DAKOTA ENTERPRISES, INC. v. JIMMY CARTER, as next friend of SHANE CARTER, a minor
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RENDERED: May 30, 2003; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2001-CA-002417-MR
DAKOTA ENTERPRISES, INC.
APPELLANT
APPEAL FROM WHITLEY CIRCUIT COURT
HONORABLE PAUL E. BRADEN, JUDGE
ACTION NO. 01-CI-00248
v.
JIMMY CARTER, as next friend of
SHANE CARTER, a minor
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, McANULTY AND PAISLEY, JUDGES.
PAISLEY, JUDGE.
This is an appeal from an order entered by the
Whitley Circuit Court denying appellant’s motion to set aside a
default judgment.
For the reasons stated hereafter, we affirm.
Appellee Jimmy Carter, as the next friend of his minor
son, Shane Carter, filed a verified complaint on April 25, 2001,
asserting that Shane was injured through the negligent and
careless operation, maintenance, and loading or unloading of
carnival equipment by the employees and agents of appellant, an
Ohio corporation.
The certified return receipt which was filed
in the circuit court record on May 1 shows that the circuit
court clerk forwarded a copy of the summons and complaint to the
Kentucky Secretary of State.
However, the record also contains
the unopened envelope, postmarked May 2, on which were printed
the Secretary of State’s return address and a mailing address of
“Dakota Enterprises, Inc., Kevin Nolan, 3500 Moxahala Park Rd.,
Zanesville, OH 43701.”
That envelope, which was filed in the
record on June 7, bore a certified return receipt and was
stamped “unclaimed.”
Appellee filed a motion on June 19 seeking a default
judgment.
The court granted the motion on July 9, and on August
13 it entered a final judgment awarding damages in the amount of
$85,934.45.
On September 14, 2001, appellant made its first
appearance in the case by filing a CR 60.02 motion to set aside
the default judgment on the ground of excusable neglect.
More
specifically, appellant asserted that it had never been served
or given notice of the proceeding.
The motion was accompanied
by the affidavit of Kevin Nolan, who stated:
1.
I, Kevin Nolan, am the President of
Dakota Enterprises, Inc.
2.
I, Kevin Nolan, was never served with a
summons or complaint in this suit.
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3.
Because my wife and I are in the
carnival business, we are routinely
absent from our house from March to
October.
4.
Occasionally, my father bags the mail
at our house for pickup.
5.
Occasionally, I send a driver to pick
up the mail at my father’s house.
6.
At all times that I either returned to
my home or read the bagged mail, I
never received any summons that was
attempted to be served on me or any
notice of this suit.
7.
I had no knowledge of this suit until
Wednesday, August 22, 2001.
The trial court denied appellant’s motion, and this appeal
followed.
Appellant contends on appeal that the trial court
abused its discretion by denying appellant’s motion to set aside
the default judgment based on appellee’s alleged failure to
provide it with proper service of process.
We disagree.
KRS 454.210(3)(a) provides that if personal
jurisdiction is authorized, service of process against a
nonresident corporation may be made on “the Secretary of State
who, for this purpose, shall be deemed to be the statutory agent
of such person or corporation.”
Further, KRS 454.210(3)(b)
provides:
The clerk of the court in which the action
is brought shall issue a summons against the
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defendant named in the complaint. The clerk
shall execute the summons by sending by
certified mail two (2) true copies to the
Secretary of State and shall also mail with
the summons two (2) attested copies of
plaintiff’s complaint. The Secretary of
State shall, within seven (7) days of
receipt thereof in his office, mail a copy
of the summons and complaint to the
defendant at the address given in the
complaint. The letter shall be posted by
certified mail, return receipt requested,
and shall bear the return address of the
Secretary of State. The clerk shall make
the usual return to the court, and in
addition the Secretary of State shall make a
return to the court showing that the acts
contemplated by this statute have been
performed, and shall attach to his return
the registry receipt, if any. Summons shall
be deemed to be served on the return of the
Secretary of State and the action shall
proceed as provided in the Rules of Civil
Procedure[.] (Emphasis added.)
Here, there is no dispute that the procedural
requirements described in KRS 454.210(3) were satisfied, and
that the unopened summons was returned as “unclaimed.”
However,
appellant relies on Cox v. Rueff Lighting Co., Ky. App., 589
S.W.2d 606 (1979), in asserting that the default judgment should
be set aside based on appellant’s failure to receive actual
notice of the action.
Like the matter now before us, Cox involved the
service of notice on a nonresident corporation.
The parties did
not dispute that the summons and complaint were properly sent by
registered mail to Cox, d/b/a the corporation, and that the
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corporation’s process agent in fact received and opened the
letter before discarding it as junk mail.
Finding that Cox had
notice of the registered letter or, at the least, that he was
given “sufficient information to place him on a kind of inquiry
notice to find out about the letter and its contents,” a panel
of this court declined to
a fortiori create a rule that a showing of
no actual notice may not constitute good
cause sufficient to warrant the setting
aside of a default judgment. The facts and
circumstances of each individual case should
be weighed. We think that in a case such as
the instant one which is a simple one-on-one
action for debt, a trial judge would be hard
pressed to refuse to set aside a default
judgment if he were truly convinced that the
movant had no actual notice in fact and was
possessed of an arguably meritorious
defense.
Id. at 607.
This panel therefore concluded that since Cox
failed to take available steps to protect corporate interests
after receiving notice of the pending action, the trial court
did not abuse its discretion by refusing to grant the requested
postjudgment relief.
Appellant asserts that the present circumstances are
distinguishable from those described in Cox, as here there was
no indication that appellant was placed either on actual notice
as to the contents of the unopened, returned envelope, or on any
type of “inquiry notice to find out about the letter and its
contents.”
Id. at 607.
However, appellant fails to acknowledge
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that this argument was previously rejected in circumstances very
similar to those now before us.
In Davis v. Wilson, Ky. App.,
619 S.W.2d 709, 710-11 (1980), summons
was promptly served upon the Secretary of
State who in turn promptly forwarded it by
certified mail, return receipt requested, to
Earl Clark d/b/a Modern Car Crushers, P.O.
Box 12253, Knoxville, Tenn. 37912. The
envelope containing that summons was
returned to the Secretary of State marked
“unclaimed.” We conclude from Cox v. Rueff
Lighting Company, Ky. App., 589 S.W.2d 606
(1979), that Clark was properly served under
the long arm statute.
Thus, in Davis this court affirmed the circuit court’s
determination that under both the long arm statute and Cox, the
nonresident corporation was properly served when the Secretary of
State forwarded a properly-addressed summons by certified mail,
return receipt requested, even though the unopened envelope was
returned to it as “unclaimed.”
In view of that holding, we are
not persuaded by appellant’s argument herein that the trial court
erred by failing to find that it was not properly served in
accordance with Cox.
Further, we are not persuaded by appellant’s assertion
that for purposes of CR 60.02 relief, its failure to timely
answer the complaint constituted excusable neglect because its
listed agent for the service of process was absent from home when
the post office attempted to serve process.
As noted above,
Kevin Nolan indicated by affidavit that he is absent from home on
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business each year from March to October, that the mail at his
house is occasionally collected by his father, and that he
occasionally sends a driver to pick up the mail at his father’s
house.
It is clear from these statements that although Nolan is
appellant’s named statutory agent for the service of process,
there is no reliable and regular method in place for serving
process upon Nolan or anyone else during the eight months when
Nolan is away from his home each year.
Obviously, the trial
court concluded that Nolan’s limited availability for the service
of process did not constitute a valid excuse for appellant’s
failure to timely respond to an action filed against it.
Having
carefully reviewed the record, we cannot say that the trial court
abused its discretion by reaching this conclusion.
The court’s order is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Donald Killian Brown
Jeri D. Barclay
Louisville, Kentucky
Todd K. Childers
Corbin, Kentucky
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