HESSMORGANHOUSE LLC v. THE KINGDOM GROUP OF COMPANIES LLC
Filing
19
ORDER granting 10 Motion to Set Aside Default. The default judgment entered on October 2, 2017 [Doc. 8] is hereby vacated. Ordered by US DISTRICT JUDGE HUGH LAWSON on 2/20/2018. (aks)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
HESSMORGANHOUSE, LLC, d/b/a HMH
CONSULTING,
Plaintiff,
v.
Civil Action No. 7:17-CV-130 (HL)
THE KINGDOM GROUP OF COMPANIES,
LLC, d/b/a THE KINGDOM GROUP,
Defendant.
ORDER
Before the Court is the motion of Defendant The Kingdom Group of
Companies, LLC, d/b/a The Kingdom Group, to set aside the default judgment
entered on October 12, 2017. (Doc. 8). Defendant argues that the default
judgment is void because Plaintiff Hessmorganhouse, LLC, d/b/a HMH
Consulting, did not properly serve Defendant. Alternatively, Defendant argues
that it is entitled to relief from the judgment because Plaintiff failed to provide
Defendant notice of the default proceedings and because the entry of default was
the result of excusable neglect. After review of the pleadings and the documents
submitted by the parties, and with the benefit of oral argument, the Court finds
that service was insufficient and vacates the default judgment. 1
Because the Court concludes that Defendant was not properly served, the Court
does not reach Defendant’s remaining arguments.
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I.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff filed this breach of contract lawsuit against Defendant on July 17,
2017, alleging that Defendant is indebted to Plaintiff in the amount of
$113,818.00 plus interest, costs, and attorney’s fees. (Doc. 1). On July 24, 2017,
Plaintiff filed an executed Proof of Service form, indicating that on July 19, 2017,
Plaintiff served Defendant by delivering a copy of the Summons and Complaint to
Hannah Miller, who the process server represented was authorized to accept
service on behalf of Defendant. (Doc. 4, p. 2). The process server attached an
addendum to the service form in which he explained the events that transpired
on the date of alleged service. (Doc. 4, p. 3).
The process server indicated that when he arrived at Defendant’s place of
business, he was greeted by a woman by the name of Erin Folsom. (Id.). He
advised Ms. Folsom that he was there to serve a lawsuit on Zachary Lewis,
Defendant’s registered agent. (Id.). Ms. Folsom stated that Mr. Lewis was not
available, at which point the process server requested to speak with someone
who could accept service on behalf of Defendant. (Id.). Ms. Folsom left the front
of the office and returned with Hannah Miller. (Id.). Ms. Miller explained that she
could not accept service without authorization from her employer. (Id.). She then
contacted Mr. Lewis by cell phone. (Id.). The process server and Mr. Lewis
exchanged words. (Id.). Eventually Mr. Lewis instructed the process server to “do
what you need to do and get out of my office.” (Id.). The process server
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interpreted this statement as granting authority to Hannah Miller to accept
service. (Id.). He then placed the documents on the desk in front of Ms. Miller
and departed. (Id.).
Defendant failed to respond to Plaintiff’s Complaint. Accordingly, on
August 11, 2017, Plaintiff filed an Application for Entry of Default. (Doc. 6). The
Clerk of Court entered default that same date. Plaintiff filed a Motion for Default
Judgment (Doc. 7) on August 17, 2017, which this Court granted on October 2,
2017 (Doc. 8). Defendant filed the present Motion to Set Aside Default Judgment
(Doc. 10) on November 14, 2017, arguing that the judgment was void because
Hannah Miller was not authorized to accept service on behalf of Defendant.
II.
DISCUSSION
The Court may set aside a default judgment under Rule 60(b). Fed. R. Civ.
P. 55(c). Federal Rule of Civil Procedure 60(b)(4) provides that a court may
relieve a party from a final judgment when a judgment is void. Insufficient service
“implicates personal jurisdiction and due process concerns;” therefore, “where
service of process is insufficient, the court has no power to render judgment and
the judgment is void.” In re Worldwide Web Systems, Inc., 232 F.3d 1291, 1299
(11th Cir. 2003) (citing Varnes v. Local 91, Glass Blowers Ass’n, 674 F.2d 1365,
1368 (11th Cir. 1982) (finding a judgment void under Rule 60(b)(4) where the
defendant was not properly served)). “The burden of proof in a Rule 60(b)(4)
motion rests with the defendant.” Id. at 1298-99.
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Pursuant to Rule 4(h), service on a corporation may be accomplished “by
delivering a copy of the summons and of the complaint to an officer, managing or
general agent, or any other agent authorized by appointment or by law to receive
service of process.” Fed. R. Civ. P. 4(h)(1)(B). Service on a corporation may also
be made in accordance with the state law in which the district court is located,
which in this case is Georgia. Fed. R. Civ. P. 4(e)(1) and (h)(1)(A). Under
Georgia law, service on a corporation is to be directed “to the president or other
officer of such corporation or foreign corporation, a managing agent thereof, or a
registered agent thereof.” O.C.G.A. § 9-11-4(e)(1)(A).
It is undisputed that Zach Lewis is both Defendant’s President and
registered agent. (Doc. 10-1, ¶ 1). It is further undisputed that Plaintiff did not
serve Mr. Lewis. Rather the question is (1) whether Hannah Miller held a
managerial position that would otherwise authorize her to accept service; or (2)
whether Zach Lewis conferred authority upon Ms. Miller to receive service in his
absence. Defendant represents that Hannah Miller served as an administrative
assistant to Nick Lewis, Defendant’s Vice President, and that her primary
responsibilities were secretarial and administrative in nature. (Id. at ¶ 3; Doc. 131, ¶ 4). Plaintiff, however, submits that Ms. Miller’s responsibilities extended
beyond merely secretarial, as suggested by her title of Brokerage and Marketing
Services Representative.
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While an employee need not be an officer of a corporation in order to
accept service, “if the employee is not an officer or has not been expressly
designated by the corporation to receive service, it is necessary that he or she
occupy some position of managerial or supervisory responsibility within the
organization.” Murray v. Sloan Paper Co., 212 Ga. App. 648, 649 (1994) (quoting
Whatley’s Interiors v. Anderson, 176 Ga. App. 406(2) (1985)) (quotation marks
omitted). Additionally, the employee’s position must “be such as to afford
reasonable assurance that [she] will inform [her] corporate principal that such
process has been served upon him.” Id. (quotation marks omitted).
Defendant disputes that Hannah Miller held any managerial role. 2 Despite
any title that may be conferred upon Ms. Miller beyond that of administrative
assistant, it is clear that even she did not believe that she had the authority to
receive service on behalf of Defendant. She specifically informed the process
server that she could not accept service without first obtaining permission from
Zach Lewis. The Court is further unpersuaded that Mr. Lewis’ statement to the
process server that he “do what you need to do and get out of my office” was
sufficient to confer authority upon Ms. Miller. In the absence of such authority,
service was invalid, and the default judgment must be set aside.
Defendant points out that Ms. Miller was a brokerage and marketing agent for a
separate, but related entity, that operated out of the same office under the name
Kingdom Insurance Group, LLC. She did not hold the position for this Defendant.
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2
III.
CONCLUSION
For the foregoing reasons, the Court GRANTS Defendant’s Motion to Set
Aside Default Judgment (Doc. 10). The default judgment entered on October 2,
2017 (Doc. 8) is hereby vacated.
SO ORDERED this 20th day of February, 2018.
s/ Hugh Lawson________________
HUGH LAWSON, SENIOR JUDGE
aks
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