Builder One Carpet One v. Wilkins

• Decision Date: 22 October 2003
• Docket Number: No. CA 02-214.,CA 02-214.
• Parties: BUILDER ONE CARPET ONE a/d/b/a Design One Carpet One v. David WILKINS and Janet Wilkins.
• Court: Arkansas Court of Appeals

128 S.W.3d 828

83 Ark. App. 252

BUILDER ONE CARPET ONE a/d/b/a Design One Carpet One v. David WILKINS and Janet Wilkins.

No. CA 02-214.

Court of Appeals of Arkansas, Division IV.

October 22, 2003.

Friday, Eldredge & Clark, LLP, by: Bruce B. Tidwell, Little Rock, for appellant.

Lewis E. Ritchey, Little Rock, for appellees.

LARRY D. VAUGHT, Judge.

This appeal arises from a default judgment obtained by appellees, David and Janet Wilkins, against appellant, Builder One Carpet One a/d/b/a Design One Carpet One (Carpet One). Previously, we remanded this case for rebriefing. See Builder One Carpet One v. Wilkins, CA02-214, 2002 WL 31133178 (Ark.App. Sept. 25, 2002). Carpet One filed a motion to set aside the default judgment on the ground that service did not comply with Ark. R. Civ. P. 4 and therefore the judgment was void. The trial court denied the motion, finding that the service upon appellant complied with Ark. R. Civ. P. 4(d)(5) and was proper. Based on the facts before us, we cannot say that the trial court erred in refusing to set aside the default judgment.

On March 30, 2000, appellees entered into a contract with appellant, in which appellant agreed to install carpet, ceramic tile, and laminate flooring in appellees' home. On March 25, 2001, appellees filed a complaint against appellant alleging that appellant committed fraud and negligence in carrying out the contract. Specifically, they alleged (1) that appellant represented the carpet to be installed as 100% nylon material and that the material installed was 80% olefin and 20% nylon; (2) that the installation of the tile was defective because it was off-center; and (3) that the laminate flooring installation was defective because the material was not acclimated to the environment of the house for forty-eight hours as required by the manufacturer's specifications, that there were gaps between the slats, and that some areas did not have glue and some areas were beginning to crack and flake. The complaint alleged that appellant was an Arkansas corporation with its principal place of business in Pulaski County, Arkansas. The summons and complaint were served upon "Richard Akel/Agent ... the duly designated agent for service of process for the defendant namely Builder One Carpet One."

Appellant failed to respond to the complaint, and a default judgment was entered against it on June 15, 2001, in the amount of $10,206.72. On August 13, 2001, appellant filed a motion to set aside the default judgment on the ground that the judgment was void because the attempted service did not comply with Rule 4, alleging that appellant was not a corporation and that Richard Akel was not a "registered agent" of Carpet One. Appellees responded that pursuant to Ark. R. Civ. P. 4(d)(5), service of the summons and complaint may be made upon an officer or partner of a partnership, limited liability company or any unincorporated association subject to suit under a common name. Appellees contended that appellant was presumably an unincorporated association based on appellant's denial that it was a corporation and that Richard Akel was an officer and owner of appellant.

A hearing took place on November 2, 2001, where counsel for the parties argued their respective positions. In addition, through the testimony of Janet Wilkins, several of appellant's advertisements were introduced, which represented that Richard Akel was an owner and president of Design One Carpet One. At the conclusion of the hearing, the trial court denied the motion to set aside the default judgment and subsequently entered an order finding that service complied with Ark. R. Civ. P. 4(d)(5). From that decision, comes this appeal.

Appellant contends on appeal that because service upon Richard Akel did not comply with Ark. R. Civ. P. 4(d)(5), the trial court erred in refusing to set aside the default judgment. Appellant correctly states the law concerning our construction of the statutory service requirements. Statutory service requirements, being in derogation of common-law rights, must be strictly construed and compliance with them must be exact. Carruth v. Design Interiors, Inc., 324 Ark. 373, 921 S.W.2d 944 (1996). The same reasoning applies to service requirements imposed by court rules. Id. Proceedings conducted where the attempted service is invalid renders judgments arising therefrom void ab initio. Id. Actual knowledge of a proceeding does not validate defective process. Id.

Rule 4(d)(5) of the Arkansas Rules of Civil Procedure provides:

(d) Personal Service Inside the State. A copy of the summons and complaint shall be served together. The plaintiff shall furnish the person making service with such copies as are necessary. Service shall be made upon any person designated by statute to receive service or as follows:

... (5) Upon a domestic or foreign corporation or upon a partnership, limited liability company, or any unincorporated association subject to suit under a common name, by delivering a copy of the summons and complaint to an officer, partner other than a limited partner, managing or general agent, or any agent authorized by appointment or by law to receive service of summons.

First, appellant argues that service did not comply with Rule 4(d)(5) because Richard Akel does not fall within any of the categories of persons to receive service for the entity named as defendant, "Builder One Carpet One a/d/b/a Design One Carpet One." Although appellant's counsel argued its position, appellant offered no evidence at the hearing on its motion to set aside the default judgment. Appellee Janet Wilkins testified that they unsuccessfully attempted to find out what type of business entity Design One Carpet One operated. Appellees did, however, introduce copies of advertisements wherein Richard Akel held himself out to be president and an owner of "Design One Carpet One." Based on this evidence, we conclude that Richard Akel held himself out to the public as being an officer and owner of the entity called Design One Carpet One and that service upon him was proper pursuant to Rule 4(d)(5).

Appellant also argues that service was not proper because "Builder One Carpet One" was not a corporation as alleged by appellees in their complaint and that without a recognizable entity for which to serve, Richard Akel cannot be a "duly designated agent." Appellant, in its brief, states that a "corporation" known as "Builder One Carpet One" does not exist and that Mr. Akel has no knowledge of or relationship with the alleged corporation. This statement of Mr. Akel's knowledge of or relationship with Builder One Carpet One is not supported by the record because Mr. Akel did not testify at the hearing and argument of counsel is not evidence. In its brief appellant further states:

In this case, a plain reading of the Complaint reasonably led Mr. Akel to take no action with regard to the Complaint against the phantom entity named as defendant [Builder One Carpet One a/d/b/a Design One Carpet One]. However, the business which he does operate [Design One Carpet One] is now being pursued based upon default judgment entered against a business entity that is a fiction of the Appellees['] imagination. This distinction in the names of the businesses, which led to the erroneous entry of a default judgment, is certainly relevant. Further, as will be explained in more detail herein, such failure to properly name and serve the correct defendant makes the default judgment void.

We disagree with appellant's contention that the plain reading of the complaint would reasonably lead Mr. Akel to take no action.

The record indicates that Richard Akel did receive service of process, although as a representative of an improperly named defendant. The question of misnomer on a complaint in...