Gutierrez v. Wal-Mart Stores, Inc.

• Decision Date: 24 January 2002
• Docket Number: No. 00-0243, No. 00-1803.
• Citation: 638 N.W.2d 702
• Parties: Sylvia GUTIERREZ, Appellee, v. WAL-MART STORES, INC., Appellant.
• Court: Iowa Supreme Court

638 N.W.2d 702

Sylvia GUTIERREZ, Appellee, v. WAL-MART STORES, INC., Appellant.

Nos. 00-0243, 00-1803.

Supreme Court of Iowa.

January 24, 2002.

Gregory M. Lederer and Christine L. Conover of Simmons, Perrine, Albright & Ellwood, P.L.C., Cedar Rapids, for appellant.

J.E. Tobey III, Davenport, and Patricia Zamora of Zamora, Taylor, Clark, Alexander, Woods & Frederick, Davenport, for appellee.

NEUMAN, Justice.

These appeals arise out of a judgment secured by Sylvia Gutierrez against Wal-Mart Stores, Inc. (WMSI) for injuries she sustained while shopping at the corporate retailer's store in Davenport. Because the appeals share the same factual and procedural background, we consider them together.

In appeal number 00-1803, following remand to the district court from our court of appeals, WMSI challenges the district court's finding that employee Dan Ellis was a "managing agent" for purpose of accepting service under Iowa rule of civil procedure 56.1(f).¹ While that matter was pending in the appellate court, WMSI filed a separate petition in the district court under Iowa rule of civil procedure 252(b) to vacate the judgment on the ground of irregularity. The court refused to set the matter for trial under rule 253(c), believing the matters raised by the petition were not collateral to the issues then under submission to the appellate court. Therefore, the court ruled, it was without jurisdiction to rule on them. That decision is the subject of WMSI's appeal number 00-0243.

Having now considered the records before us and the arguments of counsel, we affirm the court's decision regarding the sufficiency of service but reverse and remand for trial on WMSI's petition to vacate the judgment.

I. Background Facts and Proceedings.

The incident giving rise to this lawsuit occurred in August 1995. In a nutshell, Sylvia Gutierrez was doing back-to-school shopping with her four children at a Wal-Mart store in Davenport when a display box containing roughly ten oriental rugs toppled over onto her. Gutierrez was not perusing the rugs at the time; she was in a nearby aisle examining shoes. According to the district court's factual findings, the rugs "str[uck] her first in the head, then down her neck and back, and finally [left] a rug burn on the back of her legs." Gutierrez, who was in considerable pain, immediately reported the incident to a Wal-Mart employee. She then sought medical care. Gutierrez brought suit for her injuries, including medical expenses and lost wages. The case was tried to the court. Following a two-day trial, the court entered judgment in favor of Gutierrez and against WMSI in the sum of $38,678.56.

Further facts will be detailed as they pertain to the issues under review.

II. Appeal No. 00-1803: Sufficiency of Service.

Gutierrez filed suit in July 1997. Her petition named "WALMART" as the defendant. According to the return-of-service affidavit, Bi-State Legal and Court Service served "WALMART" by serving a copy of the petition and original notice on "Dan Ellis (Asst. Mgr.)" on July 30, 1997. Defendant "Wal-Mart Stores, Inc. (WMSI)" appeared and answered on August 20, 1997, admitting that it operates a store in Davenport and that Gutierrez was in its store on the date in question but denying all other allegations of the petition. It also affirmatively alleged that the tort action was barred by the two-year statute of limitations. See Iowa Code § 614.1(2) (1997). This defense rested on the claim that Gutierrez neither sued the defendant in its correct corporate name nor served its registered agent before the statute of limitations expired.

Gutierrez took no action prior to trial to amend its petition to name "Wal-Mart Stores, Inc." instead of "WALMART." Thus, at the close of all the evidence, WMSI moved for directed verdict on the ground the proper party was not served within the limitations period. The court took the matter under advisement, along with its ruling on the merits of the case. Thereafter, Gutierrez moved to amend her petition to conform to the proof adduced at trial concerning the corporation's correct name. WMSI resisted the amendment.

In its findings of fact and conclusions of law, the district court addressed the name issue and determined that a corporation may be sued under its trade name as well as its corporate name. In this case, the court held, the only mistake was Gutierrez' omission of a hyphen between "Wal" and "Mart." Because WMSI — commonly known as Wal-Mart—received original notice of the proceedings at the store where the incident occurred, the court ruled no prejudice resulted from the plaintiff's failure to correct the misnomer sooner, and the amendment was thereby allowed.

WMSI challenged the court's ruling by motion filed under rule 179(b), claiming Gutierrez failed to prove "that she served anybody, let alone WMSI or an authorized representative" before the statute of limitations deadline in order to comply with the relation-back provisions of rule 69(e).² The court summarily denied the motion and WMSI appealed.

We transferred the case to the court of appeals. That court rejected WMSI's claim the trial court abused its discretion by permitting Gutierrez' amendment to conform to the proof. In the appellate court's words, "During trial, four employees of the store referred to their employer as `Wal-Mart.' The correct party was before the court." The court of appeals nevertheless agreed with WMSI's contention that, even if the amendment was properly allowed, it would not relate back to the filing of the petition unless service on "Dan Ellis (Asst.Mgr.)" was, in fact, sufficient to confer notice on Wal-Mart Stores, Inc., under rule of civil procedure 56.1(f). That decision, the court ruled, was a fact-based inquiry about which the district court had made no finding. So the court of appeals conditionally affirmed the judgment for Gutierrez subject to a remand to the trial court "to make findings ... concerning whether Dan Ellis was a `general or managing agent' of WMSI."

That brings us to the immediate controversy before us. On remand, WMSI asserted the record contained no evidence from which the court could conclude Dan Ellis was a "general or managing agent" of WMSI. The trial court rejected this contention. It found the sworn return of service furnished prima facie proof of Dan Ellis' position with the company and noted WMSI's failure to tender any proof to the contrary. The court's opinion also rested on evidence furnished by other Wal Mart employees concerning their familiarity with Gutierrez' accident and this lawsuit. Although that testimony did not mention Ellis directly, it convinced the court that Ellis met the definition of "managing agent" contemplated by rule 56.1(f).

WMSI now claims reversal of the judgment is compelled because the court relied solely on hearsay to sustain its decision on remand. In particular, WMSI assails the court's reliance on the return-of-service affidavit. We are convinced the challenge is entirely without merit.

Our rules of procedure govern proof of service in circumstances such as this:

Iowa officers may make unsworn returns of original notices served by them, as follows: Any sheriff, or deputy sheriff, as to service in their own or a contiguous county; any other peace officer, or bailiff or marshal, as to service in their own territorial jurisdiction. The court shall take judicial notice of such signatures. All other returns ... shall be proved by the affidavit of the person making the service. ...

Iowa R. Civ. P. 59(a) (emphasis added). In keeping with this rule, our court has long accorded return-of-service affidavits presumptive validity, noting they are impeachable only upon clear and convincing proof of falsity. E.g., Ruth & Clark, Inc. v. Emery, 233 Iowa 1234, 1242, 11 N.W.2d 397, 402 (1943); Chader v. Wilkins, 226 Iowa 417, 420, 284 N.W. 183, 185 (1939); Coster v. Jensen, 218 Iowa 1215, 1217, 257 N.W. 303, 304 (1934); Des Moines Coal & Coke Co. v. Marks Inv. Co., 197 Iowa 589, 590-91, 195 N.W. 597, 598 (1923), modified on other grounds, 197 Iowa 589, 197 N.W. 628 (1924); accord Strong v. Jarvis, 524 N.W.2d 675, 677 (Iowa Ct.App.1994)

. Under this line of cases, WMSI's hearsay objection posed no impediment to the district court's finding that Dan Ellis, an assistant manager, was served at the Wal-Mart store in Davenport before the statute of limitations expired. WMSI offered no proof at trial to counter the affidavit.

Contrary to WMSI's contention, the court did not rely solely on the return-of-service affidavit to draw its next conclusion —that Ellis' corporate status was sufficient to perfect service on the corporation under rule 56.1(f). Under the rule, personal service may be made on a corporation by serving "any general or managing agent." Iowa R. Civ. P. 56.1(f). In Life v. Best Refrigerated Express, Inc., 443 N.W.2d 334, 335 (Iowa 1989), this court observed that the term "managing agent" must be considered in the context of the service statute. Thus the term fits a person whose position with the corporation "is one of sufficient character and rank to make it reasonably certain that the corporation will be apprised of the service made through the agent." Life, 443 N.W.2d at 337. The district court applied that definition to facts gleaned from testimony in this record. On appeal, we are bound by the trial court's jurisdictional fact-findings unless they are unsupported by substantial evidence. Id. at 336.

Substantial evidence, albeit circumstantial, supports the factual basis for the district court's decision. Testimony by several members of Wal-Mart's management staff revealed their knowledge and investigation of the Gutierrez incident. WMSI's vigorous and timely defense of the lawsuit suggests it was promptly notified of the service of process. The unrebutted affidavit of service states that Dan Ellis was an assistant manager at the time the suit was commenced. The record reveals that the store...