Williams v. Zellers

• Decision Date: 20 October 2020
• Docket Number: No. ED 108434,ED 108434
• Parties: Michael J. WILLIAMS, Plaintiff/Respondent, v. Kenneth ZELLERS, in his Official Capacity as Acting Director, Missouri Department of Revenue, Defendant, Vantage Credit Union, Defendant, and Nathan R. Best, Individually and as Trustee for the Nathan R. Best Living Trust, Defendant/Appellant.
• Court: Missouri Court of Appeals

611 S.W.3d 357

Michael J. WILLIAMS, Plaintiff/Respondent,

v.Kenneth ZELLERS, in his Official Capacity as Acting Director, Missouri Department of Revenue, Defendant,Vantage Credit Union, Defendant,andNathan R. Best, Individually and as Trustee for the Nathan R. Best Living Trust, Defendant/Appellant.

No. ED 108434

Missouri Court of Appeals, Eastern District, DIVISION THREE.

Filed: October 20, 2020

Arthur D. Pistorio, Thomas L. Hoeh, Co-Counsel, 123 North Spring Street, PO.O. Box 570, Perryville, MO. 63775, for appellant.

Kevin M. Whiteley, 222 S Central Ave, Suite 1000, Clayton, MO. 63105, for defendant.

Eric W. McDonnell, 301 W. High Street, Jefferson City, MO. 65105, Jill R. Rembusch, 8909 Ladue Road, St. Louis, MO. 63124, for respondent.

Angela T. Quigless, P.J.

The defendant, Nathan R. Best, individually and as trustee for the Nathan R. Best Living Trust (collectively "Best"), appeals the default judgment entered by the Circuit Court of St. Charles County in favor of the plaintiff, Michael J. Williams. The trial court declared Williams the owner of the disputed 2012 Dodge Ram truck, subject to existing liens and encumbrances, and awarded Williams damages. Because the trial court erred in determining the date on which Best was served; erred in relying on that date to find Best in default; and erred in entering a final "default" judgment against Best, we reverse and remand.

Factual and Procedural Background

Williams's petition alleges that in 2016 he purchased a 2012 Dodge Ram 3500 Mega Cab truck, and titled and registered the truck in his name with the Department of Revenue ("DOR"). Vantage Credit Union maintained a security interest in the truck in exchange for lending Williams the funds to buy it. On December 20, 2018, an individual using the name of Jonathan Miller approached Williams about purchasing the truck. Miller paid by check. After confirming that the money was deposited into his account and payment made on the Vantage loan, Williams allowed a purported employee of a local shipping company to take possession of the truck as previously agreed with Miller. On December 28th, Williams discovered that the funds received in payment for the truck had been withdrawn from his account because the check that Miller gave him was fraudulent. Williams reported the truck stolen to police.

Police recovered the truck on January 9, 2019, seizing it from Best. Best alleged that he purchased the truck for $19,200 cash from an unknown white male on December 26, 2018. Williams took possession of the truck, but was unable to obtain a replacement title from DOR. DOR had issued a certificate of title for the truck to Best. Best claimed he was the true and lawful owner, and demanded that Williams return the truck.

Williams filed his petition for declaratory judgment against Best, DOR, and Vantage on June 9, 2019, seeking a declaration of his ownership of the truck. On June 13, 2019, summonses were issued. On the same date, Williams mailed via certified mail the petition for declaratory judgment and summonses to Best's counsel, asking that Best acknowledge service, both individually and as trustee of the Best Trust, by signing and returning the acknowledgment forms. Best's counsel received the petition and summonses on June 17th, but Best never signed and returned the forms acknowledging service pursuant to Supreme Court Rule 54.16.¹ DOR and Vantage were served with summonses, but Best was not.

On July 11, 2019, DOR filed an answer to the petition, and provided a proposed judgment to the trial court declaring Williams the owner of the truck. The trial court signed the proposed judgment on July 15th declaring Williams the owner of the truck without Best having been personally served or filing a responsive pleading. No notice of a hearing on or about July 15th appears in the court minutes.

On July 18, 2019, after the trial court had already declared the parties’ rights, Williams requested the court issue alias summonses for Best as Williams had not received signed notice and acknowledgment of service. Alias summonses were issued, and Best was personally served on July 23, 2019 by the Perry County Sheriff's Department. Counsel entered his appearance for Best, and filed a motion to set aside judgment as void or in the alternative to set aside default judgment, along with a supporting affidavit from Best, on July 23rd. In his motion to set aside, Best argued that he had not been served in any capacity, that the trial court lacked jurisdiction to enter a judgment on July 15th, and that the judgment was void. In the alternative, he argued that he had not recklessly or intentionally impeded the judicial process, and that he had a meritorious defense as a good-faith purchaser for value. Best filed an answer and counterclaims against Williams the next day, July 24th.

Best's motion to set aside the judgment was argued August 16, 2019. This hearing was not conducted on the record, making it unclear as to what transpired. According to the parties’ post-hearing briefing, the trial court may have orally denied Best's motion to set aside the July 15th judgment as void, and sua sponte ordered the parties to brief the issue of setting aside the default judgment. In any event, it is undisputed that no party requested a default judgment. On August 27, 2019, the trial court entered an interlocutory order of default against Best, and set a hearing to determine damages for September 27, 2019.

At the September 27th hearing on damages, the trial court "revisited" Best's motion to set aside the July 15, 2019 judgment, and heard arguments regarding whether the August 27, 2019 judgment should be set aside. The court announced that "the Court is setting aside that initial judgment declaring ownership dated 15th of July, 2019 taking judicial notice that the order and judgment was entered on 8/27/19 against the Defendants Nathan R. Best and Trustee for the Nathan R. Best Living Trust." During the September 27th hearing, Williams agreed that the July 15th judgment was void, and argued that the trial court had set it aside and instead issued an interlocutory order of default on August 27th. Best countered that he was not properly served until July 23rd; that he then promptly filed his answer on July 24th, within the 30-day period allowed for his response; and that he was not in default because while service by mail was attempted, he did not sign and return the acknowledgment.

The trial court expressly declined to set aside its August 27th interlocutory order of default. Key to the trial court's determination was that Best's counsel orally confirmed during the August hearing that he received the petition and summonses via certified mail on June 17th. The trial court reasoned that counsel's oral confirmation constituted the required acknowledgment, and thus Best was properly served on June 17th. Because the 30-day period following June 17th expired several days before Best filed his answer on July 24th, the trial court then ruled once again that Best had defaulted, rejecting Best's oral motion to set aside the August 27th interlocutory order specifically.

The court then proceeded to hear argument regarding damages although Williams had not prayed for damages in his petition. Williams's attorney stated figures totaling $4,307.97 for insurance, estimated property taxes, and interest from the date Williams recovered possession of the truck to the date of the damages hearing; depreciation from December 23, 2018 until Williams was able to obtain a new title in his name; and out-of-pocket litigation costs. Williams did not testify to these expenses, nor does it appear that the court received documentary evidence.

On October 8, 2019, the trial court issued its judgment of default in favor of Williams with damages assessed against Best. The trial court found:

Defendant Nathan R. Best, individually and in his capacity as Trustee of the Nathan R. Best Living Trust, was properly served on June 17, 2019; has filed his responsive pleadings and counterclaims on July 24, 2019; has failed to plead or otherwise defend in a timely manner as provided by the rules; and is hereby in default.

The court ordered that any title issued in the name of Best or the Best Trust for the 2012 Dodge Ram truck was void; that Williams is the true and lawful owner of the truck subject to any existing liens or encumbrances; that Best's counterclaims were dismissed with prejudice; and that Williams was awarded $4,307.97 in damages from Best. DOR and Vantage received the relief they sought in their respective answers to Williams petition. DOR had no interest in which party was declared the owner of the truck, only that one party or the other be declared the owner for titling purposes. Vantage wanted the trial court to protect its security interest in the truck, and the court, having found that Vantage had a security interest, did so in its judgment. Best appeals from the October 8, 2019 judgment.

This Court's Appellate Jurisdiction

As an initial matter, we address Williams's contention that our Court lacks jurisdiction to entertain Best's appeal for want of a final, appealable judgment. Williams argues that the October 8, 2019 judgment neither disposed of the claims against the defendants Vantage Credit Union and Zellers, in his official capacity as acting DOR director, nor certified the claims against Best for immediate appeal under Rule 74.01(b). The October 8th judgment, however, declared Williams the owner of the truck subject to existing liens and encumbrances, awarded damages, instructed DOR to issue a title in Williams's name, and declared that Vantage has a security interest in the truck. DOR and Vantage each received the relief they prayed for in their answer, and Williams does not explain what rights, liabilities, or remedies remain to be determined for DOR and Vantage. The October 8th judgment is a final, appealable judgment because it resolves all issues in the case, leaving nothing for future...