River v. Boespflug
| Decision Date | 30 June 2021 |
| Docket Number | A168976 |
| Citation | 494 P.3d 980,312 Or.App. 558 |
| Court | Oregon Court of Appeals |
| Parties | Willamette RIVER I, an Oregon general partnership; and Justin Barton, individually and as a general partner in Willamette River I, Plaintiffs-Respondents, v. Jean-Pierre BOESPFLUG, an individual, Defendant-Appellant. |
Christopher K. Dolan, argued the cause for appellant. Also on the briefs were Russell D. Garrett and Jordan Ramis PC.
Robert B. Lowry, Portland, argued the cause for respondents. Also on the brief were Susan T. Alterman, Scott J. Aldworth, and Kell, Alterman & Runstein, L.L.P.
Before Armstrong, Presiding Judge, and Tookey, Judge, and Aoyagi, Judge.
Plaintiffs filed an action to expel defendant from their partnership by judicial determination and undertook to serve defendant in the action. Defendant did not appear in the action, and a default judgment was entered against him. Several years later, defendant sought under ORCP 71 to set aside the default judgment against him on the ground that he had not been properly served in the action. The trial court denied defendant's motion, concluding that defendant had been properly served under ORCP 7 D(1). Defendant appeals, contending that the court erred in concluding that he had been properly served. We agree with defendant and, accordingly, reverse the order denying defendant's motion.
Except where noted, the material facts are undisputed. Defendant Boespflug and plaintiff Barton began working together in the real estate investment business roughly 30 years ago. As part of their business strategy, Barton and defendant—who is a dual citizen of France and the United States—created various entities to acquire and hold investment properties, including plaintiff Willamette River I, an Oregon general partnership. In November 2012, plaintiffs filed an action seeking a judicial determination that defendant had become incapable of performing his duties under the partnership agreement and, consequently, should be expelled from the partnership. ORS 67.220(5) ; ORS 67.220(7).
Barton was the managing partner of Willamette River I, and defendant was a partner. According to plaintiffs’ November 2012 complaint, defendant failed to provide financial documents related to the partnership's loan obligations. Plaintiffs alleged that defendant had not responded to letters, phone calls, or emails requesting the required documents. Plaintiffs also alleged that defendant had fled his home in Idaho as a fugitive from an Idaho warrant for his arrest and that defendant had "left the United States."
Plaintiffs unsuccessfully attempted personal service of the summons and complaint at the Idaho addresses known for defendant. Later, a Valley County, Idaho, sheriff's deputy served those documents on a person apparently in charge at the offices of Tamarack Resort—an Idaho ski resort of which defendant was a majority owner. Defendant was listed with the Idaho Secretary of State as the registered agent for the resort. In the return of service, the deputy documented that the person in charge had stated that he did not have "anything to do with [defendant]," but that the person ultimately had accepted service. Lastly, a process server mailed by first-class mail copies of the summons and complaint to defendant at Tamarack Resort and at four other Idaho addresses, which, as plaintiffs have asserted, were the only known addresses for defendant.
Defendant failed to timely appear in the action. As permitted by ORCP 69, plaintiffs moved the court for a default order against defendant, which the court entered. The court subsequently entered judgment against defendant in April 2013, declaring him incapable of performing his duties according to the partnership agreement and expelling him from the partnership. It later entered a supplemental judgment setting $57,000 as the price at which plaintiffs could purchase defendant's interest in Willamette River I. Plaintiffs made monthly installment payments of the purchase price to defendant's bank account until the bank notified them that the account had been closed.
Four years later, defendant filed an answer to plaintiffs’ complaint. He also moved under ORCP 71 B(1)(d)1 to set aside the default judgment that had been entered against him. In supporting memoranda, defendant argued, among other things, that the judgment was void for lack of personal jurisdiction over him because he had not been served as required under ORCP 7 D, the pertinent parts of which we set out later in this opinion. Defendant stated that he had been living in France, his country of origin, and asserted that plaintiffs should have obtained information concerning defendant's whereabouts by contacting defendant's wife, whom Barton had contacted before. Defendant also argued that plaintiffs should have subpoenaed defendant's bank to determine whether defendant had provided the bank with a new address. In defendant's view, plaintiffs also should have made inquiries throughout France or, alternatively, asked the trial court to order service of him by publication.
Plaintiffs responded by asserting that service on defendant at Tamarack Resort had been proper under ORCP 7 D(2)(c), which provides the procedure for service where "the person to be served maintains an office for the conduct of business." Office service is completed "by leaving true copies of the summons and the complaint * * * with the person who is apparently in charge." Id . ORCP 7 D(2)(c) also requires a follow-up mailing of the summons and complaint by first-class mail. Plaintiffs reasoned that defendant "maintain[ed] an office for the conduct of business" at Tamarack Resort because the Idaho Secretary of State listed him as the registered agent for the resort there, and the person appearing to be in charge, despite disavowing contact with defendant, had accepted service.
Plaintiffs further argued that, even if office service was inadequate, mailing five copies of the summons and complaint to defendant's Idaho addresses was, under the circumstances, "reasonably calculated" to notify defendant of the action, thereby satisfying the service requirement in ORCP 7 D(1). Plaintiffs maintained that defendant's whereabouts were unknown and that defendant was at fault for failing to provide people with a forwarding address for him.
Lastly, plaintiffs asserted as an alternative argument that defendant's motion to set the judgment aside was moot because defendant had accepted plaintiffs’ payments to purchase his interest in Willamette River I.
The trial court rejected plaintiffs’ mootness argument, but it denied defendant's motion to set aside the judgment. It concluded that office service under ORCP 7 D(2)(c) had been inadequate because defendant had not been "significantly involved in the [Tamarack Resort] *** in the years immediately" before the attempted service there, and thus, defendant could not be said to have "maintained an office for the conduct of business" at that location. The court concluded, however, that the efforts employed by plaintiffs made to serve defendant were nonetheless effective under ORCP 7 D(1), stating:
Defendant appeals, assigning error to the order denying his motion to set aside the judgment. He renews his argument that he was not properly served and, consequently, that the trial court did not have jurisdiction to enter a judgment against him. Defendant reasons that none of plaintiffs’ efforts to serve him were reasonably calculated to apprise him of the action. Plaintiffs reprise the arguments that they made below, adding that, if service was improper, we should nonetheless affirm the trial court on the ground that defendant is judicially estopped from denying the validity of the default judgment. Defendant responds that judicial estoppel does not apply because he had no notice of the judgment when he accepted payments from plaintiffs. We address those arguments in turn.
Whether service was adequate is a legal question. Hoeck v. Schwabe, Williamson & Wyatt , 149 Or. App. 607, 615, 945 P.2d 534, 539 (1997). We accept the trial court's findings of fact bearing on that question if they are supported by evidence in the record. Id . Under ORCP 4, an Oregon court does not have jurisdiction over a defendant unless the defendant is served with summons in accordance with ORCP 7. McCall v. Kulongoski, 339 Or. 186, 192, 118 P.3d 256 (2005). Here, as framed by the parties, the threshold issue is whether service on defendant was adequate under ORCP 7 D(1), which provides, as relevant:
(Emphasis added.)
To summarize, ORCP 7 D(1) provides for...
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