Goodman Associates, LLC v. WP Mountain Properties, LLC

222 P.3d 310, 2010 WL 59290
CourtSupreme Court of Colorado
DecidedJanuary 11, 2010
DocketNo. 09SA144
StatusPublished
Cited by870 cases

This text of 222 P.3d 310 (Goodman Associates, LLC v. WP Mountain Properties, LLC) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goodman Associates, LLC v. WP Mountain Properties, LLC, 222 P.3d 310, 2010 WL 59290 (Colo. 2010).

Opinion

Chief Justice MULLARKEY

delivered the Opinion of the Court.

I. Introduction

This case addresses whether a default judgment may be set aside when a defendant failed to respond to the complaint after service of process was hand delivered to an assistant of defendant's registered agent, but the registered agent failed to find the pro[313]*313cess papers in his in-box. After the trial court set aside its default judgment, the plaintiff, Goodman Associates, LLC ("Goodman"), filed this C.A.R. 21 petition seeking to reinstate the default judgment entered against the defendant, WP Mountain Properties, LLC ("WP").

We find that the trial court erred in setting aside the default judgment. Because service of process was adequate, the trial court had personal jurisdiction over WP, and the default judgment is not void under C.R.C.P. 60(b)(8). WP's neglect in failing to respond to the complaint was neither excusable nor a mistake and cannot justify setting aside the default judgment under C.R.C.P. 60(b)(1). No other provision of C.R.C.P. 60(b) permits the trial court to set aside the default judgment in this case. Accordingly, we direct the trial court to reinstate the default judgment in favor of Goodman.

II. Facts and Procedural History

Goodman's declaratory judgment and breach of contract action against WP arises out of a failed purchase and sale agreement between the parties. Under that agreement, Goodman was to purchase real property from WP along with a dwelling unit to be constructed on the property by WP. The underlying dispute concerned whether Goodman was entitled to a return of its earnest money deposit as a result of its inability to obtain financing as contemplated in the parties' financing contingency clause.

Within the time permitted for service, a process server for Goodman delivered a copy of the summons and complaint to the address that is both WP's principal office address and the address for Rick Hermes, who is the registered agent for WP, in addition to being WP's manager and one of its members. The summons and complaint were hand delivered to Melanie Stalzer, a WP employee. Goodman's return of service identified Stalzer as "Personal Assistant" for WP.

After service, WP did not appear or otherwise respond to the complaint within the time permitted. According to WP, the reason for its failure to act was that Stalzer placed the process papers in Hermes's in-box, which he did not regularly check; as a result, Hermes was not aware that WP had been served. WP asserts that Hermes learned of the lawsuit in January 2009, more than two months after service, when a title insurance company contacted him about the suit.

In an affidavit submitted to the trial court, Hermes described his office procedure and the cireumstances surrounding the receipt of service. He first asserted that Stalzer "is not my secretary, bookkeeper, or managing agent. Rather, she is an assistant to [WP] generally, providing services for me in that capacity as well as for three other persons to whom she reports directly." He further stated, "I do not consider Ms. Stalzer to be my primary assistant. As concerns work she may do for me, Ms. Stalzer is generally involved in scheduling appointments and filing. I do not expect Ms. Stalzer to be aware of the day-to-day details of my work for W’P'”

Hermes described the controller of WP as the functional equivalent of his administrative assistant with respect to his mail. He stated that urgent documents were to be given to him personally or left on the seat of his chair rather than placed in his in-box. Hermes acknowledged that he did not regularly check his in-box on account of the volume of paper in it (over one foot in height) related to the thirty-seven companies he managed. Hermes described his workload as particularly busy in the last fiscal quarter of 2008 due to the collapse of the financial market. Finally, Hermes asserted that, with respect to service of process, he was accustomed to in-person delivery by a process server.

After the time for answering passed, Goodman moved for default judgment, and default judgment was entered. Goodman subsequently recorded a transcript of judgment in Grand and Eagle Counties. After the tran-seript was recorded and, according to WP, before it was aware of the lawsuit, WP sold property in Grand County that was subject to the judgment lien without first paying the judgment. Thereafter, Goodman filed a complaint for foreclosure against the purchaser of the Grand County property for the amount [314]*314of the judgment lien. Four months after default judgment was entered, more than two months after it allegedly learned of the default judgment, and six weeks after the complaint for foreclosure was filed, WP simultaneously filed a motion to set aside the default judgment pursuant to C.R.C.P. 60(b) and a motion to stay proceedings in the foreclosure action.

In its motion to set aside the default judgment, WP asserted that Goodman did not properly serve WP pursuant to C.R.C.P. 4 when it served Stalzer because she was not a registered agent, manager, or member of WP and had no legal background or training. WP argued that the invalid service deprived the trial court of personal jurisdiction over WP, and therefore, the default judgment was void and should be set aside under C.R.C.P. 60(b)(8). WP alternatively argued that the other cireumstances listed in C.R.C.P. 60(b) also existed and warranted vacating the judgment. Although WP did not expressly reference C.R.C.P. 60(b)(1) until it filed its reply in support of the motion, WP did initially argue that it had a meritorious defense, a necessary consideration under that subsection. As a defense, WP asserted that it did not owe Goodman the earnest money because Goodman failed to take reasonable steps to acquire financing and that it had its own claim for breach of contract based on that failure.

The trial court granted WP's motion, stating: "Upon review of the cireumstances and for the reasons set forth in the Motion, the Court concludes that justice requires that this matter proceed to resolution on the merits. Therefore, the Court deems it appropriate to grant [WPT's Motion." After receiving notice of the order setting aside judgment, the trial court in Grand County dismissed without prejudice Goodman's claims in the foreclosure action.

This petition by Goodman ensued, alleging that the trial court abused its discretion in granting WP's motion. In its reply in support of the petition, Goodman also requested that it be awarded the attorneys' fees and costs it incurred in filing this petition and responding to the motion below.

III. Jurisdiction and Standard of Review

A. Jurisdiction

We decided to exercise our original jurisdiction under C.A.R. 21 to review this case because no other adequate remedy is available. As we have previously held, "an appeal following a trial on the merits would not be an adequate remedy for a judgment lienor whose priority might be destroyed by the sale of the encumbered property by a judgment creditor whose rights attached subsequent to the default judgment." Weaver Constr. Co. v. Dist. Ct., 190 Colo. 227, 230, 545 P.2d 1042, 1044 (1976). This case is time sensitive and requiring it to proceed through trial before filing an appeal may endanger Goodman's ability to recover on its judgment lien.

B. Standard of Review

With the exception of CRCP.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Leventhal v. Jensen
Colorado Court of Appeals, 2025
Wilkerson v. Federal Credit
Colorado Court of Appeals, 2025
Ruiz-Paramo v. Aroma360
D. Colorado, 2025
Cooper v. Keefe Memorial
Colorado Court of Appeals, 2025
Tucco Home v. Air Pros
Colorado Court of Appeals, 2025
Hopkins v. Coffelt
Colorado Court of Appeals, 2025
JPMorgan v. Graham
Colorado Court of Appeals, 2025
Denton v. Air Pros One
Colorado Court of Appeals, 2025
Gottorff v. BOCC Gunnison Cnty
Colorado Court of Appeals, 2025
Good Life v. WLCO
2025 COA 8 (Colorado Court of Appeals, 2025)
Deutsche Bank v. Passmore
Colorado Court of Appeals, 2025
Anderson v. Gegus-Brown
Colorado Court of Appeals, 2024
Hummell v. Hansen
Colorado Court of Appeals, 2024
J.B. v. MKBS, LLC
2024 COA 117 (Colorado Court of Appeals, 2024)

Cite This Page — Counsel Stack

Bluebook (online)
222 P.3d 310, 2010 WL 59290, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goodman-associates-llc-v-wp-mountain-properties-llc-colo-2010.