McCulley v. Brooks & Co. General Contractors, Inc.

• Decision Date: 19 July 2018
• Docket Number: Record No. 171117
• Citation: 295 Va. 583,816 S.E.2d 270
• Court: Virginia Supreme Court
• Parties: COLIN MCCULLEY v. BROOKS & CO. GENERAL CONTRACTORS, INC.

295 Va. 583

816 S.E.2d 270

COLIN MCCULLEY

v.BROOKS & CO. GENERAL CONTRACTORS, INC.

Record No. 171117

Supreme Court of Virginia.

JULY 19, 2018

Richard T. Booker (McDonald, Sutton & DuVal, on brief), Richmond, for appellant.

Patrick C. Henry, II (Bradley P. Marrs ; Marrs & Henry, on brief), Richmond, for appellee.

PRESENT: All the Justices

OPINION BY JUSTICE D. ARTHUR KELSEY

In this case, a landlord obtained a default judgment against a commercial tenant and its guarantor for unpaid rent. The judgment was void as to the guarantor, however, because the landlord had failed to properly serve the complaint on him. Despite this fact, the circuit court found that the guarantor had entered a general appearance during post-judgment enforcement proceedings and thereby had waived any objection to the validity of the default judgment. We disagree and reverse.

I.

In 2013, Brooks & Co. General Contractors, Inc. ("Brooks & Co.") leased office and warehouse space to Plastic Lumber & Outdoor, LLC ("Plastic Lumber"). Colin McCulley personally guaranteed Plastic Lumber’s lease obligations. In May 2016, Brooks & Co. filed a complaint against Plastic Lumber and McCulley for unpaid rent, utilities, late fees, interest, and attorney fees and costs.

Brooks & Co. served process on McCulley by posting it to his front door pursuant to Code § 8.01-296(2)(b), see J.A. at 68, but the record fails to demonstrate that Brooks & Co. followed the additional requirements of that statute to mail a copy of the process to McCulley 10 days before obtaining a default judgment and to file a certificate of mailing in the circuit court clerk’s office, see id. at 95. After neither Plastic Lumber nor McCulley filed responsive pleadings, Brooks & Co. obtained a default judgment against both defendants. The circuit court entered the default judgment on July 7, 2016.

On August 24, 2016, the circuit court clerk issued a summons commanding McCulley to appear before a commissioner in chancery on September 15 to answer debtor’s interrogatories. McCulley’s counsel thereafter contacted the commissioner and successfully requested that the date be rescheduled to September 27. On September 19, McCulley filed a motion to vacate the default judgment in the circuit court, the first sentence of which reads:

COMES NOW COLIN MCCULLEY by counsel, MAKING A SPECIAL APPEARANCE FOR THE SOLE PURPOSE OF CONTESTING THIS COURT’S EXERCISE OF PERSONAL JURISDICATION [sic] BUT NOT OTHERWISE SUBMITTIN

G TO THE COURT’S PERSONAL JURISDICATION [sic], pursuant to Virginia Code § 8.01-428(A) and respectfully prays that this Honorable Court will vacate the Default Judgment ... as the same is a void judgment.

J.A. at 65. The motion asserted that Brooks & Co. had failed to properly serve the complaint, thereby depriving the circuit court of personal jurisdiction over McCulley, and that the default judgment was therefore void. See id. at 65-67. McCulley concluded his motion by reiterating that he had "made this SPECIAL APPEARANCE for the sole purpose of contesting this Court’s exercise of personal jurisdiction over him." Id. at 67. Brooks & Co. did not file any written response to the motion and later made no claim that its attempted service of process was valid.

At some point prior to September 27, 2016, McCulley’s counsel advised opposing counsel that he would ask the commissioner to stay the debtor’s interrogatories until the circuit court had an opportunity to rule on his motion to vacate the default judgment. See id. at 85, 90. On September 26, the day before the rescheduled meeting at the commissioner’s office, Brooks & Co.’s counsel emailed his response: "There is no legal basis on which to stay the interrogatories, as such, I would object to the seeking of any stay of collection proceedings, as the judgment is final."Id. at 90. A later email from Brooks & Co.’s counsel to the commissioner confirmed that McCulley had made the stay request and that the commissioner had ultimately rejected it. See id. at 91-92.

The debtor’s-interrogatory proceedings continued for several months. After an order of production directed to McCulley went unanswered, Brooks & Co.’s counsel requested that the commissioner issue a show-cause order demanding compliance upon penalty of being held in contempt. See id. The commissioner responded by instructing the parties that "[a]ny enforcement action would have to come from the Circuit Court." Id. at 92. He advised them to present the enforcement request "at the same time as the Motion to Vacate [was] heard" in the circuit court. Id.

The circuit court conducted a hearing on McCulley’s motion to vacate and ruled that the "initial service" of process on him "was defective" but that "McCulley waived any objection to this defect in service by making a general appearance in this case through his post-judgment participation in Debtor’s Interrogatories." Id. at 95. The court’s letter opinion, incorporated by reference into its final order, held that a general appearance during enforcement proceedings on a final judgment could effectively waive any claim that the judgment was void ab initio. See id. at 78-82.

II.

On appeal, Brooks & Co. concedes that it failed to certify that it had satisfied the mailing requirement of Code § 8.01-296(2)(b).¹ The only issue before us is whether McCulley waived his right to challenge the default judgment as void ab initio by participating in the debtor’s-interrogatory proceedings. McCulley argues that he did not waive that right. We agree.

A. GENERAL-APPEARANCE WAIVER

"It is elementary that one is not bound by a judgment in personam resulting from litigation ... to which he has not been made a party by service of process."

Zenith Radio Corp. v. Hazeltine Research, Inc. , 395 U.S. 100, 110, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969). "The consistent constitutional rule has been that a court has no power to adjudicate a personal claim or obligation unless it has jurisdiction over the person of the defendant." Id. Consequently, "a judgment against a party not before the court in any way will be as utterly void as though the court had undertaken to act when the subject-matter was not within its cognizance," Blanton v. Carroll , 86 Va. 539, 541, 10 S.E. 329, 329 (1889), "and may be so treated in any proceeding, direct or collateral," Finkel Outdoor Prods., Inc. v. Bell , 205 Va. 927, 931, 140 S.E.2d 695, 698 (1965) (quoting Martin P. Burks, Common Law and Statutory Pleading and Practice § 353, at 667-68 (T. Munford Boyd ed., 4th ed. 1952) ).²

In this context, we mean void ab initio and thus "ex vi termini , a nullity," Ferguson’s Adm’r v. Teel , 82 Va. 690, 696 (1886), not merely voidable, see Singh v. Mooney , 261 Va. 48, 51-52, 541 S.E.2d 549, 551 (2001) (distinguishing between judgments that are void ab initio and those that are merely voidable); 1 Henry Campbell Black, A Treatise on the Law of Judgments Including the Doctrine of Res Judicata § 170, at 248-50 (2d ed. 1902) (same).

We have held many times that a party making a general appearance prior to the entry of a final judgment waives any objection to the service of process by voluntarily submitting to the court’s jurisdiction over him. See, e.g. , Lyren v. Ohr , 271 Va. 155, 159, 623 S.E.2d 883, 885 (2006) ("A general appearance ‘is a waiver of process, equivalent to personal service of process, and confers jurisdiction of the person on the court.’ " (citation omitted) ); New River Mineral Co. v. Painter , 100 Va. 507, 509, 42 S.E. 300, 301 (1902) ("It is a well-established rule of practice that by appearing to the action the defendant waives all defects in the process and in the service thereof."); Atlantic & Danville R.R. v. Peake , 87 Va. 130, 140, 12 S.E. 348, 351 (1890) (reiterating the same "well-established rule").

We have never held, however, that a general appearance after the entry of a final judgment retroactively waives an objection to the court’s failure to obtain personal jurisdiction prior to the entry of the void judgment.³ And for good reason: A mere general appearance after the entry of a void judgment is too little, too late, to save the judgment. Just as medicine may cure a sick man of a fatal disease but not revive him after his burial, a litigant can "cure" the absence of personal jurisdiction by making a general appearance prior to final judgment but cannot resurrect a void judgment thereafter.

Many courts have adopted this logic;⁴ some have not.⁵ Agreeing with the former courts, we hold that a general appearance after the entry of a final judgment that is void ab initio because of the absence of personal jurisdiction does not, by itself, convert the prior void judgment into a valid one. Ruling otherwise, as one court succinctly put it, "defies logic and common sense." Abarca v. Henry L. Hanson, Inc. , 106 N.M. 25, 738 P.2d 519, 520 (N.M. Ct. App. 1987).

B. RATIFICATION—EQUITABLE ESTOPPEL

While a mere general appearance, by itself, is not enough to retroactively validate a judgment that is void for lack of personal jurisdiction as a result of defective service, it is possible for a litigant to forfeit the right to make that challenge to the judgment. Under the prevailing view, outlined in the Restatement (Second) of Judgments § 66 (1982), a challenge to an "invalid" default judgment, raised for the first time after entry of the judgment, should be denied if (1) the challenger "had actual notice of the judgment" and ratified it by manifesting "an intention to treat the judgment as valid," and (2) granting relief from the judgment "would impair another person’s substantial interest of reliance on the judgment."⁶

The Restatement recognizes "[t]he apparent anomaly of thus according a ‘void’ judgment the dispositive effect of a valid judgment" but correctly reframes the issue, not as whether a court can resuscitate a void judgment, but rather, whether a court can equitably estop a challenger from asserting the voidness of the judgment in the first place because of a "contract or concord,...