Printed Media Services, Inc. v. Solna Web, Inc.
| Decision Date | 15 December 1993 |
| Docket Number | No. 93-1328,93-1328 |
| Parties | PRINTED MEDIA SERVICES, INC., Appellee, v. SOLNA WEB, INC., Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Mark Gunnison, Overland Park, KS, argued, for appellant.
John Knoepfler, Minneapolis, MN, argued, for appellee.
Before FAGG and WOLLMAN, Circuit Judges, and VIETOR, * District Judge.
Solna Web, Inc. appeals the district court's denial of its Rule 60(b)(4) motion to vacate a multi-million dollar default judgment entered against it in this diversity of citizenship case. Solna Web, Inc. contends that the district court never acquired personal jurisdiction over it because it was never served with process pursuant to Federal Rule of Civil Procedure 4, and therefore the default judgment entered must be vacated as void. For the reasons discussed below, we reverse and remand to the district court.
Underlying the personal jurisdiction issue is the tale of two separate corporations, referred to herein as "Solna Delaware," a Delaware corporation and the appellant in this case, and "Solna Missouri," a Missouri corporation.
Solna Missouri was originally incorporated in 1984 under the name New Sub, Inc., but changed its name to Solna, Inc. later in 1984. On June 11, 1986, appellee Printed Media Services, Inc. ("Printed Media"), a Minnesota corporation, entered into a contract with Solna Missouri to purchase an offset press and related equipment. After receiving the offset press, Printed Media experienced various problems with the press, which it communicated Solna Delaware was incorporated under the name PEC Acquisition Corp. in November 1989, by a parent corporation, Publishers Equipment Corporation. In January 1990, Solna Missouri and Solna Delaware entered into an asset purchase agreement by which Solna Delaware purchased and assumed certain assets and liabilities of Solna Missouri. The asset purchase agreement specifically mentions Solna Delaware's potential liability to Printed Media Services in the indemnification of purchaser provision in p 5(e) of the agreement, and the "Excluded Liabilities" provision in Schedule 2 to the agreement.
to Solna Missouri. Solna Missouri again changed its name--this time to Solna Web, Inc.--in May 1989.
One of the assets that Solna Delaware purchased was the right to use the name "Solna Web, Inc." One of the terms of the agreement was that Solna Missouri would change its name to one not similar to "Solna Web, Inc." On April 2, 1990, Solna Missouri changed its name to Bocca, Inc., and on May 3, 1990, Solna Delaware changed its name to Solna Web, Inc.
After the agreement, Solna Delaware used Solna Missouri's former facility and business address, and employed at least two former employees of Solna Missouri who had been involved in the communications with Printed Media Services. 1
On May 11, 1990, after changing its name to Bocca, Inc., Solna Missouri, styling itself "Solna Web Incorporated * * * a Missouri corporation in good standing with its principal place of business located [in] Kansas City, Missouri," filed a complaint for declaratory judgment against Printed Media in United States District Court for the Western District of Missouri, seeking a declaration of rights under the terms of the contract(s) between the parties.
On May 15, 1990, Printed Media, dissatisfied with the offset press it purchased from Solna Missouri, filed this lawsuit against "Solna Web, Inc." in United States District Court for the District of Minnesota alleging contract, warranty and tort claims arising out of the sale of the offset press. Printed Media caused the summons and complaint to be served on Solna Missouri's resident agent in Missouri, LT Agent Services, Inc., on May 17, 1990. Solna Delaware's resident agent at the time was The Prentice-Hall Corporation Systems, Inc. in Delaware. Solna Delaware did not establish a Missouri resident agent until June 11, 1990.
On June 22, 1990, the defendant, styling itself "Defendant Solna Web, Incorporated," moved to dismiss Printed Media's complaint because of its declaratory judgment action pending in Missouri, and alternatively moved to transfer venue to the Western District of Missouri. In August 1990, the declaratory judgment action in Missouri was dismissed in favor of the Minnesota action. On September 10, 1990, the Minnesota district court denied the motion to dismiss or to transfer venue.
In a September 12, 1990 letter to Printed Media's counsel, Solna Missouri's counsel stated that certain individuals "are no longer employed by Defendant Solna Web, Incorporated, now known as Bocca, Inc., and are therefore, not within our control to produce for depositions." On September 27, 1990, the defendant, again styling itself "Defendant, Solna Web, Incorporated," filed an answer to Printed Media's complaint.
The record shows that at several points in the litigation Printed Media's counsel was aware of Solna Missouri's name change, Solna Delaware's purchase of its assets, and that service of process on Solna Delaware was in question. For instance, during a hearing on a motion for discovery conference on December 12, 1990, Printed Media's counsel acknowledged that Solna Missouri's brief indicated that Solna Web, Inc. (Solna Missouri) had changed its name to Bocca, Inc. Solna Missouri's counsel further stated during that hearing that "Bocca, Inc. is a caretaker corporation at this point. It is no longer actively involved in business in this country, and it has no employees. The assets of the corporation were sold in two In January 1991, Printed Media received a copy of the asset purchase agreement between Solna Missouri and Solna Delaware from Solna Delaware's parent company, Publishers Equipment Corporation. Printed Media's counsel was present at a March 1991 deposition in which the deponent, an agent of Solna Delaware, testified that after the asset purchase agreement, Solna Delaware changed its name to Solna Web, Inc. and Solna Missouri changed its name to Bocca, Inc.
separate transactions some time back, and these gentlemen have been appraised [sic] of that."
In a letter to Printed Media's counsel, dated June 5, 1991, Solna Missouri's counsel discussed at great length the corporate separateness of Solna Missouri and Solna Delaware, as well as the fact that Solna Delaware had never been served, and that Solna Missouri was the entity which had been served and responded as a defendant and was now known as Bocca, Inc.
In a settlement conference memorandum, presumably written in September or October 1991, Solna Missouri's counsel stated that the
corporation which is now known as Bocca, Inc. originally responded to the suit. Unfortunately, counsel which was retained was unaware of the April 20, 1990 name change until late 1990. As a result, counsel initially filed pleadings in this cause in the name of Solna Web, Inc. When the mistake was discovered, in late 1990, counsel began to designate its corporate client as Bocca, Inc., the name by which it is now known.
On October 25, 1991, Printed Media filed a motion on the status of defendant and for leave to amend its complaint. Printed Media sought to have the court determine which corporate entity, Solna Delaware or Solna Missouri, had responded in the name of Solna Web, Inc., and to amend its complaint to assert a cause of action against Solna Delaware. The proposed amended complaint asserted the original counts against Bocca, Inc. (Solna Missouri), and added a count for the first time against Solna Delaware asserting successor liability and related theories.
Throughout the proceedings in the district court described above, counsel for the defendant was counsel retained by Solna Missouri. He advised only Solna Missouri about the progress of the litigation, not Solna Delaware.
On January 27, 1992, the magistrate judge entered his order finding that there was "only one Solna Web, Inc. in existence when plaintiff initiated this lawsuit, and that entity was properly served and service was accepted in the name of Solna Web, Inc.," and that Solna Delaware was the "proper and named defendant herein, as this is the entity which answered and otherwise responded to the lawsuit." No Solna Delaware representatives were present or had the opportunity to brief these matters before the magistrate judge. The magistrate judge also granted Printed Media leave to amend its complaint.
Subsequent to the filing of its amended complaint, Printed Media served process on Bocca, Inc. (Solna Missouri) pursuant to Rule 4; it did not, however, serve process on Solna Delaware. In February 1992, Printed Media mailed a copy of the magistrate judge's order and a copy of the amended complaint by regular mail to Solna Delaware's then-existing registered agent in Missouri. No summons was ever served or mailed.
In May 1992, Printed Media moved for default judgment against Solna Delaware. On May 27, 1992, the motion for default judgment was granted and judgment was entered against Solna Delaware in the amount of $6,688,339. On June 30, 1992, the default judgment was registered in both the Kansas and Missouri courts.
On October 16, 1992, Solna Delaware filed, pursuant to Federal Rule of Civil Procedure 60(b)(4), a motion to vacate the default judgment as void for lack of personal jurisdiction. The district court, relying on the...
To continue reading
Request your trial
-
McKenzie v. Lunds, Inc.
...actual notice of the lawsuit. See, Adams v. AlliedSignal General Aviation Avionics, supra at 885, citing Printed Media Services, Inc. v. Solna Web, Inc., 11 F.3d 838, 842 (8th Cir.1993). Moreover, the Plaintiff fails to present "good cause" for the delay occasioned, between April 6, 1998 — ......
-
Semler v. Klang
...because, "[i]f a defendant is improperly served, a federal court lacks jurisdiction over the defendant." Printed Media Services, Inc. v. Solna Web, Inc., 11 F.3d 838, 843 (8th Cir.1993), citing Dodco, Inc. v. American Bonding Co., 7 F.3d 1387, 1388 (8th Cir.1993); see, Murphy Bros., Inc. v.......
-
Nuevos Destinos, LLC v. Peck
...the defendant." Bell v. Pulmosan Safety Equipment Corp., 906 F.3d 711, 714-15 (8th Cir. 2018) (quoting Printed Media Servs., Inc. v. Solna Web, Inc., 11 F.3d 838, 843 (8th Cir. 1993)). Service must be carried out in compliance with the Federal Rules and "[t]his principle remains true despit......
-
Banks v. Slay
...108 S.Ct. 2104, 100 L.Ed.2d 722 (1988). Therefore, where service is improper, courts lack jurisdiction. Printed Media Servs., Inc. v. Solna Web, Inc., 11 F.3d 838, 843 (8th Cir.1993). "Insufficient service is a proper basis for voiding an entry of default sua sponte because it deprives a co......