Court Opinion

ID: 4264738
Source: CourtListenerOpinion
Date Created: 2018-04-17 19:09:34.011748+00
Date Added: 2024-06-11T07:49:22.469588
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

                               NO. 2017-CA-00154-COA

UNITED AIRLINES, INC., IMPROPERLY                                        APPELLANT
NAMED AS UNITED AIRLINES
CORPORATION

v.

MARTIN H. MCCUBBINS                                                        APPELLEE

DATE OF JUDGMENT:                        11/25/2015
TRIAL JUDGE:                             HON. WINSTON L. KIDD
COURT FROM WHICH APPEALED:               HINDS COUNTY CIRCUIT COURT,
                                         FIRST JUDICIAL DISTRICT
ATTORNEY FOR APPELLANT:                  JOHN THOMAS ROUSE
ATTORNEY FOR APPELLEE:                   WAYNE E. FERRELL JR.
NATURE OF THE CASE:                      CIVIL - TORTS - OTHER THAN PERSONAL
                                         INJURY AND PROPERTY DAMAGE
DISPOSITION:                             REVERSED AND REMANDED - 04/17/2018
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

      BEFORE GRIFFIS, P.J., CARLTON AND WILSON, JJ.

      WILSON, J., FOR THE COURT:

¶1.   Martin McCubbins bought a round trip ticket from Jackson to Panama City, Panama

on United Airlines (United). McCubbins alleges that on February 6, 2013, before he

departed Jackson and again during a layover in Houston, United employees examined his

passport and ticket and assured him that everything was in order. Nonetheless, when

McCubbins arrived in Panama, he was detained and informed that he would not be allowed

to enter the country because his passport’s expiration date was less than 90 days from the

date of his travel. McCubbins was forced to spend an unpleasant night in a Panamanian
holding pen before he was allowed to return to the United States the next morning.

¶2.    After returning home, McCubbins contacted customer service representatives at

United, but United told him that he was responsible for verifying the requirements for

international travel and entry into a foreign country. United did give McCubbins a coupon

for ten percent off his next ticket to fly the friendly skies. Dissatisfied with blame and a

coupon, McCubbins filed suit against United in Hinds County Circuit Court.

¶3.    McCubbins served a summons and the complaint on United’s registered agent for

service of process in Mississippi, CT Corporation (CT). Unfortunately, the complaint named

the defendant as “United Airlines Corporation,” an Illinois corporation “with a principal

place of business located at 1200 East Algonquin Road, Elk Grove Township, IL.” This

information was out of date or just incorrect. In point of fact, United is “United Airlines,

Inc.,” a Delaware corporation with its principal place of business at 233 South Wacker Drive

in Chicago. Because the summons and complaint misnamed United, CT did not forward the

documents to United, United did not answer, and McCubbins ultimately obtained a default

judgment against “United Airlines Corporation” for $70,000.

¶4.    United first learned of the judgment when McCubbins’s attorney mailed a letter

demanding payment to United’s CEO at United’s headquarters on South Wacker Drive in

Chicago. United subsequently moved to set aside the default judgment,1 arguing that the

       1
        Two weeks after United received the letter from McCubbins’s attorney, United
removed the case to federal district court. United argued that federal question jurisdiction
existed because McCubbins’s claims were “completely preempted” by the Airline

                                             2
judgment (1) was void for lack of proper service of process or, in the alternative, (2) should

be set aside under the three-part “balancing test” applicable to a motion to set aside a default

judgment under Mississippi Rule of Civil Procedure 60(b). See Tucker v. Williams, 198 So.
3d 299, 309 (¶23) (Miss. 2016). The circuit court denied United’s motion as “not well

taken.”

¶5.    On appeal, United makes the same two arguments as in the circuit court. We hold that

service of process on United’s registered agent was sufficient. However, we agree with

United that the default judgment must be set aside under the three-part balancing test.

Therefore, we reverse and remand for further proceedings consistent with this opinion.

Additional facts are discussed below as necessary.

                                         ANALYSIS

Deregulation Act and/or the Montreal Convention, an international multilateral treaty to
which the United States is a party. The same day that United removed the case to federal
court, United also filed a motion to set aside the default judgment. Three days later,
McCubbins filed a second lawsuit against United in Hinds County Circuit Court
(“McCubbins II”). The complaint in McCubbins II was essentially identical to McCubbins’s
prior lawsuit (“McCubbins I”) except that it correctly named and identified “United Airlines,
Inc.” as the defendant. United removed McCubbins II to federal court based on the same
“complete preemption” arguments. McCubbins I and McCubbins II were assigned to
different district judges; however, both judges ultimately rejected United’s complete
preemption arguments. McCubbins v. United Airlines Inc., 227 F. Supp. 3d 654, 657-58
(S.D. Miss. 2016) (Jordan, J.); McCubbins v. United Airlines Inc., 244 F. Supp. 3d 557, 567
(S.D. Miss. 2017) (Wingate, J.). McCubbins I was remanded to state court and is the subject
of this appeal. We are told that McCubbins II has not yet been formally remanded to state
court. The removals, remands, and McCubbins II are, for the most part, irrelevant to the
issues presented in this appeal. Therefore, they are only discussed below to the limited extent
they are relevant.

                                               3
       I.     SERVICE OF PROCESS

¶6.    United’s first argument on appeal is that service of process was improper and

ineffective because the summons and complaint named “United Airlines Corporation,” not

United Airlines, Inc., and misidentified United’s state of incorporation and address. “In the

absence of proper service of process, the court lacks jurisdiction, so any default judgment

that it enters is void.” S & M Trucking LLC v. Rogers Oil Co. of Columbia, 195 So. 3d 217,

221 (¶16) (Miss. Ct. App. 2016). “If a default judgment is void, the trial court has no

discretion and must set the judgment aside.” McCain v. Dauzat, 791 So. 2d 839, 842 (¶7)

(Miss. 2001). “Sufficiency of service of process is a jurisdictional issue, which is reviewed

de novo.” BB Buggies Inc. v. Leon, 150 So. 3d 90, 95 (¶6) (Miss. 2014).

¶7.    McCubbins filed his complaint alleging negligence and breach of contract in circuit

court on January 16, 2015. As noted above, the complaint misidentified United as “United

Airlines Corporation,” an Illinois corporation with a principal place of business in the

Chicago suburb of Elk Grove Township. In fact, United is “United Airlines, Inc.,” a

Delaware corporation with its principal place of business in downtown Chicago.

¶8.    McCubbins did, however, serve a summons and the complaint on United’s registered

agent for service of process in Mississippi, CT. The summons and complaint were served

personally on Matthew Thiebodeaux, an employee of CT, on February 12, 2015, by Melissa

Rand, an employee of McCubbins’s attorney, Wayne Ferrell. Rand and Thiebodeaux knew

one another by name because she regularly served process on CT.

                                             4
¶9.    In addition, Exhibit A attached to the complaint served on CT is the eTicket itinerary

and receipt issued by United to McCubbins. Notably, the ticket was sent to McCubbins from

“United Airlines, Inc.”

¶10.   United failed to answer the complaint, so McCubbins applied for and obtained an

entry of default. McCubbins then filed a motion for a determination of damages and entry

of final judgment. On November 25, 2015, the circuit court entered judgment in favor of

McCubbins and against “United Airlines Corporation” for $70,000, including actual damages

of $50,000 and punitive damages of $20,000. On January 8, 2016, Ferrell mailed United’s

CEO a letter—at United’s correct, downtown Chicago address—demanding payment.

¶11.   We pause our discussion of the case’s procedural history here to discuss other

evidence related to McCubbins’s service of process on United’s registered agent, CT. An

affidavit from a CT employee states that CT’s records show that CT sent Ferrell a letter by

regular mail on February 13, 2015—i.e., the day after McCubbins served CT. The letter

advised as follows: “United Airlines Corporation was not listed on our records or on the

records of the State of MS. CT was unable to forward.” An affidavit from an employee in

United’s legal department confirms that United did not receive notice of the lawsuit, from

CT or otherwise, until Ferrell’s January 2016 letter to United’s CEO.

¶12.   The record copy of the February 13, 2015 letter from CT to Ferrell is not signed;

however, CT states that such letters are sent out automatically and are not signed. Ferrell

denied under oath that he ever received the letter. In addition, the letter purports to show that

                                               5
CT mistakenly sent a copy of the letter to the Hinds County Chancery Court; however, the

chancery clerk provided an affidavit stating that the court has no record of receiving such a

letter. Nor is there any evidence that the circuit court ever received such a letter.

¶13.   In opposition to United’s motion to set aside the default judgment, McCubbins also

submitted copies of CT’s policies and procedures for handling “name discrepancies” in

documents served on CT. McCubbins obtained these documents from CT by subpoena.

These documents suggest that if CT had followed its own policies and procedures, it would

have identified United as the likely defendant and forwarded the complaint and the summons

to United.

¶14.   In the circuit court, United also submitted a number of its filings with the Mississippi

Secretary of State, which show its correct corporate name and state of incorporation and the

current address of its principal place of business. On appeal, United argues that “[t]his Court

may take judicial notice of [such] records.” We agree. We also note that annual reports that

United filed with the Secretary of State as recently as 2008 showed that 1200 East Algonquin

Road in Elk Grove Township was United’s principal place of business. United apparently

moved its headquarters to downtown Chicago around that time. Thus, the address referenced

in McCubbins’s complaint was out of date, but it was not pulled out of thin air.

¶15.   Our Supreme Court has addressed the concept of a “misnomer” in several prior

opinions. In Campbell & Campbell v. Pickens Bank, 134 Miss. 559, 565, 99 So. 378, 378-79

(1924), a writ of garnishment and summons directed to the “Bank of Pickens” were served

                                              6
on the cashier for the “Pickens Bank.” The “Bank of Pickens” had been defunct for several

years. Id. at 565, 99 So. at 380. The “Pickens Bank” was the intended garnishee, but it was

misnamed in the writ and summons. Id. After a default judgment was entered against the

Pickens Bank, the bank moved to set aside the judgment, arguing that it was not properly

served with process. Id. at 565-66, 99 So. at 379. The cashier denied that he was served, but

after hearing testimony, the chancellor found as fact that the cashier was served. Id. at 567,

99 So. at 379. Even so, the Pickens Bank argued that service was ineffective because it was

not the entity named in the writ and summons. Id. at 566, 99 So. at 379. On appeal, our

Supreme Court disagreed. Id. at 568, 99 So. at 380. The Court held that service was proper

and that one summoned by a wrong name has a duty “to appear and object to the misnomer”;

and if he fails to do so, the judgment is not void merely on account of the misnomer. Id.

¶16.   The Supreme Court later distinguished Pickens Bank in Delta Cotton Oil Co. v.

Planters’ Oil Mill, 142 Miss. 591, 107 So. 764 (1926). In Delta Cotton Oil, the summons

was served on a man who served as an agent for two entities with similar names, and the

summons failed to correctly and precisely name either entity. Id. at 596-97, 107 So. at 764.

Moreover, on the particular underlying facts of that case, the judgment could have been

“applied to one as readily as to the other.” Id. at 601, 107 So. at 767. The Supreme Court

held that in that situation there was “such uncertainty as [to] make the rule of misnomer

inapplicable.” Id. The Court reaffirmed Pickens Bank’s holding and “the doctrine of

misnomer” as “a wholesome doctrine.” Id. But the Court held that the doctrine “must be

                                              7
limited to the cases where the identity of the persons sued and against whom judgment is

rendered is not doubtful.” Id. Accordingly, in Delta Cotton, the Court held that, on the facts

of that case, the judgment was void. Id.

¶17.   In a more recent case, our Supreme Court discussed another “set of circumstances”

in which the “doctrine of misnomer” does not apply. D.P. Holmes Trucking LLC v. Butler,

94 So. 3d 248, 252 (¶¶10-11) (Miss. 2012). In D.P. Holmes Trucking, the plaintiff “did not

simply misname the defendant” but rather “sued a [party] he believed to be responsible”

when, in fact, “he should have sued a different party.” Id. at (¶11). The Court held the

plaintiff was trying to substitute one real party for another real party rather than merely

correct a misnomer. Id.

¶18.   A recent decision of the Georgia Court of Appeals is also helpful and persuasive. In

Mathis v. BellSouth Telecommunications Inc., 690 S.E.2d 210 (Ga. Ct. App. 2010), the

plaintiff served Corporation Service Co. (CSC) with a summons directed to “AT & T

Telecommunications.” Id. at 212. The intended subject of the complaint, BellSouth d/b/a

AT & T of Georgia (BellSouth), appeared and argued that service of process was improper

and ineffective because “there was no such entity as AT & T Telecommunications.” Id.

However, the Georgia Court of Appeals held that service of process was sufficient and

effective because the plaintiff properly served BellSouth’s registered agent (CSC), and as

BellSouth’s registered agent, “CSC was obligated to recognize the trade names of its clients

and also to recognize some misstatements of its clients’ names and to accept service, on

                                              8
behalf of its clients, of lawsuits filed under such misnomers.” Id. at 214 (emphasis added;

quotation marks omitted).

¶19.   Based on our Supreme Court’s decision in Pickens Bank and the persuasive reasoning

of the Georgia Court of Appeals in Mathis, we hold that service of process in this case was

sufficient to give the circuit court jurisdiction over United. We recognize that there are some

distinctions between this case and Pickens Bank and Mathis. However, those differences do

not change the outcome. This case differs from Pickens Bank in that process was served on

the defendant’s registered agent, rather than on an employee of the defendant at its principal

place of business, as in Pickens Bank. However, the registered agent’s basic purpose,

especially in the case of an out-of-state corporation doing business in this State, is to stand

in the shoes of the corporation for purposes of accepting service of process. See Miss. Code

Ann. § 79-35-13(a) (Rev. 2013). For this reason, CT has an obligation “to recognize some

misstatements of its clients’ names and to accept service, on behalf of its clients, of lawsuits

filed under such misnomers.” Mathis, 690 S.E.2d at 214.

¶20.   A commercial registered agent’s obligation to know its clients is not limitless, but it

applies in this case, when (1) the misnomer was limited to the use of “Corporation” rather

than “Inc.,” (2) the complaint specifically identified the former address of United’s principal

place of business, (3) there is nothing to suggest that the complaint or summons identified

or even suggested that the defendant was some other entity that actually exists, and, perhaps

most important, (4) the complaint and Exhibit A to the complaint, McCubbins’s United

                                               9
Airlines ticket and receipt, should have dispelled any confusion as to the true identity of the

defendant. Under these circumstances, we conclude that service of process was proper and

sufficient; therefore, the circuit court had jurisdiction, and judgment is not “void.”

       II.    THREE-PART BALANCING TEST

¶21.   United also argues that, even if service of process was effective, the default judgment

should have been set aside under Mississippi Rule of Civil Procedure 60(b) and precedent

of the Mississippi Supreme Court and this Court. For the reasons that follow, we agree.

¶22.   A circuit court may set aside a clerk’s entry of default “for good cause shown.”

M.R.C.P. 55(c). However, once “a default judgment has been entered, a party must seek

relief under Rule 60(b).” Tucker, 198 So. 3d at 309 (¶22) (emphasis added). “An application

for vacation of a default judgment is addressed to the sound discretion of the trial court.” Id.

at (¶24) (quoting Guar. Nat’l Ins. v. Pittman, 501 So. 2d 377, 388 (Miss. 1987)). Therefore,

we review a “trial court’s grant or denial of a motion to set aside . . . a default judgment for

abuse of discretion. But if the trial court’s decision was based on an error of law, then we

will reverse.” Id.

¶23.   When ruling on a Rule 60(b) motion to set aside a default judgment, “the trial court

must determine” and consider three factors: “(1) the nature and legitimacy of the defendant’s

reasons for his default, i.e., whether the defendant has good cause for default, (2) whether

the defendant in fact has a colorable defense to the merits of the claim, and (3) the nature and

extent of prejudice which may be suffered by the plaintiff if the default judgment is set

                                              10
aside.” Id. at (¶23) (emphasis added) (quoting BB Buggies, 150 So. 3d at 101 (¶23)).

“Indeed, the trial court must employ the three-part balancing test when deciding whether to

set aside a default judgment, and this Court must strike the same balance when determining

whether the trial court abused its discretion in making that decision.” Wesley Health Sys. v.

Estate of Love, 200 So. 3d 440, 446 (¶24) (Miss. 2016) (quotation marks omitted).2

¶24.   “[The Supreme] Court has held that trial courts should not be grudging about setting

aside a default judgment when a proper showing has been made.” Tucker, 198 So. 3d at 309

(¶25). “Because the law does not favor default judgments, where there is a reasonable doubt

as to whether or not a default judgment should be vacated, doubt should be resolved in favor

of opening the judgment and hearing the case on its merits.” Id. (quotation marks omitted).

“And, due to the importance of affording litigants a trial on the merits, any error made by a

trial judge should be in the direction of setting aside a default judgment and proceeding with

trial.” Id. (quotation marks omitted). Under the three-part balancing test, the default

judgment in this case must be set aside so that the case may be heard on the merits.

              1.      GOOD CAUSE

¶25.   We will assume for purposes of this appeal that United did not have “good cause” for

       2
         In Wesley Health System, the Supreme Court emphasized the three-part balancing
test and appeared to hold that the trial court’s failure to apply the test was a per se abuse of
discretion and reversible error. See Wesley Health Sys., 200 So. 3d at 446-47 (¶¶23-26). The
same is true in this case. Although both parties briefed and argued the three-part test in the
circuit court, the circuit court’s ruling did not address any of the relevant factors. We do not
reverse on this ground, however, because we conclude that application of the three-part test
requires that the default judgment be set aside.

                                              11
its default. The “failure to file an answer” due to “an unintentional mistake” is not “good

cause.” BB Buggies, 150 So. 3d at 101-02 (¶24). It is true that United failed to answer

because its registered agent, CT, failed to forward the summons and complaint. It is also true

that CT’s failure to forward the complaint is attributable to McCubbins’s failure to correctly

identify United. Arguably, this provides “cause” for United’s failure. However, as discussed

above, as United’s registered agent for service of process, CT is United for purposes of

service of process, so mistakes or failures by CT may be imputed to United. In this case, it

is unnecessary to make any conclusive determination as to this factor because “lack of good

cause alone will not prevent the Court from setting aside a default judgment if the other two

factors weigh in favor of setting it aside.” Id. at 102 (¶24).

              2.     COLORABLE DEFENSE

¶26.   The Supreme Court has “held unequivocally that the second factor, the presence of

a colorable defense, outweighs the other two, and [the Court has] encouraged trial courts to

vacate a default judgment where the defendant has shown that he has a meritorious defense.”

Id. at (¶25) (quotation marks omitted). “A colorable defense is one that reasonably may be

asserted, given the facts of the case and the current law.” Tucker, 198 So. 3d at 312 (¶35).

“A defense need not be compelling, be proven to trial standards, or be supported by sworn

evidence in order to qualify as a ‘colorable defense.’” Id. It is only necessary that the

defense “be a reasonable one.” Id. Indeed, the Supreme Court has held that “a defense of

questionable strength may be colorable.” Id. (quotation marks omitted).

                                              12
¶27.   In this case, United primarily relies on its Contract of Carriage as a colorable defense.

McCubbins’s eTicket stated: “Notice of Incorporated Terms - Transportation is subject to the

terms and conditions of United’s Contract of Carriage, which are incorporated herein by

reference. . . . The full text of United’s Contract of Carriage is available at united.com or you

may request a copy at any United ticket counter.” Rule 19(A) of United’s Contract for

Carriage provides in relevant part:

       Each Passenger desiring transportation across any international boundary is
       responsible for obtaining and presenting all necessary travel documents, which
       shall be in good condition, and for complying with the laws of each country
       flown from, through or into which he/she desires transportation. UA reserves
       the right to seek reimbursement from the Passenger for any loss, damage, or
       expense suffered or incurred by UA by reason of such Passenger’s failure to
       do so. UA is not liable for any assistance or information provided by any
       employee or agent of UA to any Passenger relating to such documents or
       compliance with such laws, or for the consequences to any Passenger resulting
       from his/her failure to obtain and present such documents, which shall be in
       good condition, or to comply with such laws.

In addition, Rule 28(G) of United’s Contract for Carriage provides:

       UA shall not be liable for any damage arising out of UA’s compliance with
       any laws, government regulations, orders, rules, requirements or security
       directives or as a result of a Passenger’s failure to comply with such laws,
       government regulations, orders, rules, requirements or security directives or
       as a result of Passenger’s reliance on advice provided by UA regarding such
       laws, regulations, orders, rules, requirements or security directives. See also
       Rule 19.

United’s Contract of Carriage was filed with the United States Department of Transportation

as a “Tariff” at all times relevant to this case.

¶28.   Panzer v. Continental Airlines Inc., 398 F. Supp. 2d 529 (S.D. Miss. 2005), addressed

                                               13
the effect of essentially identical provisions of another airline’s contract for carriage and an

essentially identical claim. In Panzer, the plaintiffs purchased tickets for themselves and

their two minor children to fly to Costa Rica on Continental Airlines. Id. at 530. They

“allege[d] that on more than one occasion [Continental] employees . . . informed them that

a birth certificate was sufficient documentation for the two children to enter Costa Rica.”

Id. However, when the plaintiffs landed at the airport in Costa Rica, they were informed that

passports were required for the children, they were not allowed to enter the country, and they

“were forced to remain in the airport until the next day when they were transported back to

the United States.” Id. The plaintiffs subsequently filed suit against Continental. Id.

¶29.   The Panzer court held that the plaintiffs’ claims were barred by rules 19 and 28 of

Continental’s contract for carriage—which were substantively identical to the same rules in

United’s Contract for Carriage. See id. at 531-32. The court held that, as a matter of federal

law, “[t]ariffs that are validly filed with the DOT are considered binding law between an

airline and its passengers.” Id. at 531 (collecting cases). The court also held that the contract

of carriage “clearly dictate[d] that passengers, not the airline, [were] responsible for

procuring proper travel documents” and that the airline was “not liable for any

misinformation provided by . . . its employees regarding the requisite travel documentation.”

Id. at 532.3 In addition, the court rejected the plaintiffs’ argument “that the terms of the

       3
       See also Levy v. Delta Airlines, No. 02 Civ. 477(TPG), 2004 WL 2222149, at *5
(S.D.N.Y. Sept. 30, 2004) (“It was the responsibility of the [plaintiffs], both as a matter of
common sense and under [Delta’s contract of carriage], to obtain for [their] child the proper

                                               14
Contract were never ‘effectively’ communicated to them.” The court held that “[a]n airline

passenger is deemed to have constructive knowledge of a tariff that has been properly filed

with the DOT.” Panzer, 398 F. Supp. 2d at 532. Moreover, as in this case, the plaintiffs’

eTicket alerted them to additional terms and conditions and incorporated by reference the

contract for carriage. The district court observed that “[p]ursuant to federal regulation, ‘a

ticket or other written instrument that embodies the contract of carriage may incorporate

contract terms by reference . . . .’” Id. (quoting 14 C.F.R. § 253.4).

¶30.   There is no material difference between Panzer and this case. Moreover, McCubbins

fails to address Panzer or the relevant provisions of the Contract of Carriage.4 At oral

travel documents. [They] had no right to rely on a Delta ticket agent in connection with this
subject.”); Williams v. Nw. Airlines Inc., 163 F. Supp. 2d 628, 631 (W.D.N.C. 2001)
(“Basically, federal law provides that international carriers are not assurers of their
passengers’ compliance with the various international laws concerning entry. The duty, as
it should be, is placed solely on the passengers.”); Seisay v. Compagnie Nationale Air
France, No. 95 Civ. 7660(JFK), 1997 WL 431084, at *4 (S.D.N.Y. July 30, 1997) (holding
that under the applicable tariff “it was solely [the passenger’s] obligation to obtain [necessary
travel] documents,” and “under the terms of the tariff, [the airline was] not liable for breach
of contract”).
       4
         McCubbins asserts that Judge Jordan’s order remanding this case to state court (see
supra note 1) rejected United’s argument based on the Contract of Carriage. This assertion
conflates two distinct issues. Judge Jordan ruled that federal question jurisdiction did not
exist because McCubbins’s claims were not completely preempted by the Airline
Deregulation Act or the Montreal Convention. A defense based on federal law does not
provide a basis for removal. See, e.g., Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6
(2003). However, the Supreme Court has held that purely state-law claims, such as
McCubbins’s, may be removed to federal court “when a federal statute wholly displaces the
state-law cause of action through complete pre-emption.” Id. at 8. United argued that the
Airline Deregulation Act and the Montreal Convention completely preempted McCubbins’s
claims and thereby granted the federal court jurisdiction over the case. Judge Jordan rejected
United’s jurisdictional arguments; however, he did not address, let alone reject, United’s

                                               15
argument, McCubbins’s counsel stated that this Court is not “bound” by Panzer. It is true

that we are not bound by Panzer or similar decisions of other federal district courts. See

supra n.3. However, at this stage, United is not required to show that its defense is

dispositive or unassailable. United is only required to show that it has a “colorable” defense.

As stated above, “even a defense of questionable strength may be colorable” if it is a

“reasonable” defense. Tucker, 198 So. 3d at 312 (¶35); see also Olive v. Malouf, 94 So. 3d
1254, 1257 (¶13) (Miss. Ct. App. 2012) (stating that a defendant is not required to show that

it is “likely to prevail” in order to establish a “colorable defense” (quoting Leach v. Shelter

Ins., 909 So. 2d 1283, 1287 (¶13) (Miss. Ct. App. 2005)). United’s Contract of Carriage,

related federal law, and the on-all-fours opinion in Panzer provide at least a “reasonable” or

“colorable” defense to McCubbins’s claims.

              3.     PREJUDICE

¶31.   “[T]he extent of prejudice to the opposing party is a relevant consideration when

ruling on a motion to set aside an entry of default [or a default judgment].” Tucker, 198 So.
3d at 316 (¶46). “However, the plaintiff’s need to litigate the claims in the event a default

judgment is set aside is not grounds for a finding of prejudice.” Id. (citing BB Buggies, 150
So. 3d at 104 (¶31)). McCubbins fails to identify any other type of prejudice that he would

experience if the default judgment is set aside.5 Accordingly, the lack of prejudice also

defense on the merits based on the terms of its Contract of Carriage.
       5
      McCubbins argues that the general “delay” since the incident amounts to prejudice.
However, McCubbins himself waited almost two years after the incident to file the lawsuit.

                                              16
weighs in favor of setting aside the default judgment.

¶32.   “Two of the three factors—colorable defense and prejudice—weigh in favor of

[United] and, thus, in favor of setting aside the default judgment. Therefore, we hold that

the trial court abused its discretion in failing to set aside the default judgment. The default

judgment against [United] is set aside, and the case is remanded for proceedings consistent

with the instant opinion.” BB Buggies, 150 So. 3d at 105 (¶37).

                                      CONCLUSION

¶33.   Service of process on United’s registered agent was proper and sufficient; therefore,

the judgment was not void, and the circuit court properly refused to dismiss the case due to

improper service of process. However, for the reasons discussed above, the default judgment

must be set aside so that the case may be heard and decided on its merits. Therefore, the

judgment of the circuit court is reversed and the case is remanded for further proceedings

consistent with this opinion.

¶34.   REVERSED AND REMANDED.

     LEE, C.J., IRVING AND GRIFFIS, P.JJ., CARLTON, FAIR, GREENLEE,
WESTBROOKS AND TINDELL, JJ., CONCUR. BARNES, J., CONCURS IN PART
AND IN THE RESULT WITHOUT SEPARATE WRITTEN OPINION.

See BB Buggies, 150 So. 3d at 104 (¶33) (plaintiffs cannot claim prejudice based on their
own delay in filing suit). After learning of the default judgment against it, United promptly
removed the case to federal court and simultaneously moved to set aside the default
judgment. See supra n.1. While the removal to federal court and remand to state court took
some time, there is no showing that the removal was frivolous or undertaken for purposes of
delay.

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