Image Auto, Inc. v. Mike Kelley Enterprises, Inc.

• Decision Date: 21 December 2001
• Citation: 823 So.2d 655
• Parties: IMAGE AUTO, INC. v. MIKE KELLEY ENTERPRISES, INC.
• Court: Alabama Supreme Court

823 So.2d 655

IMAGE AUTO, INC. v. MIKE KELLEY ENTERPRISES, INC.

1000156.

Supreme Court of Alabama.

December 21, 2001.

Richard Crum and Brian Mosholder of Cobb, Shealy & Crum, P.A., Dothan, for appellant.

Tracy T. Sproule and Rhonda Pitts Chambers of Taylor & Taylor, Birmingham, for appellee.

SEE, Justice.¹

Richard Bray, an Alabama resident, bought a 1992 Lexus automobile from Image Auto, Inc., a Florida company. Image Auto had advertised the automobile in an automobile sales magazine circulated in Alabama, and after Bray saw the automobile in the magazine Bray traveled to Florida to purchase it. The odometer on the automobile had been tampered with before Bray purchased it, and Bray signed an affidavit prepared by Image Auto stating that he had been informed that the odometer was not correct. However, the title document Image Auto provided Bray indicated that the odometer reading was correct. After the automobile had been involved in an accident, Bray sold it to Mike Kelley Enterprises, Inc.; in that sales transaction Bray represented that the odometer reading was correct. Kelley Enterprises sold the automobile to another party, and that person discovered that the odometer had been tampered with. Kelley Enterprises bought the automobile back from its customer at a higher price than the customer had paid for it. On March 23, 1999, Kelley Enterprises sued Image Auto and Bray in the Circuit Court of Coffee County, Alabama, charging fraud, intentional misconduct, and oppression, and seeking compensatory and punitive damages.

Kelley Enterprises contacted the Secretary of State of the State of Florida, seeking the proper address at which to serve Image Auto. Diane Deloach, the paralegal who contacted the Florida Secretary of State on Kelley Enterprises' behalf, stated in a sworn affidavit filed with the circuit court that the address of the agent for service of process provided in the documents on file with the Secretary of State was 2213 East Atlantic Boulevard, Pompano Beach, Florida 33062. In her affidavit, Deloach also stated that she telephoned Image Auto and that she spoke to David Lanzi, the president of Image Auto, who told her that Image Auto's principal place of business was 2213 East Atlantic Boulevard, Pompano Beach, Florida, 33062.

The Atlantic Boulevard address had been Image Auto's address for service of process for several years, but Image Auto asserts that it officially changed that address with the Secretary of State's office on January 11, 1999. Image Auto's former accountant had at one time done business at that address, and it was the original address for service of process for Image Auto, as filed with the Secretary of State in January 1997. Image Auto changed accountants in April 1997, and at that time, ceased doing any business with the accountant at 2213 East Atlantic Boulevard, but Image Auto did not file a change of address for service of process with the Secretary of State until January 1999.

The evidence indicates that the accountant who had done business with Image Auto for a short time and whose business was located at the Atlantic Boulevard address had retired and had sold his business and the building at that address to another accountant in June 1998. Image Auto never did business with the accountant who had purchased the building. Service by certified return-receipt mail was effected at that address on March 25, 1999, and the receipt was returned to Kelley Enterprises' attorney. The accountant who does business at that address stated in an affidavit that he does not recognize the signature on the return receipt, although he states in the affidavit that "the individual who signed for this delivery was probably a temporary staff member during the very busy `tax season.'" That accountant also stated in his affidavit that when he gets mail addressed to persons who are not clients of his, he immediately throws that mail in the trash.

Image Auto did not respond to the service sent by certified mail. Kelley Enterprises sought a default judgment against Image Auto on October 19, 1999. The default judgment was entered on December 14, 1999. The court held a hearing on January 7, 2000, to determine damages, and on February 3, 2000, it awarded Kelley Enterprises $50,000 in compensatory damages and $300,000 in punitive damages. On September 22, 2000, Image Auto moved to set aside the judgment, arguing that the default judgment was void under Rule 60(b)(4), Ala. R. Civ. P. The circuit court denied that motion, and Image Auto appeals the denial of its motion to set aside the default judgment.

"The standard of review on appeal from the denial of relief under Rule 60(b)(4) is not whether there has been an abuse of discretion. When the grant or denial of relief turns on the validity of the judgment, as under Rule 60(b)(4), discretion has no place. If the judgment is valid, it must stand; if it is void, it must be set aside. A judgment is void only if the court rendering it lacked jurisdiction of the subject matter or of the parties, or if it acted in a manner inconsistent with due process. Satterfield v. Winston Industries, Inc., 553 So.2d 61 (Ala.1989)."

Insurance Mgmt. & Admin., Inc. v. Palomar Ins. Corp., 590 So.2d 209, 212 (Ala. 1991).

Rule 60(b), Ala. R. Civ. P., permits a court to "relieve a party ... from a final judgment, order, or proceeding [when] ... the judgment is void." The only argument Image Auto presented in its motion to set aside the default judgment was that the judgment was void under Rule 60 because, it argued, Image Auto had not been properly served with notice of the suit under Rule 4.2(b)(1), Ala. R. Civ. P., and that, therefore, the trial court lacked personal jurisdiction over Image Auto, a Florida corporation. It is settled law that failure to effect proper service under Rule 4, Ala. R. Civ. P., deprives the court of jurisdiction and renders a default judgment void. Richardson v. Arrington, 431 So.2d 1301 (Ala.Civ.App.1983); see also Whitfield v. Sanders, 366 So.2d 258 (Ala.1978).

The Rule 60(b) standard requires Image Auto to present clear and convincing evidence that it did not receive service of process. Raine v. First Western Bank, 362 So.2d 846, 848 (Ala.1978). A signed return certificate filed in the clerk's office provides a rebuttable presumption that the party to whom the service was sent has been properly served. Insurance Mgmt. & Admin., Inc. v. Palomar Ins. Corp., 590 So.2d 209, 213 (Ala.1991). It is uncontested that Kelley Enterprises received a signed return certificate and that it properly filed that certificate in the clerk's office. Kelley Enterprises, therefore, established a rebuttable presumption that Image Auto was properly served.

Image Auto cannot rebut the presumption of correctness merely by denying that it was properly served.

"[A] properly executed return will not be invalidated upon the uncorroborated statements of the parties in which they deny service upon themselves. Raine, supra. Corroboration does not necessarily mean that there must be additional, supporting testimony from another person; however, a mere denial by the party challenging the return is insufficient. Raine, supra. There must be additional evidence, such as statements of fact, tending to support the denial of service of process. See, e.g., Nolan v. Nolan, 429 So.2d 596 (Ala.Civ.App.1982), where the only evidence presented was the testimony of the party successfully

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