Barlage v. Valentine

• Decision Date: 25 April 2011
• Docket Number: 2 CA-CV 2004-0127
• Parties: DALE BARLAGE, Plaintiff/Appellant, v. LEIGH VALENTINE,Defendant/Appellee.
• Court: Arizona Court of Appeals

DALE BARLAGE, Plaintiff/Appellant,

v.LEIGH VALENTINE, Defendant/Appellee.

2 CA-CV 2004-0127

COURT OF APPEALS STATE OF ARIZONA DIVISION TWO DEPARTMENT B

Dated: April 25, 2011

OPINION

APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY

Cause No. C20033143

Honorable Sharon Douglas, Judge Pro Tempore

REVERSED AND REMANDED

Kevin W. Rouse

Minneapolis, MN

Attorney for Plaintiff/Appellant

Collins Butler, P.L.C.

By Michael J. Butler Tucson

Attorneys for Defendant/Appellee

PELANDER, Chief Judge.

¶1. In this contract action, appellant Dale Barlage contends the trial court erred in vacating the default judgment entered against appellee Leigh Valentine. Because weconclude the basis for the trial court's ruling was not completely sound, we reverse the order vacating the default judgment and remand the case for further proceedings.

BACKGROUND

¶2Appellant Dale Barlage filed this action against Valentine Cosmetics, L.L.C. and Leigh Valentine in June 2003.¹ Barlage attempted to serve the out-of-state defendants in two ways: by mail and publication. Pursuant to Rule 4.2(c), Ariz. R. Civ. P., 16 A.R.S., Pt. 1, he sent the summons and complaint by certified mail to the Dallas, Texas, address listed on Valentine's Texas driver's license. That address, which listed a suite number, was located in a branch of The UPS Store, a commercial mail-receiving agency (CMRA). Barlage also published the summons under Rule 4.2(f), averring that Valentine was "[a]voiding service of process."

¶3 When neither Valentine Cosmetics nor Valentine filed an answer, Barlage applied for and obtained an entry of default. In November 2003, after a default hearing at which Barlage testified, a default judgment in the amount of $784,000 was entered in his favor against Valentine and Valentine Cosmetics. Valentine moved to set aside the judgment, arguing that she had never been served with the summons and complaint.² Thetrial court granted the motion, stating that although Valentine "was likely evading service," Barlage's "efforts to serve her under Rule 4.2(f) and Rule 4.2(c)... have failed."

DISCUSSION

¶4 Proper, effective service on a defendant is a prerequisite to a court's exercising personal jurisdiction over the defendant. Koven v. Saberdyne Sys., Inc., 128 Ariz. 318, 321, 625 P.2d 907, 910 (App. 1980) ("Proper service of process is essential for the court to have jurisdiction over the defendant."); Kadota v. Hosogai, 125 Ariz. 131, 134, 608 P.2d 68, 71 (App. 1980) ("[T]he law is clear that a judgment is void if the trial court did not have jurisdiction because of a lack of proper service."). Barlage contends he properly served Valentine and, therefore, the trial court had personal jurisdiction and erred in vacating the default judgment entered against her. He maintains that, contrary to the trial court's ruling, he properly served Valentine with the summons by publication and by certified mail under Rule 4.2, Ariz. R. Civ. P.

¶ 5 We will not disturb an order vacating a default judgment unless a clear abuse of discretion is shown. Cockerham v. Zikratch, 127 Ariz. 230, 233, 619 P.2d 739, 742 (1980). But, "[s]ome legal justification for the vacation of judgment must exist," and vacating a default judgment without legal grounds is an abuse of discretion. Id. We therefore consider the grounds on which the trial court vacated the default judgment. I. Service by Publication

¶6 Barlage first argues the trial court erred in determining that service of the summons by publication was inadequate under Rule 4.2(f). In the affidavit he filed to showwhy he had used publication, Barlage stated that Valentine had been "[a]voiding service." He further stated that Valentine's residence was unknown, despite "a diligent search to find out," and that his search had "failed to reveal any information that might lead to knowledge" of that.

¶7 Citing Sprang v. Peterson Lumber, Inc., 165 Ariz. 257, 798 P.2d 395 (App. 1990), the trial court stated that "a finding of due diligence prior to service by publication is a jurisdictional prerequisite." The court found that Barlage had produced evidence that, "even if [he] had conducted a due diligence search and set forth those facts in [his] affidavit, [he] likely would not have been able to locate the residence of... Valentine." But the court ruled that Barlage's affidavit of due diligence, which failed to set forth any of the due diligence measures he had taken, was insufficient.³

¶8 Rule 4.2(f) permits service by publication when an out-of-state defendant has "avoided service of process." The rule also requires that the party who serves pleadings by publication "shall file an affidavit showing the manner and dates of publication and mailing, and the circumstances warranting utilization of the procedure authorized by this subpart which shall be prima facie evidence of compliance herewith." Id. The affidavit must "set[] forth facts indicating [the serving party] made a due diligent effort to locate an opposing party to effect personal service." Sprang, 165 Ariz. at 261, 798 P.2d at 399; see also Omega II Inv. Co. v. McLeod, 153 Ariz. 341, 342, 736 P.2d 824, 825 (App. 1987) (finding of due diligence before service by publication is jurisdictional prerequisite). Barlage's affidavit failed to set forth any facts showing a due diligence effort. It merely asserted in conclusory fashion that such an effort had been made and, therefore, was insufficient. See Sprang, 165 Ariz. at 261, 798 P.2d at 399.

¶9 Barlage contends, however, that "[t]here is no dispute that plaintiff Barlage's counsel exercised due diligence in attempting to locate... Valentine prior to... service by publication." And, he argues, a plaintiff is not required to "rely exclusively on the affidavit supporting service of process by publication." Rather, the court should consider "the entire record" in determining whether Valentine had avoided service, making service by publication valid. In Hirsch v. National Van Lines, Inc., 136 Ariz. 304, 666 P.2d 49 (1983), our supreme court stated that service by registered mail on an out-of-state corporate defendant under former Rule 4(e)(1) and (2) could be valid even though the requisite affidavit had not stated the circumstances warranting the procedure that had been used. But, the Hirschcourt found that "there was evidence available to the judge at the time the motion to set aside was heard" indicating that the circumstances had in fact existed. Id. at 308, 666 P.2d at 53.

¶10. Here, in contrast, the trial court stated that Barlage had merely introduced evidence that "if [he] had conducted" a due diligence search, he probably would not have been able to locate Valentine. As noted earlier, the court also found that Valentine was "likely evading service of process." Contrary to Barlage's argument, however, this does not suggest that he had shown the circumstances allowing service by publication, namely Valentine's avoidance of service. Rather, it merely reflects the trial court's belief that due diligence efforts, if made, likely would have been fruitless.

¶11. Indeed, Barlage presented some evidence that Valentine had received the summons, but Valentine disputed that, averring that she "first became aware of [the] lawsuit against her on December 10, 2003." And, other than the service by certified mail to Valentine's mailing address, discussed below, the only other service Barlage attempted was by certified mail to Valentine's mother's residence in North Carolina. Thus, we cannot say the trial court erred in finding that Barlage's attempt to serve Valentine by publication had failed.

II. Service by Mail

¶12. Barlage also contends the trial court erred in determining that, because Valentine herself had not signed the return receipt, he had failed to adequately serve her by certified mail. As noted earlier, Barlage sent the summons and complaint by certified mailto a Dallas, Texas, address listed on Valentine's driver's license.⁴ That address was located in a branch of The UPS Store. The certified mail receipt was signed and returned in June 2003 by an "S. Bailey," whom Valentine averred she did not know.⁵

¶13 When Valentine rented her box at The UPS Store, however, she signed an "Application for Delivery of Mail Through Agent" with the United States Postal Service. That application authorized The UPS Store, as a CMRA, to receive "restricted delivery mail." Although the application was a standard form, the authorization to accept certified mail was not simply part of the boilerplate language. Rather, it included a separate box in which Valentine had to write her name to authorize the CMRA to accept "restricted delivery mail." Thus, Valentine expressly authorized her CMRA to accept certified mail on her behalf.

¶14 Rule 4.2(c) requires the serving party to file an affidavit with the court stating, inter alia, that the summons and a copy of the pleading "were in fact received by the party as evidence[d] by the receipt." Citing dicta in Snow v. Superior Court, 183 Ariz. 320, 324 n.2, 903 P.2d 628, 632 n.2 (App. 1995), the trial court stated that the Rules of CivilProcedure "require that the return receipt be signed by the individual upon whom service is attempted." Because it was undisputed that Valentine had not personally signed the return receipt in this case, the court ruled that the attempted mail service had "failed."

¶15 Snow was a special action that arose from a criminal case in which a summons had been delivered by certified mail to the residential address Snow had listed on an arrest questionnaire. Id. at 322, 903 P.2d at 630. The person who signed the return receipt lived at that address and had been named as Snow's "nearest relative/friend." Id. That person, however, apparently was not authorized to accept service or certified mail on his behalf. The Snow court found that her signature was insufficient because Snow himself had not signed the receipt. Construing Rule 3.4, Ariz. R. Crim. P., 16A A.R.S., the court stated that "the...