Diversified Distributors, Inc. v. Bell Appliance Service, Inc.

• Court: Court of Appeals of South Carolina
• Decided: February 18, 2003
• Docket: 2003-UP-128
• Status: Unpublished

Opinion

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Diversified Distributors, Inc.,        Respondent,

v.

Bell Appliance Service, Inc., d/b/a Bell Appliance Sales and Service, and Daniel Paul Bell,        Defendants,

Of whom Bell Appliance Service, Inc., d/b/a Bell Appliance Sales and Service, is        Appellant.

---

Appeal From Charleston County
Gerald C. Smoak, Circuit Court Judge

---

Unpublished Opinion No.  2003-UP-128
Submitted January 10, 2003 – Filed February 18, 2003

---

AFFIRMED

---

Frederick J. Newton, of Charleston; for Appellant.

Charles S. Altman and Robert E. Culver, both of Charleston; for Respondent.

PER CURIAM: Bell Appliance, Inc. (Bell Appliance) appeals the default judgment entered against it, arguing that Diversified Distributions, Inc. did not comply with Rule 4, SCRCP, when it purportedly served Bell Appliance with a summons and complaint. 

FACTS

Bell Appliance is a family-run appliance sales business, wholly owned by David S. Bell.  Bell Appliance has done business under many different, although similar, names, such as: Bell Appliance Service, Inc., Bell Appliance Sales and Service; Bell Appliance Center, Inc.; Bell Furniture Outlet; and Bell Furniture and Appliance. However, no matter what the name, the sign on top of the store, the mailing address, and the telephone number were always the same. 

In this case, Diversified alleges that Bell Appliance, doing business as Bell Appliance Sales and Service, ordered over $80,000 in appliances and failed to pay for the goods. Diversified filed a summons and complaint against Bell Appliance and Daniel Bell. In its attempt to serve Bell Appliance, Diversified learned that Bell’s registered agent was David S. Bell.  However, the registered address, 5739 Dorchester Road, Charleston Heights, South Carolina, did not exist.  Rather than send service to the non-existent address, Diversified served the summons and complaint via certified mail, return receipt requested, delivery restricted to Daniel P. Bell, at the Bell Appliance business address.  Daniel Bell is David Bell’s son and operated the appliance sales business at the time.  Daniel Bell signed the receipt for delivery. 

In addition to serving Daniel Bell, Diversified sent a copy of the summons and complaint to Bell Appliance Service, Inc.  Originally, the summons and complaint were sent with restricted delivery, but the U.S. Postal service will not send restricted delivery to a corporate entity.  Therefore, the summons and complaint were sent via certified mail, return receipt requested to Bell Appliance, and Daniel Bell accepted this service as well.

Neither defendant answered the summons and complaint, and an Order of Default and Default Judgment was entered in the amount of $111,492.65. Diversified began to execute its judgment lien upon Bell Appliance’s commercial property.  Bell Appliance moved to set aside the default judgment, arguing it was never served.

Bell Appliance argues that David Bell was the sole owner and operator of Bell Appliance Services, Inc., and that he “got out of the retail business and went to a . . . landlord type” business before this action arose. David Bell leased a portion of his building to his son, Daniel, who ran his own company called “Bell Appliance Sales.” Other businesses also rented space in David Bell’s building, and all of the businesses received mail in one large mailbox. David Bell continued to receive mail for Bell Appliance Services, Inc. in that mailbox too. David Bell asserts that he never received the summons and complaint for Bell Appliance and that Daniel Bell was an employee of an entirely separate business at the time the pleadings were received. Therefore, if Daniel Bell was in fact served with the pleadings, service was not effective against Bell Appliance.

Judge Smoak denied the motion, finding that Bell Appliance failed to meet its burden of proving that Daniel Bell was unauthorized to accept service of process on its behalf.  Bell Appliance appeals.

ISSUES

1. Was Daniel Bell authorized to receive service on behalf of Bell Appliance?
   

2. Even if Daniel Bell was authorized to receive service, was service proper where it was delivered via certified mail, return receipt requested but not restricted to the addressee?

 STANDARD OF REVIEW

“The power to set aside a default is exercised within the sound discretion of the trial court whose decision will not be disturbed on appeal absent a clear showing of an abuse of discretion.” Hill v. Dotts, 345 S.C. 304, 308, 547 S.E.2d 894, 896 (Ct. App. 2001) (citations omitted).   “An abuse of discretion in setting aside a default judgment occurs when the judge issuing the order was controlled by some error of law or when the order, based upon factual, as distinguished from legal conclusions, is without evidentiary support.”  Estate of Weeks, 329 S.C. 251, 259, 495 S.E.2d 454, 459 (Ct. App. 1997). 

DISCUSSION

Rule 4(d)(3), SCRCP, provides for service on a corporation by delivering a copy of the summons and complaint to “a managing or general agent” of the corporation. [1]   Furthermore, service can be made on a corporation by registered or certified mail, return receipt requested and delivery restricted to the addressee.  Rule 4(d)(8), SCRCP.  In determining whether service of process was properly made, this court examines whether the plaintiff sufficiently complied with the rules so that the lower court had personal jurisdiction over the defendant and the defendant had notice of the proceedings.  Roche v. Young Bros., Inc., 318 S.C. 207, 210, 456 S.E.2d 897, 899 (1995).    

In this case, service on Bell Appliance was received by Daniel Bell via certified mail, return receipt requested.  However, because of U.S. Postal Service rules, the delivery of the summons and complaint was not restricted to the addressee.

Bell Appliance first argues that Daniel Bell was not authorized to accept service on its behalf.  We disagree.

While it is clear from the record that David Bell, not Daniel Bell, was Bell Appliance’s registered agent, service on a corporation’s general or managing agent is sufficient even when the corporation has a registered agent.  Renney v. Dobbs House, Inc., 275 S.C. 562, 274 S.E.2d 290 (1981).  Therefore, so long as Daniel Bell was a general or managing agent, he was authorized to accept service on behalf of Bell Appliance.

The circuit court found that “Daniel P. Bell was operating and managing Bell Appliance Sales and Service at the business address for Bell Appliance.  The business used the same phone number, the same signs, the same name, and the same vendors that Bell Appliance had been using for several years.” (R. 9) There is ample evidence in the record to support this factual finding.  David Bell admitted that Daniel operated an appliance business in the same building in which Bell Appliance had been, the sign on the building never changed, and a partner in Diversified who dealt with both David and Daniel Bell swore in an affidavit that he was never informed that Daniel’s business was different from David’s business.  (R. 87) Therefore, we find the circuit court did not abuse its discretion in finding that Daniel Bell was a managing agent authorized to receive service of process on behalf of Bell Appliance.

Bell Appliance next argues that service was improper because it was not mailed with delivery restricted to the addressee.  We disagree.

A primary purpose of Rule 4, SCRCP, is to assure the defendant receives reasonable notice of the action.  Roche, 318 S.C. at 209, 456 S.E.2d at 899.  Exact compliance with the rule is not required to effectuate service of process.  Id. at 210, 456 S.E.2d at 899 (citations omitted).  In this case, the fact that delivery to Bell Appliance was not restricted to the addressee did not undermine the underlying goal of giving notice.    Daniel Bell, a managing agent of Bell Appliance, accepted delivery of the summons and complaint. Thus technical compliance with the statute, i.e., restricting delivery to “an officer, a managing or general agent, or to any other agent authorized by appointment or by law,” would have been no more likely to provide notice.  Therefore, Diversified’s service on Bell Appliance was proper even though the summons and complaint were not sent with delivery restricted to the addressee. See McCall v. Finney, 294 S.C. 1, 4, 362 S.E.2d 26, 28 (Ct. App. 1987) (stating that this court has long recognized an overriding rule of civil procedure that “whatever doesn’t make a difference doesn’t matter”).

For the foregoing reasons the default judgment is

AFFIRMED.

HEARN, C.J., GOOLSBY and SHULER, JJ., concur.

---

[1] Specifically, Rule 4(d)(3) states that service can be made “[u]pon a corporation . . . by delivering a copy of the summons and complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law .  . . .”