Ex parte Lereta, LLC

226 So. 3d 140, 2016 WL 7030971
CourtSupreme Court of Alabama
DecidedDecember 2, 2016
Docket1151054
StatusPublished
Cited by7 cases

This text of 226 So. 3d 140 (Ex parte Lereta, LLC) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ex parte Lereta, LLC, 226 So. 3d 140, 2016 WL 7030971 (Ala. 2016).

Opinions

MAIN, Justice.

LERETA, LLC, petitions this Court for a writ mandamus directing the Colbert Circuit Court to vacate its order denying LERETA’s motion to set aside a default judgment entered against it in the action brought by Fronia Warhurst and to enter an order setting aside the default judgment. Because we conclude that Warhurst did not perfect service of process on LERETA, we grant the petition and issue the writ. , ..

I. Facts and Procedural History

Warhurst’s house flooded during a rainstorm in September 2012. On July 28, 2014, Warhurst sued the City of Tüseüm-bia, JP Morgan Chase Bank, N.A. (“Morgan Chase”), and LERETA. Warhurst averred that Tuscumbia negligently and/or wantonly maintained or repaired a storm-drainage system near her' house, which, she said, proximately resulted in the flooding. Warhurst further alleged that, before the flooding, Morgan Chase, the holder of Warhurst’s mortgage, wrongfully terminated her flood insurance. Finally, War-hurst alleged that LERETA, a company that provides flood-zone-determination reports and certifications to lenders, incorrectly informed Morgan Chase that War-hurst’s house ■ was not in a flood zone. Warhurst demanded judgment against all three defendants in the amount of $250,000, “or as a jury may determine.”

Warhurst attempted to serve LERETA via certified mail addressed to its corporate headquarters. The certified mail was not addressed to any particular individual; rather, it was addressed generally to “Lereta LLC,” as follows:

“Lereta LLC
“1123 Parkview Drive
“Covina, California
“91724”

The certified mail was received and signed for by an employee of LERETA on August 4, 2014. It is undisputed that the employee who signed the certified-mail receipt was [142]*142not an officer, partner, managing agent, general agent, or agent authorized by appointment or by law to receive service of process. Further, the employee who signed for the certified mail did not check the “agent” box on the certified-mail return receipt.

LERETA did not file an answer. On September 15, 2014, Warhurst filed an application for entry of a default judgment against LERETA and requested that the judgment be entered in the amount of $250,000. On October 9, 2014, the circuit court entered a default judgment against LERETA in the amount of $250,000. The claims against Tuscumbia and Morgan Chase remained pending, and, on the motion of Tuscumbia, the circuit court stayed the action as to Tuscumbia pending War-hurst’s collection efforts against LERETA.

On March 25, 2016, LERETA filed a motion to set aside the default judgment. In its motion, LERETA argued that the court’s October 9, 2014, order purporting to enter a default judgment was not a final judgment and thus was subject to being set aside by the circuit court. It also argued that Warhurst had not perfected service on LERETA because the certified mail was not addressed to an officer, member, managing agent, general agent, or an agent authorized by appointment or law to receive service of process. LERETA further averred that it has a meritorious defense, that no prejudice will result to War-hurst if the default judgment is set aside, and that the default judgment was not a result of its own culpable conduct. In support of its motion, LERETA attached an affidavit of its chief executive officer, John Walsh. Walsh testified that he was unaware of the action against LERETA until March 2016. He testified that the employee who signed for the certified mail was not an officer, member, or managing or general agent of LERETA and was not an agent authorized to receive service of the complaint.

Warhurst states that, on April 20, 2016, she initiated formal debt-collection proceedings in California in an attempt to collect on the default judgment entered against LERETA. On May 26, 2016, the circuit court entered an order denying LERETA’s motion to set aside the default judgment. This petition for the writ of mandamus followed.

II. Analysis

Initially, we address whether a petition for a writ of mandamus is the proper vehicle by which to address the circuit court’s denial of LERETA’s motion to set aside the default judgment.

“ ‘ “Mandamus is an extraordinary remedy and will be granted only where there is ‘(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; ■ (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court.’ ”
“ ‘Ex parte Ocwen Federal Bank, FSB, 872 So.2d 810, 813 (Ala. 2003) (quoting Ex parte Alfab, Inc., 586 So.2d 889, 891 (Ala. 1991)). Mandamus will he to direct a trial court to vacate a void judgment or order. Ex parte Chamblee, 899 So.2d 244, 249 (Ala. 2004).’ ”

Ex parte Scrushy, 940 So.2d 290, 293-94 (Ala. 2006)(quoting Ex parte Sealy, L.L.C., 904 So.2d 1230, 1232 (Ala. 2004)).

Ordinarily, “[i]f we were dealing with a true judgment by default, where damages had been assessed and the judgment was otherwise ‘final,’ the petitioners would have an adequate remedy by means of appeal, and mandamus would not be appropriate.” Ex parte Family Dollar [143]*143Stores of Alabama, Inc., 906 So.2d 892, 897 (Ala. 2005). The default judgment in this case, however, did not adjudicate all the claims as to all the parties, and the circuit court did not certify the judgment as final pursuant to Rule 54(b), Ala. R. Civ. P. Thus, the order is interlocutory and does not support a direct appeal. See Progress Indus., Inc. v. Wilson, 52 So.3d 500, 505 (Ala. 2010) (“ ‘A judgment by default, rendered in advance against one of several defendants, is interlocutory until final disposition is made as to all defendants.’” (quoting Hallman v. Marion Corp., 411 So.2d 130, 132 (Ala. 1982))).

Nevertheless, despite the nonfinal nature of the judgment, Warhurst has initiated legal proceedings in California against LERETA in an attempt to collect on the judgment, and the circuit court in thi^ case has indefinitely stayed the action against Tuscumbia pending Warhurst’s collection efforts. Accordingly, LERETA is currently faced with defending against collection proceedings related to a nonfinal judgment as to which it has no present right to appeal. Under these circumstances, LERETA has no adequate means by which to challenge the nonfinal judgment, other than a petition for writ of. mandamus. Thus, a writ of mandamus is the appropriate remedy in this case. See, e.g., Ex parte Family Dollar, 906 So.2d at 897 (holding mandamus review proper from the denial of a motion to set aside a nonfinal default judgment).

Further supporting our conclusion that mandamus is the proper remedy is LERETA’s contention that the default judgment is void for want of personal jurisdiction. “ ‘ “[Mjandamus will he to direct a trial court to vacate a void judgment or order.” ’ ” Ex parte Trust Co. of Virginia, 96 So.3d 67, 69 (Ala. 2012) (quoting Ex parte Scrushy, 940 So.2d at 294, quoting in turn Ex parte Sealy, 904 So.2d at 1232). LERETA argues that the circuit court never obtained personal jurisdiction over it and, thus, that the default judgment is void and is due to be set aside. Specifically, LERETA contends- that it was not served in .accordance with Rule 4, Ala. R. Civ.

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