Southern Transit Co. Inc. v. Collums

966 S.W.2d 906, 333 Ark. 170, 1998 Ark. LEXIS 274
CourtSupreme Court of Arkansas
DecidedMay 7, 1998
Docket97-967
StatusPublished
Cited by29 cases

This text of 966 S.W.2d 906 (Southern Transit Co. Inc. v. Collums) 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
Southern Transit Co. Inc. v. Collums, 966 S.W.2d 906, 333 Ark. 170, 1998 Ark. LEXIS 274 (Ark. 1998).

Opinion

Annabelle Clinton Imber, Justice.

The appellant, Southern Transit Co. Inc., challenges a default judgment that was entered in favor of the appellee, Eugene Collums, on the issue of liability. We affirm.

Eugene Collums collided with a truck owned by the Southern Transit Company, and operated by its employee, Bruce Peek. On February 26, 1997, Collums filed a negligence action against Southern Transit and Bruce Peek for the injuries he sustained during the accident. Collums then sent by certified mail a copy of the complaint, the summons, and several discovery requests to Southern Transit’s agent for service. The summons correctly listed Southern Transit and Bruce Peek as the defendants, but it was improperly directed to Defendant Bruce Peek instead of Southern Transit. On March 7, 1997, Southern Transit’s agent for service received the certified mail and signed the return receipt.

On April 2, 1997, Collums gave Southern Transit a thirty-day extension to file an answer to the complaint. When Southern Transit failed to file its answer within the extended time period, Collums filed a motion for default judgment on May 21, 1997. On June 19, 1997, which was 104 days after the date of service and forty-three days after the expiration of the thirty-day extension, Southern Transit filed its answer to Collums’s complaint. On June 23, 1997, Southern Transit also filed a response to Collums’s request for default judgment. In its response, Southern Transit argued for the first time that default judgment should not be granted to Collums because the summons was improperly directed to Bruce Peek, instead of Southern Transit.

On July 8, 1997, the trial court struck Southern Transit’s answer as untimely, ordered a default judgment against Southern Transit as to liability, and granted a jury trial on the issue of damages. The default judgment was entered as to Southern Transit only and did not apply to Defendant Bruce Peek. Southern Transit subsequently filed a motion to set aside the default judgment, which was denied by the trial court on July 30, 1997. Southern Transit appeals. Although the issue of damages remains to be resolved by a jury and the default judgment was entered only as to Southern Transit, we have jurisdiction over this case because it is an interlocutory appeal of the trial court’s order striking Southern Transit’s answer. See Ark. Sup. Ct. R. 1—2(a)(11); Ark. R. App. P.—Civ 2(a)(4); Arnold Fireworks Display, Inc. v. Schmidt, 307 Ark. 316, 820 S.W.2d 44 (1991).

I. Void Judgment

On appeal, Southern Transit contends that the trial court erred when it granted Collums’s motion for default judgment under Ark. R. Civ. P. 55(a). In 1990, we substantially revised Rule 55 so that more cases would be decided on the merits instead of upon the technicalities that often lead to default judgment. B & F Engineering, Inc. v. Cotroneo, 309 Ark. 175, 830 S.W.2d 835 (1992) (citing Addition to Reporter’s Notes to Rule 55, 1990 Amendment). One of the changes was to make the grant of default judgment under Rule 55(a) discretionary rather than mandatory. Id. The comments to Rule 55 also provide that:

In deciding whether to enter a default judgment, the court should take into account the factors utilized by the federal courts, including: whether the default is largely technical and the defendant is now ready to defend; whether the plaintiff has been prejudiced by the defendant’s delay in responding; and whether the court would later set aside the default judgment under Rule 55(c).

Addition to Reporter’s Notes to Rule 55, 1990 Amendment (emphasis added). Accordingly, in B & F Engineering, supra, we used the grounds listed in Rule 55(c) when deciding whether the trial court abused its discretion in granting a default judgment under Rule 55(a). This analysis is equally applicable to the case at hand.

Arkansas Rule of Civil Procedure 55(c) provides that a default judgment may be set aside for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect; (2) the judgment is void; (3) fraud, misrepresentation, or other misconduct of an adverse party; or (4) any other reason justifying relief from the operation of the judgment.

In addition to establishing one of the above grounds, the defendant must also demonstrate a meritorious defense to the action, unless the ground asserted is that the judgment is void. Ark. R. Civ. P. 55(c); Wilburn v. Keenan Co., Inc., 298 Ark. 461, 768 S.W.2d 531 (1989).

In this case, Southern Transit argues that the default judgment was void because the service of process was improper. In several cases we have held that a default judgment is void under Ark. R. Civ. P. 55(c)(2) if the defendant was improperly served under Ark. R. Civ. P. 4. See, e.g, Thompson v. Potlatch Corp., 326 Ark. 244, 930 S.W.2d 355 (1996) (no summons was issued to the defendant); Carruth v. Design Interiors, Inc., 324 Ark. 373, 921 S.W.2d 944 (1996) (summons was not signed by the clerk); Wilburn v. Keenan Co., Inc., 298 Ark. 461, 768 S.W.2d 531 (1989) (the summons was not marked “restricted delivery”). In Thompson, supra, we held that “the technical requirements of a summons, and compliance with those requirements must be exact.” Likewise, in Carruth, supra, and Wilburn, supra, we said that “[statutory requirements, being in derogation of common law rights, must be strictly construed and compliance with them must be exact.” Accordingly, we held in Carruth and Wilburn that the default judgments were “void ab initio” due to the defective summons regardless of whether the defendant had actual knowledge of the pending lawsuit.

Arkansas Rule of Civil Procedure 4 requires the summons to contain, among other things, “the names of the parties,” and that the summons “be directed to the defendant.” In this case, the summons correcdy listed the names of both defendants, but incorrectly directed the summons to Bruce Peek instead of Southern Transit. Because the summons did not strictly comply with the technical requirements of Ark. R. Civ. P. 4, the trial court could have held that the default judgment was “void ab initio” regardless of the fact that Southern Transit had actual knowledge of the complaint against it.

In reaching this conclusion, we are not unmindful of two older Arkansas cases where we said that only “substantial compliance” with Ark. R. Civ. P. 4 is required. Ford Life Ins. Co. v. Parker, 277 Ark. 516, 644 S.W.2d 239 (1982); Tucker v. Johnson, 275 Ark. 61, 628 S.W.2d 281 (1982). These cases, however, were decided before Rule 55 was revised in 1990, and accordingly they are no longer applicable.

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Bluebook (online)
966 S.W.2d 906, 333 Ark. 170, 1998 Ark. LEXIS 274, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-transit-co-inc-v-collums-ark-1998.