Huggins v. Hallmark Enterprises, Inc.
Citation | 351 S.E.2d 779,84 N.C.App. 15 |
Decision Date | 20 January 1987 |
Docket Number | 8628SC41,Nos. 8628SC40,s. 8628SC40 |
Court | Court of Appeal of North Carolina (US) |
Parties | Gurtha HUGGINS v. HALLMARK ENTERPRISES, INC. Gurtha HUGGINS v. BAILEY'S TUNNEL ROAD CAFETERIA, INC. |
Morris, Golding, Phillips and Cloninger by James N. Golding, Asheville, for defendant-appellants.
These actions arise out of a fall allegedly sustained by plaintiff on or about 15 April 1981 at the Hallmark Cafeteria in Innsbrook Mall in Asheville, North Carolina.
The record discloses that in 1972 Hallmark Enterprises, Inc. (herein Hallmark) purchased 80% of the stock of Bailey's Tunnel Road Cafeteria, Inc. (herein Bailey's), which corporation operated a cafeteria in Innsbrook Mall in Asheville, North Carolina, under the name Hallmark Cafeteria. At the time of the purchase, the name and address of the registered agent for both corporations was changed in the Secretary of State's Office to E.O. Hall, 4808 Montclair Avenue, Charlotte, North Carolina. E.O. Hall moved from Charlotte to Spartanburg, South Carolina, sometime in late 1972 or early 1973. Thereafter neither defendant ever maintained a registered agent in North Carolina.
The question before the Court for review in this consolidated appeal is whether the trial court erred in denying motions by defendants Hallmark and Bailey's to set aside default judgments entered against them.
For the reasons which follow, we vacate the judgment entered against defendant Hallmark and affirm the judgment entered against defendant Bailey's.
On 17 September 1982, plaintiff filed a complaint against defendant Hallmark alleging that she fell upon the premises of Hallmark's cafeteria at the Innsbrook Mall in Asheville, North Carolina, on 15 April 1981. Plaintiff alleged that her fall and resulting injuries were caused by a loose floor tile.
The original summons, also issued on 17 September 1982, was directed to E.O. Hall, Agent for Service of Process, 4808 Montclair Avenue, Charlotte, North Carolina. The summons and complaint were sent to the Sheriff of Mecklenburg County on 22 September 1982 for service on defendant. The Sheriff returned the summons and complaint on 17 October 1982, stating that Hallmark was not served because he "did not locate E.O. Hall."
Thereafter, plaintiff sent the summons and complaint to the North Carolina Secretary of State, who accepted the substituted service of process and mailed a copy of the summons and complaint to Hallmark Enterprises, Inc., c/o E.O. Hall, 4808 Montclair Avenue, Charlotte, North Carolina, on 3 November 1982. The summons and complaint were returned by the U.S. Postal Service to the Secretary of State marked "not deliverable as addressed, unable to forward, return to sender."
On 4 January 1983, plaintiff obtained an alias and pluries summons from the Clerk of Court for Buncombe County. This summons was directed to Hallmark Enterprises, Inc., E.O. Hall, 4808 Montclair Avenue, Charlotte, North Carolina. On 20 January 1983, plaintiff served the summons and complaint on the Secretary of State. On 25 January 1983, the Secretary's office mailed a copy of the summons and complaint to Hallmark Enterprises, Inc., c/o Clyde R. Hall, 410 Wallace Building, Salisbury, North Carolina.
On plaintiff's motion, the Clerk of Court for Buncombe County entered default on 15 March 1983. Plaintiff moved for default judgment demanding damages in the sum of $112,683.00, and the Clerk entered Judgment by Default on 28 March 1983 in the sum of $112,683.00.
Subsequent to the entry of this default judgment, it was determined that the Clerk's entry of this default judgment was improper, and that the matter would have to be tried before a jury. An issue as to damages for personal injuries was submitted to a jury on 17 November 1983, and a judgment was entered against defendant on 28 November 1983 in the sum of $61,250.00.
No further action was taken by plaintiff until plaintiff's counsel contacted defendant by phone on 11 July 1985. Thereafter on 8 October 1985, a Notice of Right to Have Exemptions Designated was sent by plaintiff to defendant, c/o E.O. Hall, Registered Agent, 125 Hall Street, Spartanburg, South Carolina, 29302. Defendant filed a motion and affidavit for relief from judgment and motion to dismiss on 16 October 1985, which motion was heard and denied by Judge Lamm on 13 November 1985. Defendant appealed.
In its first assignment of error, defendant Hallmark contends the trial court erred in finding that service of this summons upon the Secretary of State's office on 3 November 1982 was valid even though no alias or pluries summons had been issued at this time, nor had it been extended by the Clerk's office. We agree.
This Court, in County of Wayne ex rel. Williams v. Whitley, 72 N.C.App. 155, 157-58, 323 S.E.2d 458, 461 (1984), stated:
The summons must be served within thirty days after the date of the issuance of the summons. G.S. 1A-1, Rule 4(c). However, the failure to make service within the time allowed does not invalidate the summons. The action may continue to exist as to the unserved defendant by two methods. First, within ninety days after the issuance of the summons or the date of the last prior endorsement, the plaintiff may secure an endorsement upon the original summons for an extension of time within which to complete service of process. Secondly, the plaintiff may sue out an alias or pluries summons at any time within ninety days after the date of issue of the last preceding summons in the chain of summonses or within ninety days of the last prior endorsement. G.S. 1A-1, Rule 4(d)(1) and (2). Thus, a summons that is not served within the thirty-day period becomes dormant and cannot effect service over the defendant, but may be revived by either of these two methods. If the ninety-day period expires without the summons being served within the first thirty days or revived within the remaining sixty days, the action is discontinued. If a new summons is issued, it begins a new action. G.S. 1A-1, Rule 4(e).
The record shows that the plaintiff had a summons issued on 17 September 1982, the same day the complaint was filed. Thus, the action did in fact commence. G.S. 1A-1, Rule 3. When the summons was returned unserved by the Mecklenburg County Sheriff's Department on 17 October 1982 (within thirty days of its issuance), it became dormant or unserveable, but nevertheless was not invalidated according to G.S. 1A-1, Rule 4(c) and was subject to being revived under the two methods under Rule 4(d). However, plaintiff served the original summons upon the Secretary of State's office on 3 November 1982 without having revived it under Rule 4(d). We hold, therefore, that this dormant summons could not and did not subject defendant to the jurisdiction of the court.
Defendant Hallmark next argues that the trial judge erred in ruling that Hallmark was properly served with process on 20 January 1983. The original summons was issued in this matter on 17 September 1982. On 4 January 1983, an alias and pluries summons was issued which stated that the last summons was issued on 17 September 1982. This alias summons was served on the Secretary of State on 20 January 1983. Since the alias summons was issued more than ninety days after the date the original summons was issued, it did not comply with G.S. 1A-1, Rule 4(d)(2). Thus, the original summons herein could not serve as a basis for the issuance of an alias or pluries summons necessary to maintain an unbroken continuation of the action.
However, we must also consider G.S. 1A-1, Rule 4(e) which provides:
When there is neither endorsement by the clerk nor issuance of alias or pluries summons within the time specified in Rule 4(d), the action is discontinued as to any defendant not theretofore served with summons within the time allowed. Thereafter, alias or pluries summons may issue, or an extension [may] be endorsed by the clerk, but, as to such defendant, the action shall be deemed to have commenced on the date of such issuance or endorsement.
Under Rule 4(e), this alias summons was properly issued, but this action is deemed to have commenced against this defendant Hallmark on 4 January 1983.
Although this summons was clearly directed to Hallmark Enterprises, Inc., E.O. Hall, 4808 Montclair Avenue, Charlotte, North Carolina, "[f]or a reason unknown to the Plaintiff-Appellee the Secretary of State served the alias and pluries summons and the complaint upon the following: Hallmark Enterprises, Inc., c/o Clyde R. Hall, 410 Wallace Building, Salisbury, North Carolina."
In her brief, plaintiff offers the following reasons for the Secretary's actions:
[T]he Secretary of State's Office knew that it would be fruitless to serve the corporation at the Charlotte address because it had previously attempted to do so with negative results and therefore the Secretary of State decided in good faith to try to serve the corporation in Salisbury with the hope that it would be the correct corporation; or in the alternative someone in the Secretary of State's office simply made an error.
We do not find this argument persuasive.
As stated in Coble v. Brown, 1 N.C.App. 1, 5-6, 159 S.E.2d 259, 263 (1968), "[s]ubstituted or constructive service of process is a radical departure from the rule of common law, and therefore statutes authorizing it must be strictly construed ... in determining whether effective service under the statute has been made."
With this principle in mind, we must examine G.S. 55-15, which provides:
(b) Whenever a corporation shall fail to appoint or maintain a registered agent in this State, or whenever its registered agent cannot with due diligence be found at the registered office, then the Secretary of State shall be an agent of such corporation upon whom any such process, notice, or demand may be served. Service on the...
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