General Finance Corp. v. Skinner
| Citation | 426 N.E.2d 77 |
| Decision Date | 29 September 1981 |
| Docket Number | No. 1-380A67,1-380A67 |
| Parties | GENERAL FINANCE CORPORATION, Defendant-Appellant, v. Madonna SKINNER, Plaintiff-Appellee. |
| Court | Court of Appeals of Indiana |
James S. Kirsch, Kroger, Gardis & Regas, Indianapolis, for defendant-appellant.
Hansford C. Mann, Max E. Goodwin, Mann, Chaney, Johnson, Hicks & Goodwin, Terre Haute, for plaintiff-appellee.
Defendant-appellant General Finance Corporation (GFC) appeals the denial of its amended motion for relief from a default judgment entered in the Vigo Superior Court alleging insufficient service of process.
The trial court awarded plaintiff-appellee Madonna Skinner (Skinner) $5,000 compensatory damages, and $50,000 punitive damages under Count I, and $4,000 compensatory under Count II.
We affirm.
The facts most favorable to the judgment disclose on July 21, 1978, Skinner filed a complaint against GFC concerning certain insurance benefits she had not received while disabled and unable to make loan payments. Skinner had refinanced a pre-existing loan from General Finance Corporation of Indiana (GFC of Ind.), and had purchased credit disability insurance on her new loan balance which would cover loan payments should she become disabled. Service of process of the Summons and Complaint was made by registered mail and addressed to:
General Finance Corporation
c/o C. T. Corporation Systems
1011 Merchants Bank Building
C. T. Corporation Systems (C.T.) was the registered agent for GFC of Ind. C.T. returned the Summons and Complaint to the Clerk of the trial court with a letter stating it was not the resident agent for GFC.
On September 5, 1978, Skinner filed a motion for default upon which the trial court entered an order of default. Subsequently, a hearing was held to determine damages; however, no one appeared for GFC. Thereafter, on March 8, 1979, the trial court awarded Skinner $59,000 in damages.
The principal question to be decided in this appeal is the validity of the service of Summons. The suit was filed against "General Finance Corporation," and process was issued to C.T. as resident agent. On the records of the Secretary of State's office, C.T. was resident agent for a separate corporation known as "General Finance Corporation of Indiana." Insomuch as GFC had not been admitted it had no resident agent formally designated. Resolution of the question necessitates an analysis of the interrelation of the structure as well as the operation of the two corporations.
GFC of Ind. is a Delaware Corporation admitted to do business in Indiana. Its business is that of a loan company, and it has 42 offices in Indiana. C.T. is its resident agent, but GFC of Ind. does not seem to have a principal office, and its principal officers and directors all reside in Illinois. GFC is likewise a Delaware Corporation, but it is not admitted to do business in Indiana, and its principal office is in Evanston, Illinois. GFC of Ind. is a wholly owned subsidiary of GFC which, in addition, owns 25 other loan companies having "General Finance Corporation" as their name in as many states. In all, there are in excess of 400 loan offices throughout the United States operating under the general umbrella of GFC. The President and Secretary-general counsel of GFC and GFC of Ind. are the same persons. The general supervisor of GFC of Ind., Joe A. Simala, is an assistant vice president of GFC, and is paid and appointed by its officers. GFC is wholly owned by CNA Financial Corporation (CNA), a financial conglomerate, which controls directly or indirectly 60 or more other substantial corporations exclusive of the 26 subsidiaries of GFC. CNA, in turn, is controlled by Loews Corporation. Mr. Stan Ginsberg is the corporate lawyer for both GFC and GFC of Ind., and maintains offices with GFC in Evanston.
A checking account is maintained with the Continental Illinois National Bank and Trust Company of Chicago, Illinois in the name of "General Finance Corporation and/or subsidiaries," and the checks are imprinted with that legend. All loan proceeds for loans initiated by GFC of Ind. and other subsidiaries are issued by check from that account by GFC. All payrolls for GFC of Ind. and the other subsidiaries are paid from that account by GFC. A computer terminal at GFC of Ind. transmits all transactions to the GFC office in Evanston simultaneous with the making of a loan, and all accounting is done by GFC. All credit disability insurance is screened through the GFC home office, and all records The Terre Haute loan office (GFC of Ind.) used a letterhead which bore the inscription "General Finance Corporation." The Terre Haute area telephone directory contained for many years the advertising of "General Finance Corporation," not "General Finance Corporation of Indiana." GFC, from its Evanston office, without prior consultation with the Terre Haute office, placed advertisements in the Terre Haute area; certain advertising letters to so-called preferred customers bore, in addition to the heading "General Finance Corporation," a stamp which said "General Finance Corporation, 426 Wabash Avenue, Terre Haute, In." No mention is made of "General Finance Corporation of Indiana." In the customer's loan payment book there appears the statement that "there are over 400 General Finance and General Finance Corporation offices from coast to coast and you have earned a special priority at whatever one you choose." The sign attached to the Terre Haute office reads "friendly Bob Adams service, General Finance Loans." Mailings of advertisements, called stuffers, which are printed and sent from GFC offices in Evanston, merely refer to GFC, but are circulated locally in the Terre Haute area. The Bob Adams logo is a nationwide trademark of GFC.
of insurance are kept there. Mr. Reedy, the manager of the Terre Haute GFC of Ind. office, referred to GFC in Evanston as the "home office," and testified that he relied upon the home office for instruction and advice on loans as well as insurance matters. In fact, one Mr. Cunningham, in relation to this matter with Skinner, instructed Reedy not to issue any further insurance coverage to her. Throughout its brief, GFC makes reference to "home office" and "branch office" in describing the relationship between GFC and GFC of Ind.
GFC filed 45 lawsuits in Vigo County to collect defaulted loans which were, in name, made by one of its subsidiaries, and reduced 41 of them to judgment, 32 by default. Each Complaint alleged that the money was borrowed from GFC. Among these, were some loan agreements that were made out of state by another GFC subsidiary. No assignment of the loans was reflected in the loan documents.
In the instant case, the note and mortgage executed by Skinner was made payable to GFC of Ind., but the Financing Statement filed in the office of the recorder of Vigo County shows the secured party to be "General Finance Corporation." Further, the disability insurance policy prepared by the Terre Haute office reflected that "General Finance Corporation and Subsidiaries" was the Creditor/Policy Holder. Collection letters were sent to Skinner and her employer by the Terre Haute office after the notice of her disability, and were written on the letterhead stationery of "General Finance Corporation," and signed by Mr. Reedy of the Terre Haute office.
GFC raises six issues on appeal. In its brief, GFC's entire discussion centers upon Issue I. As appellant states in its brief, Therefore, resolution of Issue I is dispositive. GFC states the issues:
I. "Was the mailing of the Complaint and Summons to C.T. Corporation Systems sufficient service of process upon the Defendant-Appellant General Finance Corporation?"
II. "Was the Defendant-Appellant General Finance Corporation denied a fair trial by irregularities in the proceedings?"
III. "Did the entry of default against the Defendant-Appellant General Finance Corporation constitute an abuse of discretion by the trial court?"
IV. "Did the entry of default and judgment against the Defendant-Appellant V. "Was the entry of default and judgment against the Defendant-Appellant General Finance Corporation contrary to law?"
General Finance Corporation result from accident or surprise which ordinary prudence could not have prevented?"
VI. "Is the judgment against the Defendant-Appellant General Finance Corporation void because of lack of jurisdiction over the person?"
GFC argues: General Finance Corporation is not admitted to do business in Indiana. GFC of Ind. is a chartered and licensed Indiana corporation and a subsidiary of the parent, GFC. C.T. is the resident agent of GFC of Ind., but not the resident agent of GFC. Therefore, GFC argues, service of process on C.T. did not amount to sufficient service on GFC. In support of its argument, GFC cites Ind. Rules of Procedure, Trial Rule 4.6(A)(1) and Ind.Code 23-3-3-1.
T.R. 4.6(A)(1) requires, in service upon organizations, that it be made on the executive officer or the lawfully appointed agent of the corporation. Ind.Code 23-3-3-1 provides that for a foreign corporation not admitted to do business in this state, who transacts or does business in this state, service of process shall be made on the Secretary of State, acting as agent for such foreign corporation.
Because Skinner did not serve process on the Secretary of State, but rather served on the agent of another corporation, GFC contends that service was insufficient on it. Sufficient service of process, GFC states, demands that the means utilized be reasonably calculated to...
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