Shamrock Development, Inc. v. Smith, No. A06-1647.

• Decision Date: 07 August 2008
• Docket Number: No. A06-1647.
• Parties: SHAMROCK DEVELOPMENT, INC., Respondent, v. Randall N. SMITH, Appellant, Denison E. Smith, Defendant, Dakota Turkey Farms, Limited Partnership, Defendant.
• Court: Minnesota Supreme Court

754 N.W.2d 377

SHAMROCK DEVELOPMENT, INC., Respondent, v. Randall N. SMITH, Appellant, Denison E. Smith, Defendant, Dakota Turkey Farms, Limited Partnership, Defendant.

No. A06-1647.

Supreme Court of Minnesota.

August 7, 2008.

Timothy J. Mattson, Charles Schoenwetter, Bowman and Brooke LLP, Minneapolis, MN, for appellant.

Charles E. Lundberg, Stanford P. Hill, David A. Turner, Bassford Remele, PA, Minneapolis, MN, for respondent.

Heard, considered, and decided by the court en banc.

OPINION

MEYER, Justice.

In this appeal, we are asked to decide whether respondent Shamrock Development, Inc.'s attempted service of process by publication on appellant Randall Smith satisfied the requirements of Minn. R. Civ. P. 4.04(a) and the Due Process Clause of the United States Constitution. The district court concluded that the service by publication was sufficient, and the court of appeals affirmed. We reverse and remand to the district court.

In April 1996 the Hennepin County District Court entered a civil judgment in favor of Farm Credit Leasing Services Corporation (Farm Credit) against Dakota Turkey Farms limited partnership (the partnership) and certain individual partners, including Randall N. Smith. In connection with this judgment, Farm Credit filed with the district court an affidavit of identification of judgment debtor that identified Randall Smith's residential address in Washington, D.C., and his business address in Arlington, Virginia. A similar affidavit identified an address in Medina, Minnesota, as both the residential and business address of one of the other partners; the same Medina street address was also registered with the Secretary of State as the partnership's address.¹ Farm Credit's judgment was subsequently assigned to Shamrock Development, Inc. (Shamrock). The record indicates that Shamrock requested and was mailed a copy of the entire district court file in October 2002.

In 2006 Shamrock decided to renew its judgment by commencing a new civil action against the judgment debtors.² On March 19 Shamrock attempted to serve the partnership with process at the Medina address but discovered that the address is a private home and that the current owner was not associated with the partnership. Shamrock subsequently effected service of process on the partnership by serving the Secretary of State as provided by Minn.Stat. § 5.25 (Supp.2007).

Shamrock attempted to locate Randall Smith, an individual judgment creditor, using an online database. Despite the affidavit of identification indicating that Smith resided in Washington, D.C., and had a business address in Virginia, the record suggests that Shamrock limited its database search for Smith to the Medina address. The results indicated that Smith was associated with the Medina address in some manner from April 1996 through October 2000 and listed him as a "Possible Previous Resident[ ]" of the address; the results also listed the partnership as a "Possible Previous Business[ ]" associated with the address. Knowing that Smith did not currently reside at the Medina address, Shamrock then attempted to locate him by searching bankruptcy filings and hiring a private investigator. These efforts were also unsuccessful. According to Smith, he resided in Washington, D.C., from 1981 through 1997; in Sunny Isles, Florida, from 1998 through 2000; and in Los Angeles, California, since 2001.

Having failed to locate Smith, Shamrock decided to commence service by publication pursuant to Minn. R. Civ. P. 4.04(a). On March 22, 2006, Shamrock's attorney — David Turner — filed with the district court a copy of the summons and complaint and an affidavit regarding service by publication. In this affidavit, Turner made the following statements: "Defendant Randall N. Smith is a resident individual domiciliary who has departed from the State of Minnesota with intent to defraud creditors, or to avoid service, or remains concealed within with the like intent"; "I believe that * * * Defendant Randall N. Smith [is] not [a] resident[ ] of the State of Minnesota or cannot be found therein"; and "I do not know * * * Randall N. Smith's place[ ] of residence or address[ ] for service of process." Shamrock subsequently caused the summons to be published in Finance and Commerce, a Minneapolis business and legal newspaper, on March 24, March 31, and April 7, 2006.

Smith made a limited and special appearance and moved to dismiss the claims against him because, inter alia, (1) service by publication was not sufficient because he is not a resident individual domiciliary of Minnesota; and (2) the publication in this case was not "reasonably calculated" to apprise him of the pendency of the action and therefore violated his due process rights. Smith also moved to strike the Turner affidavit pursuant to Minn. R. Civ. P. 12.06.

The district court denied Smith's motion to dismiss. The court reasoned as follows:

[Minnesota law] do[es] not require the plaintiff to actually prove the underlying facts in order for service by publication to be valid. An affidavit forming the basis for service by publication need only be made honestly and in good faith by the plaintiff based on the information available to the plaintiff at the time the affidavit is made. If an affidavit is made in good faith by the plaintiff and the plaintiff's attorney alleging the necessary facts under the applicable law or rule (such as 4.04), then service by publication is valid unless the defendant can prove that the plaintiff could have found the defendant through the exercise of ordinary diligence.

(Citations omitted.) The court concluded that Shamrock had a good-faith basis to believe that Smith was a Minnesota resident, that Shamrock had made a diligent effort to locate him, and that Shamrock had therefore met the requirements for service by publication under Rule 4.04. The court did not address Smith's argument that the publication violated his due process rights. The court of appeals affirmed. Shamrock Dev., Inc. v. Smith, 737 N.W.2d 372, 374, 381 (Minn.App.2007).

I.

We first consider whether Smith waived his jurisdictional defense by moving to strike the Turner affidavit regarding service by publication and by collaterally attacking the underlying 1996 judgment. A party may waive a jurisdictional defense, including insufficient service of process, by submitting itself to the court's jurisdiction and affirmatively invoking the court's power. See, e.g., Miss. Valley Dev. Corp. v. Colonial Enters., Inc., 300 Minn. 66, 71-73, 217 N.W.2d 760, 763-64 (1974). But "simple participation in the litigation * * * does not, standing alone, amount to waiver of a jurisdictional defense. Rather, it is the failure to provide the court an opportunity to rule on the defense before affirmatively invoking the court's jurisdiction on the merits of the claim that is determinative." Patterson v. Wu Family Corp., 608 N.W.2d 863, 868 (Minn.2000). "Where a party simultaneously invokes the court's jurisdiction on the merits and asks the court to rule on a jurisdictional defense, waiver will not result unless other circumstances clearly demonstrate the party's acquiescence to the court's jurisdiction." Ryan Contracting, Inc. v. JAG Invs., Inc., 634 N.W.2d 176, 185 (Minn.2001), overruled on other grounds by Mavco, Inc. v. Eggink, 739 N.W.2d 148, 157 (Minn.2007); see also Minn. R. Civ. P. 12.02 ("No. defense or objection is waived by being joined with one or more defenses or objections in a responsive pleading or motion.").

Smith's motion to strike the Turner affidavit and his arguments against the enforcement of the original 1996 judgment occurred at the same time he was asking the court to rule on his insufficient service of process defense. The motion itself also indicated that Smith was not acquiescing to the court's jurisdiction: "[n]othing in [the motion] should be construed as an admission that a general appearance consenting to the full jurisdiction of this Court has been made." Finally, during oral argument on the motion, Smith's attorney stated that "from day one we have always maintained there is no jurisdiction because service of process has been a nullity, it's been ineffective." Thus, Smith's motion to strike the Turner affidavit and argument opposing the enforcement of the original judgment occurred simultaneously with his ineffective service of process arguments, and the surrounding circumstances do not demonstrate his acquiescence to the court's jurisdiction. We therefore conclude that Smith did not waive his ineffective service of process defense.

II.

We turn to the merits of Smith's argument that service of process by publication was ineffective in this case. Both the district court and the court of appeals concluded that Rule 4.04(a) requires a good-faith allegation that the jurisdictional facts exist in order for service by publication to be valid, not that the jurisdictional facts actually exist. See Shamrock, 737 N.W.2d at 379. Smith argues that service by publication is sufficient under Rule 4.04(a) only if the jurisdictional facts actually exist.

Whether service of process was effective, and personal jurisdiction therefore exists, is a question of law that we review de novo. Roehrdanz v. Brill, 682 N.W.2d 626, 629 (Minn.2004); Patterson, 608 N.W.2d at 866. But in conducting this review, we must apply the facts as found by the district court unless those factual findings are clearly erroneous. Minn. R. Civ. P. 52.01; see also Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) ("On appeal, a trial court's findings of fact are given great deference, and shall not be set aside unless clearly erroneous.").

We also review the construction and application of the Minnesota Rules of Civil Procedure de novo. St. Croix Dev., LLC v. Gossman, 735 N.W.2d 320, 324 (Minn.2007); Mingen v. Mingen, 679 N.W.2d 724, 727 (Minn.2004). "The words of a court rule, like those of a statute, must be taken and construed...