Midway Oil Corp. v. Guess

• Decision Date: 05 February 1986
• Docket Number: No. 85-192,85-192
• Parties: MIDWAY OIL CORPORATION, a Wyoming corporation, Appellant (Defendant), v. Roy H. GUESS and R.P. Swirczynski, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

Page 339

714 P.2d 339

MIDWAY OIL CORPORATION, a Wyoming corporation, Appellant (Defendant), v. Roy H. GUESS and R.P. Swirczynski, Appellees (Plaintiffs).

No. 85-192.

Supreme Court of Wyoming.

Feb. 5, 1986.

James R. McCarty, Casper, for appellant.

L. Craig Clayton of Donald R. Winship Associates, P.C., Casper, for appellees.

Before THOMAS, C.J., and ROONEY, ^* BROWN, CARDINE and URBIGKIT, JJ.

URBIGKIT, Justice.

Default judgment was entered upon failure to answer a complaint for specific performance and money damages. Appeal is taken from an order denying the motion to set aside the judgment made when notice of the suit was first obtained after judgment entry.

We will reverse.

The case, by a ten-page complaint, involved claimed oil-lease contractual rights for overriding royalties and money damages by plaintiff as appellee, as derived from an oral or implied agreement as compensation for finding a buyer for oil interests of defendant-appellant.

Defendant was organized as a Wyoming corporation in 1933 and listed as its agent for service Gertrude Morrison, 104 South Center Street, Casper, Wyoming. Nothing in the court file reflects whether the address still exists today. By certificate obtained after the default judgment had been entered, it was determined that the corporate charter was revoked on January 17, 1985, and the last annual report for 1982 listed the name and address of the corporation as Box 1144, Casper, Wyoming 82602. ¹

Suit was filed and summons issued April 2, 1985, with the address for the agent of service as given on the summons P.O. Box 1144, Casper, Wyoming 82602. The summons return service stated:

"AFTER DUE AND DILIGENT SEARCH WE WERE UNABLE TO LOCATE GERTRUDE MORRISON AGENT FOR MIDWAY OIL CORP. IN NATRONA COUNTY, WYOMING 4-4-85 * * * [Mileage $.69]." ²

No effort to attempt to serve any officer or manager of the corporation or its office is indicated by the return.

An alias summons was issued April 9 and served on the Secretary of State on April 12, with a copy of the complaint thereafter mailed by the Secretary of State to Box 1144, Casper, WY 82601, and returned with the Post Office notation of "Return to sender No forwarding order on file. Unable to forward."

As addressed by plaintiff, correspondence had been sent to defendant on November 1, 1984, reflecting knowledge of counsel for plaintiff that the mailing address for the corporation was Post Office Box 681, Thayne, Wyoming. Thayne is a relatively small, rural-character community, some 200 miles from Casper.

Service having been made on the Secretary of State on April 12, 1985, and without actual notice to defendant, an application for entry of default was filed May 8, 1985, with a default entered on that date. Two days later, an application for entry of a default judgment was made, and default judgment was signed and filed on May 10, 1985, without any hearing or evidentiary presentation.

The default judgment found:

(1) service of process was duly and rightfully made;

(2) the claims of plaintiffs are in part based upon the obligations of defendant implied or imposed by law; plaintiffs set in motion the chain of events which resulted in two separate sales of the Midway field; the services rendered by plaintiffs to defendant were beneficial to defendant; and plaintiffs were entitled to the benefits of their agreement; and

(3) the court had jurisdiction of the parties, the subject matter of the action and the relief requested.

By the judgment, specific performance was ordered, requiring the assignment of four per cent of eight-eighths overriding royalty interest in designated acreage, through the base of the Dakota Formation and two per cent of eight-eighths below Dakota; if an assignment was not made, the judgment would otherwise serve to assign and transfer; and plaintiffs additionally have judgment against defendant in the sum of $30,000, "as compensation for Defendant's deficiency in the performance due Plaintiffs * * *."

After entry of the default judgment, attempted mailing by the clerk of court addressed to P.O. Box 1144, Casper, WY 82602 was also returned undelivered.

Defendant moved to set aside the default judgment with an attached affidavit on June 17, 1985.

Plaintiff's response to the motion attached the 1982 annual report for the corporation, which showed a corporate and officer (Gerald Binks) address of Box 1144, Casper, Wyoming 82602, with nothing shown on the form as to the address of the agent for service.

The motion to set aside the default judgment was denied by the court on the basis that the service of process on the Secretary of State was proper; that Rule 4(d)(4), W.R.C.P., did not require the clerk of court to mail copies of the summons and complaint to the defendant corporation in advance of default entry; and that defendant had not shown other grounds to the court sufficient for the default to be set aside.

Appeal issues stated by defendant as appellant were: ³

" * * * [T]he trial court erred in refusing to set aside the default and default judgment upon the ground that there was not a presentation of a sufficient factual basis for the relief awarded by the judgment.

" * * * [T]he trial court erred in refusing to set aside the default and default judgment since the defendant had no actual notice of the suit and since there was a meritorious defense to the allegation of the complaint which would justify setting aside the default under the provisions of Rule 60(b)(6)."

The issues presented by plaintiffs as appellees were stated similarly, and further raised an additional issue that the defendant corporation failed to maintain the required registered agent. ⁴

We will posture the issues presented:

I. Sufficiency of attempted service in Natrona County to justify attempted service on the Secretary of State.

II. Sufficiency of service on the Secretary of State when plaintiff had actual mailing address for the corporation and the listed mailing address was insufficient to effectuate delivery of a copy of the summons and complaint to give suit notice.

III. Answer date.

IV. Inadequacy of proof of damages.

V. Abuse of discretion in denying motion to set aside default.

The propriety of this court considering all issues is justified as a question of initial jurisdiction. Pease Brothers v. American Pipe & Supply Co., Wyo., 522 P.2d 996 (1974); Vanover v. Vanover, 77 Wyo. 55, 307 P.2d 117 (1957).

I Initial Service

The designated agent for service was Gertrude Morrison, with a stated street address and not a post office box number. Practical realism teaches us that the inclusion of a box number on a summons for the sheriff's process service affords him no assistance (and normally no service for plaintiff). The requirement or desirability of a deliverable address is the reason that present law requires a street address and not a box number for the agent for service of a qualified corporation. Section 17-1-109, W.S.1977. Except from the negative implication from the last known address in Thayne, there is nothing in the file to show that Midway Oil Corporation did not have an office in Natrona County. Certainly it is only known that the sheriff did not find Gertrude Morrison, Post Office Box 1144, Casper, Wyoming. A more adequate negative return is strongly indicated if used for later reliance on substituted service. Bryant v. Wybro Federal Credit Union, Wyo., 544 P.2d 1010 (1976); Pease Brothers v. American Pipe & Supply Co., supra; 47 Am.Jur.2d Judgments § 1174, p. 197.

Since the last known address of defendant as available to plaintiffs was geographically far removed, the inclusion of a box number for service by the sheriff in Natrona County was at best misleading. Obviously, the service-of-process issue in this fashion would only occur in a case of a corporation or a like entity where the attempted local services were first utilized as the predicate for service on the Secretary of State or other substitute service. Otherwise, the service would be insufficient and a better address from counsel to sheriff would be required before jurisdiction was claimed or obtained. Rules 4(f), 4(d)(4), and 4(d)(6), W.R.C.P. See Bryant v. Wybro Federal Credit Union, supra.

We hold that under Rule 4(d)(4), W.R.C.P., the attempted local service was not adequate or adequately proved, where at a minimum the last known address or the in-county street address was not listed for the information of the sheriff. Attempted service at a post office box number would hardly be actual service. National Supply Co. v. Chittim, Wyo., 387 P.2d 1010 (1964); 62 Am.Jur.2d Process § 111, p. 896.

Since the service of process is the basis upon which jurisdiction is obtained, this court and current law have frequently enunciated the rule that strict compliance with the statute is required. In re Estate of Lonquest, Wyo., 526 P.2d 994 (1974); Pease Brothers v. American Pipe & Supply Co., supra; Joseph Russell Realty Co. v. Kenneally, 185 Mont. 496, 605 P.2d 1107 (1980); Ratcliff v. Werlein, Tex.Civ.App., 485 S.W.2d 932 (1972); 62 Am.Jur.2d Process § 3, p. 785.

II Service on the Secretary of State

Plaintiffs received notice from the Secretary of State that the attempted mailing to the Casper box number had been unsuccessful and the notice consequently returned. Counsel did not request a further mailing or advise the Secretary of State of the more current address of Thayne, Wyoming, by requesting re-mailing either to the street address in Casper as the address of the agent for service, or to the most current address known in Thayne.

Although we are reluctant in this case to postulate a rule in regard to the notice mailing from the Secretary of State to the most current known address, which is not specifically required by statute (which might be both wiser and safer), as otherwise required of counsel in certain substitute-service processes under Rule 4, W.R.C.P., we do find in this case that the mailing to an address not listed for the...