   9

a legal error when it construed Ligas’s motion to quash as
a waiver of his objection to personal jurisdiction.
   A district court may reconsider a prior decision when
there has been a significant change in the law or facts since
the parties presented the issue to the court, when the court
misunderstands a party’s arguments, or when the court
overreaches by deciding an issue not properly before it. See
Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185,
1191 (7th Cir. 1990). The district court thought this case fell
within the first category, holding that Ligas’s effort to
extinguish the tax liens was a significant change in the facts
before the court. But nothing new indicated that Ligas had
been properly served after all or that the government had in
fact shown good cause and was consequently entitled to a
fourth extension of time to accomplish service. Rather, the
district court simply interpreted Ligas’s motion to quash the
liens as a request for affirmative relief that waived his
previously asserted jurisdictional objection.
  That interpretation flowed from an erroneous legal
conclusion about the effect of Ligas’s motion on his prior
jurisdictional objection. Under the circumstances of this
case, Ligas’s motion is closely analogous to an answer that
includes both a jurisdictional defense and a counterclaim.
The general rule is that a defendant does not waive an
asserted jurisdictional defense when his answer also
requests relief in the form of a counterclaim, a cross-claim,
or a third-party claim. See, e.g., Rates Tech. Inc. v. Nortel
Networks Corp., 399 F.3d 1302, 1308 (Fed. Cir. 2005); Bayou
Steel Corp. v. M/V Amstelvoorn, 809 F.2d 1147, 1149 (5th Cir.
1987); Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1330 (9th
10                                                No. 06-3917

Cir. 1984); Chase v. Pan-Pac. Broad., Inc., 750 F.2d 131, 132
(D.C. Cir. 1984). As these cases explain, the federal rules
permit defendants to simultaneously seek relief and raise a
jurisdictional defense without waiving that defense. In some
cases, the requested relief is completely unconnected to the
jurisdictional argument, such as when a defendant files a
counterclaim unrelated to the merits of the plaintiff’s claim.
See, e.g., Frank’s Casing Crew & Rental Tools, Inc. v. PMR
Techs., Ltd., 292 F.3d 1363, 1372 (Fed. Cir. 2002) (noting that
personal jurisdiction is not waived “where an unrelated
claim is brought as a permissive counterclaim against the
plaintiff” if the proper jurisdictional objection is raised by
motion or answer). In other cases, the sought-after relief is
consistent with the jurisdictional objection because a court’s
decision to grant the relief is simply the logical extension of
a ruling in the defendant’s favor on jurisdictional grounds.
See Neifeld v. Steinberg, 438 F.2d 423, 425 n.4 (3d Cir. 1971)
(declining to find defendant waived jurisdictional objection
when it filed a motion to extinguish a writ of attachment
and a motion to dismiss for lack of jurisdiction).
   Ligas’s request to extinguish the tax liens falls into this
second category of cases because the liens were unenforce-
able once the district court dismissed the government’s
complaint. The tax liens were valid only to the extent that
the government could have prevailed against Ligas. Al-
though our dissenting colleague maintains that “the govern-
ment’s case was not obviously destroyed by the dismissal of
its complaint,” infra p. 15, the government itself thought so;
the government had consistently maintained that it could
not refile the lawsuit because the statute of limitations had
No. 06-3917                                                      11

expired.2 Ligas’s motion to extinguish the liens was a logical
extension of the jurisdictional dismissal of the complaint,
following necessarily from the court’s Rule 4(m) order. In
opposing the government’s fourth request for an extension
of time, Ligas had asked the district court to remove the
liens if it dismissed the complaint. By renewing that request
after the Rule 4(m) dismissal, Ligas did not voluntarily
submit to the jurisdiction of the court.
  The district court apparently thought that because Ligas
had alternative methods of extinguishing the tax liens that
required him to submit to a court’s jurisdiction, his effort to
seek such relief in this proceeding constituted a waiver of
his jurisdictional objection. It is true that Ligas had other
procedural avenues to remove the liens. For example, under
I.R.C. § 6325(a)(1), the Secretary of the Treasury must
release a lien within 30 days after the liens become “legally



2
   An additional observation about the statute-of-limitations issue
is appropriate. There is a difference between dismissing a suit
without prejudice and dismissing a suit with leave to reinstate;
after a dismissal without prejudice, the plaintiff can resurrect his
lawsuit only by filing a new complaint. See Richmond v. Chater, 94
F.3d 263, 267-68 (7th Cir. 1996). We have previously implied that
when the statute of limitations prevents a lawsuit that has been
dismissed under Rule 4 from being refiled, reinstatement is not
possible either. See McLaughlin, 470 F.3d at 701. At the same time,
Rule 60(b) may permit a district court in some circumstances to
reinstate a suit it erroneously dismissed without prejudice, but
the district court did not rely on Rule 60(b) as the basis for
reconsidering and vacating its order dismissing the government’s
complaint.
12                                                  No. 06-3917

unenforceable,” which would not occur until the final
judgment was entered against the government. If the
Secretary did not release the liens, then Ligas could have
brought suit under I.R.C. § 7432 for damages. Similarly,
Ligas could have filed a separate action under 28 U.S.C.
§ 2410 to quiet title, or he could have waited until the
government filed a second lawsuit to assert the statute-of-
limitations defense.
  However, the existence of these alternative remedies does
not make Ligas’s motion to quash the tax liens improper,
nor does it mean that by making the motion he waived his
objection to personal jurisdiction. Just as the assertion of a
counterclaim does not waive an asserted jurisdictional
defense, Ligas’s motion to quash did not waive the jurisdic-
tional objection he maintained throughout the proceedings.3
The motion to quash was not at all inconsistent with his
long-standing jurisdictional objection. To the contrary, like
the Fifth Circuit, “we cannot fathom how a motion premised
on a jurisdictional objection could simultaneously operate
as a waiver of that very objection.” PaineWebber Inc. v. Chase
Manhattan Private Bank (Switz.), 260 F.3d 453, 461 (5th Cir.


3
  In response to Labe Bank’s third-party suit against him to
foreclose his mortgage, Ligas apparently wanted to refinance the
mortgage. As he pointed out, as long as the federal tax liens
remained on the home, any refinanced mortgage would be
inferior to the federal tax liens. Given that Ligas reasonably
believed no lender would agree to refinance his home as long as
the federal tax liens remained on his property, Ligas understand-
ably wanted the liens removed as soon as possible to increase his
chances of successfully refinancing his home.
No. 06-3917                                                  13

2001); cf. Neifeld, 438 F.2d at 425 n.4, 431 (affirming district
court’s decision to simultaneously dismiss a case for lack of
jurisdiction and quash a writ of attachment).
  Nor did Ligas waive his objection by subsequently filing
an answer and litigating the merits of the government’s
complaint. We have previously held that a defendant does
not waive a jurisdictional argument when it properly raises
the defense but participates in litigation at the district
court’s direction. See IDS Life Ins. Co. v. SunAmerica Life Ins.
Co., 136 F.3d 537, 540 (7th Cir. 1998). In short, given that
Ligas had consistently maintained his objection to personal
jurisdiction and only entered limited appearances for that
purpose, we cannot identify anything to support the govern-
ment’s contention that Ligas waived his service-of-process
objection.
  The government nonetheless argues that the district
court’s decision to reinstate its complaint was proper
because the government served Ligas on March 15, 2005, in
accordance with the district court’s March 1, 2005 order
authorizing service pursuant to Rule 4(e)(1) and 735 Ill.
Comp. Stat. 5/2-203.1. The problem for the government is
that even if it properly served Ligas under section 5/2-203.1,
the period of time in which Rule 4(m) required it to serve
Ligas had already elapsed. At the time the district court
ordered the government’s complaint dismissed, it had given
the government until January 19, 2005, to serve Ligas. True,
the district court’s March 1 order extended the time for
service beyond that date, but the court vacated this order
and quashed the alternative service when it dismissed the
government’s complaint. We have concluded that the
14                                                  No. 06-3917

court’s decision to reconsider and vacate this dismissal
order was premised upon a legal error and must be re-
versed.
  Ligas was never properly served, and the court’s decision
to reconsider and vacate the Rule 4(m) dismissal order and
reinstate the complaint was based on a legally erroneous
conclusion that Ligas’s motion to quash waived his objec-
tion to personal jurisdiction. Accordingly, we REVERSE the
judgment of the district court and REMAND the case to the
district court with instructions to dismiss the complaint.




  EVANS, Circuit Judge, dissenting. The majority concludes
that Ligas’s motion to quash tax liens did not waive his
previous objection to service of process and invest the
district court with personal jurisdiction. I disagree.
  In the first instance, it is somewhat regrettable that we are
squabbling over service of process; Ligas was clearly
dodging service and gaming the system. But service of
process represents an important value on the whole—notice
to defendants that they are being sued—even if it seems like
a frustrating formality from time to time (as in this case
where Ligas knew the government was after him). See United
States v. Jiles, 102 F.3d 278, 282 (7th Cir. 1996) (“[S]ervice of
process laws are designed to ensure defendants receive
No. 06-3917                                                 15

notice in accordance with concepts of due process.”); cf.
McMasters v. United States, 260 F.3d 814, 817 (7th Cir. 2001)
(“Actual notice to the defendant is insufficient; the plaintiff
must comply with the directives of Rule 4.”).
   The question here, however, is not whether service of
process was effectuated. The district court, Chief Judge
Holderman presiding, decided that it was not, and the case
is only before us now because the court shifted course and
subsequently found that Ligas waived his previously
sustained objection. As to the issue of waiver, the majority
holds that Judge Holderman erred as a matter of law
because Ligas’s request to extinguish the liens was “simply
the logical extension of a ruling in the defendant’s favor on
jurisdictional grounds.”
  Is that so? Judge Holderman thought not, and I tend to
agree.
  The problem I see with the majority’s reasoning is that the
government’s case was not obviously destroyed by the
dismissal of its complaint on service of process grounds.
Since the dismissal was without prejudice, the government
had the ability to lodge a new complaint and make a fresh
run at service of process. True, the government was in a bad
spot in light of the statute of limitations. However, the
district court ruling on service of process had nothing to do
with the statute of limitations. The potential application of
the statute of limitations, an affirmative defense that Ligas
would have to prove even in the face of the government’s
statements that the suit might be time-barred, hinged on
facts—including those pertaining to a likely argument for
equitable tolling—that were not litigated. See General Auto
16                                                 No. 06-3917

Serv. Station v. City of Chicago, 526 F.3d 991, 1001 (7th Cir.
2008) (the statute of limitations is an affirmative defense);
Travelers Cas. & Sur. Co. of Am., Inc. v. Northwestern Mut. Life
Ins. Co., 480 F.3d 499, 504 (7th Cir. 2007) (equitable tolling
“enable[s] a plaintiff to extend the statute of limitations in
exigent circumstances”). So, while a final defeat for the
government would have rendered the liens invalid, see 26
U.S.C. § 6325(a)(1), that defeat did not happen here, and
extinguishing the liens did not “follow necessarily” from the
dismissal without prejudice.
  That may all seem like a hypertechnical approach to civil
procedure. But keep in mind Judge Holderman’s take:
“Ligas has litigated this case on procedure.” Ligas sought to
avoid the merits of the lawsuit—and skirt hundreds of
thousands of dollars in tax obligations, including remitting
FICA taxes he withheld from his employees’ paychecks—by
evading service of process at every step. To say that Ligas
was within his rights to demand service by the book is not
to say that his approach was laudable. Under these circum-
stances, the district court’s exacting application of proce-
dure on the other end seems more than reasonable. The
court simply gave Ligas a taste of his own medicine; those
who live by the sword of procedural technicalities cannot
complain when they die by it.
  Because I do not believe the district court abused its
discretion, I respectfully dissent.




                             12-1-08
