McCall v. Ikon

• Decision Date: 28 February 2005
• Docket Number: No. 3953.,3953.
• Citation: 611 S.E.2d 315,363 S.C. 646
• Court: South Carolina Supreme Court
• Parties: Jonathan S. McCALL, Respondent, v. IKON, d/b/a IKON Educational Services, and CESC (Computer Services Corporation, Defendants, of whom IKON, d/b/a IKON Educational Services is, Appellant).

Page 315

611 S.E.2d 315

363 S.C. 646

Jonathan S. McCALL, Respondent, v. IKON, d/b/a IKON Educational Services, and CESC (Computer Services Corporation, Defendants, of whom IKON, d/b/a IKON Educational Services is, Appellant).

No. 3953.

Court of Appeals of South Carolina.

Submitted December 1, 2004.

Decided February 28, 2005.

Rehearing Denied April 21, 2005.

David A. Wilson, of Greenville, for Appellant.

Duke K. McCall, Jr., and Mark M. Trapp, of Greenville, for Respondent.

KITTREDGE, J.:

This is an appeal from the denial of relief from default judgment under Rule 60(b), SCRCP. Appellant raises two exceptions to the default judgment: (1) that the default was in error because it was never properly served with the plaintiff's summons and complaint, and (2) alternatively, even if service were proper, it was not notified of the subsequent damages hearing concerning this unliquidated claim. We join the circuit court in rejecting Appellant's first exception, finding service of process was effective, but we agree with Appellant's second argument that notice of the damages hearing was insufficient. Accordingly, we remand this matter to the circuit court for a new damages hearing.

FACTS/PROCEDURAL HISTORY

This appeal stems from confusion over the name of the appellant corporation. Appellant was identified in the summons and complaint by the name under which it chose to conduct business in South Carolina, "IKON, d/b/a IKON Educational Services."¹ Like many larger companies, IKON operates through a corporate structure that includes various subsidiaries and business units that fall under the umbrella of a parent corporation. At the top of this corporate structure is IKON Office Solutions, Inc., which is an Ohio corporation that operates different businesses in the technology field throughout the country. Within this corporation is IKON Office Solutions' wholly owned subsidiary, IKON Office Solutions Technology Services, L.L.C. At the time this cause of action arose, both IKON Office Solutions, Inc., and IKON Office Solutions Technology Services, L.L.C., were authorized to do business in South Carolina. IKON Education Services, however, was not technically registered to do business in South Carolina, although IKON chose to conduct business in this state under that name.

IKON opened a computer training center in Greenville, South Carolina, under the name IKON Education Services. IKON continued to operate the Greenville facility until December 2001, when it decided to sell its entire technology education unit to Computer Educational Services Corporation (CESC).

Caught in the middle of this tangle of corporate identity was Respondent Jonathan McCall. Just one month before IKON sold its education unit to CESC, McCall entered into a contract with IKON Education Services in Greenville for a full year of computer training courses. The only parties named in the contract were McCall and IKON Education Services. There was no reference to any other IKON entity. Within a few weeks of taking over the education operation, however, CESC closed the Greenville location and cancelled the classes there.

On January 9, 2002, McCall filed the present breach of contract action, naming as defendants "IKON, d/b/a IKON Educational Services" and CESC. McCall served a copy of the summons and complaint upon CT Corporation System, the registered agent for service of process in South Carolina for IKON. However, CT Corporation System returned the summons and complaint to McCall's counsel one week later, advising by letter that it was not the agent for any entity by the name of "IKON Educational Services." The letter additionally noted that "CT Corporation System serves as Registered Agent for more than one company with `IKON' as part of its name." Thereafter, McCall served Sonja Cantrell, the Office Operational Manager for CESC and former office manager for IKON, with the same summons and complaint.²

McCall filed an affidavit of default in February 2002, accompanied by two affidavits of service, one addressed to Cantrell and the other to CT Corporation System. Upon scheduling of the damages hearing, McCall mailed only one notice of the hearing to CESC's Greenville office address which was also the former address for IKON Education Services.

At the damages hearing, at which neither of the defendants appeared, the circuit court granted McCall a default judgment in the amount of $58,407.19 against the defendants jointly and severally. Subsequently, IKON filed a motion for relief from judgment under Rule 60(b)(1), SCRCP, which was denied because the circuit court found service upon both defendants "was properly perfected and adequate notice was given pursuant to the Code."³ The circuit court also denied IKON's motion to reconsider. This appeal followed.

STANDARD OF REVIEW

A motion to vacate or set aside a default judgment is addressed to the sound discretion of the trial judge and will not be disturbed absent an abuse of discretion. Tri-County Ice and Fuel Co. v. Palmetto Ice Co., 303 S.C. 237, 242, 399 S.E.2d 779, 782 (1990). An abuse of discretion arises when the trial judge was controlled by an error of law or where his order is based on factual conclusions that are without evidentiary support. Id.

LAW/ANALYSIS

I. Service of Process Was Proper

Appellant asserts that IKON Education Services — as "merely a division of IKON Office Solutions Technology Services, LLC" — was "not a legal entity capable of being sued." Instead, according to Appellant, "[t]here are several recognized corporations existing in South Carolina with IKON as part of their name," including IKON Office Solutions, Inc., and its subsidiary, IKON Office Solutions Technology Services, L.L.C. Appellant therefore argues that McCall's attempts to serve his summons and complaint upon a phantom entity named "IKON Educational Services" or simply "IKON" rather than properly naming one of the "recognized" IKON corporations "existing in South Carolina" rendered the purported service ineffective. We find service was effective, and therefore conclude the circuit court properly denied Rule 60 relief in this regard.

As this issue has been framed by Appellant, its resolution would seem to entail a technical analysis of when a corporation may be said to "exist" for purposes of our civil rules governing service of process. Our rules governing service of process do not turn on parsing strict technicalities or debating murky legal abstractions. On the contrary, our supreme court has specifically held that "[w]e have never required exacting compliance with the rules to effect service of process." Roche v. Young Bros. Inc., 318 S.C. 207, 209-10, 456 S.E.2d 897, 899 (1995) (citing Foster v. Crawford, 57 S.C. 551, 36 S.E. 5 (1900); Saunders v. Bobo, 2 Bailey 492 (1831); Miller v. Hall, 1 Speers 1 (1842)). "Rather, we inquire whether the plaintiff has sufficiently complied with the rules such that the court has personal jurisdiction of the defendant and the defendant has notice of the proceedings." Roche, 318 S.C. at 210, 456 S.E.2d at 899. To establish that service has been properly effected, the plaintiff need only show compliance with the civil rules on service of process. Moore v. Simpson, 322 S.C. 518, 523, 473 S.E.2d 64, 67 (Ct.App.1996). When these rules are followed, there is a presumption of proper service. Roche, 318 S.C. at 211, 456 S.E.2d at 900.

Contrary to these principles governing service of process, IKON urges us to apply the rules in a manner that demands the strictest technical compliance. The company cleaves to the narrow view that because it is registered to do business in our state under certain "legal" names, its obligation to answer or appear in response to any civil action extends only so far as it has been correctly and precisely identified according to the roll maintained by the Secretary of State. In this case, IKON would paint itself as a hapless victim of mistaken identity, going about its business and never imagining that anyone would attempt to sue them under a name that is not officially or legally "recognized" as a corporation that "exists" in South Carolina.

Indeed, our courts have rejected similar attempts by parties to avoid service of process by seeking refuge under a highly technical interpretation of the rules:

A suit at law is not a children's game, but a serious effort on the part of adult human beings to administer justice; and the purpose of process is to bring parties into court. If it names them in such terms that every intelligent person understands who is meant, as is the case here, it has fulfilled its purpose; and courts should not put themselves in the position of failing to recognize what is apparent to everyone else.

Griffin v. Capital Cash, 310 S.C. 288, 292, 423 S.E.2d 143, 146 (Ct.App.1992). It has long been recognized that a corporation may be known by several names in the transaction of its general business. See Long v. Carolina Baking Co., 193 S.C. 225, 239, 8 S.E.2d 326, 332 (1939). "If a corporation has acquired a name by usage, an adjudication against it by the name so acquired is valid and binding." Id. "If [a corporation] is sued in a name under which it transacts business,...