Delta Apparel, Inc. v. Farina

• Decision Date: 30 October 2013
• Docket Number: No. 5180.,5180.
• Citation: 750 S.E.2d 615,406 S.C. 257
• Court: South Carolina Court of Appeals
• Parties: DELTA APPAREL, INCORPORATED, Respondent, v. Daniel G. FARINA, Appellant. Appellate Case No. 2012–205467.

406 S.C. 257

750 S.E.2d 615

DELTA APPAREL, INCORPORATED, Respondent,

v. Daniel G. FARINA, Appellant.Appellate Case No. 2012–205467.

No. 5180.

Court of Appeals of South Carolina.

Heard Sept. 12, 2013.

Decided Oct. 30, 2013.

Candy M. Kern–Fuller and Nicole Lynne Thornton, of Upstate Law Group, LLC, of Easley, for Appellant.

Samuel W. Outten and Catherine Runion Atwood, of Womble Carlyle Sandridge & Rice, LLP, of Greenville, for Respondent.

LOCKEMY, J.

Daniel G. Farina appeals the trial court's denial of his Rule 60(b), SCRCP motion for relief from judgment. He argues the trial court did not have personal jurisdiction to award a judgment against him and that he was not served with proper notice of the initial claim of Delta Apparel, Incorporated (Delta). We reverse.

FACTS

Farina was hired by Delta, a corporation with corporate offices in Greenville, South Carolina, as the general manager of its Ceiba Textiles plant (Ceiba) in Villanueva, Honduras. In April of 2007, the State of California Franchise Tax Board (California Tax Board) requested that Delta begin withholding certain amounts from Farina's pay. In July of 2008, Delta terminated Farina's employment and entered into a severance settlement agreement with him. As part of the severance settlement, Farina accepted $41,022.92 as full severance payment corresponding to days of labor from October 16, 2007, up to July 10, 2008. On August 15, 2008, pursuant to the California Tax Board's mandate, Delta withheld 25%, which equaled $9,673.63, from Farina's severance payment.

In October of 2008, Farina filed a suit in Honduras against Ceiba claiming he was an employee of Ceiba, he was wrongfully terminated, and he was owed $57,984.14 in unpaid severance. On September 1, 2009, the Honduran court ruled in Farina's favor, ordering Ceiba to pay Farina $230,039.78.¹ Delta, on behalf of Ceiba, appealed the judgment to the Honduran court of appeals, which affirmed the judgment and awarded punitive damages. Delta appealed the appellate decision to the Supreme Court of Honduras, which affirmed in favor of Farina with the exception of the punitive damages award. Delta then paid the Honduran judgment to Farina.

On May 4, 2010, Delta filed a motion for a restraining order in South Carolina to enjoin Farina from disposing of the funds from the Honduran judgment. A hearing was scheduled in July of 2010 in which the trial court denied Delta's motion. Farina was not present at the hearing; however, he had contacted an attorney about the matter. The attorney was never retained, but he did have two conversations about the case with Delta's counsel. Also on May 4, 2010, Delta filed a summons and complaint claiming Farina fraudulently misrepresented his employment to the Honduran court. Further, Delta alleged Farina breached the employment agreement entered into by the parties. The time within which responsive pleadings could be filed expired without an answer from Farina, and, as a result, Delta filed a motion for default judgment on July 5, 2010. It also filed an affidavit of default on July 22, 2010.

Farina filed a motion to dismiss the case on July 26, 2011, and he attached an affidavit in support of his motion. The day after receiving Farina's motion to dismiss, Delta sent Farina notice of its motion for default judgment with a hearing scheduled for September 1, 2011. Delta explained that because it received notice of Farina's motion to dismiss, it sent the notice of the default judgment hearing to Farina's last known address in California as well as to the Arizona address provided on his recent correspondence.

Farina did not appear at the default judgment hearing. At the hearing, Delta alleged it served Farina with notice of its initial claim in three different ways: (1) it mailed notice to his last known address; (2) it sent notice by certified mail with receipt, which was signed and returned; and (3) it sent notice by FedEx to his address, which required a signature. Further, Delta alleged Farina had actual notice because he contacted an attorney to represent him in the action and then decided not to retain the attorney. Delta also stated it employed Farina and that Farina was an employee for Delta at all times even though he worked for its Honduran facilities. Delta filed an affidavit from its employee, Deborah Merrill, supporting Delta's request for an award of $96,484.14 in damages, as well as alleging that Farina had regular contact with Delta's corporate offices in Greenville, South Carolina. The trial court ruled in Delta's favor.

A hearing for Farina's motion to dismiss was scheduled for November 7, 2011.² In his motion, Farina argued there were five issues with Delta's claim.

Plaintiff's [sic] cannot be awarded a Default Judgment in a case that he cannot show proper proof of service

I [Farina] have not had any relationship that could result in a monetary judgment award from a Family Court Division of South Carolina in favor of plaintiff

I was employed as General Manager in plaintiff's Honduran subsidiary, Ceiba Textiles SRL, from October 2006 until my termination on June 2008

Any labor matter from that relationship is under the jurisdiction of the labor law of a foreign country, Honduras

Plaintiff is using South Carolina legal system to harass me, knowing well that I cannot afford legal representation and/or a personal appearance without losing a significant amount of income, jeopardizing my employment in these uncertain economic times, plus incurring in non-planned expenses.

Farina was present at the hearing, and he asserted he was a resident of Arizona, was working in northern Mexico, and had not been a resident of California since April of 2010. He claimed the first notice he received was in July of 2011 regarding Delta's motion for a default judgment scheduled to be heard on September 1, 2011. Delta denied all his claims and also maintained that while Farina labeled his motion as one pursuant to Rule 60(b), SCRCP, he did not allege any permissible grounds for relief under Rule 60(b), SCRCP. Farina responded that while he received notice of the motion for a restraining order, he thought the matter had been dropped and was not aware there was any other claim. He maintained the restraining order involved his judgment in Honduras, which was a matter not properly before the South Carolina court system. The trial court issued a Form 4 order denying Farina's Rule 60(b), SCRCP motion.

STANDARD OF REVIEW

“The decision whether to set aside an entry of default or a default judgment lies solely within the sound discretion of the trial judge.” Roberson v. S. Fin. of S.C., Inc., 365 S.C. 6, 9, 615 S.E.2d 112, 114 (2005) (citing Thompson v. Hammond, 299 S.C. 116, 119, 382 S.E.2d 900, 902–03 (1989)). “The trial court's decision will not be disturbed on appeal absent a clear showing of an abuse of that discretion.” Id. (citing Mitchell Supply Co., Inc. v. Gaffney, 297 S.C. 160, 163, 375 S.E.2d 321, 323 (Ct.App.1988)). “ ‘An abuse of discretion in setting aside a default judgment occurs when the [trial court] issuing the order was controlled by some error of law or when the order, based upon factual, as distinguished from legal conclusions, is without evidentiary support.’ ” Id. (quoting In re Estate of Weeks, 329 S.C. 251, 259, 495 S.E.2d 454, 459 (Ct.App.1997)).

LAW/ANALYSISRule 60, SCRCP

Despite captioning his motion as one to dismiss, Farina presented his arguments pursuant to Rule 60, SCRCP, which is a motion to relieve the party from a judgment or order. The relevant portion of Rule 60, SCRCP, provides:

(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud, misrepresentation, or other misconduct of an adverse party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application.

Rule 60(b), SCRCP. We will now address his arguments on appeal.

Improper Service

Farina first argues the default judgment is void pursuant to Rule 60(b)(4), SCRCP, because he did not receive proper service of the summons and complaint. He contends the trial court therefore erred in denying his request to relieve him of the judgment. We disagree.

Rule 4, SCRCP, pertaining to proper service, “assures the defendant of reasonable notice of the action.” Roche v. Young Bros., Inc. of Florence, 318 S.C. 207, 209, 456 S.E.2d 897, 899 (1995). To effect service on an individual such as Farina, Rule 4(a)(d)(1), SCRCP, provides service may be made by delivering a copy of the summons and complaint to him “personally or by leaving copies thereof at his dwelling house or usual place of abode with some person of suitable age and discretion then residing therein, or by delivering a copy to an agent authorized by appointment or by law to receive service of process.”

Effective service of process can also be made upon an individual “by registered or certified mail, return receipt requested and delivery restricted to the addressee. Service is effective upon the date of delivery as shown on the return receipt.” Rule 4(d)(8), SCRCP. Finally, service can be made upon an individual “by a commercial delivery service which meets the requirements to be considered a designated delivery service in accordance with 26 U.S.C. § 7502(f)(2).” Rule 4(d)(9), SCRCP. “Service is effective upon the date of delivery as shown in the delivery record of the commercial delivery service.” Id. If service is by certified mail or commercial delivery...