Poteet v. Bethke

• Decision Date: 18 May 1987
• Docket Number: No. 46A04-8608-CV-263,46A04-8608-CV-263
• Citation: 507 N.E.2d 652
• Court: Indiana Appellate Court
• Parties: George F. POTEET, Appellant (Defendant Below), v. Monica BETHKE and Daniel Bethke, Appellees (Plaintiffs Below).

Page 652

507 N.E.2d 652

George F. POTEET, Appellant (Defendant Below), v. Monica BETHKE and Daniel Bethke, Appellees (Plaintiffs Below).

No. 46A04-8608-CV-263.

Court of Appeals of Indiana Fourth District.

May 18, 1987.

Fred M. Stults, Jr., Stults, Custer, Kutansky & McClean, Gary, David L. Zoss, Stults, Custer, Kutansky & McClean, Valparaiso, for appellant.

Donald E. Transki, Michigan City, for appellees.

YOUNG, Judge.

George Poteet appeals the partial denial of his "Motion to Vacate Default Judgment." The only issue presented by his appeal is whether the trial court abused its discretion in not vacating the entire judgment on the basis that it was void for lack of personal jurisdiction. We reverse.

On February 28, 1984, an automobile accident occurred involving vehicles driven by George Poteet and Monica Bethke. Monica and her daughter sustained injuries as a result of the accident. At the time the accident occurred, Poteet was living at 306 Liberty Street in Westville, Indiana and he gave that address to the investigating officer.

Due to marital difficulties, Poteet moved in September of 1984 from the Liberty Street address to 111 South Porter Street in Michigan City, Indiana. He did, however, apparently receive a letter from the Bethkes' attorney which had been sent to the Liberty Street address in October of 1984. ¹

By December 13, 1984, Poteet's insurer, Metropolitan, apparently had reached a settlement with the Bethkes' as to Monica's claim and had sent a $50,000 draft and a "Release of All Claims" form to the Bethkes. ² Although the Bethkes' cashed the draft, they failed to return the release form. On December 14, 1984, Poteet filed a form with the U.S. Post Office requesting that his address be changed from the Liberty Street address in Westville to the Porter Street address in Michigan City. Although Poteet still resides in Michigan City, he moved from the Porter Street address to 107 Nevada Street in March of 1985. He did not file a change of address request when he made this move.

On July 8, 1985, the Bethkes filed suit against Poteet. Service upon Poteet was made by sheriff who attached the summons and complaint to the door of 306 Liberty Street in Westville. A copy of the summons was sent to that same address by registered mail. Although Poteet's ex-wife, Jeanne Loane, had vacated the premises on July 1, 1985, she found the documents when she returned to prepare the house for sale. Not knowing what to do with the documents or where to locate Poteet, Loane placed the documents in her car until later in the summer when she happened to see a county police officer. Loane gave the documents to the officer who said that he would take care of the matter. On August 7, 1985, the Bethkes obtained a default judgment against Poteet in the amount of $1,000,000.

On or about August 10, 1985, Poteet's roommate at the Porter Street address received a copy of the summons and complaint. ³ He stated in an affidavit that he delivered them to Poteet the same day he received them. Poteet claims to have received the documents on August 11, 1985. On August 19, 1985, Poteet was contacted at his place of employment by Fred Stults who had been hired as Metropolitan's attorney on August 15, 1985. Stults had located Poteet through the Westville Post Office and Poteet's former Porter Street landlord. Stults filed a motion to vacate the default judgment on behalf of Poteet on September 9, 1985. Except as to the issue of damages, the motion was denied.

Poteet claims that because he was not properly served with notice of the suit, the judgment against him was void for lack of personal jurisdiction and the trial court should therefore have vacated the entire judgment. Where the trial court lacks personal jurisdiction, the judgment is void. Smith v. Tisdal (1985), Ind.App., 484 N.E.2d 42. A void judgment is of no force or effect, Id., and must be set aside whether the party seeking relief does so by separate action or by a motion pursuant to Trial Rule 60(B)(6). Harvey, 4 Indiana Practice 215 (1971). Therefore the only issue we must resolve is whether the service upon Poteet was insufficient to render him subject to the trial court's jurisdiction.

Service upon an individual may be made by leaving a copy of the summons and complaint at his dwelling house or usual place of abode. Ind. Rules of Procedure, Trial Rule 4.1(A)(3). The Bethkes rely upon Grecco v. Campbell (1979), 179 Ind.App. 530, 386 N.E.2d 960, for the proposition that 306 Liberty Street was Poteet's dwelling house or usual place of abode and therefore service upon him was properly made. As the court in Grecco noted, however, "[w]hat is or is not a party's 'dwelling house or usual place of abode' within the context of T.R. 4.1 is a question that must be determined on the particular facts of each case." Id. at 533, 386 N.E.2d at 962. The facts of this case are clearly distinguishable from those presented in Grecco.

In Grecco, the summons and complaint were left at a house owned by the defendant while the defendant was staying with relatives due to illness and marital problems. The defendant found the documents upon his return to the house. He had been absent for approximately a month. Default judgment was not entered until two weeks after the defendant had found the documents and sent them to his insurance company. In holding that the residence constituted the defendant's dwelling house or usual place of abode, the court specifically noted that the defendant was living in the house both prior to and after his problems and that he referred to his return as "returning home." Id.

In this case, Poteet had left the Liberty Street address approximately ten months before the summons and complaint were left there. Furthermore, Poteet's absence from that address was not temporary as was the case in Grecco. Poteet had left the address permanently. Under these facts, we cannot conclude that the Liberty Street address was Poteet's dwelling house or usual place of abode. The service upon Poteet was therefore defective.

The Bethkes argue that even if the service was defective it should not be set aside because it was reasonably calculated to inform Poteet of the action being instituted against him. (Appellee's Brief, p. 6 citing Ind.Rules of Procedure, Trial Rule 4.15(F) ⁴). They essentially base their argument on the fact their attorney sent a copy of the complaint to Poteet's insurer and therefore it was aware of the suit. Apparently, the Bethkes are contending that Metropolitan was Poteet's agent for service of process or that giving notice to a liability insurer is reasonably calculated to inform the defendant of the pending litigation. We find both contentions unpersuasive in this case.

In order for service to be based upon an agency relationship, the agent must have been designated to receive such service by or pursuant to a statute or a valid agreement. Ind.Rules of Procedure, Trial Rule 4.7. There is no evidence that such a designation existed in this case.

We have found no Indiana cases which address whether a plaintiff may serve a defendant's liability insurer absent a statutory or contractual designation of the insurer as the defendant's agent for the purpose of service of process. The cases from other jurisdictions which have addressed the issue have done so in terms of a specific procedural rule which gave the trial court the discretion to permit a method of service not provided by other rules. Krueger v. Williams (1981), 410 Mich. 144, 300 N.W.2d 910 (interpreting GCR 1963, 105.8); Silvas v. Kelly (1984), 136 Mich.App. 790, 357 N.W.2d 772 (interpreting GCR 1963, 105.8); Feuchtbaum v. Constantini (1971), 59 N.J. 167, 280 A.2d 161 (interpreting R. 4:4-4(i)); Austin v. Millard (1978), 164 N.J.Super. 219, 395 A.2d 1267 (interpreting R. 4:4-4(i)); Ledbetter v. Schnur (1969), 107 N.J.Super. 479, 259 A.2d 237 (interpreting R. 4:4-4(i)); Young v. Bunny Bazaar, Inc. (1969), 107 N.J.Super. 320, 258 A.2d 158 (interpreting R. 4:4-4(i)); Rudikoff v. Byrne (1968), 101 N.J.Super. 29, 242 A.2d 880 (interpreting R. 4:4-4(j) in conjunction with New York CPLR 308(4)); Dobkin v. Chapman (1968), 21 N.Y.2d 490, 289 N.Y.S.2d 161, 236 N.E.2d 451 (interpreting CPLR 308(4)); Lerman v. Church (N.Y.Supreme Ct.1967) 54 Misc.2d 402, 282 N.Y.S.2d 622 (interpreting CPLR 308(4)); Pieret v. Murray (1969), 59 Misc.2d 201, 298 N.Y.S.2d 201 (interpreting CPLR 308(4)).

Indiana has a rule similar to those addressed in the aforementioned cases. This rule provides:

Upon application of any party the court in which any action is pending may make an appropriate order for service in a manner not provided by these rules when such rule is reasonably calculated to give the defendant actual knowledge of the proceedings and an opportunity to be heard.

Ind.Rules of Procedure, Trial Rule 4.14(B). The Bethkes, however, did not apply for a court order permitting them to serve Poteet's insurer. Furthermore, an order permitting such service would have been inappropriate in this case.

In determining whether service may be made upon the defendant's insurer, courts generally have considered four factors: 1) the plaintiff's need, 2) the public interest, 3) the reasonableness of the plaintiff's efforts to inform the defendant, and 4) the availability of adequate safeguards for the defendant. See e.g. Krueger v. Williams (1981), 410 Mich. 144, 300 N.W.2d 910; Feuchtbaum v. Constantini (1971), 59 N.J. 167, 280 A.2d 161; Dobkin v. Chapman (1968), 21 N.Y.2d 490, 289 N.Y.S.2d 161, 236 N.E.2d 451. The plaintiff's need has been found to be apparent from the widespread potential for damage by motorists which exists due to our mobile population. Dobkin v. Chapman (1968), 21 N.Y.2d 490, 289 N.Y.S.2d 161, 169, 236 N.E.2d 451, 459. The public interest generally has been evidenced by proof of financial responsibility requirements, state recovery funds and provisions for service upon non-resident motorists. Id. but...