Court Opinion

ID: 6550831
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:25:28.376384+00
Date Added: 2024-06-11T15:56:06.277751
License: Public Domain

James R. Cooper, Judge, dissenting. I respectfully dissent from the majority opinion. I have no particular quarrel with the majority’s decision that the service was adequate because the appellant’s president had actual knowledge of the suit and thus had the opportunity to defend. However, I disagree with the majority’s, and the trial court’s, decision that the failure to file a timely answer was not excusable. What has happened is that the appellee, an attorney, induced the appellant’s president not to file an answer by agreeing to “drop the suit”. The majority finds that phrase ambiguous, but it is unlikely that the appellee meant anything other than a dismissal because the parties had agreed on a payment plan. The appellant corporation obviously relied on the appellee’s representations, for it did not file an answer or attempt to do so until it received notice that the appellee intended to present a motion for a default judgment. In Perry v. Bale Chevrolet Co., 263 Ark. 552, 566 S.W.2d 150 (1978), the Arkansas Supreme Court found that the trial court abused his discretion by granting a default judgment. The defendant was properly served with a summons, and he attempted to file an answer one day late.' His excuse for being late was that he had been in communication with representatives of the appellee and that it was agreed that the suit would be dismissed prior to the last day for filing his answer. The trial court found that excuse insufficient to prevent the granting of a default judgment. In reversing, the Supreme Court said: Under the peculiar circumstances of this case, we disagree and reverse the judgment. Pertinent circumstances are the appellant’s understanding that the suit would be dismissed without his being required to answer, his prompt action in tendering a handwritten answer and the filing of a typewritten answer only one day late. Perry, supra, at 553. As noted in Perry, supra, default judgments are not the favorites of the law, and in several instances substantial compliance by a defendant has been held sufficient to avoid a default judgment. See, Winters v. Lewis, 260 Ark. 563, 542 S.W.2d 746 (1976); Barkis v. Bell, 238 Ark. 683, 384 S.W.2d 269 (1964); Easley v. Inglis, 233 Ark. 589, 346 S.W.2d 206 (1961); Cummings v. Lord’s Art Galleries, 227 Ark. 972, 302 S.W.2d 792 (1957). On the peculiar circumstances of the case at bar, I would reverse the trial judge’s decision, and hold that the appellant’s failure to timely answer was the result of “excusable neglect” or “other just cause”. Fitzwater v. Harris, 231 Ark. 173, 328 S.W.2d 501 (1959). Tom Glaze, Judge, dissenting. Because appellee failed to obtain service on appellant as provided under Rule 4(d)(5) of the Arkansas Rules of Civil Procedure, I believe this cause should be reversed. In my opinion, the Supreme Court’s holding in Edmonson v. Farris, 263 Ark. 505, 565 S.W.2d 617 (1978) clearly dictates such reversal. Here the majority incorrectly attempts to distinguish Ed-monson. This Court erroneously states that the defendant Edmonson did not have actual notice of the suit until after the default judgment was entered and that the judgment was void for lack of notice under Ark. Stat. Ann. § 29-107 (Repl. 1962). Nothing in the Edmonson decision reflects the defendant was unaware of the suit until after the default judgment was entered. Furthermore, such a factual distinction was not significant in the Supreme Court’s holding, which was based upon appellee’s (Farris’) failure to obtain proper service under Ark. Stat. Ann. § 27-330 (Repl. 1962). In Edmonson, the defendant was out of town when his wife picked up his summons at the sheriffs office. The trial court observed that the service upon Edmonson’s wife at the sheriffs office rather than “at the place of abode” — as required under § 27-330 — was a technical distinction, and it held the service was valid. The Supreme Court reversed the trial court, holding statutory service requirements, being in derogation of common law rights, must be strictly construed and exactly complied with. The Supreme Court further held the default judgment against Edmonson was void ab initio because the sheriff failed to comply with the mandatory provisions of § 27-330. 697 S.W.2d 124 In the instant case, the sheriff failed to comply with the mandatory provisions of Rule 4(d)(5), which requires service upon a corporation by delivering a copy of the summons and complaint to an officer, partner (other than a limited partner), managing or general agent, or any agent authorized by appointment or law to receive service of the summons. Undisputedly, the sheriff served appellant’s receptionist and thereby failed to comply with any of the terms set out in Rule 4(d)(5). If the Supreme Court required strict compliance with service procedures in Edmonson, I fail to see how we can do otherwise in this cause. I dissent. Supplemental Opinion on Denial of Rehearing Delivered October 9, 1985 Melvin Mayfield, Judge. After our decision affirming the trial court, 15 Ark. App. 176, 690 S.W.2d 745 (1985), the appellant filed a petition for rehearing accompanied by a 16-page brief. The appellee has filed a response to the petition alleging that the appellant is attempting to reargue the entire case.  Arkansas Supreme Court and Court of Appeals Rule 20(g) provides that “Counsel are expected to argue the case fully in the original briefs, and the brief on rehearing is not intended to afford an opportunity for a mere repetition of the argument already considered by the Court.” Here, the appellant did not even reply to the appellee’s brief, but after our opinion was handed down, the appellant filed a brief on rehearing containing 18 cases not cited in its original brief and containing twice as many pages as the argument portion of its original brief.  We agree with the appellee that appellant’s brief on rehearing violates Rule 20(g) and that this is sufficient reason to deny the petition for rehearing. However, we think the petition should also be denied on its merits. The thrust of appellant’s original brief was that actual knowledge of a proceeding in court will not validate a default judgment granted on defective service of process. As pointed out in our original opinion, all the cases cited by appellant fell into two categories: (1) where the summons was defective in form so that it did not notify the defendant that failure to answer would result in default judgment, or (2) where the summons was not served in the proper manner and the defendant did not have actual notice of the suit until after judgment was entered against him.  In its brief on rehearing the appellant renews its argument and cites a case not cited in its original brief, Halliman v. Stiles, 250 Ark. 249, 464 S.W.2d 573 (1971), as additional authority. That case, however, presents nothing new. It clearly holds that Ark. Stat. Ann. § 29-107 (Repl. 1962) makes a judgment null and void if rendered “without notice, actual or constructive.”1 This explanation of Halliman and a case cited in appellant’s original brief, Edmonson v. Farris, 263 Ark. 505, 565 S.W.2d 617 (1978), was given in the last paragraph of the case of White v. Ray’s Bldg. Contractor, 267 Ark. 83, 589 S.W.2d 28 (1979), cited in our original opinion. But in White the appellant had actual knowledge of the suit before default judgment was entered against him and because of that the court refused to set the judgment aside. As we pointed out in our original opinion, that is the situation in the instant case.  However, the appellant’s brief on rehearing also makes a new argument on this point. It is now argued that knowledge of the pendency of an action does not cure invalid service of process where challenged by a motion to quash filed prior to the granting of a default judgment. A number of cases not cited in its original brief are cited in appellant’s rehearing brief in support of this contention. Most of them are patently not applicable and we do not find that the decision in any of them is based on the fact that a motion to quash was filed prior to the granting of a default judgment. On the other hand, one of the cases cited in White states: “After the entry of a default judgment the defendant’s attack should be directed against the judgment rather than against the service of process.” See Employers Mutual Casualty Co. v. Buckner, 233 Ark. 564, 345 S.W.2d 924 (1961). Moreover, under ARCP Rule 12(b) a defense based upon insufficiency of service of process may be raised by responsive pleading or motion, but under Rule 12(h)(1) that defense is waived by the failure to properly assert it. And in Pender v. McKee, 266 Ark. 18, 582 S.W.2d 929 (1979), the court said: It is a well-settled general rule, however, that any objection to irregularities or defects in the service of process is waived unless made promptly and diligently and that defective service of process may be sufficient to constitute legal notice of a suit and support a judgment therein, so long as the service actually gives the party served notice of the proceedings. (Citations omitted.) 266 Ark. at 35.  In view of appellant’s new argument about its motion to quash, it is important to note Rule 12 and Pender because the appellant failed to file a pleading or motion of any kind for more than 50 days after its president actually received a summons giving him notice of the filing of the suit and warning him that default judgment would be entered if no response was filed within 20 days. Rule 12 and Pender both recognize that the insufficiency of service of process may be waived and we think there is ample evidence to support the trial court’s action in denying appellant’s belated motion to quash and in granting the appellee’s motion for default judgment. Appellant’s brief for rehearing states that this case “fits exactly in the mold” of Nutrena Mills, Inc. v. Parsons Feed & Farm Supply, Inc., 234 Ark. 1058, 356 S.W.2d 421 (1962), but we do not agree. In that case the court said “the deputy sheriff’s return merely recited that he had served the writ by delivering a copy to Shorty Parsons, vice president of the appellee.” The court then pointed out that the law required that service be had upon the president of the corporation or, in his absence, upon certain other officers, and the court held that the service was void. The reason for this holding was explained in O’Guinn VW, Inc. v. Lawson, 256 Ark. 23, 505 S.W. 2d 213 (1974), in these words: “In Nutrena Mills, we pointed out that the service was void because the unavailability of the president of the corporation was neither recited in the return nor shown by the evidence.” Id. at 26. Although a motion to quash service was granted in Nutrena Mills, there was no evidence in that case from which the court could have found a waiver of the defective service. But we have a completely different situation in the instant case. Here, the return states that service was had upon Raymond Cardwell “the duly designated agent for service.” The evidence here shows that Cardwell was in fact the proper agent for service and that he became aware of and actually received the summons the same day it was left with the receptionist at his corporation’s office. However, instead of making a prompt and diligent objection to the sufficiency of the service by filing a motion or other pleading in the suit, the appellant made an agreement to pay the appellee the amount sued for and, after making substantial payments, it breached its agreement. Now it wants to set aside the judgment in the suit which it ignored and offers the excuse that, because it never really intended to fulfill the agreement it made, it should now be allowed to question the sufficiency of the service giving it notice of the suit.  Of course, “We do not favor default judgment and look with disfavor on substituting actual notice for proper notice,” see A.O. Smith Harvestore Products, Inc. v. Burnside, 282 Ark. 27, 665 S.W.2d 288 (1984), but under the circumstances in this case we do not think the trial judge’s decision should be reversed. The petition for rehearing is denied. Glaze, J., dissents. Cooper, J., would grant rehearing for the reasons expressed in his dissent to the original opinion.   See footnote in Tucker v. Johnson, 275 Ark. 61, 628 S.W.2d 281 (1982), for statement that section 29-107 was not superseded with respect to default judgments by the Arkansas Rules of Civil Procedure.