Union Storage Co., Inc. v. Knight

• Court: D.C. Court of Appeals
• Writing for the Court: Per Curiam
• Citation: Union Storage Co., Inc. v. Knight, 400 A.2d 316 (D.C. 1979)
• Decision Date: 22 March 1979
• Docket Number: No. 12796.,12796.
• Parties: UNION STORAGE COMPANY, INC., Appellant, v. Sara KNIGHT, Appellee.

400 A.2d 316

UNION STORAGE COMPANY, INC., Appellant, v. Sara KNIGHT, Appellee.

No. 12796.

District of Columbia Court of Appeals.

Argued January 17, 1979.

Decided March 22, 1979.

William F. Reed, Washington, D. C., for appellant. Richard Ross, Washington, D. C., also filed an appearance.

Michael O. DeMouy, Washington, D. C., for appellee. Roderick A. DeArment, Washington, D. C., was on brief, for appellee.

Before KERN, HARRIS and FERREN, Associate Judges.

PER CURIAM:

In February 1973, appellee won a default judgment against appellant amounting to $15,506, plus interest and costs. This amount reflected the value of appellee's belongings destroyed while in storage with appellant. In June 1977, appellant moved to vacate the judgment, claiming it never received actual notice of the suit. The trial court denied that motion and from its ruling comes this appeal.

I

Appellee filed suit in June 1970 alleging that fire destroyed her belongings in 1967 while stored with appellant.¹ Appellee immediately attempted service on appellant's president, E. S. Pincus, at appellant's business address in Northwest Washington. The summons was returned with a notation that the building was vacant.² After a lapse of 15 months, appellee attempted service three more times at the same address over a period of approximately three months. The returns of the first two summons noted that the address was now a vacant lot, and there is no record of return on the third.³ By this time the appellant corporation had been dissolved under the laws of South Dakota, where it had been organized.

As a foreign corporation, appellant had a designated agent, an attorney, for service of process in the District until appellant's certificate to transact business in the District was revoked in September 1971. Appellee did not attempt to contact the agent during the course of his agency, but did attempt such service on January 18, 1972. The summons directed service on "Reg. Agt., E. S. Pincus, 1815 H St., N.W." The record indicates no return from this process.

Eleven months later, appellee served the D.C. Superintendent of Corporations, which in turn sent notice of the action to the South Dakota address indicated on the last annual report appellant had filed with the Superintendent in 1969.⁴ The notice was returned by the Post Office bearing notation that the address was unknown.

Default was entered in January 1973. An ex parte damages hearing was held in February, but before that time, appellee personally visited the law offices of appellant's agent. There appellee, according to her affidavit, spoke to one of the agent's law associates, who apparently had knowledge of the affairs of appellant, in an attempt to persuade the agent to represent appellant during the damages proceedings. No counsel appeared for appellant, however, and appellee was awarded $15,506 plus interest and costs after the ex parte hearing.⁵

Collection on this judgment has so far proved fruitless. The dissolved corporation's remaining assets have long since been transferred to the deceased majority stockholder's estate. Although appellee filed a claim in May 1973 on the estate with the Probate Division of the trial court, that case was already closed and the assets distributed. She tried other means to enforce the judgment, but not until May 1977 did her new counsel call appellant's former agent to inquire about satisfaction of the judgment. This inquiry prompted appellant's motion from which this appeal arises.

II

Motions to vacate judgment pursuant to Super.Ct.Civ.R. 60(b)(6) are committed to the trial court's sound discretion, Ohio Valley Construction Co. v. Dew, D.C. App., 354 A.2d 518 (1976), and are only to be granted in "unusual and extraordinary situations justifying an exception to the overriding policy of finality.'" Id., quoting Railway Express Agency, Inc. v. Hill, D.C. App., 250 A.2d 923, 925 (1969).

We must consider the following factors in evaluating the propriety of the denial of such a motion: whether the movant (1) received actual notice of the proceeding, (2) acted in good faith, (3) presented a prima facie adequate defense, and (4) acted promptly upon discovery of the judgment. Prejudice to the non-moving party is also a factor. Jones v. Hunt, D.C.App., 298 A.2d 220 (1972).

The trial court, in denying appellant's motion, stated:

So the Court finds that service [on the Superintendent of Corporations] was valid, and that there was in all probability actual notice, but to the extent that actual notice was not realized, that circumstance was brought about by the affirmative conduct of defendant corporation [in failing to maintain a South Dakota address for service of process].

. . . The Court is of the view that substantial prejudice has been shown in this case and must necessarily exist.

In the first instance, we have over ten years which have expired between the principal events of the fires of '68, and a new trial that would take place if the Court granted the motion. Memories and recollections must necessarily dim and dim substantially during that time.

Also, the Court finds that records have been lost. . . .

Without reaching the question of whether appellant received actual notice, the evidence is clear that appellant would have received actual notice but for its own failure to maintain information on its current address in South Dakota. D.C. Code 1973, § 29-933m requires that a foreign corporation file an annual report with the Superintendent of Corporations before April 15 of every year which shall include its address in its state of incorporation. Appellant failed to file such a report in 1970 and 1971 in violation of the statute, eventually leading to revocation of its certificate to do business on September 13, 1971. D.C. Code 1973, § 29-934b(a)(6). When appellee served her amended complaint on the Superintendent of...