Citicorp Indus. Credit, Inc. v. Wal-Mart Stores, Inc., WAL-MART

• Decision Date: 20 May 1991
• Docket Number: No. 90-97,WAL-MART,90-97
• Citation: 305 Ark. 530,809 S.W.2d 815
• Parties: CITICORP INDUSTRIAL CREDIT, INC., Appellant, v.STORES, INC., Appellee.
• Court: Arkansas Supreme Court

Page 815

809 S.W.2d 815

305 Ark. 530

CITICORP INDUSTRIAL CREDIT, INC., Appellant, v. WAL-MART STORES, INC., Appellee.

No. 90-97.

Supreme Court of Arkansas.

May 20, 1991.

Frederick S. Ursery, Little Rock, for appellant.

George R. Rhoads, Rogers, for appellee.

DAVID E. SMITH, Special Justice.

Citicorp Industrial Credit, Inc., appeals the entry of a default judgment against it in favor of Wal-Mart Stores, Inc. The case presents the issue of whether a foreign corporation has thirty days to respond to a summons and complaint or whether it is limited to twenty days. Citicorp asks this court to interpret the term "non-resident" as used in Rule 12(a) of the Arkansas Rules of Civil Procedure. The Supreme Court has jurisdiction over this appeal under Rule 29(1)(c) of the Rules of the Supreme Court because it involves an interpretation of the Arkansas Rules of Civil Procedure.

Specifically, Citicorp contends that it is a foreign corporation and, therefore, a non-resident of the State of Arkansas under Rule 12(a) notwithstanding that it registered to do business in Arkansas and has a registered agent for service of process in Arkansas, The Corporation Company located in Little Rock, as is required by Ark.Code Ann.Sec. 4-27-501. Citicorp contends that the trial court erred in concluding otherwise. We agree and reverse the judgment.

There are no disputed facts material to the issue involved in this appeal. The only dispute involves an application of Rule 12(a) to those facts. The case, therefore, presents only a question of law for our determination.

A detailed review of the allegations of the complaint is not necessary to an understanding of the issue raised by this appeal. Simply stated, Wal-Mart alleged that Citicorp had converted the proceeds of two checks which Wal-Mart contended it had mailed to the wrong post office box. Wal-Mart sought judgment against Citicorp for the full amount of the two checks, plus pre-judgment interest and other incidental relief.

On July 15, 1988, Wal-Mart filed its complaint in the Circuit Court of Benton County, Arkansas. On July 15, 1988, the Benton County Circuit Clerk issued a summons directed to Citicorp which notified Citicorp that it had twenty days to answer the complaint. Counsel for Wal-Mart served the summons and complaint by certified mail, restricted delivery, on Citicorp's registered agent for service of process on July 20, 1988.

On August 10, 1988, Wal-Mart filed a motion for default judgment, alleging that service was made on Citicorp on July 20, 1988; that twenty days after that date was August 9, 1988; and that no answer had been filed by that date.

On August 11, 1988, Citicorp filed a response to the motion. In that response, Citicorp alleged that the motion for default judgment was premature because it is a foreign corporation having been incorporated in the State of Delaware, that its principal place of business is in Harrison, New York, that Citicorp is a non-resident under the Arkansas Rules of Civil Procedure, and that this fact is not altered because Citicorp registered to do business in Arkansas and appointed an agent for service of process. Citicorp further alleged that, as a non-resident, it was entitled to thirty days from the date of service in which to respond to Wal-Mart's complaint and that, therefore, Citicorp had until August 19, 1988, in which to file its responsive pleading. On August 18, 1988, Citicorp filed a motion to dismiss the complaint under Rule 12(b)(3) alleging that venue in Benton County was improper.

Wal-Mart later filed affidavits of officers of Wal-Mart and Tyson Foods, Inc., establishing that both are Delaware corporations and filed a certificate of the Benton County Circuit Clerk, in support of its motion for default judgment. The clerk's certificate stated that in cases filed against Wal-Mart and Tyson Foods in the Benton County Circuit Court the summonses issued provided that the defendants had twenty days in which to answer. The apparent purpose of the affidavits and certificate was to establish that it is the custom and practice in Benton County to allow foreign corporations with registered agents in Arkansas twenty days to respond to a complaint. Citicorp moved to strike the affidavits and clerk's certificate as being irrelevant and impertinent.

A hearing was held on the three motions after which, the trial court entered a default judgment against Citicorp for the full amount sought by Wal-Mart, plus pre-judgment interest, for a total judgment of $193,935.29. The trial court ruled that Citicorp's motion to dismiss and motion to strike were rendered moot by the ruling on Wal-Mart's motion for default judgment. In its default judgment, after reciting the facts, the trial court reached the following conclusions:

That the defendant, Citicorp Industrial Credit, Inc., is a Delaware corporation which has been domesticated in the State of Arkansas by making the appropriate filing with the Arkansas Secretary of State and has a registered office and registered agent in the State of Arkansas. Therefore, the defendant, Citicorp Industrial Credit, Inc., is not a non-resident of this State for the purpose of the application of the Answer filing deadline of Rule 12 of the Arkansas Rules of Civil Procedure and only had twenty (20) days after the service of the summons upon it in which to file its answer or pleading.

We hold that the trial court's conclusions are erroneous as a matter of law.

Rule 12(a) of our Rules of Civil Procedure mandates the time within which a responsive pleading to a summons and complaint must be filed. It reads, in part, as follows:

A defendant shall file his answer within twenty (20) days after the service of summons and complaint upon him, except when service is upon a non-resident of this state, in which event he shall have thirty (30) days after service of summons and complaint upon him within which to file his answer....

We think that the language of the rule is clear and unambiguous. This is consistent with Reporter's Note 3 to Rule 12:

This rule allows a nonresident of this State a period of thirty (30) days to plead regardless of where service was effected and regardless of whether service was effected through a resident agent in this State.

According to Rule 12, a non-resident defendant is entitled to thirty days in which to respond to a complaint. A resident defendant, however, is limited to twenty days. The Rule supplants former law found in superseded Ark.Stat.Ann. Sec. 27-1135 (Repl.1962) which gave defendants twenty days in which to respond, unless service was made outside the state, in which case the defendant was entitled to thirty days in which to respond. The Rule unequivocally grants non-resident defendants thirty days to respond, regardless of whether service was made within or outside of the state.

The trial court concluded that by registering to do business and having a registered agent in Arkansas, Citicorp...