Opinion ID: 2617820
Heading Depth: 3
Heading Rank: 3

Heading: The Judgment Is Void

Text: The Borough's most serious argument is that the judgment is void due to lack of personal jurisdiction. As this court stated in Aguchak v. Montgomery Ward Co., 520 P.2d 1352, 1354 (Alaska 1974) (footnote omitted): A judgment is void and subject to attack under F.R.Civ.P. 60(b)(4) if the court that rendered it lacked personal jurisdiction over the defendant.... Although under other subsections of Rule 60(b) the movant must show that denial of the motion below was an abuse of discretion in order to prevail on appeal, no question of the lower court's discretion is presented by a Rule 60(b)(4) motion because the validity of a judgment is strictly a question of law. Nor need the movant show that he could present a meritorious defense in a subsequent proceeding, again because a void judgment is entitled to no respect whatever. I would reverse the trial court on the ground that the judgment was void due to lack of personal jurisdiction. Under Federal Rule of Civil Procedure 60(b)(4), the wording of which is identical to Alaska Civil Rule 60(b)(4), a judgment is void and subject to attack if the court that rendered the judgment lacked subject-matter jurisdiction or personal jurisdiction or if it otherwise involves a plain usurpation of power. 7 J. Moore & J. Lucas, Moore's Federal Practice ¶ 60.25[2], at 60-225 to 60-229 (2d ed. 1985). Following those guidelines, a reviewing court must first examine whether the superior court had personal jurisdiction over the Borough in the present case. [11] Proper service is one way a court can legally obtain personal jurisdiction over a defendant. In the present case, English Bay attempted to serve process on the Borough. However, for the reasons stated below, the attempted service of process was inadequate. First, service on a public corporation such as the Borough must be made by delivering a copy of the summons and of the complaint to the chief executive officer or chief clerk or secretary thereof. Alaska R.Civ.P. 4(d)(9). English Bay claims only to have served the Borough's attorney. It does not claim to have ever served Borough Mayor Stan Thompson or Borough Clerk Joanne Brindley. The analogous Federal Rule of Civil Procedure 4(d)(6) allows service upon a municipal corporation only by delivering a copy of the summons and the complaint to the chief executive officer, or as otherwise allowed by state law. Under the federal rule, service is invalid if process is delivered to one who is not the `chief executive officer' of the entity. 2 J. Moore & J. Lucas, supra ¶ 4.30, at 4-251 (2d ed. 1986). Given the public importance of lawsuits against boroughs and other public corporations, I favor the same strict interpretation of Alaska Civil Rule 4(d)(9). Here, I do not consider English Bay's error to be minor. English Bay's attempted service on the Borough was legally insufficient. Second, pursuant to Civil Rule 4(d)(9), service upon a borough cannot be accomplished by mail. [12] The rule plainly states that process must be delivered. Under Federal Rule of Civil Procedure 4(d)(6), delivery means personal delivery by one authorized to serve process; mail service is insufficient. 2 J. Moore & J. Lucas, supra, ¶ 4.30, at 4-252; 4A C. Wright & A. Miller, Federal Practice and Procedure § 1109, at 172 (1987); see also Cambridge Mut. Fire Ins. Co. v. City of Claxton, Georgia, 720 F.2d 1230 (11th Cir.1983). I see no reason to construe Alaska's rule differently. Although mail service is allowed on corporations pursuant to Alaska Civil Rule 4(h), [13] I interpret corporations in Civil Rule 4(h) as excluding public corporations, since corporations and public corporations are treated differently under Rule 4(d). Since English Bay alleges no service on the Borough other than by mail, its service was invalid. Third, the Borough claims that it never received any summons whatsoever, and also never received a complaint that had been filed by the court. In an affidavit, the Borough's attorney admits he received an unfiled copy of a complaint (without a case number), but he assumed it was nothing more than a negotiating threat in the various pending foreclosures. Although English Bay's affidavits on this point are confusing, they do not seem to contradict the Borough's attorney. The affidavits indicate that a legal secretary in the office of English Bay's attorney either mailed or delivered copies of the summons and complaint to the court clerk, to be filed and then mailed to the Borough's attorney. There is no separate affidavit showing exactly what was mailed to the Borough or when. An envelope was mailed to and received by the Borough's attorney, as evidenced by a certified mail return receipt. However, English Bay presented no evidence of the contents of that envelope. [14] Thus, taking the assertions of the Borough's attorney at face value, it seems that no proper summons and complaint were ever served. Even without proper service of process, Alaska courts can acquire personal jurisdiction over a defendant if the defendant makes an appearance. Alaska Statute 09.05.010 provides: The voluntary appearance of the defendant is equivalent to the personal service of a copy of the summons and complaint upon the defendant. [15] The Borough undertook three actions that conceivably could be regarded as voluntary appearances sufficient to confer personal jurisdiction in this action: (1) On July 30, 1984, the Borough's attorney signed a stipulation in the 1982 foreclosure action (not the present case) that refers to the present action by name. (2) On June 16, 1986  three days after the Borough believed the court would automatically dismiss this case pursuant to Civil Rule 41(e)  the Borough filed a motion to amend the court's order of dismissal by adding a provision that would dissolve the preliminary injunction against the Borough. In this motion, the Borough did not explicitly make or preserve its defense of lack of personal jurisdiction. [16] (3) On June 23, 1986, the Borough moved to dismiss the case on the ground that English Bay did not timely respond to the court's notice to show cause. Again, the Borough did not explicitly preserve its defense of lack of personal jurisdiction. English Bay also argues that the Borough made a voluntary appearance pursuant to AS 09.05.010 on July 30, 1984, when the Borough attorney signed a stipulation in the 1982 foreclosure action, 3KN-82-302 Civil, that refers to this present action by name. The majority makes reference to this stipulation as being a relevant fact, but does not further embellish on its significance. [17] However, since the superior court's rulings on these post decree motions were influenced in part by this stipulation which shows the Borough's awareness of this pending action, I now address these arguments. The term appearance in AS 09.05.010 refers to personal jurisdiction: the voluntary appearance operates as a substitute for service of process so as to confer personal jurisdiction over the defendant. Many of the cases relied upon by English Bay and the majority involve situations in which the party had been served with process but had not answered. [18] In our case, the defendant Borough was never properly served. Since service of process or a voluntary appearance represent the formal initiation of a lawsuit, courts have adopted bright line rules governing these procedures. For example, for service on a public corporation, Alaska Civil Rule 4(d)(9) requires service on the chief executive officer or chief clerk or secretary. These special rules were adopted to prevent precisely the type of mishaps presented in this case. State courts in other jurisdictions have rejected the idea that an agreement or stipulation extending time to plead or to answer constitutes an appearance for purposes of personal jurisdiction. See generally Annotation, Stipulation Extending Time to Answer or Otherwise Proceed as a Waiver of Objection to Jurisdiction for Lack of Personal Service: State Cases, 77 A.L.R.3d 841, 853-59 (1977 & Supp. 1987); Annotation, Appearance to Make Application for Extension of Time or Continuance, or Order in that Regard, as Waiver of Objection to Jurisdiction for Lack of Personal Service, 81 A.L.R. 166, 169 (1932). Most courts conclude that such a stipulation is insufficient evidence of a party's intent to submit to the jurisdiction of the court. [19] As the California Supreme Court stated in Busching v. Superior Court, 12 Cal.3d 44, 115 Cal. Rptr. 241, 524 P.2d 369, 373 (1974): A party who merely seeks an extension of time to plead cannot reasonably be deemed to make a general appearance. His purpose may be to obtain adequate time to determine whether or not to object to the jurisdiction of the court. (Citations omitted). [20] In construing a statute similar to AS 09.05.010, the Oregon Supreme Court held that an unfiled oral stipulation extending time for the defendant to answer did not constitute an appearance. Thoenes v. Tatro, 270 Or. 775, 529 P.2d 912, 917 (1974). The court in Thoenes noted: [I]n the absence of an estoppel the jurisdiction of the court should not be held to attach for any purpose until the defendant has in some way used the machinery of the court to serve his ends. A motion for an extension of time would, of course, constitute such use. And a stipulation between the parties for an extension of time, if filed with the court, could be deemed a use of the court's processes. (Footnotes omitted; emphasis added). See also Charette v. Eisenbraun, 274 Or. 491, 547 P.2d 612, 613 (1976); State ex rel. Karr v. Shorey, 30 Or. App. 137, 567 P.2d 118, 121 (1977). In this case the Borough entered into a stipulation with English Bay extending the redemption period for certain property foreclosed upon by the Borough as long as surety bonds were posted. The stipulation was filed with the court under the case heading In Re Kenai Peninsula Borough 1982 Foreclosure Proceeding on Properties for the Real Property Taxes Delinquent for the Tax Year of 1981 (Civil Action No. 3KN-82-302 CI). In addition, the stipulation stated [t]hat for and in consideration of the extension of the redemption period stated above, it is hereby agreed that a Stipulation will be executed and filed in the action styled English Bay Corporation v. Kenai Peninsula Borough, case no. 3KN 84- 563CJ, allowing the Kenai Borough a similar extension of time until the 30th day of August, 1984, to answer the pleadings on file therein. This stipulation was never executed. Since the existing stipulation was filed in another matter and only referred to a future stipulation, it cannot be regarded as submission to the court's jurisdiction in this case. While the stipulation arguably indicates the Borough was aware of the present action, such awareness is irrelevant to whether the court had personal jurisdiction over the Borough. [21] When a court can legally obtain personal jurisdiction over a defendant, it does so either when process is properly served  an affirmative act of the court to establish its power over the defendant  or when the putative defendant makes a voluntary appearance or otherwise affirmatively submits to jurisdiction. Mere awareness is too nebulous a concept to constitute a suitable test for personal jurisdiction. [22] I agree with the majority that the Borough's June 16, 1986, motion to the court constituted a voluntary appearance which, pursuant to AS 09.05.010, is equivalent to personal service. In making that motion, the Borough recognized that the case had not been dismissed pursuant to Civil Rule 41(e), and argued that it should be. The June 16 motion was a deliberate submission to the court's power. However, while the court had jurisdiction over the Borough on June 16, it erred in granting default judgment to English Bay because the court did not have before it a valid entry of default. [23] First, English Bay never served notice of entry of default on the Borough as required by Civil Rule 55(a)(2). Second, the entry of default on November 24, 1984, was invalid since the court did not have jurisdiction over the Borough. Third, no default had yet occurred as of June 16, 1986, and English Bay's application for entry of default and for a default judgment was not ripe for any judicial decision on the merits. The majority holds that taking a default judgment without notice of default under Civil Rule 55(c)(1) should not ordinarily be regarded as rendering the underlying judgment void. However, the treatise cited by the court for this proposition also cites several federal cases in which failure to give notice combined with other procedural irregularities was held sufficient to vacate the judgment. [24] In light of all the procedural irregularities in this case, [25] failure to give notice of the application for default should be grounds to hold the judgment void. The majority view states that the dissent's conclusion that there was no valid application for a default is dubious. To the contrary, it is the majority that reaches the illogical conclusion that the June 16, 1986, appearance resurrects or cures the invalid November 13, 1984, application for entry of default. This conclusion is farcical because under Civil Rule 12(a) a default did not even exist until twenty days after the Borough appeared and failed to answer the summons and complaint. An application for entry of default cannot be valid on June 23 when the default itself could not have occurred until July. See Alaska R.Civ.P. 55(a). Alaska Statute 09.05.010 specifically states that an appearance is equivalent to personal service of a copy of the summons and complaint upon the defendant. (Emphasis added). What then does the word equivalent mean? According to Webster's New World Dictionary, Second College Edition, it means equal in meaning, power, substance and value. Therefore, this lawsuit must proceed under the normal operation and requirements of the civil rules. [26] By appearing, the defendant does not consent to the validity of proper service of all previously filed motions and orders. [27] Thus, the majority reaches the impossible conclusion that when the trial court granted the default judgment on July 22, 1986, it had before it a valid application for entry of default as well as for a default judgment. [28] Even assuming that the entry of default was defective, the majority concludes that the trial court did not err in entering a default judgment without first entering a default. The court cites a number of federal authorities for the proposition that entry of default is largely a formality. These cases are clearly inapplicable to our rule. Unlike the federal rule, Alaska Civil Rule 55(c)(2) contains the following sentence: When application is made to the court for a default judgment, counsel shall file a memorandum of the default, showing when and against what parties it was entered... . I interpret this sentence as providing that, in Alaska state courts, (1) a valid entry of default must precede a default judgment by the court, and (2) a litigant cannot apply for a default judgment prior to the time that the opposing party has committed the default. Both of these requirements were violated in this case. First, the court issued the default judgment without a prior valid entry of default. Second, since the court first obtained personal jurisdiction over the Borough on June 16, 1986, when the Borough made a voluntary appearance, the Borough could not have committed any default until twenty days later, in July. See Alaska R.Civ.P. 12(a). English Bay never subsequently applied for a default or a default judgment. Nor did they serve notice of such applications on the Borough. Since no default had yet occurred, English Bay's earlier applications were nullities. I would therefore conclude that the superior court plainly usurped its power by issuing a default judgment in the absence of a prior valid entry of default, without valid applications for entry of a default or a default judgment, and in direct violation of AS 09.05.010. Cf. SEC v. Seaboard Corp., 666 F.2d 414, 415, 417 (9th Cir.1982) (default judgment which the court entered for refusal to pay discovery sanction was punitive, not founded on an exercise of the court's inherent power, and void); Compton v. Alton S.S. Co., 608 F.2d 96, 106 (4th Cir.1979) (default judgment resulting from erroneous application of statute was void). Under these circumstances, the default judgment against the Borough is void. Therefore, the court should have set it aside under Civil Rule 60(b)(4).