Tonnie Norton v. Pulaski County Industrial Development Commission

DIVISION I

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

ANDREE LAYTON ROAF, JUDGE

CA01-658

April 24, 2002

TONNIE NORTON AN APPEAL FROM PULASKI COUNTY

APPELLANT CIRCUIT COURT

V. [00-5602]

PULASKI COUNTY INDUSTRIAL HONORABLE JOHN WARD, DEVELOPMENT COMMISSION CIRCUIT JUDGE

APPELLEE

AFFIRMED

Appellant Tonnie Norton appeals the circuit court's refusal to set aside a default judgment entered against him in Sherwood Municipal Court. The judgment, which awarded $4,910.98 to appellee Pulaski County Industrial Development Commission (hereafter "PCIDC") and suspended Norton's commercial driver's license, was entered after Norton was served by warning order and failed to respond. On appeal, Norton argues that Rules 4(f) and 4(j) of the Arkansas Rules of Civil Procedure, which permit service of summons by warning order, and Arkansas Code Annotated section 16-13-708 (Repl. 1999), which permits a judge to suspend a defendant's driver's license under certain circumstances, are unconstitutional. We disagree and affirm.

On May 6, 1998, Norton executed a promissory note to PCIDC to obtain funds for truck driving school. Upon executing the note, he signed a document acknowledging that,if he failed to pay on the note, his commercial driver's license could be suspended. Norton indeed failed to pay, and on January 6, 1999, PCIDC sued him in Sherwood Municipal Court. An attempt to serve the complaint and summons on Norton at his last-known address in Dumas, Arkansas, was unsuccessful, the envelope having been returned marked "Box closed...." Thereafter, PCIDC president Ron Davis filed an affidavit requesting a warning order stating that diligent inquiry had been made as to Norton's whereabouts, yet his whereabouts remained unknown.

A warning order was issued by the Sherwood Municipal Clerk and published in the Pulaski County Daily Record for two consecutive weeks. Norton did not respond to the warning order, and, on May 18, 1999, PCIDC obtained a default judgment against him. The judgment awarded PCIDC $4,910.98, plus interest, costs, and attorney fees and ordered that Norton's commercial driver's license be suspended, pursuant to Norton's contractual agreement with PCIDC.

On May 8, 2000, nearly a year after the default judgment was entered, Norton moved to set it aside on the grounds that he was not served with process and that Arkansas Code Annotated section 16-13-708 was unconstitutional. The municipal court denied Norton's motion, and he appealed to Pulaski County Circuit Court. The circuit court affirmed the municipal court ruling and allowed the default judgment to stand. This appeal followed.

Norton argues first that Rule 4(f) of the Arkansas Rules of Civil Procedure is unconstitutional because, by permitting a warning order to be published in the county where the action is filed rather than the defendant's county of residence, it is not calculated to givethe defendant notice of the proceedings against him. Rule 4(f), as it existed during the times relevant to this case,1 read in pertinent part:

(f) Service Upon Defendant Whose Identity or Whereabouts Is Unknown. (1) Where it appears by the affidavit of a party or his attorney that, after diligent inquiry, the identity or whereabouts of a defendant remains unknown, service shall be by warning order issued by the clerk and published weekly for two consecutive weeks in a newspaper having general circulation in a county wherein the action is filed....

Service of process or a waiver of that service is necessary to satisfy the due process requirements of the United States Constitution. Meeks v. Stevens, 301 Ark. 464, 785 S.W.2d 18 (1990). If a default judgment is granted without sufficient service of process, that judgment should be set aside. See id.

In Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950), the United States Supreme Court recognized that service by publication is constitutionally permissible in the case of persons who are missing or unknown. In doing so, the Court acknowledged that "[c]hance alone brings to the attention of even a local resident an advertisement in small type in the back pages of a newspaper, and if he makes his home outside the area of the newspaper's normal circulation the odds that the information will reach him are large indeed." Id. at 315. Nevertheless, the Court recognized that, based on practical considerations, notice by publication is permissible, although it is "probably futile." Id. at 317.

In our view, the Supreme Court understood that service by publication was a practical but imperfect means of giving notice to a defendant, and the Court implicitly recognized that there would be instances in which the defendant being constructively served would live outside the area where notice was published. Further, our own supreme court has held that, even in the case of a non-resident defendant, Rule 4(f) provides a method of service reasonably calculated to give a defendant actual notice of the proceedings. See Horne v. Savers Fed. Sav. & Loan Ass'n, 295 Ark. 182, 747 S.W.2d 580 (1988). Additionally, we note that, under ordinary circumstances, PCIDC's suit against Norton would have been filed in Desha County, Norton's county of residence. The venue statute applicable to recovery on a note, Arkansas Code Annotated section 16-60-111(a) (1987), provides that the action may be filed in the county where the defendant resided at the time the cause of action arose. Had PCIDC filed suit in Desha County, the warning order would have been published there, under the terms of Rule 4(f). However, when Norton executed the promissory note, he agreed that, if a lawsuit were filed, he would submit to the jurisdiction of Pulaski County.

Under the circumstances, we hold that Rule 4(f)(1) meets the constitutional requirements of due process in this case.2

Regarding Norton's argument that Arkansas Code Annotated section 16-13-708 is unconstitutional, subsection (a) of that statute reads:

The court may certify in writing to the Department of Finance and Administration that a debtor has failed to make satisfactory arrangements for the payment of fines and request the department to revoke, suspend, or refuse to renew the debtor's motor vehicle registration or driver's license.

Norton contends that this statute was used by the municipal court to revoke his driver's license. However, the municipal court suspended Norton's license based on his contract with PCIDC, not based on section 16-13-708. Further, this statute applies when a defendant has failed to pay a fine, not when he has failed to pay on a promissory note. Therefore, Norton cannot show he has been prejudicially impacted by the statute, and he has no standing to challenge its constitutionality. See Bader v. State, 344 Ark. 241, 40 S.W.3d 738 (2001).

Affirmed.

Bird and Vaught, JJ., agree.

1 Rule 4(f) was amended by the Arkansas Supreme Court on January 24, 2002. See In re: Arkansas Rules of Civil Procedure; and Rules of the Supreme Court and Court of Appeals, 347 Ark. Appx. (2002).

2 Norton also challenges the constitutionality of Rule 4(j) of the Rules of Civil Procedure. However, that rule applies to warning orders issued in in rem actions, and so is not applicable here. Rule 4(j) was eliminated and combined with Rule 4(f) in the supreme court's January 24, 2002 per curiam, referred to in footnote 1.

Additionally, Norton does not argue that appellee failed to strictly comply with the requirements to perfect service pursuant to Rule 4(f) in any respect. Thus, we do not address any questions with regard to defects in the procedure employed by appellee.