Mid-States Tubulars, Inc. v. Maverick Tube Corp.

• Decision Date: 14 July 1987
• Docket Number: No. 51691,MID-STATES,51691
• Citation: 735 S.W.2d 142
• Parties: TUBULARS, INC., Plaintiff-Appellant, v. MAVERICK TUBE CORPORATION, Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 142

735 S.W.2d 142

MID-STATES TUBULARS, INC., Plaintiff-Appellant, v. MAVERICK TUBE CORPORATION, Defendant-Respondent.

No. 51691.

Missouri Court of Appeals,

Eastern District,

Division One.

July 14, 1987.

Motion for Rehearing and/or Transfer

Denied Aug. 13, 1987.

Application to Transfer

Denied Sept. 15, 1987.

Robert J. Lenze, St. Louis, for plaintiff-appellant.

Martin P. Zucker, St. Louis, for defendant-respondent.

KELLY, Judge.

Mid-States Tubulars, Inc., a Missouri corporation, appeals from the judgment of the trial court granting respondent Maverick Tube Corporation's petition for review and motion to set aside a $61,000.00 default judgment entered in favor of Mid-States against Maverick in an action for breach of contract. We reverse and remand.

Mid-States and Maverick engaged in a series of business dealings in early 1985. Maverick supplied steel pipe and casing to Mid-States. A disagreement prompted Mid-States to sue Maverick for breach of contract in January 1986. The summons, issued by the court and directed to Maverick's registered agent C.T. Corporation System in the City of St. Louis, was personally served on C.T. Corporation System on February 6, 1986.

After obtaining an interlocutory judgment by default, Mid-States procured a final default against Maverick on April 3, 1986, after testimony and evidence at a hearing that same day. On May 9, 1986, Maverick filed its "Motion to Set Aside Judgment and Petition for Review", accompanied by an affidavit and memorandum in support of its motion.

Maverick's motion to set aside the judgment or, alternatively, petition for review specifically invoked Rules 74.12 and 74.32 as procedural authority to vacate the default judgment entered. Rule 74.12 provides for the filing of a petition for review to set aside final judgment upon good cause shown entered against a defendant who neither has been summoned personally nor has appeared. Rule 74.32 provides for the filing of a motion to set aside a judgment for irregularity.

In its motion, Maverick stated that it never received actual notice of the lawsuit and never received a summons and petition. Maverick acknowledged that on February 6, 1986, the summons and petition were served on C.T. Corporation System which at that time was listed as the registered agent for Maverick. C.T. Corporation System had instructions, upon its receipt of service of process and petition directed to Maverick, to forward both the summons and petition for delivery to Nucorp Energy, Inc., located in San Diego, California.

Nucorp Energy, Inc. had been the parent company of Maverick; however, during 1985 bankruptcy proceedings involving both companies, the two had emerged on December 6, 1985, from the bankruptcy as separate and independent corporate entities with no relation to each other. On February 14, 1986, Nucorp Energy, Inc. received the summons and petition originally directed to Maverick. Maverick did not actually learn of the lawsuit filed against it by Mid-States until May 1986. Apparently, although not alleged in Maverick's motion Nucorp Energy, Inc. failed to ever notify Maverick about the lawsuit.

Maverick discovered the lawsuit only after it had subsequently initiated its own action against Mid-States in February 1986. Its first attempt at service on Mid-States was returned "non est" because the registered agent for Mid-States no longer had an office at the address listed with the Missouri Secretary of State's office. An alias summons was issued, directed to "Dan Gaines or any other officer or managing agent at the office of Mid-States Tubulars, Inc.", and was executed on April 7, 1986.

In response to Maverick's lawsuit against it, Mid-States filed a motion to dismiss based upon Mid-States having already obtained the default judgment against Maverick. Maverick has claimed that, prior to Mid-States' motion to dismiss, "counsel for Maverick Tube had no notice or knowledge of the existence of the prior pending lawsuit by Mid-States."

Maverick's motion to set aside the default judgment further stated that if Mid-States had correctly listed its own registered agent, Maverick would have successfully served Mid-States before Mid-States obtained its interlocutory default on March 11, 1986, against Maverick. Maverick concluded that it, in turn, would have received Mid-States' motion to dismiss Maverick's lawsuit within the thirty-day period after entry of the default enabling Maverick to request that the trial court merely set aside the default judgment entered against it, before the judgment became final.

Gregg Eisenberg, the vice-president of sales for Maverick, attested that Maverick did not learn of Mid-States' lawsuit against it until May 7, 1986, when he received a call from Maverick's attorney informing it of the lawsuit. His affidavit further swore that "[n]o person or employee associated with Maverick Tube Corporation ever received a summons or petition in that action." He added that, effective April 1986, Maverick had changed its registered agent for service of process.

Ten days later, both parties appeared and orally argued Maverick's motion to set aside the default judgment. The trial court took the motion as argued under submission. The trial court rendered its decision May 27, 1986. The trial court's entry of its judgment, apparently handdrafted by counsel for Maverick, provided in part:

"Defendant's motion to set aside default judgment denied.

Defendant's petition for review granted. Final judgment of 4-3-86 is hereby set aside for good cause shown."

We infer from the trial court's action in granting the petition for review to set aside the final judgment while denying the motion to set aside the default judgment that it believed Rule 74.12 was controlling.

Mid-States asserts that the trial court erred in granting Maverick's petition for review under Rule 74.12 because petitions for review are proper only in cases in which a defendant is not personally summoned and here, Maverick was personally summoned. Mid-States also argues that the trial court lost jurisdiction to set aside the final judgment since more than thirty days had elapsed. Finally, Mid-States claims setting aside the default judgment violates cogent public policy that litigation must end.

Before addressing the points relied on by Mid-States, we must face a threshold issue raised by Maverick of our jurisdiction. While accepting that an order denying a default judgment is appealable, Maverick questions whether an order setting aside a default judgment is also appealable. Where a defendant's motion to vacate the default judgment is overruled within the thirty day period following its rendition, the order overruling his motion is an appealable order. O'Mara v. Gingrich, 424 S.W.2d 92, 94 (Mo.App.1968). Pursuant to Rule 75.01, the judgment becomes final after thirty days and subject to attack by timely appeal. However, an order setting aside a default judgment within thirty days after rendition does not amount to a final judgment subject to appeal. O'Mara, 424 S.W.2d at 93. In O'Mara, we precisely observed the following:

After the default judgment has been set aside the posture of the case is simply this: No determination of the merits of the case has been made, no rights or duties of either party have been decided and after appropriate responsive pleading has been filed the case will be ready for trial. As was pointed out by this court in Diekmann v. Associates Discount Corp., 410 S.W.2d 695, 697, there is no element of finality where the trial court sets aside the default judgment within thirty days after the judgment--or in pre-code days did so during the term in which default judgment was rendered. The net result has been a long line of cases holding that, that finality lacking, an order vacating a default judgment is not appealable. Crossland v. Admire, 118 Mo. 87, 24 S.W. 154; Holder v. Chidister, Mo., 193 S.W. 568; Carter v. Levy, Mo.App., 217 S.W. 549; Owens v. Owens, Mo.App., 280 S.W.2d 867; Kallash v. Kuelker, Mo.App., 347 S.W.2d 467; Harper v. Harper, Mo.App., 379 S.W.2d 889; Steffan v. Steffan, Mo.App. 390 S.W.2d 587. As was so graphically put in Diekmann v. Associates Discount Corp., supra, 'During this incubation period a default judgment is within the breast of the court; and because it has not become final, setting it aside is a discretionary act from which no appeal lies.' Long ago, the Supreme Court said, with respect to an order vacating a default judgment, 'The motion then was to set aside the judgment, and not for a new trial, and the court was not required to give a reason for its action.' Crossland v. Admire, supra, at 24 S.W. 154, 155. (Emphasis ours).

424 S.W.2d at 93.

If the trial court sets aside a default judgment more than thirty days after its rendition, the default judgment has become final and the court's order setting aside the default is immediately appealable. O'Mara, 424 S.W.2d at 94. In this situation, the plaintiff has had a final judgment taken from him and he is obviously an aggrieved party. Id. The appealability of a trial court's order granting a defendant's motion to set aside a final, default judgment remains constant regardless of the method utilized by the defendant to set aside the final default judgment. See e.g. Sprung v. Negwer Materials, Inc., 727 S.W.2d 883, 889 (Mo. banc 1987) (motion to set aside "on equitable grounds", i.e. treated as a separate suit in equity); ABC Fireproof Warehouse Co. v. Clemans, 658 S.W.2d 28, 30 n. 1 (Mo. banc 1983) (motion to set aside for irregularity under Rule 74.32); Casper v. Lee, 362 Mo. 927, 245 S.W.2d 132, 135 (banc 1952) (writ of error coram nobis); Jacobsmeyer v. National Emergency Disaster Corp., 676 S.W.2d 843, 844 (Mo.App.1984) (writ of error coram nobis); Godsy v. Godsy, 565 S.W.2d 726, 731 (Mo.App.1978) (motion to set aside for fraud and separate petition in equity); Diekmann v. Associates Discount Corp., 410 S.W.2d 695, 698-99 (Mo.App.19...