State ex rel. Monster Tree Serv., Inc. v. Cramer
| Decision Date | 06 November 2020 |
| Docket Number | No. 20-0043, No. 20-0044,20-0043 |
| Citation | 853 S.E.2d 595 |
| Parties | STATE of West Virginia EX REL. MONSTER TREE SERVICE, INC., Petitioner v. The Honorable Jeffrey D. CRAMER, Judge of the Circuit Court of Marshall County, and David S. Duvall, Respondents State of West Virginia ex rel. Monster Franchise, LLC, Petitioner v. The Honorable Jeffrey D. Cramer, Judge of the Circuit Court of Marshall County, and David S. Duvall, Respondents |
| Court | West Virginia Supreme Court |
Ashley Hardesty Odell, Esq., Bowles Rice LLP, Morgantown, West Virginia, William L. Burner, Esq., Bowles Rice LLP, Martinsburg, West Virginia, Counsel for Petitioner Monster Tree Service, Inc.
Ancil G. Ramey, Esq., Steptoe & Johnson PLLC, Huntington, West Virginia, Bradley Shafer, Esq., Mintzer, Sarowitz, Zeris, Ledva & Meyers, LLP, Wheeling, West Virginia, Counsel for Petitioner Monster Franchise, LLC.
Michelle Marinacci, Esq., Christopher M. Turak, Esq., Gold Khourey & Turak, L.C., Moundsville, West Virginia, Counsel for Respondent David S. Duvall.
In these related proceedings, Monster Tree Service, Inc., ("Monster, Inc. ") and Monster Franchise, LLC, ("Monster Franchise ") ask the Court to issue writs of prohibition setting aside defaults that were entered against them in the Circuit Court of Marshall County.1 They contend that the circuit court lacked personal jurisdiction over them and should have granted their motions to set aside their defaults.
Based on the record before us, the arguments of the parties, and the applicable law, we find that the circuit court erred in refusing to set aside the defaults entered against Monster, Inc., and Monster Franchise. Accordingly, we grant the writs of prohibition, vacate the circuit court's orders refusing to set aside these defaults, and remand these cases to the circuit court for further actions consistent with this opinion.
Respondent David S. Duvall was injured on November 17, 2017, when he fell from a tree. At the time, Mr. Duvall was working for Monster Tree Service of the Upper Ohio Valley, Inc. ("Monster UOV "). Though Monster UOV is an Ohio corporation, it has its principal place of business in Wheeling, West Virginia, and Mr. Duvall sustained his injuries in Marshall County, West Virginia. According to Mr. Duvall, his damages include medical bills that "approach" one million dollars.
On September 14, 2018, Mr. Duvall's attorney wrote to "Monster Tree Service," asking it to preserve evidence. The attorney directed the letter to the attention of Joshua Skolnick, who—according to the record—is the president of Monster, Inc., and the organizer of Monster Franchise. He also describes himself on social media as the "CEO/Founder" of "Monster Tree Service," a title that he purports to have held since 2008. Monster, Inc., is a Pennsylvania corporation formed in 2005; Monster Franchise is a Pennsylvania limited liability company formed in 2011.2 The record does not indicate that either Monster, Inc., or Monster Franchise is registered to do business in West Virginia.
On October 1, 2018, counsel for Monster Franchise replied to say that its relationship to its franchisees is governed by a franchise agreement that allows franchisees "to use the ‘Monster Tree Service’ mark and business system[.]" Counsel for Monster Franchise also advised that Mr. Duvall was employed by a franchisee's corporation—Monster UOV—and that Monster Franchise had nothing to do with the accident.
On February 8, 2019, Mr. Duvall sued Monster UOV and Monster, Inc., in Marshall County Circuit Court. Mr. Duvall tried to serve Monster, Inc., via the West Virginia Secretary of State, but the record does not show that the mailing from the Secretary of State to Monster, Inc., was ever delivered.
Counsel for Monster Franchise contacted Mr. Duvall's counsel again on April 4, 2019. This time, counsel also wrote on behalf of Monster, Inc. The letter reprised earlier arguments and demanded that Mr. Duvall dismiss his suit. The letter further advised that Monster, Inc., "operates a Monster Tree business solely within Eastern Pennsylvania and is not involved in any capacity with the Monster Franchise system and has never operated in West Virginia."
Nevertheless, on April 16, 2019, Mr. Duvall filed an amended complaint that names Monster UOV, Monster, Inc., and Monster Franchise as defendants. In his amended complaint, Mr. Duvall alleges that Monster, Inc., and Monster Franchise provide opportunities for people to operate a franchise business of trimming or cutting trees "under the Monster name with Monster marketing and training support" and that Monster UOV is one of their franchisees. He accuses Monster, Inc., and Monster Franchise of maintaining a "unified advertising website" with Monster UOV that "solicits ... residential and commercial customers in West Virginia" and of making advertising claims that created a duty to monitor and train Monster UOV. Those advertising claims, according to Mr. Duvall, include assurances that Monster, Inc., "and/or" Monster Franchise provide: (1) "personal, onsite training at [the franchisee's] location[,]" (2) "training on their proprietary systems and processes for every part of the tree trimming/cutting business, including ... day-to-day operations[,]" (3) "training on safety, equipment usage, operations and daily management[,]" and (4) "the right to purchase equipment through Monster accounts." Mr. Duvall alleges that, despite these assurances to the public, Monster, Inc., and Monster Franchise failed to ensure that Monster UOV was both properly trained and properly equipped to safely engage in the business of trimming or cutting trees.
The following day, April 17, 2019, Mr. Duvall's attorney replied to the April 4, 2019 letter from counsel for Monster, Inc., and Monster Franchise. Mr. Duvall's attorney contended that Mr. Duvall had a good faith basis for suing Monster, Inc., and Monster Franchise and refused to dismiss the suit. Mr. Duvall's attorney enclosed a courtesy copy of the Amended Complaint and advised that "[s]ervice of the same is being made in accordance with applicable law."
On April 22, 2019, the West Virginia Secretary of State accepted service on behalf of Monster, Inc. The Secretary of State duly forwarded the amended complaint to Monster, Inc., and, according to the United States Post Office, someone signed for the mailing. Though the handwriting is not clear, the signature appears to say, "MTS"; the handwritten address says "1861 LSR."3
Also on April 22, 2019, the West Virginia Secretary of State accepted service on behalf of Monster Franchise. However, when the Secretary of State forwarded the amended complaint to Monster Franchise, this mailing was returned. Handwritten remarks on the mailing say, "NOT AT THIS ADDRESS" and "RETURN TO SENDER." Printed remarks from the United States Post Office say, "RETURN TO SENDER" and "UNABLE TO FORWARD."
On May 31, 2019, Mr. Duvall moved for default. According to the attached affidavit of counsel, all defendants were served via the West Virginia Secretary of State, and all failed to answer. Regarding Monster Franchise, Mr. Duvall's counsel acknowledged that "the certified mail ... had been returned as undeliverable by virtue of a handwritten return to sender, not at this address notation," yet she contended that the certified mailing was sent to the proper address according to the Pennsylvania Secretary of State. She also asserted that Monster Franchise "has actual notice of the Amended Complaint by virtue of service upon [Monster, Inc.], a related company with shared officers."
Five days later, on June 5, 2019, the circuit court entered defaults against all defendants. On June 24, 2019, Monster, Inc., moved to set aside the default, arguing that less than 20 days had passed since the default was entered and that Monster, Inc., had several meritorious defenses, including insufficient service of process and lack of personal jurisdiction. In support of its motion, Monster, Inc., filed an affidavit from Joshua Skolnick. According to Mr. Skolnick, the signature on the return of service was not his or that of "anyone else authorized to accept service of lawful process on behalf of Monster[, Inc.]" He claimed that he had "inquired of persons who usually receive and receipt mail for Monster[, Inc.,] and the signature on the return of service is not identifiable."
Regarding Monster, Inc.’s business activities, Mr. Skolnick asserted that Monster, Inc., is not affiliated "in any way" with Monster UOV, that Monster, Inc., "is a Pennsylvania tree-cutting company that operates solely in Pennsylvania[,]" and that Monster, Inc., "uses the Monster Tree Service trademark pursuant to a licensing agreement." Mr. Skolnick's affidavit further provides that Monster, Inc., caused no tortious injury, conducts no business, provides no goods or services, solicits no business, engages in no persistent course of conduct, derives no substantial revenue from goods or services sold, and maintains no offices, agents, or employees in West Virginia. The affidavit further denies that Monster, Inc., operates or contributes "in any way" to the Monster Tree Service website or advertises itself as an entity qualified to train companies about tree removal.
Mr. Duvall responded to Monster, Inc.’s motion on September 6, 2019. Mr. Duvall argued that Monster, Inc., was properly served and that, based on plausible inferences from numerous representations to the public—which he endeavored to show through attachments—Monster, Inc., is actually "the parent company and in control of all franchising operations, including training of franchisees." He argued that, based on Monster, Inc.’s published activities, he had made a prima facie case for jurisdiction. He also accused Monster, Inc., of "significant intransigence" and argued that Monster, Inc., had not shown good cause to set aside its default.
Monster Franchise moved to...
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