First Mgmt., Inc. v. Topeka Inv. Grp., LLC

• Decision Date: 30 March 2012
• Docket Number: No. 106,178.,106,178.
• Citation: 277 P.3d 1150,47 Kan.App.2d 233
• Parties: FIRST MANAGEMENT, INC., Appellee, v. TOPEKA INVESTMENT GROUP, LLC, Appellant.
• Court: Kansas Court of Appeals

47 Kan.App.2d 233

277 P.3d 1150

FIRST MANAGEMENT, INC., Appellee,

v.TOPEKA INVESTMENT GROUP, LLC, Appellant.

No. 106,178.

Court of Appeals of Kansas.

March 30, 2012.

Syllabus by the Court

1. The interpretation of a statute is a question of law over which this court has unlimited review.

2. When interpreting a statute, this court must ascertain the legislature's intent through the statutory language, giving ordinary words their ordinary meaning. The fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. When a statute is plain and unambiguous, the court will not read into the statute something not readily found in it.

3. Service of process is the method of formally commencing an action by giving the defendant notice of the action in the manner prescribed by statute. The defendant normally does not become a party to the action until served with the summons.

4. Procedural due process requires notice and an opportunity to be heard at a meaningful time and in a meaningful manner.

5. Both personal and subject matter jurisdiction are required to establish jurisdiction.

6. If a district court lacks jurisdiction in a case, an appellate court does not acquire jurisdiction on appeal.

7. Without jurisdiction, a default judgment is void. A void judgment may be vacated at any time.

8. K.S.A. 2010 Supp. 60–304(e) provides that service of process may be accomplished on a domestic limited liability company by: (1) serving an officer, manager, partner, or a resident, managing or general agent; (2) leaving a copy of the summons and petition or other document at any of its business offices with the person having charge thereof; or (3) serving any agent authorized by appointment or by law to receive service of process, and if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant.

9. When an employee of a limited liability company is in charge of one of its business offices at the time of the service of process, even if not an officer of that company, personal service on that employee is effective under K.S.A. 2010 Supp. 60–304(e)(2).

10. A decision to set aside a default judgment rests within the discretion of the trial court. This decision is subject to review under an abuse of discretion standard. Judicial discretion is abused when no reasonable person would agree with the decision of the trial court.

11. A motion to set aside a default judgment will only be granted if the movant has proven by clear and convincing evidence that (1) the nondefaulting party will not be prejudiced by the reopening, (2) the defaulting party has a meritorious defense, and (3) the default was not the result of inexcusable neglect or a willful act.

Brenda L. Head and Randall J. Forbes, of Frieden, Unrein & Forbes, LLP, of Topeka, for appellant.

Heather F. Shore, of Brown & Ruprecht, PC, of Kansas City, Missouri, for appellee.

Before GREENE, C.J., PIERRON and MARQUARDT, JJ.

MARQUARDT, J.

Topeka Investment Group, LLC, appeals the judgment granted to First Management, Inc. for plumbing services First Management provided on a Holiday Inn Express owned by Topeka Investment. We affirm.

First Management substantially completed plumbing related work at a Holiday Inn Express for Topeka Investment on June 14, 2010. On September 23, 2010, First Management demanded payment from Topeka Investment. Topeka Investment then requested some minor “punch list” work. First Management completed the “punch list” work and again demanded payment on October 13, 2010. Topeka Investment refused to pay First Management.

On December 6, 2010, First Management filed a petition against Topeka Investment for “$22,583.67 together with pre- and postjudgmentinterest, costs; and for such further additional relief as the Court deems just and proper,” claiming unjust enrichment and promissory estoppel. A process server appointed by the district court served the desk clerk at the Holiday Inn Express with the summons and petition on December 11, 2010. Topeka Investment did not file an answer to the petition, and on January 7, 2011, First Management filed a motion for default judgment. A copy of the motion was mailed to Topeka Investment's registered agent, Madan Rattan, at the Holiday Inn Express address of 601 NW Highway 24, Topeka, Kansas, 66608.

On February 9, 2011, the district court granted judgment to First Management for the principal amount requested of $22,583.67, plus $319.38 prejudgment interest.

On March 15, 2011, Topeka Investment filed a motion to set aside the judgment, claiming that the service of process was not proper, and thus, the district court did not have jurisdiction to enter a judgment against it. The district court denied the motion, determining that service was proper. Topeka Investment timely appeals.

Service of Process

Topeka Investment argues the district court erred when it determined that service was proper under K.S.A. 2010 Supp. 60–304(e). The interpretation of a statute is a question of law over which this court has unlimited review. Owen Lumber Co. v. Chartrand, 283 Kan. 911, 915, 157 P.3d 1109 (2007).

When interpreting a statute, this court must “ascertain the legislature's intent through the statutory language it employs, giving ordinary words their ordinary meaning.” State v. Stallings, 284 Kan. 741, 742, 163 P.3d 1232 (2007). The fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. Bergstrom v. Spears Manufacturing Co., 289 Kan. 605, 607, 214 P.3d 676 (2009). When a statute is plain and unambiguous, the court will not read into the statute something not readily found in it. Double M Constr. v. Kansas Corporation Comm'n, 288 Kan. 268, 271, 202 P.3d 7 (2009).

Proper service of process is an essential before a court may exert personal jurisdiction over a litigant in a lawsuit. In re Estate of Pritchard, 37 Kan.App.2d 260, 270, 154 P.3d 24 (2007). “Service of process is a method of formally commencing an action by giving the defendant notice of the action. The person named as defendant normally does not become a party to the action until served with the summons.... The court obtains jurisdiction of the defendant through service of process.” In re Marriage of Welliver, 254 Kan. 801, 803, 869 P.2d 653 (1994).

Service of process provides notice of the lawsuit. Notice satisfies the constitutional considerations of due process. Procedural due process requires “notice and an opportunity to be heard at a meaningful time and in a meaningful manner.” Alliance Mortgage Co. v. Pastine, 281 Kan. 1266, 1275, 136 P.3d 457 (2006).

Jurisdiction over the defendant is acquired by issuance and service of process in the manner prescribed by statute. Kansas Bd. of Regents v. Skinner, 267 Kan. 808, 812, 987 P.2d 1096 (1999). Both personal and subject matter jurisdiction must be present to establish jurisdiction. Davila v. Vanderberg, 4 Kan.App.2d 586, 588, 608 P.2d 1388 (1980).

If a district court lacks jurisdiction, an appellate court does not acquire jurisdiction on appeal. Harsch v. Miller, 288 Kan. 280, 200 P.3d 467 (2009). Without jurisdiction, a default judgment is void. “A void judgment is one rendered by a court which lacked personal or subject matter jurisdiction or acted in a manner inconsistent with due process. [Citations omitted.] ... A void judgment is a nullity and may be vacated at any time. [Citation omitted.].” In re Marriage of Hampshire, 261 Kan. 854, 862, 934 P.2d 58 (1997).

Under K.S.A. 2010 Supp. 60–304(e), services of process on a domestic limited liability company, like Topeka Investment, can be made by:

“(1) Serving an officer, manager, partner or a resident, managing or general agent;

“(2) leaving a copy of the summons and petition or other document at any of its business offices with the person having charge thereof; or

“(3) serving any agent authorized by appointment or by law to receive service of process, and if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant.” (Emphasis added.)

“Substantial compliance with any method of serving process effects valid service of process if the court finds that, notwithstanding some irregularity or omission, the party served was made aware that an action or proceeding was pending in a specified court that might affect the party or the party's status or property.” K.S.A. 2010 Supp. 60–204.

A panel of this court has held that substantial compliance means compliance with respect to the essential matters necessary to assure every reasonable objective of the statute. Fisher v. DeCarvalho, 45 Kan.App.2d 1133, 1147, 260 P.3d 1218 (2011). Under Kansas law, both substantial compliance with the statutory requirements of service and awareness of the pending action are all that is required. Sellens v. Telephone Credit Union, 189 F.R.D. 461, 464 (D.Kan.1999).

On appeal, Topeka Investment argues that First Management did not properly serve it with the summons and petition. First Management argues, and the district court agreed, that Topeka Investment was properly served through K.S.A. 2010 Supp. 60–304(e)(2), by leaving a copy at any of Topeka Investment's business offices “with the person having charge thereof.”

On December 11, 2010, First Management, through Hatfield Process Service, served the petition and summons on Laura Petrie, front desk clerk at the Holiday Inn Express at 601 NW Highway 24, Topeka, Kansas, 66608. Holiday Inn Express is located at this address; its business is legally classified as “Topeka Investment Group, LLC, doing business as Holiday Inn Express & Suites.” Topeka Investment owns the real property and the Holiday Inn Express franchise license for the hotel operating at this address. In Rattan's supplemental affidavit, he states: “The correct legal classification of the Holiday Inn Express located at...