S & M Trucking, LLC v. Rogers Oil Co. of Columbia

Citations: 195 So. 3d 217; 2016 WL 3153745Docket: No. 2015-CA-00526-COA

Court: Court of Appeals of Mississippi; June 7, 2016; Mississippi; State Appellate Court

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Rogers Oil Company of Columbia Inc. (Rogers Oil) initiated a lawsuit against S. M Trucking LLC (S. M) in circuit court to recover an alleged debt of $23,258.48, plus attorney's fees. After failing to serve S. M’s registered agent and its members, Rogers Oil attempted service through the Secretary of State as allowed by Mississippi law. S. M did not respond within the required thirty days, prompting Rogers Oil to obtain a default judgment. Upon discovering the judgment, S. M moved to have it set aside, claiming it was void due to improper service. The circuit court denied this motion, leading to S. M’s appeal. The court found that service under the applicable statute was improper, rendering the default judgment void. Consequently, the court reversed the circuit court's decision and remanded the case for further proceedings.

Rogers Oil is based in Columbia, Mississippi, and sells fuel, while S. M is a small trucking company with members Stephanie and Michael Lee, who were customers of Rogers Oil. The complaint filed by Rogers Oil on May 21, 2013, alleged non-payment for goods and services and specified S. M’s principal business location and registered agent. Despite multiple attempts at service, including issuing alias summonses and extending the service deadline, Rogers Oil was unable to effectuate service on S. M. An affidavit from a private investigations firm confirmed ongoing unsuccessful efforts to serve any authorized representative of S. M Trucking.

Rogers Oil submitted an invoice from the Barnett Group detailing efforts to serve S. M, which included multiple visits to various addresses associated with the Lees and phone calls to Michael Lee, but lacked verification or explanation. On February 28, 2014, the clerk issued an alias summons to S. M Trucking, LLC, sent by certified mail to an incorrect address. The summons was returned unclaimed with handwritten alterations to the address. On April 7, 2014, Rogers Oil obtained a default judgment for $28,903.74 due to S. M's non-payment. Subsequently, Rogers Oil requested a judgment debtor examination, which was granted, and a citation was served to Stephanie Lee. S. M later filed a motion to set aside the default judgment, claiming it was void due to improper service and lack of jurisdiction. S. M also noted its administrative dissolution and denied owing any debt, despite admitting to purchasing fuel from Rogers Oil. In response, Rogers Oil contended that S. M's motion was untimely, that jurisdiction and venue were proper, and filed for a writ of execution against S. M's property.

On February 25, 2012, the circuit court denied S. M’s motion to set aside a default judgment, concluding that S. M was properly served, that the court had jurisdiction, and that the motion was untimely. The court also denied Rogers Oil’s motion for a writ of execution. S. M filed a notice of appeal. The discretion to grant or deny a Rule 60(b) motion typically lies with the lower court unless the judgment is void, which requires the court to set it aside. A default judgment is void if there was improper service of process, which is governed by Mississippi Rule of Civil Procedure 60(b)(4). Unlike the first three subsections of Rule 60(b), which impose a six-month filing limit, subsection (4) has no such limit, as a void judgment cannot be cured by time. Rogers Oil claimed proper service through the Secretary of State, but S. M contended that Rogers Oil did not demonstrate reasonable diligence in attempting to serve S. M’s governors. The record includes attempts at service by Windham and Walker, but their affidavits lack sufficient detail to substantiate claims of reasonable diligence. An invoice from the Barnett Group indicates some efforts to serve the Lees, but it is unverified and offers little weight without supporting evidence. The attempts to locate the Lees at their home and business address were insufficient to establish reasonable diligence.

Rogers Oil failed to serve the Lees via first-class mail, despite Mississippi Rule of Civil Procedure 4(c)(3) allowing such service, and did not demonstrate reasonable diligence in attempting service. Evidence showed no attempts by the Lees to evade service, as Rogers Oil only noted the absence of individuals at the Lees’ home on unspecified occasions. The comparison with other cases indicated that service through the Secretary of State was justified only when defendants actively avoided service, which was not established here. Moreover, Rogers Oil managed to locate and serve Stephanie Lee shortly after a court order for a judgment debtor exam, further questioning its claims of diligence.

Rogers Oil also argued that S. M waived any objection to service by participating in proceedings after entering an appearance. However, S. M countered that Rogers Oil did not raise the waiver argument in the circuit court, instead focusing on the timeliness of S. M’s motion to set aside the default judgment. Ultimately, the law clarifies that a defendant’s entry of appearance does not waive the right to contest jurisdiction due to improper service, rendering Rogers Oil's waiver argument meritless. Thus, S. M’s appearance was legally insignificant concerning the challenge to service.

S. M did not waive its right to contest the sufficiency of service by participating in a judgment debtor exam on November 10, 2014, prior to filing its motion to set aside the default judgment. Mere participation in the exam, which pertained only to collection efforts by Rogers Oil and not the merits of the case, did not constitute a defense on the merits. The court noted that a defendant must raise jurisdictional challenges at the earliest opportunity, but S. M's initial action to contest the default judgment due to insufficient service was timely, occurring only nineteen days after its appearance. The court concluded that Rogers Oil failed to demonstrate reasonable diligence in serving S. M's members before resorting to service through the Secretary of State, rendering the default judgment void. Therefore, the judgment of the Marion County Circuit Court was reversed and the case was remanded for further proceedings, with all appeal costs assessed to the appellee.

The attorney's fee amount in the judgment was altered from the original request to $4,950, yet the judgment reflects the total requested in Rogers Oil's motion. S. M contended that Marion County was an improper venue and that the circuit court lacked jurisdiction since S. M resided in Hinds County and purchased fuel in Covington County. Relevant case law includes Gillard v. Great S. Mortg. Loan Corp. and Bryant v. Lovitt. A default judgment can be set aside under Rule 60(b)(2), requiring a motion to be filed within six months; however, S. M's motion was filed over seven months post-judgment. Rule 4(c)(3) applies to defendants under Rule 4(d)(4), which includes unincorporated associations like limited liability companies, as defined by state law. The judgment was deemed void due to improper service, thus making S. M's venue and jurisdiction arguments unnecessary to address.