XTRA Lease, LLC v. Pigeon Freight Servs.
| Decision Date | 07 February 2023 |
| Docket Number | ED110391 |
| Parties | XTRA LEASE, LLC, Respondent, v. PIGEON FREIGHT SERVICES, INC., Appellant. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of St. Louis County 21SL-CC01024 Honorable John N. Borbonus
Pigeon Freight Services Inc., (hereinafter "Pigeon Freight") appeals the judgment denying its motion to set aside a default judgment entered in favor of Xtra Lease LLC (hereinafter "Xtra Lease"). Pigeon Freight failed to preserve its argument that there was good cause to set aside the default judgment because of confusion regarding the status of the litigation. The return of service was facially valid and Pigeon Freight did not present clear and convincing evidence showing it was not properly served. The circuit court did not abuse its discretion by denying Pigeon Freight's motion to vacate the default judgment. We affirm the judgment.
On March 4, 2021, Xtra Lease filed a two-count petition against Pigeon Freight alleging breach of contract and action on account. On March 15, 2021, before service of the summons and petition, Pigeon Freight's President, Sergiu Tintuic (hereinafter "Tintuic") emailed counsel for Xtra Lease and stated it appeared "Xtra Lease filed a lawsuit in St. Louis and [Pigeon Freight] will be served soon." Three days later, on March 18, 2021 Xtra Lease utilized a special process server appointed by the circuit court to serve the summons and petition on Pigeon Freight at its office in Lansing, Illinois. The process server executed an affidavit stating he served copies of both documents by leaving them at Pigeon Freight's Lansing Illinois office with a man named "Sam," who accepted service and identified himself as the general manager. Within two hours of service, Tintuic emailed Xtra Lease's counsel to acknowledge receipt of the summons and ask for information regarding settlement.
Over the next few weeks, Tintuic and Xtra Lease's counsel exchanged emails attempting to negotiate a settlement. On April 27, 2021, Xtra Lease filed the return of service with the special process server's affidavit.
On April 28, 2021, Xtra Lease's counsel emailed Tintuic a final settlement offer. He informed Tintuic that if the offer was not accepted, "Xtra Lease will move forward with its case." Tintuic responded but did not accept the offer. Pigeon Freight never filed a responsive pleading or requested an extension of time to do so.
On May 26, 2021, Xtra Lease filed a motion for default judgment. A hearing was set for June 15, 2021. Pigeon Freight did not respond or appear at the hearing. The circuit court entered a default judgment against Pigeon Freight for $99,899.97, plus interest.
On September 23, 2021, Pigeon Freight filed a motion to vacate the default judgment alleging the circuit court lacked jurisdiction because of improper service. The circuit court held an evidentiary hearing on October 12, 2021. Tintuic and Sam testified on behalf of Pigeon Freight. They testified Sam was not Pigeon Freight's general manager and that it did not maintain the Lansing, Illinois office on the date of service. Xtra Lease introduced evidence showing Pigeon Freight maintained offices in Lansing, Illinois, that Tintuic received service, and that Sam was authorized to accept service on behalf of Pigeon Freight. On October 18, 2021, the circuit court entered an order and judgment denying the motion to vacate and finding Xtra Lease effectuated proper service by delivering a copy of the summons and petition to Pigeon Freight's Lansing, Illinois business office to Sam who, as an "independent contractor, was in fact "the person in charge of" the office.
Pigeon Freight asserts three points on appeal.[1] It claims: (1) the circuit court abused its discretion by denying the motion to vacate because it was filed timely, based on good cause, and raised a meritorious defense; (2) the return of service was facially deficient, rendering the judgment void; and (3) the proof of service was deficient because Xtra Lease offered no evidence showing Sam was in charge of its Lansing, Illinois office or that it maintained an office there.
This Court generally reviews the circuit court's denial of a motion to set aside a default judgment for abuse of discretion. Jones v. Riley, 560 S.W.3d 540, 544 (Mo. App. E.D. 2018). "However, we review de novo whether a judgment should be vacated because it is void." Morris v. Wallach, 440 S.W.3d 571, 575 (Mo. App. E.D. 2014).
When applying the abuse of discretion standard to a decision denying a motion to set aside a default judgment, this Court favors a decision on the merits and, therefore, affords the circuit court "narrowed discretion" to deny a motion to set aside a default judgment. Brungard v. Risky's Inc., 240 S.W.3d 685, 687-88 (Mo. banc 2007). The general policy favoring disposition on the merits, however, "must be carefully applied to the facts of each case in the interest of justice; for, the law defends with equal vigor the integrity of the legal process and procedural rules and, thus, does not sanction the disregard thereof." Sprung v. Negwer Materials, Inc., 775 S.W.2d 97, 100 (Mo. banc 1989).
In its first point, Pigeon Freight claims its "motion to vacate was timely filed; was based on good cause; and raised at least an arguably meritorious defense." It argues the good cause element was satisfied because Tintuic's testimony showed the failure to answer the petition resulted from "confusion" due to ongoing settlement negotiations. Pigeon Freight, however, did not raise this argument in its motion to vacate the default judgment, thus failing to preserve it for appellate review.
Rule 74.05(d) authorizes the circuit court to set aside a default judgment "[u]pon motion stating facts" showing good cause and a meritorious defense. Pigeon Freight, as the moving party, has the burden to plead and prove good cause for setting aside the judgment. Brungard, 240 S.W.3d at 688. The pleading requirements of Rule 74.05(d) are further informed by Rule 55.26(a), which generally provides a motion "shall state with particularity the grounds therefor[.]" This Court determines compliance with the Rule 74.05(d) pleading requirements by examining "the allegations in the defaulting party's motion, and such other matters as affidavits, exhibits, and proposed answers." Capital One Bank (USA) NA v. Largent, 314 S.W.3d 364, 366-67 (Mo. App. E.D. 2010).
Unlike its argument on appeal, Pigeon Freight's motion to vacate includes no allegation claiming confusion about the status of the litigation. Instead, Pigeon Freight alleged "[t]his [m]otion seeks to set aside the default judgment based on defective service of process." Consistent with that allegation, Pigeon Freight further alleged service was defective because it did not maintain an office in Lansing, Illinois and Sam was not authorized to accept service. There is no allegation of good cause based on confusion or any related issue like negligence or a good faith mistake. See Turner v. Gateway Bobcat of Missouri Inc., 450 S.W.3d 444, 448 (Mo. App. W.D. 2014) (). Pigeon Freight's motion to vacate - and the circuit court's judgment denying it - focus on the alleged service deficiencies with no mention of confusion about the status of the litigation.
Likewise, Pigeon Freight's affidavits, exhibits, and proposed answer do not assert there was good cause for the default due to confusion about the status of the litigation. Instead, the affidavits attached to the motion and the exhibits admitted into evidence at the evidentiary hearing relate solely to Pigeon Freight's allegations it did not maintain an office in Lansing, Illinois and that Sam was not authorized to accept service. Pigeon Freight's proposed answer to Xtra Lease's petition similarly includes no assertion regarding good cause due to confusion.
The first time Pigeon Freight claimed good cause based on confusion is in its appellant's brief filed with this Court. "Our Court will not consider an argument that was not presented to the trial court and made for the first time on appeal." Solomon v. St. Louis Cir. Att'y, 640 S.W.3d 462, 472 (Mo. App. E.D. 2022) ( the defendant did not preserve for appeal its argument the circuit court erred by entering a default judgment by improperly denying leave to file an untimely motion to dismiss). "Simply put, a party cannot rely on one theory to set aside a judgment before the trial court then, when unsuccessful, rely upon a different theory on appeal." McGee ex rel. McGee v. City of Pine Lawn, 405 S.W.3d 582, 587 (Mo. App. E.D. 2013).[2]
Pigeon Freight argues it asserted the issue of confusion in its motion for new trial. But the motion for new trial asserted only that the circuit court should have found Pigeon Freight did not recklessly impede process because the parties discussed the lawsuit. Further, even if this assertion sufficiently raised the argument on appeal, it is immaterial because "[a] party may not utilize a motion for new trial to raise an objection that should have been raised during trial." Lewis v. Biegel, 364 S.W.3d 670, 676 (Mo. App. W.D. 2012); see also Penzel Constr. Co., Inc. v. Jackson R-2 Sch. Dist., 635 S.W.3d 109, 127 (Mo. App. E.D. 2021) ().[3]
Pigeon Freight's argument that it showed good cause due to confusion regarding the status of the litigation was not presented to the circuit court and, therefore, is not preserved for...
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