McClay v. Mid-Atlantic Country Magazine

• Decision Date: 15 July 1993
• Docket Number: MID-ATLANTIC,No. 21399,21399
• Citation: 190 W.Va. 42,435 S.E.2d 180
• Court: West Virginia Supreme Court
• Parties: Don McCLAY and Mountain Top Realty Inc., Plaintiffs Below, Appellees, v.COUNTRY MAGAZINE, Defendant Below, Appellant.

Page 180

435 S.E.2d 180

190 W.Va. 42

Don McCLAY and Mountain Top Realty Inc., Plaintiffs Below, Appellees, v. MID-ATLANTIC COUNTRY MAGAZINE, Defendant Below, Appellant.

No. 21399.

Supreme Court of Appeals of West Virginia.

Submitted May 11, 1993.

Decided July 15, 1993.

Syllabus by the Court

1. "To enable a court to hear and determine an action, suit or other proceeding it must have jurisdiction of the subject matter and jurisdiction of the parties; both are necessary and the absence of either is fatal to its jurisdiction." Syllabus Point 3, State ex rel. Smith v. Bosworth, 145 W.Va. 753, 117 S.E.2d 610 (1960).

2. "A foreign corporation not authorized to do business in this state is amenable to service of process and subject to the jurisdiction of the courts of this state if such process is served upon and accepted by the state auditor only in the three instances described in the third paragraph of Code, 1931, 31-1-71, as amended, namely, (a) if such corporation makes a contract to be performed in whole or in part, by any party thereto, in this State; (b) if such corporation commits a tort in whole or in part in this State; or, (c) if such corporation manufactures, sells, or supplies any product which causes injury to a person or property within this State." Syllabus Point 2, Schweppes U.S.A. Limited v. Kiger, 158 W.Va. 794, 214 S.E.2d 867 (1975).

3. "A court which has jurisdiction of the subject matter in litigation exceeds its legitimate powers when it undertakes to hear and determine a proceeding without jurisdiction of the parties." Syllabus Point 4, State ex rel. Smith v. Bosworth, 145 W.Va. 753, 117 S.E.2d 610 (1960).

Daniel T. Booth, Martin & Seibert, L.C., Martinsburg, for defendant below, appellant.

No appearance for the plaintiffs below, appellees.

PER CURIAM:

Mid-Atlantic Country Magazine, a Virginia corporation, appeals an order of the Circuit Court of Tucker County granting a default judgment against it in the amount of $66,500 to Don McClay and Mountain Top Realty, Inc., a domestic corporation. On appeal, Mid-Atlantic maintains that because of defective service of process the circuit court lacked personal jurisdiction over it. Because we agree that the circuit court lacked personal jurisdiction over Mid-Atlantic, we reverse the order of the circuit court.

On December 19, 1990, the appellees ¹ instituted a civil action in the Circuit Court of Tucker County against Mid-Atlantic alleging that Mid-Atlantic had breached their contract when the appellees' realty advertisement did not appear in the magazine's issue featuring Canaan Valley and Tucker County, the areas served by the appellees, but did appear in a different issue that did not feature any areas served by the appellees. The complaint alleges that Mr. McClay paid $1,500 for the advertisement. The complaint, which also alleges that Daniel T. Booth, Esq. is Mid-Atlantic's agent, was mailed to Mr. Booth, who according to the Certificate of Service is Mid-Atlantic's "named counsel of record."

Before the complaint was filed by letter dated November 6, 1990, Mr. Booth attempted to collect $1,619.50, which Mountain Top allegedly owed to Mid-Atlantic for the advertisement. In his letter, Mr. Booth said that his firm had "been retained by Mid-Atlantic Country to collect an account due and owing" by Mountain Top and that "[a]ll communications and correspondence relating to this account must be directed to this office." After Mr. Booth received the complaint, he filed a motion to dismiss pursuant to Rule 12(b) of the W.Va. RCP with his affidavit averring that he was not the agent of Mid-Atlantic to accept service of process in West Virginia.

On January 28, 1991, the appellees filed an amended complaint. A certified copy of the amended complaint was mailed to Mid-Atlantic's corporate address in Virginia and a copy was mailed to Mr. Booth. On February 22, 1991, Mid-Atlantic filed a motion to dismiss alleging that service by publication was insufficient to obtain an in personam judgment against Mid-Atlantic.

On August 1, 1991, the appellees filed a motion for default judgment and Mid-Atlantic objected asserting that the default judgment motion was improper before the resolution of its motions to dismiss. After a hearing, the circuit court granted the appellees judgment by default. After the circuit court refused to set aside the judgment, Mid-Atlantic appealed to this Court.

I

Although Mid-Atlantic raises several issues concerning the lower court's procedures, the central question concerns the circuit court's jurisdiction. In Syl. pt. 3, State ex rel. Smith v. Bosworth, 145 W.Va. 753, 117 S.E.2d 610 (1961), we stated our long recognized rule on jurisdiction:

To enable a court to hear and determine an action, suit or other proceeding it must have jurisdiction of the subject matter and jurisdiction of the parties; both are necessary and the absence of either is fatal to its jurisdiction.

See Syl. pt. 1, Schweppes U.S.A. Limited v. Kiger, 158 W.Va. 794, 214 S.E.2d 867 (1975).

The valid exercise of in personam jurisdiction by a circuit court over a nondomestic corporation depends upon "two elements, amenability to jurisdiction and service of process." Terry v. Raymond International, Inc., 658 F.2d 398, 401 (5th Cir.1981), cert. denied, 456 U.S. 928, 102 S.Ct. 1975, 72 L.Ed.2d 443 (1982). In the present case, Mid-Atlantic maintains that the appellees' service of process was defective. Service of process is the "physical means by which jurisdiction is asserted." Terry id.

Rule 4(d) of W.Va. RCP states, in pertinent part:

Personal or substituted service of process shall be made by delivering or mailing within the State a copy of the summons and of the complaint together, in the manner prescribed in this subdivision.... Personal or substituted service shall be made in the following manner:

* * * * * *

(8) Foreign Corporations and Business Trusts Not Qualified to Do Business.--Upon a foreign corporation, including a business trust, which has not qualified to do business in the State, (A) by delivering a copy of the summons and of the complaint to any officer, director, trustee, or agent of such corporation; or (B) by delivering copies thereof to any agent or attorney in fact authorized by appointment or by statute to receive or accept service in its behalf.

W.Va.Code 56-3-14 [1931] states, in pertinent part, that service of process on a foreign corporation "not qualified to do such business under the laws of this State, ... may be made by delivering, within the State, a copy of the process or notice to any officer, director or agent of such corporation acting or transacting business for it in this State."

First, the appellees attempted service of process by mailing the summons and complaint to Mr. Booth, a lawyer who wrote a collection letter for Mid-Atlantic. The appellees, based on the collection letter, allege that Mr. Booth is an agent or an attorney in fact for Mid-Atlantic. However, by an affidavit, Mr. Booth denies that he is authorized to act as Mid-Atlantic's general agent or general counsel, or to accept service of process for Mid-Atlantic. In Adkins v. Globe Fire Ins. Co., 45 W.Va. 384, 387, 32 S.E. 194, 195 (1898), we discussed a similar case in which the service of process alleged that the lawyer served was the insurance company's attorney in fact but the return did not state that this lawyer "was attorney appointed by the company to accept service of process." In Adkins, this Court, discussing the return of a service of process that said the summons was served "by delivering a copy to Alf. Paul, attorney in fact and of record for said Globe Fire Insurance Company" said:

Attorney in fact for what purpose? To make a deed, or sell property, or accept service of process? The return does not say.... The facts making the substitute a proper person for service under the law must appear.... This return says that Paul was attorney of record. This does not help. If attorney for any purpose, his power might be of record. We cannot assume therefrom that he was attorney to accept service.

Adkins, 45 W.Va. at 387, 32 S.E. at 195. See also Pueblo of Santa Rose v. Fall, 273 U.S. 315, 47 S.Ct. 361, 71 L.Ed. 658 (1927) (holding that no one has the right to appear as another's lawyer without the authority to do so); Stone v. Bank of Commerce, 174 U.S. 412, 421, 19 S.Ct. 747, 750-51, 43 L.Ed. 1028 (1899) ("The authority of an attorney commences with his retainer. He cannot while acting generally as an attorney for an estate or a corporation accept service of process which commences the action without any authority so to do from his principal").

Based on the record in the present case, we find that the service of process on Mr. Booth was invalid under Rule 4(d)(8)(A) of the W.Va. RCP because Mr. Booth was not an agent for Mid-Atlantic and was not authorized to accept service of process.

II

The appellees also attempted service by mailing a copy of the amended complaint to Mid-Atlantic's corporate address in Virginia. Rule 4(d)(8)(B) allows service upon "any agent or attorney in fact authorized by appointment or by statute to receive or accept service in its behalf." ² W.Va.Code 31-1-15 [1984], sometimes referred to as our long-arm statute, authorizes the Secretary of State to act as the attorney in fact for the acceptance of service of notice and process for all domestic corporations and for all foreign corporations authorized to do business in West Virginia. In addition, W.Va.Code 31-1-15 [1984] authorizes the Secretary of State to act as the attorney in fact to accept service of notice and process for foreign corporations that do business in West Virginia without having been authorized. W.Va.Code 31-1-15 [1984] states, in pertinent part:

Any foreign corporation which shall conduct affairs or do or transact business in this State without having been authorized so to do pursuant to the provisions of this article shall be conclusively...