Mared Industries, Inc. v. Mansfield, Appeal No. 03-0097 (Wis. App. 11/4/2003)

• Decision Date: 04 November 2003
• Docket Number: Appeal No. 03-0097.
• Parties: Mared Industries, Inc., Plaintiff-Appellant, v. Alan Mansfield, individually, and d/b/a Diamond Blade Warehouse, Defendants-Respondents.
• Court: Wisconsin Court of Appeals

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Mared Industries, Inc., Plaintiff-Appellant, v. Alan Mansfield, individually, and d/b/a Diamond Blade Warehouse, Defendants-Respondents.

Appeal No. 03-0097.

Court of Appeals of Wisconsin, District I.

Filed November 4, 2003.

APPEAL from an order of the circuit court for Milwaukee County: No. 02CV005491, MAXINE A. WHITE, Judge. Affirmed in part; reversed in part.

Before Wedemeyer, P.J., Fine and Curley, JJ.

DECISION

CURLEY, J.

¶1. Mared Industries, Inc., appeals from an order dismissing its case, without prejudice, against Alan Mansfield and Diamond Blade Warehouse, Inc. Mared argues that the trial court erred in: (1) reopening and vacating the default judgment entered against Mansfield; (2) vacating its order denying Diamond Blade Warehouse's motion to reopen the default judgment and, accordingly, reopening and vacating the default judgment against Diamond Blade Warehouse; and (3) dismissing Mared's case as a result. Because service upon an authorized agent in lieu of personal service on the individual is permissible, and Mared's process server served a person claiming to be Mansfield's agent, and because the "d/b/a" designation is not indicative of a corporate entity, but only of another name, we accordingly reverse in part, and affirm in part.

I. Background.

¶2. On June 5, 2002, Mared filed a complaint against Mansfield, individually, and doing business as Diamond Blade Warehouse, claiming breach of contract and intentional interference with contractual relations, and requesting injunctive relief and an accounting, as a result of an alleged violation of a contract and an earlier settlement agreement between the parties. For this appeal, however, we are concerned only with the propriety of the service of process.

¶3. Mansfield is the President of Diamond Blade Warehouse, Inc., an Illinois corporation. Diamond Blade Warehouse operates a warehouse facility in Buffalo Grove, Illinois. On June 10, 2002, William K. Monsen, an Illinois process server, delivered two authenticated copies of the Summons and Complaint to Michael Levy, an employee of Diamond Blade Warehouse, at the Buffalo Grove facility.¹ The process server maintains that Levy told him that he was authorized to accept service on behalf of both Mansfield and Diamond Blade Warehouse. Neither Mansfield nor Diamond Blade Warehouse, Inc.'s registered agent was served personally.

¶4. On June 18, 2002, Mansfield's (and Mansfield d/b/a Diamond Blade Warehouse's)² counsel contacted Mared's counsel by telephone. They allegedly discussed the claim and potential counterclaims, but no request for additional time to file an answer to Mared's complaint was made. There were several instances of contact between the two attorneys regarding the matter after that initial phone call. As of the July 25, 2002 deadline for filing, neither Mansfield nor Diamond Blade Warehouse had filed an answer.

¶5. On July 29, 2002, Mared filed a motion for default judgment. Upon receipt of the motion, Mansfield's counsel allegedly contacted Mared's counsel and requested additional time to file an answer, indicating that they had miscalculated the due date. The request apparently was denied, as a default judgment was granted on August 5.

¶6. On August 22, 2002, Mansfield filed a motion to reopen the default judgment alleging that neither Mansfield nor Diamond Blade Warehouse was properly served. On September 19, the trial court issued an order granting Mansfield's motion as to himself, but denying the motion as to Diamond Blade Warehouse. The trial court found that the service on Diamond Blade Warehouse "was sufficient to confer jurisdiction." (Emphasis omitted.) It held that "[o]mission of indication of corporate status from service papers, where the process was served on the entity, via Levy does not defeat jurisdiction, since amendment can be made to the pleadings at anytime [sic] such that they indicate DBW's corporate status."

¶7. On September 26, 2002, Mared filed a motion to amend the misnomer and appropriately identify the corporate defendant as "Diamond Blade Warehouse, Inc." On October 19, Mansfield (and Diamond Blade Warehouse) filed a motion to reconsider the September 19, 2002 order as to the denial of Diamond Blade Warehouse's motion to reopen the default judgment. He argued that since the complaint listed only "Alan Mansfield, individually and d/b/a Diamond Blade Warehouse," there was no notice, prior to the order of September 19, "that D[iamond] B[lade] W[arehouse], Inc., an independent legal entity, was at risk as a Defendant in this case." Mansfield asserted that in the trial court's order of September 19, the court "effectively substituted the Defendant in the case and entered an Order of Default against D[iamond] B[lade] W[arehouse], Inc." Accordingly, Mansfield also argued that amending the complaint to read "Diamond Blade Warehouse, Inc." would add a defendant to the case without proper notice.

¶8. On November 18, 2002, the trial court issued an order partially vacating its order of September 19, and granting Diamond Blade Warehouse's motion to reopen and vacate the default judgment. On December 17, the trial court issued a final order dismissing Mared's action, as it had previously determined that neither party was properly served.

II. Analysis.

¶9. "The determination of whether to vacate a default judgment is within the sound discretion of the trial court. On appeal, the trial court's decision will not be disturbed unless there has been [an erroneous exercise] of discretion." Gaertner v. 880 Corp., 131 Wis. 2d 492, 500, 389 N.W.2d 59 (Ct. App. 1986) (citation omitted). A trial court properly exercised its discretion if it "examined the relevant facts, applied a proper standard of law, and, using a demonstrated rational process, reached a conclusion that a reasonable judge could reach." Loy v. Bunderson, 107 Wis. 2d 400, 415, 320 N.W.2d 175 (1982). Yet, "[t]he interpretation and application of statutes present questions of law that we review de novo." State ex rel. Steldt v. McCaughtry, 2000 WI App 176, ¶11, 238 Wis. 2d 393, 617 N.W.2d 201 (emphasis added). Thus, whether service of a summons and complaint is sufficient to confer jurisdiction over a defendant is "reviewed as a question of law." Useni v. Boudron, 2003 WI App 98, ¶8, ___ Wis. 2d ___, 662 N.W.2d 672.

A. The trial court erred in vacating its default judgment against Mansfield, as he was properly served.

¶10. Mared contends that Wis. Stat. § 801.11(1)(d) (2001-02)³ permits service upon an individual's authorized representative. Mared further argues that "[t]he affidavit of Mr. Monsen and the testimony he provided on September 9, 2002, demonstrate[] that Michael Levy `insisted' ... that he had Mr. Mansfield's authority to accept service of process on his behalf." Mared contends that the trial court erred in addressing only Wis. Stat. § 801.11(1)(a) and (b), and failing to address § 801.11(1)(d), which permits service of process upon an authorized representative. We agree.

¶11. Wisconsin's "civil procedure rules require that the service of a summons in a manner prescribed by statute is a condition precedent to a valid exercise of personal jurisdiction. If the court lacks personal jurisdiction, then any judgments rendered by it against the complaining party are void." State v. Moline, 170 Wis. 2d 531, 539, 489 N.W.2d 667 (Ct. App. 1992) (citation and alteration omitted). Proper service is required, "notwithstanding actual knowledge by the defendant." Danielson v. Brody Seating Co., 71 Wis. 2d 424, 429, 238 N.W.2d 531 (1976). Wisconsin Stat. § 801.11 sets forth the means by which proper service is achieved. It provides, in relevant part:

Personal jurisdiction, manner of serving summons for. A court of this state having jurisdiction of the subject matter and grounds for personal jurisdiction as provided in s. 801.05 may exercise personal jurisdiction over a defendant by service of a summons as follows:

(1) Natural person. Except as provided in sub. (2) upon a natural person:

(a) By personally serving the summons upon the defendant either within or without this state.

(b) If with reasonable diligence the defendant cannot be served under par. (a), then by leaving a copy of the summons at the defendant's usual place of abode:

1. In the presence of some competent member of the family at least 14 years of age, who shall be informed of the contents thereof;

1m. In the presence of a competent adult, currently residing in the abode of the defendant, who shall be informed of the contents of the summons; or

2. Pursuant to the law for the substituted service of summons or like process upon defendants in actions brought in courts of general jurisdiction of the state in which service is made.

....

(d) In any case, by serving the summons in a manner specified by any other statute upon the defendant or upon an agent authorized by appointment or by law to accept service of the summons for the defendant.

Wis. Stat. § 801.11(1) (emphasis added).

¶12. Mansfield contends that because no other statute allows for service of a natural person on an agent, the trial court should be affirmed:

[Mared]'s novel argument, unsupported by any case law or other authority, that sections 801.11(1)(d) and 801.13(1), Wis. Stats. create an additional acceptable method of personal service upon a natural person must be rejected. Section 801.11(d) relates to serving a summons in a manner "specified by any other statute [e.g., a manner not already specified in section 801.11] upon the defendant or upon the defendant's authorized agent by appointment or by law," and cannot be read to eviscerate or conflict with the prior provisions of Wis. Stat. § 801.11. (emphasis added). Plaintiff's transparent attempt to rewrite the statute by reading out the service "specified by any other statute" requirement in favor of an independent basis for service on an authorized agent of a non-disabled adult natural person is wholly...