Hirsch v. National Van Lines, Inc., 16176-PR
Citation | 666 P.2d 49,136 Ariz. 304 |
Decision Date | 12 May 1983 |
Docket Number | No. 16176-PR,16176-PR |
Parties | Howard L. HIRSCH and Cynthia L. Hirsch, husband and wife, Plaintiffs/Appellees, v. NATIONAL VAN LINES, INC., a Delaware corporation, Defendant/Appellant. |
Court | Supreme Court of Arizona |
Law Offices of Paul G. Rees, Jr., Tucson by H. Michael Wright, Mesa, for plaintiffs/appellees.
Slutes, Browning, Sakrison & Grant by John Pelander, Tucson, for defendant/appellant.
Plaintiff Hirsch entered into an agreement to have his personal property moved from Chicago, Illinois to Tucson, Arizona by defendant National Van Lines (hereinafter referred to as National). When the property was received in Tucson, Hirsch found that several items were damaged and others were missing. Hirsch notified National of the problems with his property and ultimately filed a "statement of claim" with National. Although there were efforts at settling the claim, Hirsch eventually filed a complaint against National on May 14, 1980. The defendant was served by certified mail in Illinois pursuant to Rule 4(e)(2)(a) Ariz.R.Civ.P. As a result of National's failure to answer, a default judgment was entered on September 29, 1980, in the amount of $96,287.50. The judgment included compensatory damages of $63,787.50, punitive damages of $25,000.00, and attorney's fees of $7,500.00.
On January 12, 1981, National moved to set aside the entry of default and original default judgment under Rule 60(c)(1) Ariz.R.Civ.P. Before any ruling the defendant moved to re-open and seek relief also under Rule 60(c)(4) and (6). The court permitted National to raise the additional issues and, after further hearing, denied the motion to set aside the default and the default judgment. An amended judgment was entered on July 14, 1981 deleting the attorney's fees, thus reducing the amount of the judgment to $88,787.50.
On appeal National raised several issues concerning both the denial of the motion to set aside and the amended default judgment. The Court of Appeals vacated the default judgment finding it void due to insufficient service of process. It is from this decision that Hirsch is now seeking review.
We have jurisdiction pursuant to Ariz. Const. Art. 6, § 5(3) and Rule 23 Ariz.R.Civ.App.P. We vacate the decision of the Court of Appeals. 134 Ariz. 334, 666 P.2d 79.
National initially claims that service by registered mail was not available to Hirsch since there was an individual in Arizona upon whom service could have been made. The defendant produced documents showing that it had a "designated agent" in Arizona as required by § 321(c) of the Interstate Commerce Act (now codified at 49 U.S.C. § 10330(b)). We do not believe that the presence of this agent should bar plaintiffs from utilizing the alternative means of service codified in Rule 4(e)(2) Ariz.R.Civ.P. when, as in the instant case, a foreign corporation has not registered to do business in Arizona and does not have a statutory agent listed with the Corporation Commission.
The purpose of the statutory provision requiring motor carriers to designate an agent in each state in which it operates (49 U.S.C. § 10330(b)) is not to grant a privilege or benefit to carriers by limiting procedural rights of the residents of the state; rather, it is for the protection of the shippers and other persons injured in some manner by the carriers. See Madden v. Truckaway Corp., 46 F.Supp. 702 (D.Minn.1942); Gerut v. Poe, 11 F.R.D. 281 (E.D.Ill.1951); Trailer Express Inc. v. Gammil, 403 So.2d 1292 (Miss.1981); 49 U.S.C. § 10101 (general transportation policy).
In Madden, supra, the Court stated the following when considering the interaction between state rules of process and 49 U.S.C. § 321(c) (now codified at 49 U.S.C. § 10330(b)):
"But that Congress ever intended to interfere with the internal policies of the States with respect to the acquisition of jurisdiction in their local courts, and to supplant their various process statutes, is indeed most improbable, if not in conflict with the limitations on the power of the Federal government."
46 F.Supp. at 704. Furthermore, the language of 49 U.S.C. § 10330 is permissive rather than mandatory. It states that the "motor carrier * * * shall designate an agent in each State in which it operates * * * on whom process issued by a court with subject matter jurisdiction may be served in an action brought against that carrier * * * " (emphasis added). We conclude, therefore, that since there was no statutory agent registered with the Corporation Commission, it was permissible for Hirsch to utilize the alternative means of service referred to in Rule 4(e)(1) Ariz.R.Civ.P.
The Court of Appeals decided that because Hirsch had not fulfilled all of the requirements for service under Rule 4(e)(1), the trial court did not have personal jurisdiction over the defendant. Rule 4(e)(1) provides in part as follows:
[emphasis added]
The part of Rule 4(e)(2) applicable in the instant case reads as follows:
"When the defendant is a * * * corporation doing business in this state * * * which has caused an event to occur in this state out of which the claim which is the subject of the complaint arose, service may be made as herein provided, and when so made shall be of the same effect as personal service within the state."
Subparagraph (a) of Rule 4(e)(2) then states:
The plaintiff's affidavit of service read as follows:
Attached thereto was the receipt.
The Court of Appeals ruled that the affidavit was insufficient because it failed to state that National did not have a "legally appointed and constituted agent in this state." Furthermore, the Court of Appeals noted that at the time of entry of default and at the time the default judgment was entered there was nothing in the record which "gave any hint as to the existence or non-existence of an agent of [National] in Arizona." Due to the incomplete affidavit, the Court of Appeals decided that service of process was incomplete and therefore the trial court lacked jurisdiction to enter a default judgment.
When considering the issue of jurisdiction, the Court will review the pleadings and affidavits filed by the parties. Cockerham v. Zikratch, 127 Ariz. 230, 619 P.2d 739 (1980); Chavez v. State of Ind., Logansport Hosp., 122 Ariz. 560, 596 P.2d 698 (1979). It is the fact of service and the resulting notice, rather than the proof of service, that establishes the court's jurisdiction over the defendant. Safeway Stores, Inc. v. Ramirez, 99 Ariz. 372, 409 P.2d 292 (1965). In Cockerham this Court considered whether a default judgment was void due to the plaintiff's failure to file the affidavit of service required by Rule 4(e)(2)(b) Ariz.R.Civ.P. The defendants claimed that the trial court did not have personal jurisdiction over them since the plaintiff did not comply with all the requirements of Rule 4(e)(2)(b). In rejecting this argument the Court stated:
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