Glenn Basham v. Henry Tillaart

Citation: Not availableDocket: M2002-00723-COA-R3-CV

Court: Court of Appeals of Tennessee; May 21, 2003; Tennessee; State Appellate Court

Original Court Document: View Document

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Glenn Basham, operating as Glenn Basham Nursery, filed a lawsuit against Henry Tillaart and Martin Tillaart, businessmen from Ontario, Canada, for unpaid debts related to a commercial sale of nursery stock, claiming $48,877.08, inclusive of interest. The complaint referenced the defendants under the trade name 'Dutchmaster Nurseries.' Over six years later, Basham sought to substitute the individual defendants with the Canadian corporation Dutchmaster Nurseries, Ltd. The Tillaarts moved to dismiss the case, arguing insufficient service of process and that the statute of limitations barred the claim. The trial court denied Basham's amendment request and granted the dismissal. On appeal, Basham contended that the dismissal was improper and that he should have been allowed to amend his complaint. The appellate court affirmed the trial court’s decision, noting that the original complaint was filed on June 8, 1994, and that attempts to serve the Tillaarts were made through the Tennessee Secretary of State and directed to an address in Canada. Return receipts for the service were signed by Betty-Anne Gifford, an employee of Dutchmaster Nurseries Ltd., who indicated she was not authorized to accept service on behalf of the defendants. The court's ruling was supported by Gifford’s affidavit, which clarified her role and lack of authority regarding the acceptance of legal documents.

On June 22, 1994, while employed at Dutchmaster Nurseries Limited, the author signed for mail delivered by a postman, with the return receipt cards showing identical signatures from both the postal worker and Ms. Gifford. Ms. Gifford’s affidavit does not clarify her actions regarding the mail. On November 28, 1994, the plaintiff's original counsel filed a motion for default judgment that lacked a certificate of service for the individual defendants, and no trial court action was recorded. After changing counsel, the plaintiff filed a new motion for default judgment on November 30, 1999, to which the individual defendants responded on September 18, 2000, asserting they had not entered into any agreements with the plaintiff and that Dutchmaster Nurseries, Ltd. had rejected defective nursery stock purchased from the plaintiff between 1992 and 1994. On September 29, 2000, the plaintiff sought to substitute Dutchmaster Nurseries, Ltd. for the individual defendants. The individual defendants opposed this on November 6, 2000, citing prejudice from the plaintiff's delays and also filed a motion to dismiss for insufficient service of process and failure to state a claim, arguing the claim was barred by the statute of limitations. The trial court did not exclude materials outside the pleadings, which allowed the motion to dismiss to be treated as a motion for summary judgment. On appeal, the court's review is de novo with no presumption of correctness, and the moving party is entitled to summary judgment if there are no genuine issues of material fact. The plaintiff contested the sufficiency of service of process as claimed by the defendants, a matter governed by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents, which aims to ensure timely notice to international defendants and streamline service procedures. Both the U.S. and Canada are signatories to this treaty.

The statute of limitations for the lawsuit concerning a commercial sale of goods is governed by Tenn. Code Ann. § 47-2-725(1), requiring that any breach of contract action be initiated within four years of the cause of action accruing. The plaintiff's complaint was timely filed on June 8, 1994, based on transactions occurring in March 1992. However, it remains uncertain whether the subsequent issuance and service of process met legal standards, as the trial court found deficiencies in this area regarding the individual defendants.

Under the Hague Convention, service of process must be conducted through the designated Central Authority of the foreign country—in this case, Canada's Ministry of the Attorney General for Ontario. The plaintiff failed to comply with these requirements by sending documents to the Tennessee Secretary of State instead of the Canadian Central Authority. The Secretary of State's attempt to serve the individual defendants by direct mail is not permitted under the Hague Convention. The plaintiff incorrectly cited Article 10 of the Convention, which allows for sending judicial documents by postal channels only if the destination state does not object, failing to distinguish between initial service of process and subsequent communications.

Article 10(a) of the Hague Convention is interpreted by numerous courts as a means for sending documents after service of process has been achieved via the Central Authority. It does not allow for direct mail service of leading process. Even if direct mail were permitted, service would be inadequate because it must comply with the foreign jurisdiction's laws. In this case, the individual defendants are located in Ontario, Canada, where service can occur through personal delivery, residential delivery to an adult, or mail to the last known address with an acknowledgment of receipt card. The plaintiff incorrectly directed the Tennessee Secretary of State to send documents by direct mail to the defendants’ workplace, which is not allowed under Ontario law. Ontario's rules require the acknowledgment card, which the plaintiff failed to provide. Furthermore, the documents were received by an employee, Betty-Anne Gifford, who is not an authorized agent for service of process for the defendants or their corporation, making the service invalid.

Plaintiff's method of service of process did not comply with the Tennessee Rules of Civil Procedure. Proper service requires personal delivery of the summons and complaint to the individual, or, if evaded, leaving them at the individual's residence with a suitable person, or delivering to an authorized agent. The plaintiff's attempts failed to meet these requirements, as there was no evidence of evasion by the defendants, and service at a place of business to an employee not authorized for service is insufficient. The case noted that even if Marlin Tillaart had actual knowledge of the lawsuit, such knowledge does not substitute for proper service under the Hague Convention or Tennessee law. Additionally, the original complaint's service was untimely and did not comply with Tenn. R. Civ. P. 3, resulting in the statute of limitations barring the plaintiff's action against the individual defendants. Ultimately, the court concluded that the service was deficient in multiple respects, rendering the plaintiff's claims against the defendants barred by the statute of limitations.

The plaintiff argued that the trial court incorrectly denied his motion to amend the complaint to substitute Dutchmaster Nurseries, Ltd. for the individual defendants, citing Tenn. R. Civ. P. 15.01, which encourages granting leave to amend when justice requires. He asserted that the relation back provisions of Tenn. R. Civ. P. 15.03 were met, allowing the amendment to relate back to the date of the original complaint and thus not be barred by the statute of limitations. However, the court noted that the original complaint did not toll the statute of limitations against the individual defendants due to improper service and untimely issuance of process under Tenn. R. Civ. P. 3. The court found it inconsistent to allow the relation back of a claim that was not viable at the time of the proposed amendment. Consequently, the amendment could not withstand a motion to dismiss based on the statute of limitations, leading the court to conclude that there was no abuse of discretion in denying the plaintiff's motion to amend. The trial court's judgment was affirmed, and costs were taxed to the appellant, Glenn Basham, with the case remanded for cost collection.