Hughes v. Cox

• Decision Date: 12 June 1992
• Citation: 601 So.2d 465
• Parties: Gearlene HUGHES, d/b/a Hughes Realty and Hughes Realty of Clanton v. Ray K. COX, et al. 1900734.
• Court: Alabama Supreme Court

Page 465

601 So.2d 465

Gearlene HUGHES, d/b/a Hughes Realty and Hughes Realty of Clanton v. Ray K. COX, et al.

1900734.

Supreme Court of Alabama.

June 12, 1992.

Rehearing Denied July 10, 1992.

Robert A. Huffaker and Jack B. Hinton, Jr. of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellant.

Bruce J. McKee of Hare, Wynn, Newell & Newton, Birmingham, for appellees.

PER CURIAM.

Gearlene Hughes appeals from a default judgment entered against her in the amount of $629,000. The trial court denied Hughes's motion to set aside the default judgment, and this appeal followed. ¹ Hughes argues that the default judgment is void because the complaint named her sole proprietorship as a defendant, not her individually, and, in the alternative, that the trial court abused its discretion in denying her Rule 55(c), Ala.R.Civ.P., motion to set aside the default judgment.

The record before us supports the following general statement of the facts, although we note that Hughes has not submitted anything in opposition to the plaintiffs' evidence. In January 1986, Ray and Karen Cox purchased a house from Thomas and Judith Duke. Hughes Realty Company was the selling agent, and City Finance of Clanton financed the purchase for the Coxes. The Coxes moved into the house in February 1986 and, around June 1986, noticed standing water outside the house. The Coxes contacted a man to come to the house and clean out the septic tank; however, when the man attempted to pump out the tank, he discovered that there was, in fact, no septic tank. Instead, a 500-gallon gasoline tank had been buried in the ground. The top of the tank had rusted and water was bubbling out of the top onto the ground.

The Coxes then discovered a large accumulation of liquid under the house. The liquid was raw sewage, and it had been seeping from under the house into their house through the walls. The man who had come to the house to clean the tank told the Coxes that the land on which their house was situated would not percolate and that, therefore, a septic tank could not be installed. There was also no sewage system, because the house was located in a rural area of Chilton County.

The Coxes and their one-year-old son, Matthew, began developing boils on their skin while living in the house, and they continued to develop these boils after leaving the house. Mrs. Cox was pregnant at the time the boils started to develop, and the child of this pregnancy, born after the Coxes had moved out of the house, also developed the same type of boils. After seeking medical attention, the Coxes were told by their doctor that an infection of staphylococcus aureus (staph) was causing the boils on their skin. The Coxes were treated with antibiotics, and the doctor advised them to clean everything in the house with bleach. They followed the doctor's instructions; however, the boils continued. The doctor then advised them to move out of the house because he thought it very likely that the raw sewage was causing their staph infections. The Coxes left the house in June 1986 and have made no payments on the note since that time.

On October 10, 1986, the Coxes, individually and on behalf of their son Matthew, filed a complaint against City Finance, the Dukes, and "Hughes Realty of Clanton, Alabama." The complaint alleged negligence wantonness, and fraud and misrepresentation with regard to the condition of the house, the condition of the soil as to whether it would percolate, and the existence of a septic tank. City Finance counterclaimed, but, after discovery and negotiations, both the claim against it and its counterclaim were dismissed by agreement of the parties. In January 1990, the claims against the Dukes were also dismissed by consent of the parties, and "Hughes Realty of Clanton, Alabama," remained as the only defendant.

The Coxes moved for an entry of default against Hughes Realty and, on April 3, 1990, the circuit court entered a default and scheduled a hearing on damages. The court held that hearing on May 3 and entered the following on the case action summary sheet:

"Plaintiffs present with attorney, hearing on damages on default. Defendant['s] name amended to conform to proof & since service was had on Geraldine [sic] Hughes to reflect Defendant, Geraldine [sic] Hughes, d/b/a Hughes Realty Company. Oral order entered. Written judgment to follow."

On June 27, 1990, the Coxes amended their complaint and substituted "Gearlene Hughes, d/b/a Hughes Realty or ² Hughes Realty of Clanton" for "Hughes Realty of Clanton, Alabama" as the defendant. Service of the original summons and complaint had been made at the business premises of Hughes Realty and had been personally accepted by Gearlene Hughes. Similarly, a first amended complaint had been served on Hughes. However, Hughes was not served with a copy of the amended complaint naming her individually. The court entered a default judgment against Hughes on September 14, 1990, awarding $4,000 compensatory damages to Matthew Cox, through his father; $100,000 compensatory and $175,000 punitive damages to Ray Cox; and $150,000 compensatory and $200,000 punitive damages to Karen Cox.

On September 20, 1990, Hughes filed a motion to set aside the default judgment. ³ On November 1, the trial court held a hearing on that motion and, on December 21, 1990, entered an order denying it. ⁴ A notice of appeal was filed on February 1, 1991. The record was supplemented in August 1991 to reflect the timeliness of the order denying the post-trial motion, and the appeal was submitted thereafter.

Hughes argued in her motion to set aside the default judgment that, because the original summons and complaint had named "Hughes Realty of Clanton" as the defendant, without indicating whether Hughes Realty was a sole proprietorship, a partnership, or a corporation, she had no notice of being included as a defendant in this action. Hughes contends that because the action was not filed against a suable entity, but only against a trade name under which she did business, the complaint did not name her as a defendant. Hughes further argues that the Coxes' amendment to the complaint substituting "Gearlene Hughes, d/b/a Hughes Realty or Hughes Realty of Clanton," for "Hughes Realty of Clanton," was not sufficient to give her notice that she was a defendant in the action because she was never served a copy of the amended complaint. She contends that, for these reasons, the court never acquired jurisdiction over her and the judgment against her is void.

For a judgment to be void, the court rendering the judgment must have lacked jurisdiction of the subject matter or of the parties, or have acted in a manner that was inconsistent with due process. Smith v. Clark, 468 So.2d 138 (Ala.1985). A motion challenging a judgment as void is not addressed to the discretion of the court. If the judgment is void, it must be set aside. Seventh Wonder v. Southbound Records, Inc., 364 So.2d 1173 (Ala.1978).

Hughes contends that the trial court lacked personal jurisdiction over her and further argues that May v. Clanton, 208 Ala. 588, 95 So. 30 (1922), requires this Court to hold that, as a matter of law, the default judgment entered against Hughes Realty was void and was due to be set aside. In May, Walter L. Clanton brought suit against the sheriff for wrongful execution on his personal property pursuant to a judgment that had been entered against "Home Steam Laundry" and not against him personally. The summons and complaint in the prior action had been personally served on Clanton, the manager (and, the Court assumed, the owner) of Home Steam Laundry. A default judgment had been entered against Home Steam Laundry. The trial court in Clanton's action against the sheriff "held the judgment in the former cause void and gave the general charge for plaintiff, leaving the jury to assess damages." This Court in May held:

"The record of the former action showed no judgment against the plaintiff in this. Plaintiff was not named as a defendant and there could be no judgment against him. This results, we think, from familiar principles. Had the former suit been brought against a suable entity, perhaps parol evidence would have been admissible to show his identity with this plaintiff. Tarleton v. Pollard, 25 Ala. 300, 60 Am.Dec. 515. But it does not appear that Home Steam Laundry was a suable entity. Home Steam Laundry was, we may assume, merely the name of a business conducted by plaintiff. Plaintiff was liable for all obligations incurred in the prosecution of that business; but, to enforce any such obligation, suit should have been brought against plaintiff in the only name by which he appears to have been known."

May, 208 Ala. at 589-90, 95 So. at 31.

The holding in May, however, is contrary to the principles of pleading established by the Alabama Rules of Civil Procedure. "These rules shall be construed to secure the just, speedy and inexpensive determination of every action." Rule 1(c). "When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter his default," Rule 55(a), and the court proceeds under Rule 55(b) to enter a default judgment. "The adoption of the Alabama Rules of Civil Procedure was accompanied by the abolition of the harsh rules of pleading that had been followed by our courts." Williams v. Kasal, 429 So.2d 1008, 1010 (Ala.1983), citing B & M Homes, Inc. v. Hogan, 376 So.2d 667 (Ala.1979). The rules are designed to prevent preclusion of a viable claim or defense because of "technical inaccuracy in pleading." Prescott v. Thompson Tractor Co., 495 So.2d 513, 516 (Ala.1986).

The Rules of Civil Procedure are designed to give fair notice of the claim against the defendant. Simpson v. Jones, 460 So.2d 1282 (Ala.1984); Dempsey v. Denman, 442 So.2d 63 (Ala.1983); Carter v. Calhoun County...