LMC Prop v. Prolink Roofing Sys

CourtCourt of Appeals for the Fifth Circuit
DecidedOctober 9, 2024
Docket23-11090
StatusUnpublished

This text of LMC Prop v. Prolink Roofing Sys (LMC Prop v. Prolink Roofing Sys) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LMC Prop v. Prolink Roofing Sys, (5th Cir. 2024).

Opinion

Case: 23-11090 Document: 57-1 Page: 1 Date Filed: 10/09/2024

United States Court of Appeals for the Fifth Circuit ____________ United States Court of Appeals Fifth Circuit

No. 23-11090 FILED October 9, 2024 ____________ Lyle W. Cayce LMC Properties, Incorporated, Clerk

Plaintiff—Appellee,

versus

Prolink Roofing Systems, Incorporated,

Defendant—Appellant. ______________________________

Appeal from the United States District Court for the Northern District of Texas USDC No. 4:15-CV-204 ______________________________

Before Wilson and Douglas, Circuit Judges, and Vitter, District Judge. * Per Curiam: † Prolink Roofing Systems, Incorporated contends that the district court erred in denying its motion to vacate a 2017 default judgment because Prolink did not have actual notice of the lawsuit or the default judgment, and because the district court lacked personal jurisdiction over Prolink. Since we

_____________________ * United States District Judge for the Eastern District of Louisiana, sitting by designation. † This opinion is not designated for publication. See 5th Cir. R. 47.5. Case: 23-11090 Document: 57-1 Page: 2 Date Filed: 10/09/2024

No. 23-11090

find that the district court erred by not addressing its personal jurisdiction over Prolink before addressing the merits of Prolink’s motion to vacate the default judgment, we VACATE the district court’s ruling denying Prolink’s motion to vacate and REMAND for further proceedings. I. Background LMC Properties, Inc. (“LMC”) sued Single Source Roofing Corporation (“Single Source”) in 2015 for breach of warranty and negligence stemming from a 1995 roof replacement and subsequent roof repairs made in 2013. LMC filed an Amended Complaint adding Prolink Roofing Systems, Inc. (“Prolink”) as a defendant, asserting that Prolink is “the successor in interest” of Single Source. The summons issued to Prolink was returned as executed on May 17, 2016. On January 31, 2017, LMC filed a motion seeking an entry of default and a default judgment as to Prolink. On March 8, 2017, the clerk of court issued a clerk’s entry of default as to Prolink, and the district court dismissed Single Source without prejudice pursuant to Federal Rule of Civil Procedure 4(l) and (m). On March 24, 2017, the district court issued an order setting an evidentiary hearing for April 26, 2017, on LMC’s motion for default judgment, and ordered LMC to serve a copy of the order on Prolink and to file proof of service by April 20, 2017. LMC filed a status report on April 20, 2017, along with several exhibits, detailing its efforts to serve Prolink with a copy of the Amended Complaint and the order setting an evidentiary hearing. On April 26, 2017, the district court held an evidentiary hearing, granted LMC’s motion for default judgment, and entered a default judgment against Prolink in the amount of $750,000, plus attorney’s fees, pre- judgment interest, and post-judgment interest. The district court issued a

2 Case: 23-11090 Document: 57-1 Page: 3 Date Filed: 10/09/2024

Final Judgment against Prolink on April 27, 2017, in the amount of $845,618.84, plus post-judgment interest. 1 Six years later, Prolink filed a Motion to Vacate Judgment and Motion to Dismiss First Amended Complaint, seeking to vacate the default judgment under Rule 60(b)(1), (4), and (6). Prolink moved to vacate the default judgment as void due to insufficient service of process under Rule 60(b)(4), and moved to vacate the default judgment for good cause under Rule 60(b)(1) and (6). Prolink also moved to dismiss LMC’s claims for lack of personal jurisdiction under Rule 12(b)(2). After filing its motion, Prolink received additional information from LMC’s counsel regarding Registered Agent Solutions, Inc. (“RAS”), Prolink’s registered agent for service of process, which LMC claimed was served with the Amended Complaint and the order setting an evidentiary hearing. In response, Prolink filed an Amended Motion to Vacate Judgment and Motion to Dismiss First Amended Complaint (the “Amended Motion to Vacate”), seeking relief under Rule 60(b)(1) and (6). Prolink sought to vacate the default judgment under Rule 60(b)(1) based upon excusable neglect, namely its mistaken belief that RAS was not its registered agent at the time and, instead, that CT Corporation was its registered agent for service. Prolink also moved to vacate the default judgment under Rule 60(b)(6) “if relief is not available via Rule 60(b)(1).” Prolink claimed that it “simply had no knowledge or awareness of the existence of” the default judgment until there was an attempt to execute the Final Judgment in March 2023. Notably, the Amended Motion to Vacate also included a Rule 12(b)(2) motion to dismiss LMC’s claims based upon the district court’s lack of personal jurisdiction over Prolink.

_____________________ 1 The court notes that the minute entry from the evidentiary hearing reflects an award of $15,000 in attorney’s fees, while the transcript from the evidentiary hearing and the Final Judgment reflect an award of $15,500 in attorney’s fees.

3 Case: 23-11090 Document: 57-1 Page: 4 Date Filed: 10/09/2024

LMC opposed the motion, arguing that Prolink was properly served with both the Amended Complaint and the order setting an evidentiary hearing through Prolink’s registered agent, RAS, and that the default judgment was properly obtained. 2 LMC also argued that because Prolink was properly served with a copy of the summons and complaint and failed to answer, Prolink waived personal jurisdiction. On September 27, 2023, the district court denied Prolink’s Amended Motion to Vacate. The district court held that relief under Rule 60(b)(1) was foreclosed because Prolink failed to bring its motion within the one-year limitation period set forth in Rule 60(c)(1). The district court also held that Prolink’s delay in bringing its Rule 60(b)(6) motion was unreasonable because LMC served Prolink with notice of the suit through RAS, its registered agent in North Carolina, on May 17, 2016, and served Prolink with notice of the evidentiary hearing through its registered agent in Delaware on April 17, 2017. 3 The district court rejected Prolink’s contention, supported by the unsworn declaration of its president, Gary Kassem, that Prolink was never aware of the suit. Voicing skepticism about Prolink’s contentions that, “contrary to the record—no one who purportedly accepted service on Defendant’s behalf had the authority to do so,” the district court “strain[ed] _____________________ 2 LMC also argued that it would be prejudiced if the district court vacated the default judgment because it had relied upon the default judgment in selling and assigning the Final Judgment to a third party over a year before Prolink filed its motion to vacate. LMC also claimed that it would be prejudiced if it had to litigate the case because the underlying roof repairs occurred in 2013 and involve warranties issued as far back as 1995. 3 The district court found that RAS resigned its position as Prolink’s registered agent in North Carolina effective September 16, 2016. We note that elsewhere in the order, the district court states that, “Registered Agent was appointed in North Carolina in 2014, Defendant was served through Registered Agent in May 2015, and Registered Agent did not resign that appointment until September 2015.” These references to 2015 appear to be a typographical error, as the documents relied upon by the district court demonstrate that these events occurred in 2016.

4 Case: 23-11090 Document: 57-1 Page: 5 Date Filed: 10/09/2024

to see any justifiable reason” to grant relief under Rule 60(b)(6). As such, the district court denied the Amended Motion to Vacate.

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LMC Prop v. Prolink Roofing Sys, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lmc-prop-v-prolink-roofing-sys-ca5-2024.