Title: Ex parte Caterpillar Financial Services Corporation.

State: alabama

Issuer: Alabama Supreme Court

Document:

Rel: June 30, 2021
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter.  Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300
Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2020-2021
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Ex parte Caterpillar Financial Services Corporation
PETITION FOR WRIT OF MANDAMUS
(In re:  Caterpillar Financial Services Corporation
v.
Horton Logging, LLC, and Gary Horton)
(Shelby Circuit Court, CV-19-900689)
SELLERS, Justice.
Caterpillar Financial Services Corporation ("CFS") petitioned this
Court for a writ of mandamus directing the Shelby Circuit Court to vacate
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an order purporting to grant a motion to set aside a default judgment in
favor of CFS in its action against Horton Logging, LLC ("HL"), and Gary
Horton ("Horton").  Because the trial court's order purports to grant a
successive postjudgment motion, over which the trial court had no
jurisdiction, we grant CFS's petition and issue the writ.
In June 2019, CFS commenced its action against HL and Horton,
seeking to recover amounts allegedly owed by those parties pursuant to
loan documents executed in connection with the financing of the sale of
logging equipment to HL.  HL and Horton did not answer the complaint,
and, on September 6, 2019, the trial court entered a default judgment
against them.
On October 4, 2019, HL and Horton moved the trial court for relief
from the default judgment.  They cited Rule 55(c), Ala. R. Civ. P., which
authorizes trial courts to set aside a default judgment on the motion of a
party filed within 30 days after the entry of the judgment, and Rule 60(b),
Ala. R. Civ. P., which authorizes trial courts to grant relief from a
judgment for various reasons.  HL and Horton alleged in their motion that
they "have meritorious defenses against the claims of [CFS]."  They did
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not, however, mention the other two factors relevant to motions to set
aside a default judgment identified in Kirtland v. Fort Morgan Authority
Sewer Service, Inc., 524 So. 2d 600, 604-05 (Ala. 1988), namely, whether
the plaintiff will be unfairly prejudiced if the default judgment is set aside
and whether the default judgment resulted from the defendant's own
culpable conduct.
Nearly a year later, on August 3, 2020, after multiple continuances
and after counsel for HL and Horton withdrew from the matter, the trial
court held a virtual hearing.  However, at some point during that hearing,
the trial court rescheduled the matter for another virtual hearing on
September 2, 2020.  On the day of the rescheduled hearing, the trial court
entered an order stating: "[HL and Horton] failed to appear [at the
hearing] and therefore the motion [for relief from the default judgment]
is denied."
HL and Horton did not appeal from the trial court's September 2,
2020, order.  Instead, they filed another motion under Rule 60(b) asking
the trial court to reconsider and set aside the September 2020 order and
to reset the motion for relief from the default judgment for another
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hearing.  In support of the second Rule 60(b) motion, Horton submitted an
affidavit stating that, after he attended the August 3, 2020, virtual
hearing, he attempted to contact his former attorney "multiple times to no
avail," that he attempted to contact other attorneys in an effort to retain
new counsel, and that he attempted to participate in the September 2,
2020, virtual hearing but "was unable to successfully connect."  Finally,
Horton averred in his affidavit that he "believe[d] that [he had] multiple
meritorious defenses" to CFS's claims and that "neither party would be
prejudiced by setting aside the September 2, 2020, order."  HL and Horton
also filed a motion to stay CFS's efforts at garnishment. 
The trial court set the motion to stay garnishment for a hearing. 
Approximately two weeks after that hearing, on January 27, 2021, the
trial court entered an order purporting to grant HL and Horton's second
Rule 60(b) motion, without specifying its reasoning.  Thereafter, CFS
timely filed its mandamus petition.  CFS argues that the second Rule
60(b) motion was a successive postjudgment motion that the trial court
lacked jurisdiction to grant.
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"A petition for the writ of mandamus is the proper
method for securing review of a trial court's order granting a
successive postjudgment motion. See Ex parte Keith, 771 So.
2d 1018 (Ala. 1998), and Ex parte Baker, 459 So. 2d 873 (Ala.
1984). 'A writ of mandamus is an extraordinary remedy, and
it will be "issued only when there is: (1) a clear legal right in
the petitioner to the order sought; (2) an imperative duty upon
the respondent to perform, accompanied by a refusal to do so;
(3) the lack of another adequate remedy; and (4) properly
invoked jurisdiction of the court." ' Ex parte P & H Constr. Co.,
723 So. 2d 45, 47 (Ala. 1998) (quoting Ex parte United Serv.
Stations, Inc., 628 So. 2d 501, 503 (Ala. 1993))."
Ex parte Jordan, 779 So. 2d 183, 184 (Ala. 2000).  Moreover, this Court
will review by petition for the writ of mandamus a trial court's setting
aside a default judgment.  Ex parte Ward, 264 So. 3d 52, 55 (Ala. 2018).1
As noted, HL and Horton's motion for relief from the default
judgment cited both Rule 55(c) and Rule 60(b).  A Rule 55(c) motion is
subject to Rule 59.1, Ala. R. Civ. P., which provides that certain
postjudgment motions are deemed denied by operation of law if they
1The second Rule 60(b) motion asked the trial court to set aside the
September 2, 2020, order denying HL and Horton's motion for relief from
the default judgment and to reset that motion for a hearing.  The trial
court entered an order stating simply that the second Rule 60(b) motion
was "granted."  The parties, however, have represented to this Court that
the default judgment has been set aside and that litigation is proceeding.
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remain pending more than 90 days.  More than 90 days elapsed without
a ruling on HL and Horton's motion for relief from the default judgment. 
Accordingly, to the extent that the motion relied on Rule 55(c), it was
denied by operation of law.2
Rule 60(b) is not subject to the 90-day deadline in Rule 59.1., and
precedent from this Court indicates that, generally speaking, a party is
not necessarily precluded from relying on both Rule 55(c) and Rule 60(b)
in requesting a trial court to set aside a default judgment.  See Ex parte
Lang, 500 So. 2d 3, 4 (Ala. 1986) ("The Alabama Rules of Civil Procedure
do not contemplate the filing of a Rule 60(b) motion during the pendency
of a Rule 55(c) motion.  But while the Rules do not contemplate it, they do
not preclude it, either."); Ex parte Vaughan, 539 So. 2d 1060, 1061 (Ala.
1989) ("[T]he Rules [of Civil Procedure] do not, at the present time,
preclude the filing of alternative Rule 55(c) and 60(b) motions."); Edwards
v. Johnson, 143 So. 3d 691, 694 (Ala. 2013) ("[T]he Alabama Rules of Civil
2Rule 59.1 allows the 90-day deadline set out therein to be extended
by "the express consent of all the parties, which consent shall appear of
record."  There is nothing, however, before this Court indicating that CFS
expressly consented to an extension of the deadline.
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Procedure do not necessarily preclude a defendant from filing alternative
Rule 55(c) and Rule 60(b) motions with the trial court." (emphasis
omitted)).  
However, in Ex parte Haynes, 58 So. 3d 761 (Ala. 2010), this Court
noted that the appropriate way to challenge the denial of a Rule 55(c)
motion to set aside a default judgment is to appeal from that denial and
that a Rule 60(b) motion cannot be used as a substitute for an appeal by
asking a trial court to "reconsider" the denial of the Rule 55(c) motion.  As
in the present case, Haynes involved the denial of a Rule 55(c) motion by
operation of law pursuant to Rule 59.1.  Thereafter, the trial court in
Haynes elected to treat the motion alternatively as a Rule 60(b) motion
and purported to grant it.  This Court issued a writ of mandamus,
concluding that the Rule 55(c) motion, fairly read, could not also have
been considered a motion under Rule 60(b).  The Court noted that the
motion did not cite Rule 60(b) and "lack[ed] ... any distinction in the
grounds for relief based on Rule 55(c) as opposed to Rule 60(b)."  58 So. 3d
at 766.  Alternatively, the Court held that, 
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"[e]ven if [the motion] could be deemed a motion asking in the
alternative for relief under Rule 60(b), the defendants' motion
would in this respect add nothing to the previously denied [by
operation of law] Rule 55(c) motion and thus would constitute
an improper attempt to use a Rule 60(b) motion as 'a
substitute for an appeal of the original judgment.' "
58 So. 3d at 766-67.  
Similarly, HL and Horton's original motion for relief from the
default judgment, although it cited both Rule 55(c) and Rule 60(b), made
no distinction "between the grounds for relief under Rule 55(c) and those
for relief under Rule 60(b)."  Id. at 765.  As was the case in Haynes,
"[b]ecause there existed nothing in the motion to distinguish the Rule
55(c) motion from the purported Rule 60(b) motion, any Rule 60(b) aspect
to the motion would simply constitute a motion to 'reconsider' the Rule
55(c) motion."  Id.  Although CFS does not cite Haynes, it points to Rule
59.1 and asserts that "the trial court's jurisdiction terminated ninety (90)
days after [the motion to set aside the default judgment was originally
filed]."  Thus, CFS appears to suggest that, once the Rule 55(c) aspect of
the motion was denied by operation of law, HL and Horton's remedy was
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to appeal and that the Rule 60(b) aspect of the motion was simply an
improper request for the trial court to "reconsider" the denial.
In any event, CFS more succinctly argues that, to the extent that the
trial court had jurisdiction to rule on the Rule 60(b) aspect of HL and
Horton's initial motion for relief from the default judgment, after the trial
court entered the September 2, 2020, order expressly denying the motion,
the trial court lacked jurisdiction to grant the second Rule 60(b) motion. 
CFS points to Ex parte Keith, 771 So. 2d 1018, 1022 (Ala. 1998), for the
proposition that, "[a]fter a trial court has denied a postjudgment motion
pursuant to Rule 60(b), that court does not have jurisdiction to entertain
a successive postjudgment motion to 'reconsider' or otherwise review its
order denying the Rule 60(b) motion."  As the Court noted in Pinkerton
Security & Investigation Services, Inc. v. Chamblee, 961 So. 2d 97, 101-02
(Ala. 2006):
"Successive Rule 60(b) motions brought on the same grounds
are impermissible because they are 'generally considered
motions to reconsider the original ruling and are not
authorized by Rule 60(b).' Wadsworth v. Markel Ins. Co., 906
So. 2d 179, 182 (Ala. Civ. App. 2005).  A motion to reconsider
the trial court's denial of a postjudgment motion is barred
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because after the denial the trial court loses jurisdiction over
the action."
See also Ex parte Jordan, 779 So. 2d 183 (Ala. 2000) (issuing a writ of
mandamus and holding that the trial court lost jurisdiction after it denied
a Rule 60(b) motion requesting reinstatement of an action and that the
trial court therefore could not grant a second Rule 60(b) motion asking for
the same relief).
The second Rule 60(b) motion in this case is essentially the same as
the first Rule 60(b) motion.  In both motions, HL and Horton sought to set
aside the default judgment because, they asserted, they have meritorious
defenses to CFS's claims.  Because the second Rule 60(b) motion is nothing
more than a request for reconsideration of the trial court's denial of the
first Rule 60(b) motion, the trial court had no jurisdiction to grant it.3
The Court notes that, in responding to CFS's mandamus petition,
HL and Horton assert that the default judgment against them is "void"
3Although HL and Horton claim that they had a valid excuse for
failing to attend the virtual hearing on September 2, 2020, they do not
present the Court with any legal authority indicating that, because of that
excuse, the trial court had jurisdiction to "reconsider" the denial of the
first Rule 60(b) motion.
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because, they claim, CFS failed to properly serve them with the summons
and complaint.  Under Rule 4(c)(1), Ala. R. Civ. P., an individual may be
served by leaving the summons and complaint with a person of suitable
age and discretion residing in the individual's dwelling house or usual
place of abode or by leaving the summons and complaint with an agent
authorized by appointment or law to receive service of process.  Under
Rule 4(c)(6), an entity may be served by leaving the summons and
complaint with "an officer, a partner (other than a limited partner), a
managing or general agent, or any agent authorized by appointment or by
law to receive service of process."  The returns on service and other
documents submitted by the process server in this case indicate that the
summons and complaint were served on an individual named Blake
Horton at an address in Columbiana and that Blake informed the process
server that he lived with Horton and was authorized to accept service for
HL.  HL and Horton, however, suggest to this Court that Blake was not
an employee or "registered agent" of HL and that he did not in fact live
with Horton at the time of service.
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HL and Horton do not clearly discuss whether the trial court, after
denying HL and Horton's initial motion to set aside the default judgment,
would have had jurisdiction to consider a Rule 60(b) motion asserting
failure of proper service.  In any event, HL and Horton's second Rule 60(b)
motion did not actually assert that ground for relief.  Although HL and
Horton claim that they argued lack of proper service during the hearing
on their motion to stay CFS's garnishment efforts, there is no transcript
of that hearing or other materials before this Court to  verify that
averment.  Thus, nothing before the Court establishes that HL and Horton
ever challenged the sufficiency of service in the trial court.4  Finally, as
CFS points out, lack of proper service was omitted not only from HL and
Horton's second Rule 60(b) motion, but also from their initial motion for
relief from the default judgment.  The Court of Civil Appeals, in Klaeser
4HL and Horton attached certain exhibits to their response to CFS's
mandamus petition, which are aimed at establishing that Blake Horton
was not authorized to accept service for HL and Horton.  It appears,
however, that those exhibits were not submitted to the trial court.  In
ruling on a mandamus petition, this Court is limited to consideration of
the evidence that was presented to the trial court.  Ex parte McDaniel,
291 So. 3d 847, 852 (Ala. 2019).  
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v. Milton, 47 So. 3d 817, 821 (Ala. Civ. App. 2010), noted precedent
indicating that "a defendant waives the defense of improper service of
process if that defendant does not raise the issue in his or her first
appearance following the entry of a default judgment."  The court in
Klaeser held that the defendant in a custody-modification proceeding had
waived insufficiency of service because she had failed to raise it in her
first appearance following the entry of a default judgment against her.  In
support, the court pointed to Pridgen v. Head, 282 Ala. 193, 198, 210 So.
2d 426, 430 (1968), in which this Court held that a defendant, who argued
that a default judgment should have been set aside based on lack of proper
service, had waived that argument when he "appeared generally and filed
[a] motion to dismiss and quash ... garnishment, which motion contained
no grounds challenging the sufficiency of the service upon the defendant." 
See also Aetna Ins. Co. v. Earnest, 215 Ala. 557, 558, 112 So. 145, 145
(1927) (" 'Where a judgment has been rendered by the court without
jurisdiction of the person, a general appearance after such judgment
waives all objection to the jurisdiction of the court over the person. Thus
a general appearance by defendant after final judgment waives any and
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all defects and irregularities in the service of process and return, just as
fully as it does where such appearance is entered before final judgment.' "
(quoting 4 Corpus Juris, Appearances § 64, p. 1364)).  HL and Horton have
not addressed the fact that they did not argue lack of proper service upon
initially appearing and challenging the default judgment in this case.
In sum, the trial court erred in granting HL and Horton's second
Rule 60(b) motion.  Accordingly, we grant CFS's petition for a writ of
mandamus and direct the trial court to vacate the January 27, 2021,
order.
PETITION GRANTED;  WRIT ISSUED.
Parker, C.J., and Bolin, Shaw, Wise, Mendheim, Stewart, and
Mitchell, JJ., concur.
Bryan, J., concurs in the result.
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