Adams v. Nationsbank

Karen R. Baker, Judge,

dissenting. Alexander Hamilton rightly argued that “[t]o avoid an arbitrary discretion in the courts, it is indispensable that they should be bound down by strict rules and precedents, which serve to define and point out their duty in every particular case that comes before them....” The Federalist No. 78; Willie Hutcherson v. State, CA CR 00-645 (May 30, 2001) (J. Hart, concurring).

The majority opinion in this case departs from over 150 years of precedent established by the Arkansas Supreme Court. The majority relies upon the statement in the original judgment that proper service was effected. It further depends upon an affidavit filed in the original default-judgment action by the attorney for appellee containing the following language:

That service was made upon the Defendant, Doug Adams, by certified mail, return receipt requested, refused and served by first class mail on April 26, 1988. That said first class letter has not been returned by the post office. (Attached hereto as Exhibits A and B are the original summons and first class letter return receipt showing service upon the Defendant.)

In support of their position, the majority states that “[w]hen a judgment recites that the defendant was ‘duly served with summons herein as required by law,’ it must be taken as true unless there is something in the record to contradict it.” The record in this case contradicts the affidavit of the attorney and the finding that the summons was properly served.

A copy of the April 26, 1988, letter was file-marked by the circuit clerk on April 26, 1988. The attorney’s affidavit was filed on June 16, 1988. The record contains no return receipt signed by the addressee or the agent of the addressee, no returned envelope, no postal document nor affidavit by a postal employee reciting or showing refusal of the process by the addressee.

Appellant did not answer the complaint nor make an entry of appearance in the proceeding. Subsequently, the trial court entered a default judgment on August 3, 1988. A series of garnishment attempts, one executed garnishment, and a writ of scire facias in 1998 followed. The appellant never appeared or answered any of those actions. Then in 1999, following another garnishment attempt, appellant answered and through counsel asked the trial court to vacate the 1988 judgment asserting it was void ab initio for lack of in personam jurisdiction over appellant because no service was effected.

In its order denying appellant’s 1999 motion to vacate, the trial court found that service was effected by counsel in the 1988 action as evidenced by the affidavit of appellee’s attorney and that appellant had not demonstrated that delivery was refused by someone other than the addressee pursuant to Ark. R. Civ. P. 4(d)(8)(A). However, that finding was clearly erroneous as a matter of law. Rule 4(d)(8)(A), although allowing for service by mail with certain restrictions, specifically imposes an additional protection before a court may enter a default judgment against a defendant who has been served in accordance with this provision: “Service pursuant to this paragraph shall not be the basis for the entry of a default or judgment by default unless the record contains a return receipt signed by the addressee or the agent of the addressee, or a returned envelope, postal document or affidavit by a postal employee reciting or showing refusal of the process by the addressee. ...” Rule 4(d)(8)(A).

The Arkansas Supreme Court expounded upon the rule’s requirement of refusal in Meeks v. Stevens, 301 Ark. 464, 785 S.W.2d 18 (1990). The court emphasized that refusal is not passive in character:

With respect to Rule 4(d)(8)(A), the active nature of refusal is spelled out with care. The record must contain ‘a return receipt signed by the addressee or the agent of the addressee, or a returned envelope, postal document or affidavit by a postal employee reciting or showing refusal of the process by the addressee.’ Silence or inaction, which elsewhere in the law may be presumed to be token consent, is not, in this instance, equivalent to refusal.

Id. at 468, 785 S.W.2d at 20 (emphasis in original).

The Meeks court held that “unclaimed” mail returned by the postal department failed to fulfill the rule’s requirement of “refusal” of the mailed notice before default may be entered. In reaching their decision, the court focused on the potential deprivation of substantial rights in a default judgment action and the necessity of satisfying due process requirements in that context:

Though Rule 55 of the Arkansas Rules of Civil Procedure provides for entry of default judgment when a party fails to appear or otherwise defend, the courts have made it abundantly clear that defaults are not favored and this court has so stated. Because of its harsh and drastic nature which can result in the deprivation of substantial rights, a default judgment should only be granted when stricdy authorized and when the party affected should clearly know he is subject to default if he does not act in a required manner.

Service of process or a waiver of that service is necessary in order to satisfy the due process requirements of the United States Constitution. Therefore, where sufficient notice of an action has not been given, and a default judgment has followed, a motion to set aside the judgment must be granted. Id. at 466-67, 785 S.W.2d at 19-20 (citations omitted).

No one disputes that the record in this case contains none of the evidence required by the rule. Statutory service requirements, being in derogation of common law rights, must be strictly construed and compliance with them must be exact. Cole v. First Nat’l Bank of Ft. Smith, 304 Ark. 26, 800 S.W.2d 412 (1990) (citing Wilburn v. Keenan Cos., 298 Ark. 461, 768 S.W.2d 531 (1989)). As the Arkansas Supreme Court emphasized in Meeks, this strict compliance is necessary to satisfy due process requirements. “It has long been established that when no sufficient service has been had, the court does not acquire jurisdiction of the person of the defendant.” Meeks 1301 Ark. at 469, 785 S.W.2d at 21 (citing Coffee v. Gates and Bro., 28 Ark. 43 (1872)).

Appellee’s attempted service of process was defective. Even if appellant was aware of the 1988 proceeding, the Arkansas Supreme Court has “made it clear that actual knowledge of a proceeding does not validate defective service of process.” Green v. Yarbrough, 299 Ark. 175, 771 S.W.2d 760 (1989); Wilburn v. Keenan Companies, Inc., 298 Ark. 461, 768 S.W.2d 531 (1989); Tucker v. Johnson, 275 Ark. 61, 628 S.W.2d 281 (1982). Accordingly, the trial court erred in refusing to vacate the default judgment which had been entered based upon the defective service.

Because no notice sufficient to satisfy due process was obtained, the 1988 judgment was void. Void judgments have no legal effect. Davis v. Office of Child Support Enforcement, 322 Ark. 352, 357, 908 S.W.2d 649, 652 (1995) (citing Rankin v. Schofield, 81 Ark. 440, 98 S.W. 674 (1905)). They are worthless; no rights can be obtained from them and all proceedings founded upon them are equally worthless. Id. Therefore, all subsequent orders, garnishments, attempts at revival, any and all actions flowing from the 1988 judgment are also void.

The majority holds that the trial court properly “concluded that the objection raised by the appellant to the default judgment had been waived.” Appellant’s objection was that the trial court had no jurisdiction to enter the default judgment. While I agree that it is possible for a party to waive the defense of personal jurisdiction, see Arkansas Dep’t of Human Servs. v. Farris, 309 Ark. 575, 832 S.W.2d 482 (1992), I find no authority, and the majority cites none, for its proposition that personal jurisdiction is waived by a failure to appear in an action.

If anything, appellant preserved his defense by failing to appear. The majority cites Raymond v. Raymond, 343 Ark. 480, 36 S.W.3d 733 (2001), to support its reasoning that the Arkansas Supreme Court would find that the facts of this case merely show a failure to prove service. Yet both the majority and the dissenting opinions in Raymond require that we hold the trial court lacked jurisdiction over the appellant and that the default judgment is void.

The Raymond majority explained it simply. Service of valid process is necessary to give a court jurisdiction over a defendant. Id. A summons is necessary to satisfy due process requirements. Id. Statutory service requirements, being in derogation of common-law rights, must be strictly construed and compliance with them must be exact. Id. Proceedings conducted where the attempted service was invalid renders judgments arising therefrom void ab initio. Id. Even actual knowledge of a proceeding does not validate defective process. Id.

The dissent’s reasoning in Raymond also supports that the case at bar be reversed. Id. at 489, 36 S.W.2d at 738 (Imber, J., dissenting). Rules 12(b)(5) and 12(h)(1) of the Rules of Civil Procedure clearly set forth the procedure for raising an insufficiency-of-service-of-process defense. Id. (citing Sublett v. Hipps, 330 Ark. 58, 63, 952 S.W.2d 140 (1997)). Where a defendant believes that the trial court lacks personal jurisdiction over him because of insufficient service of process, he may take one of three actions to preserve that defense: (1) he may file a motion to dismiss the complaint against him for failure to obtain service of process; (2) he may file a responsive pleading in which he asserts the defense of insufficient service; or (3) he may simply choose not to appear or to contest jurisdiction. Id. (emphasis added).

Therefore, the trial court’s decision that appellant’s objection had been waived is clearly erroneous as a matter of law.

The majority’s reference to “the intermittent reliance on the judgment” has no effect on the trial court’s lack of jurisdiction to enter a default judgment in this case. Even a writ of scire facias cannot breathe life into a void judgment:

The legal effect of a judgment on a scire facias, where judgments remain without process or satisfaction, is to remove the presumption of payment arising from lapse of time. It adds nothing to the validity of the former judgment, but simply leaves it as it was when rendered. The scire facias is dependent for its legal existence upon a valid judgment; without it, the whole proceeding, by scire facias, is a nullity. It is, therefore, perfectly immaterial to the merits of this case whether the defendants appeared to the writ of scire facias or not.

Pile et al., 9 Ark. 336, 4 Eng. 336 (1849).

Because the original default judgment is void due to lack of service, I would reverse and remand with instructions to vacate the 1988 judgment and all garnishments and orders entered pursuant to it.

NEAL, J., joins in this dissent.