Graff v. Kelly

• Decision Date: 09 July 1991
• Docket Number: No. 72052,72052
• Citation: 1991 OK 71,814 P.2d 489
• Parties: John David GRAFF d/b/a 63rd Street Medical Clinic, Appellee, v. Joseph F. KELLY, d/b/a Joseph F. Kelly, M.D., an individual, Appellant.
• Court: Oklahoma Supreme Court

Page 489

814 P.2d 489

1991 OK 71

John David GRAFF d/b/a 63rd Street Medical Clinic, Appellee, v. Joseph F. KELLY, d/b/a Joseph F. Kelly, M.D., an individual Appellant.

No. 72052.

Supreme Court of Oklahoma.

July 9, 1991.

On Certiorari From the Court of Appeals, Division 2.

The appellant appeals from the denial of a motion for summary judgment upon his petition to vacate the trial court's default judgment in the amount of $13,832.00. The appellant based his petition to vacate the default judgment upon defective service of process.

CERTIORARI PREVIOUSLY GRANTED, OPINION OF THE COURT OF APPEALS VACATED, JUDGMENT OF THE TRIAL COURT REVERSED AND REMANDED WITH DIRECTIONS.

David P. Henry, Coyle & Henry, P.C., Oklahoma City, for appellee.

Brent D. Coldiron, Pool, Thompson, Coldiron, Blankenship, & Vincent, Del City, for appellant.

ALMA WILSON, Justice:

This appeal raises a single issue of first impression, whether service of process is valid when the process server serves the summons upon an employee, not the defendant, at that defendant's place of employment. We hold that such service is invalid under 12 O.S.Supp.1990, § 2004(C)(1)(c)(1).

The appellee brought suit against the appellant on February 24, 1987, alleging breach of contract and tort. The petition alleged that the appellant was employed by the appellee clinic and was responsible for rendering medical services to patients of the clinic. It further alleged that all monies received for the rendition of those services were to be paid directly to the clinic for its benefit. The appellant is alleged to have received payment from patients which he refused to tender to the clinic, converting those payments for his own use. Because he was alleged to have a contract with the clinic, such action was claimed to be a breach of contract. The clinic asked for $12,500.00 in damages for the breach of contract. It asked punitive damages for the alleged conversion.

On March 4, 1987, a return of service was filed which swore that the service agent served "Joseph Kelly M.D.'s Receptionist" at the appellant's business address, 4405 S.E. 28th, which the service agent endorsed as Kelly's "usual place of residence" and that the agent left the summons with "a member of the staff." On June 12, 1987, the trial court judge signed a Journal Entry of Judgment finding that the defendant (appellant) had been served at his place of business, that he had failed to answer the summons, and was in default. The plaintiff (appellee) was awarded a judgment in the amount of $12,500.00 for breach of contract, plus costs in the amount of $82.00 and an attorney's fee in the amount of $1,250.00 for a total judgment of $13,832.00. On May 26, 1988, the appellant was ordered to appear for a hearing on assets to be held on June 14, 1988.

On July 12, 1988, the appellant filed a petition to vacate the judgment based on defective service of process, and appellee answered by general denial. On September 14, 1988, the appellant moved for summary judgment and alleged that there was no substantial controversy concerning the material facts. The appellee objected to the appellant's motion for summary judgment and appellee moved for summary judgment. The trial court denied the motion of the appellant on October 28, 1988, and the appellant filed his Petition in Error with this Court on November 14, 1988.

On November 23, 1988, this Court on its own motion ordered the appellant to show cause why the appeal should not be dismissed as premature because the trial court's order appeared to be interlocutory. The appellant responded that his petition to vacate a default judgment rested not upon a dispute of factual issues but upon an interpretation of the law and that the facts as presented upon summary judgment were not contested. He stated that the legal issue was whether or not service of summons upon his receptionist at his place of business was adequate service under Oklahoma law. He added that a trial would not produce any new facts and would present the trial court with the identical legal question which would eventually be appealed. He attached copies of the court records. On December 29, 1988, this Court ordered the appeal to proceed based upon Rule 1.11(b)(3) of the Rules of Appellate Procedure in Civil Cases which provided in pertinent part:

(b) Computation of judgment date and definition of final order

... if the case is tried to the court, judgment is deemed rendered when its terms are completely pronounced by the judge and clearly resolve all the issues in controversy. Shaw v. Sturgeon, Okl., 304 P.2d 341, 343; Emerson v. Lewis, Okl., 274 P.2d 529. The following constitute final orders:

* * * * * *

(3) one modifying or refusing to vacate or modify a final judgment....

12 O.S., ch. 15, app. 2, amendment of Sept. 22, 1986. The case was subsequently assigned to the Court of Appeals which affirmed. We have previously granted certiorari.

On the merits, the appellant argues that the trial court erred by denying his motion for summary judgment upon his petition to vacate the prior default judgment. His argument is based upon the assertion that service on his receptionist is not a proper substitute service provided for in the Oklahoma Pleading Code and more specifically by 12 O.S.Supp.1990, § 2004(C)(1)(c)(1). The appellee argues that service was proper under the statute because the receptionist was an agent of the appellant or, alternatively, because the appellant received actual notice of the lawsuit.

Title 12 O.S.1981, § 1038, provides in pertinent part: "A void judgment may be vacated at any time, on motion of a party, or any person affected thereby." This provision applies only when the invalidity appears on the face of the judgment roll. Town of Watonga v. Crane Co., 189 Okla. 184, 114 P.2d 941, 942 (1941). The "petition" ¹ to vacate the default judgment which was filed by the appellant asserts that the judgment entered was void on its face.

A judgment is void on its face when the judgment roll affirmatively shows that the trial court lacked either (1) jurisdiction over the person; (2) jurisdiction over the subject matter; or, (3) judicial power to render the particular judgment. Morgan v. Karcher, 81 Okl. 210, 197 P. 433.

Town of Watonga, 114 P.2d at 942. The judgment roll is the same as the "record" and is made up of the petition, the process, return, the pleadings subsequent thereto, reports, verdicts, orders, judgments, and all material acts and proceedings of the court. Elliott v. City of Guthrie, 725 P.2d 861, 863 n. 8 (Okla.1986).

In the record, on the return, under a paragraph entitled "USUAL PLACE OF RESIDENCE" the return reads as follows:

I certify that on the 4 day of March I served the following; Joseph Kelly M.D.'s Receptionist a copy of said Summons at 4405 SE 28th which is the usual place of residence, with Joseph Kelly M.D., a member of the family or residence [sic] over fifteen (15) years of age.

All the blank spaces, which are indicated by underlining above, were hand written, and the term "family" was crossed out and the term "staff" was hand written underneath. If the construction of the return does not reveal that it met the requirements of the statutes at the time of service of process, then the judgment is void on its face. If void on its face, the judgment may be set aside at any time pursuant to 12 O.S.1981, § 1038. ²

The appellee answered the appellant's petition to vacate by a general denial which stated that the underlying judgment was not subject to modification, being set aside, or being vacated pursuant to "12 O.S. § 1031 et seq." In the appellee's own motion for summary judgment he argues that the receptionist was appellant's agent by appointment or by law to receive service of process. Without explanation, the trial court denied appellant's motion for summary judgment. The Court of Appeals affirmed on the grounds that the appellant did not deny that he received actual notice.

Actual notice cannot by itself be sufficient to establish in personam jurisdiction, otherwise there would be no provision for challenging the mode of delivery or the lack of delivery of the summons and petition under 12 O.S.Supp.1990, § 2012(B)(5). 1984 Okla.Sess.Laws, ch. 164, § 12. Coming into court with such a challenge would prove the party had actual notice of the lawsuit and the motion would always be denied. The rule must be that which is stated by the Supreme Court of Georgia: "Where there has been no service of a suit, or waiver thereof, the necessity of service is not dispensed with by the mere fact that the defendant may in some way learn of the filing of the suit." Piggly-Wiggly Georgia Co. v. May Investing Corp., 189 Ga. 477, 6 S.E.2d 579, 580 (1939). The Supreme Court of Alabama in Cooper v. Watts, 280 Ala. 236, 191 So.2d 519, 522 (1966) held that the mere fact that a defendant has learned of the filing of a lawsuit does not dispense with the necessity of service of process or a waiver thereof, in order that a court obtain jurisdiction over the person. The court added that "a person's mere presence in court does not give jurisdiction to enter a judgment against him when he was not brought there by any legal means." Cooper, 191 So.2d at 522, citing 21 C.J.S. Courts § 83.

Because actual notice of a lawsuit alone is not sufficient to establish in personam jurisdiction, we must determine whether the substituted service of process was effective to establish such jurisdiction. This Court held in Steincamp v. Steincamp, 593 P.2d 495, 498 (Okla.1979), that in determining the sufficiency of substituted service of process, three questions must be answered: "(1) Is there a statute authorizing the method of service employed?; (2) Have the requirements of the statute been observed?; (3) Have fundamental due process requirements been met?"

The appellee argues that the receptionist was a proper agent for service of process under 12 O.S.Supp.1990, § 2004(C)(1)(c)(1). The first...