Hooks v. McCondichie Props. 1, LP

• Decision Date: 14 January 2015
• Docket Number: Nos. A14A2238,A14A2333.,s. A14A2238
• Citation: 767 S.E.2d 517,330 Ga.App. 583
• Parties: HOOKS v. McCONDICHIE PROPERTIES 1, LP et al. McCondichie Properties 1, LP et al. v. Hooks.
• Court: Georgia Court of Appeals

330 Ga.App. 583

767 S.E.2d 517

HOOKS

v.McCONDICHIE PROPERTIES 1, LP et al.

McCondichie Properties 1, LP et al.

v.Hooks.

Nos. A14A2238

A14A2333.

Court of Appeals of Georgia.

Jan. 14, 2015.

Reconsideration Denied Feb. 3, 2015.

Certiorari Denied July 6, 2015.

Sams, Larkin, Huff & Balli, James Alan Wilson Balli, Marietta, David Edmund Ralston, Blue Ridge, Justin Harper Meeks, for appellant.

Freeman Mathis & Gary, Jack R. Hancock, Forest Park, Sun S. Choy, Seth Freeman Kirby, Atlanta, for appellees.

Opinion

ELLINGTON, Presiding Judge.

Michael Hooks filed this personal injury action against McCondichie Properties 1, LP, and McCondichie Properties 2, LP, collectively (“McCondichie”) in the Superior Court of Clayton County. He served the Secretary of State of Georgia, and obtained a default judgment. McCondichie filed a motion to set aside the default judgment. The trial court determined that Hooks was authorized to serve McCondichie by substituted service upon the Secretary of State but that Hooks failed to perfect such service in the statutorily prescribed manner. On that basis, the trial court granted McCondichie's motion to set aside the default judgment. Pursuant to a granted application for an interlocutory appeal, both parties appeal.

In Case No. A14A2238, Hooks contends that the trial court erred in ruling that he failed to comply with the statutory requirements for substituted service upon a limited partnership. In Case No. A14A2333, McCondichie contends that the trial court erred in finding in the first instance that substituted service upon the Secretary of State was authorized. Based on this argument, McCondichie contends that, even if the trial court erred in ruling that Hooks failed to comply with the requirements for substituted service, such error was moot and the order granting its motion to set aside the default judgment nevertheless must be affirmed. For the reasons explained below, we hold that the trial court erred in setting aside the default judgment and reverse.

Under Georgia law, when the defense of lack of personal jurisdiction due to defective service is raised by way of a motion to set aside the judgment, the trial court sits as the trier of fact. Our standard of review in this regard is the any evidence rule, and absent an abuse of discretion, we will not reverse a trial court's refusal to set aside a judgment.

(Footnote omitted.) Stokes & Clinton, P.C. v. Noble Sys. Corp., 318 Ga.App. 497, 498, 734 S.E.2d 253 (2012). However, where the facts are undisputed and the question is one of law, we review the ruling de novo. Guthrie v. Wickes, 295 Ga.App. 892, 892, 673 S.E.2d 523 (2009).

So viewed, the facts relevant to both appeals are as follows: In his complaint, Hooks alleged that he was injured while on duty as a police officer, responding to a burglary call at property owned by McCondichie. On August 5, 2013, Hooks sent McCondichie a demand letter through its registered agent, James Tenney, at the address McCondichie had provided to the Secretary of State for its registered office. McCondichie acknowledged having received the demand letter. Further, McCondichie's insurer notified Hooks' counsel that it was investigating the claim. Hooks filed suit against McCondichie on December 12.

On December 30, 2013 and on January 6, 2014, Hook's process server attempted to serve the complaint on McCondichie through Tenney at the registered office address. Neither Tenney's name nor the name of his law firm was displayed at that address either on the outside of the building or inside the lobby. The address was for an executive office suite, and the receptionist at the front desk was answering calls for several different companies. When the process server asked the receptionist to notify Tenney that a complaint needed to be served, she took no action to call anyone; instead, she “immediately stated that [Tenney] was ‘out of the office.’ ” To the process server, the office appeared to be a “virtual office” rather than Tenney's actual place of business.¹ Hooks later learned that Tenney's principal place of business was located at another address.²

The receptionist informed the process server that there was no one authorized to accept service of process for Tenney or McCondichie at the executive office suite. Hooks provided the court with a copy of the virtual office's standard contract, highlighting a paragraph warning clients not to use the location as their registered office for service of process. The process server averred that, based on his experience, further attempts to serve Tenney at that address would have been futile.

On January 9, 2014, Hooks made substituted service upon McCondichie through the Secretary of State and forwarded a copy of the complaint to Tenney at the registered office address through a commercial courier service. On the same day, the courier service attempted delivery, but was informed by the receptionist that neither Tenney nor any employee or agent of his was present to accept the package. The courier returned the unclaimed package to Hooks' attorney. The courier's affidavit and receipt of delivery indicates that, when he attempted delivery, he was informed by the receptionist that Tenney was not available to accept delivery. The receptionist for the office suite stated in her affidavit that she was not employed by Tenney. Although she has no recollection of the delivery, she stated that she would have signed for and accepted Tenney's mail as part of her duties as office receptionist, but that she would have declined to accept service of process because she was not authorized to do so.

McCondichie failed to answer the complaint, and the trial court granted Hooks a default judgment on March 10, 2014. On March 21, 2014, McCondichie moved to set aside and vacate the default judgment pursuant to OCGA § 9–11–60(d)(1), arguing that Hooks failed to properly perfect service and that, therefore, the trial court lacked personal jurisdiction to enter the default judgment. The superior court found that Hooks exercised reasonable diligence in attempting to serve McCondichie and that substituted service on the Secretary of State was authorized. However, the trial court granted the motion to open default judgment on the narrow issue that Hooks failed to comply fully with OCGA § 14–9–104(g) because forwarded process via “statutory overnight delivery,” as defined in OCGA § 9–10–12(b)(3), requires a signed receipt from the addressee or an agent of the addressee.

1. McCondichie argues that whether Hooks failed to comply with the statutory requirements for substituted service on the Secretary of State is a moot point because the court committed a more fundamental error by finding, in the first instance, that substituted service on the Secretary of State was authorized. McCondichie argues that the trial court erred in finding that Hooks exercised reasonable diligence in serving McCondichie, contending that the record evidence does not support a finding that McCondichie failed to maintain a registered office within the meaning of the law.³ Consequently, McCondichie argues, the trial court's order setting aside the default judgment should be affirmed, but on this alternate ground. We disagree.

Under Georgia law, a limited partnership “shall continuously maintain” a “registered office” and a “registered agent for service of process on the limited partnership.” OCGA § 14–9–104(a). Further, “[t]he address of the business office of the registered agent shall be the same as the address of the registered office[.]” (Emphasis supplied.) OCGA § 14–9–104(a)(2).

In this case, the record shows that McCondichie maintains both a registered agent for service of process and a registered office. The record also shows that the addresses listed with the Secretary of State for the agent and the office are the same, at least on paper. However, the record also supports a finding that the registered agent actually maintained his principal place of business elsewhere and that, while he was absent from the registered office, there was no one present in the registered office authorized to accept service of process.

OCGA § 14–9–104(a)'s requirement that a limited partnership “ continuously maintain” a registered office does not mean that a registered agent must be present in the office every moment of the day or that the agent must keep the office open outside of normal business...