Nucor Corp. v. Kilman

186 S.W.3d 720, 358 Ark. 107
CourtSupreme Court of Arkansas
DecidedJune 17, 2004
Docket03-864
StatusPublished
Cited by63 cases

This text of 186 S.W.3d 720 (Nucor Corp. v. Kilman) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nucor Corp. v. Kilman, 186 S.W.3d 720, 358 Ark. 107 (Ark. 2004).

Opinions

Jim Hannah, Justice.

Appellant Nucor Corporation (Nucor) stice. denying its motion to set aside a default judgment entered in favor of appellees Marty Kilman, Mike Evans, and Betty Evans in the amount of $5,390,500.1 Separate appellant Systems Contracting Corporation (Systems) appeals an order denying its motion to intervene and motion to set aside default judgment. The court of appeals certified this case to this court because it found that this case presents an issue of first impression and the interpretation of. a rule; thus, our jurisdiction is pursuant to Ark. Sup. Ct. R. l-2(d) (2003).

Facts

On April 4, 200!, Kilman and Evans, employees of Systems, were injured while using a scissor lift to install pipe at Nucor’s facility in Hickman, Arkansas. Subsequently, Systems paid workers’ compensation benefits to both Kilman and Evans. At the time of the accident, Systems had a contract with Nucor to provide various labor services to Nucor as an independent contractor. The contract contains an indemnification provision, whereby Systems agrees to indemnify and hold harmless Nucor from claims relating to bodily injury, sickness, disease, or death caused in whole or in part by the negligence of Systems.

Systems received three letters from John T. Holleman IV, attorney for the appellees. The first letter, dated April 16, 2001, was faxed to Melinda Hall, Vice President of Human Resources & Risk Management for Systems. In that letter, Holleman requested information regarding any investigation Systems had conducted in relation to the April 4 accident. On May 7, 2001, Paul Pfiefer, an attorney with Holleman’s firm, faxed a letter to Hall requesting the same information. In the third letter, faxed on May 18, 2001, Holleman stated that he would file a petition pursuant to Rule 27 of the Arkansas Rules of Civil Procedure if Systems failed to respond by May 21, 2001. In each of the letters sent to Systems, the appellees’ attorneys acknowledged that Systems might assert a workers’ compensation lien and noted that in order to assert such a lien, Systems was “required to cooperate with us in pursuit of our claim.” After receiving the letters, Hall contacted Systems’s counsel. Although Holleman informed Hall that he would file a Rule 27 petition if Systems failed to respond by May 21, he instead filed a Rule 27 petition on May 18, in Union County Circuit Court, seeking to depose certain employees of Systems.2

At the same time Holleman was pursuing the Rule 27 matter against Systems, he began working on the case against Nucor. In the course of preparing to file claims against Nucor, Holleman was referred to Blytheville attorney Robert L. Coleman, and Holleman contacted Coleman for assistance on the appellees’ claims. After a brief discussion, Coleman informed Holleman that he was Nucor’s retained counsel and thus would be unable to assist Holleman in the case against Nucor. Coleman claims that before the conversation ended, he asked Holleman to send him a courtesy copy of any suit filed so Coleman could make sure that a defense was entered for Nucor.

After speaking with Holleman, Coleman sent a letter on Nucor’s behalf to counsel for Systems and counsel for Systems’s insurance carrier, informing them of the call from Holleman regarding the potential suit against Nucor. In the letter, Coleman stated that he anticipated that Kilman and Evans would file a suit against Nucor. The letter also served as demand upon Systems to fulfill its contractual obligation to indemnify Nucor in the event that Nucor’s insurance provider failed to provide coverage. Nu-cor’s controller, Mark DiGirolamo, received a copy of the letter from Coleman to Systems.

The appellees filed suit against Nucor, Roderick Warren, individually, and John Doe, in White County Circuit Court on November 27, 2001, alleging negligence in connection with the April 4 accident. A summons was issued and signed by Pat Ellis, White County Deputy Clerk, for Alice Barker, Clerk. The summons identified the defendants in the matter as “Nucor Corporation, Et Al.” The summons did not contain the names of defendants Warren and Doe. Process server Kevin Lewis served the summons on The Corporation Company, Nucor’s designated agent for service of process, in Little Rock, Arkansas. The appellees did not notify Systems that they had filed suit against Nucor.

On December 3, 2001, DiGirolamo received an electronic mail transmission from Nucor’s home office in North Carolina. The transmission included the Summons, Complaint, “Plaintiffs First Request for Admissions,” and “Plaintiffs First Set of Interrogatories and Requests for Production of Documents to Defendant, Nucor Corporation.”

Subsequent to filing their complaint, the appellees dismissed defendants Warren and Doe from the case, leaving Nucor as the sole defendant. Nucor failed to answer the complaint and, as a result, the appellees filed a motion for default judgment. The trial court held a hearing on the motion and, on April 19, 2002, a default judgment was entered against Nucor in the amount of $5,390,500.

Nucor learned of the judgment on December 23, 2002, when its bank received a writ of garnishment and contacted counsel for Nucor. On January 13, 2003, Nucor filed a motion to set aside default judgment and motion to dismiss. Nucor informed Systems of the default judgment, and on January 28, 2003, Systems filed a motion to intervene and set aside default judgment. The trial court denied all motions.

For reversal, Nucor argues that the trial court erred in concluding that the default judgment was not void due to insufficiency of process and insufficiency of service of process. Nucor also argues that the trial court erred in failing to set aside the default judgment pursuant to Rule 55(c) of the Arkansas Rules of Civil Procedure. Further, Nucor contends that the trial court erred in refusing to set aside the default judgment due to the misconduct of appellees’ counsel. Additionally, Nucor claims that the trial court erred in denying its motion to set aside because the complaint fails to state facts upon which relief can be granted. Finally, Nucor claims that the default judgment in favor of Evans should be set aside because the White County Circuit Court was not the proper venue for Evans’s claim.

Systems appeals the trial court’s denial of its motion to intervene, arguing that the trial court erred in denying its motion because Systems had an unconditional right to notice of the appellees’ lawsuit and an opportunity to join in the action pursuant to Arkansas Code Annotated § ll-9-410(a)(l)(A) (Repl. 2002), and Rule 24 of the Arkansas Rules of Civil Procedure. Systems also contends that the trial court erred in denying its motion to set aside default judgment because Systems was unable to intervene in the lawsuit to protect its rights.

Standard of Review

We have stated that we review a trial court’s granting or denial of a motion to set aside default judgment for abuse of discretion. Smith v. Sidney Moncrief Pontiac, Buick, GMC Co., 353 Ark. 701, 120 S.W.3d 525 (2003); Tharp v. Smith, 326 Ark. 260, 930 S.W.2d 350 (1996).

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Cite This Page — Counsel Stack

Bluebook (online)
186 S.W.3d 720, 358 Ark. 107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nucor-corp-v-kilman-ark-2004.