Northern States Power Company v. TriVis, Inc.

Filing 28

ORDER granting 15 Motion to Vacate Order (Written Opinion) Signed by Senior Judge David S. Doty on 12/21/2016. (DLO)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 16-2792(DSD/BRT)
Northern States Power Company,
Plaintiff,
v.

ORDER

TriVis, Inc.,
Defendant.
James J. Hartnett, Esq., Kyle R. Hardwick, Esq. and Faegre
Baker Daniels LLP, 90 South 7th Street, Suite 2200,
Minneapolis, MN 55402, counsel for plaintiff.
C. Todd Koebele, Esq., John Paul J. Gatto, Esq., Ryan Malone,
Esq. and HKM Law Group, 30 East 7th Street, Suite 3200, St.
Paul, MN 55101, counsel for defendant.

This matter is before the court upon the motion to vacate
default judgment by defendant TriVis, Inc.

Based on a review of

the file, record, and proceedings herein, and for the following
reasons, the court grants the motion.

BACKGROUND
This dispute arises from services performed by TriVis for
plaintiff Xcel Energy.

In 1999, David Bland incorporated TriVis

under the laws of Alabama for the purpose of providing nuclear
waste services. Bland Decl. ¶¶ 1-2. Bland served as the company’s
president and registered agent for service in Alabama.

Id. ¶ 3.

In 2008, TriVis filed a certificate of authority to transact
business in Minnesota with the Minnesota Secretary of State,

appointing

Patrick

Smith,

a

registered agent for service.

former

TriVis

Id. ¶¶ 4-5.

employee,

as

the

On August 7, 2012,

the Minnesota Secretary of State revoked the certificate, most
likely for failing to pay the annual fee.

Id. ¶ 6; Gatto Aff. Ex

D, ECF No. 18-2.
On March 18, 2013, Xcel contracted with TriVis to dispose of
spent nuclear fuel rods at the Monticello, Minnesota nuclear plant.
Gatto Aff. Ex. B ¶¶ 4-5, ECF No. 18.

TriVis allegedly failed to

follow proper procedures in disposing of the nuclear rods, which
led Xcel to terminate the contract and triggered a regulatory
investigation.
No. 24.

See id. Ex. I ¶¶ 16-17; Hartnett Decl. Ex. 3, ECF

In June 2014, Bland informed Xcel that TriVis would be

going out of business due to the Monticello event.
Ex. 7.

Hartnett Decl.

On October 8, 2014, TriVis filed articles of dissolution

with the Alabama Secretary of State.

See id Ex. 10.

In September 2015, Xcel brought claims against TriVis for
breach of contract and negligent misrepresentation in Hennepin
County.

See Gatto Aff. Ex. B.

On September 18, Xcel attempted to

serve TriVis at its registered address in Alabama, but failed
because TriVis had shut down operations.

Hartnett Decl. Ex. 11.

In an another attempt to effect service, on September 23, Xcel
served the summons and complaint on the Minnesota Secretary of
State pursuant to Minn. Stat. § 5.25, subd. 4(b).
Exs. C, E.

See Gatto Aff.

Xcel requested that the secretary mail the summons and

2

complaint to TriVis’ Alabama address, but the secretary sent the
documents to TriVis’ registered office address in Clear Lake,
Minnesota, which was also returned as undeliverable.1
F.

See id. Ex.

Subsequently, on September 24, Xcel mailed the civil cover

sheet for the summons and complaint by certified mail to TriVis’
Alabama address, which was, again, returned as undeliverable.

See

Hartnett Decl. Ex. 12.
Xcel moved for a default judgment against TriVis, which the
state

court

granted

on

December

3,

2015,

for

the

amount

of

$10,020,355, plus pre- and post-judgment interest and reimbursement
of Xcel’s costs and disbursements.

See Gatto Aff. Ex. A.

Shortly

thereafter, Xcel instituted garnishment proceedings against several
insurers of TriVis, which was timely removed to this court. See N.
States Power Co. v. TriVis, Inc., No. 16-51, 2016 WL 2621953, at *2
(D. Minn. May 6, 2016).

Garnishee Underwriters at Lloyds, London

contacted Bland concerning the suit on February 5, 2016.
Decl. ¶ 14.

Bland

Bland testified that this is the fist time he learned

of Xcel’s suit.

Id.

Separate from the garnishment action, TriVis

removed the complaint and default judgment on August 19.

On

October 21, TriVis filed the instant motion to vacate the default
judgment.

1

At some point prior to 2012, Smith, the registered agent,
left Minnesota, and no TriVis employee remained at the Clear Lake
address. Bland Decl. ¶ 7.
3

DISCUSSION
TriVis

argues

that

the

court

should

vacate

the

default

judgment because the state court’s judgment is void under Fed. R.
Civ. P. 60(b)(4).

The judgment of a court is void if the defendant

was not properly served.

See Printed Media Servs. Inc. v. Solna

Web, Inc., 11 F.3d 838, 843 (8th Cir. 1993) (“If a defendant is
improperly served, a federal court lacks jurisdiction over the
defendant.”).

The court looks to state law in determining whether

service was sufficient.

See Barner v. Thompson/Ctr. Arms Co., 796

F.3d 897, 900 (“In a case that has been removed from state court,
the sufficiency of service prior to removal is determined by state
law ....”).
Where a state court’s judgment is void for lack of service, a
federal court has the authority to vacate the judgment.

See

Johnson v. Arden, 614 F.3d 785, 799 (8th Cir. 2010) (affirming
district court’s order vacating a state court judgment for lack of
personal jurisdiction); see also Jenkinds v. MTGLQ Inv’rs, 218 F.
App’x 719, 724 (10th Cir. 2007) (“The district court then could set
aside the [state court’s] default judgment under Fed. R. Civ. P.
55(c) and 60(b).”). The court has no discretion in granting relief
from a void judgment.

Johnson, 614 F.3d at 799.

TriVis argues that Xcel’s service of process under Minn. Stat.
§ 5.25 was insufficient, and the court agrees.

Minnesota law

provides that service of process may be effected on a foreign

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corporation “whenever the certificate of authority of a foreign
corporation is revoked or canceled” by delivering to the Minnesota
Secretary of State the documents to be served.
subdiv 4(b).

Minn. Stat. § 5.25

When service is effected by the secretary of state,

the secretary must forward the copy of service of process addressed
to the business entity: (1) at the registered office in Minnesota;
(2) at the address designated in the application for withdrawal, if
the business entity has withdrawn from Minnesota; (3) at the
address

provided

by

the

submitting

party,

if

the

business’

authority to do business in Minnesota has been revoked; or (4) at
the address provided by the submitting party, if the business was
never authorized to do business in Minnesota.
subdiv. 6.

Minn. Stat. § 5.25

Where a business entity has had its authority to

transact business in Minnesota revoked, “service must be made”
according to the third or fourth options listed above. Minn. Stat.
§ 5.25 subdiv. 5(c).
Here, TriVis’ authority to do transact business in the state
had been revoked; therefore, the statute required the secretary of
state to send service of process to the address provided by Xcel.
But the secretary sent the service of process to TriVis’ Minnesota
address, not the Alabama address provided by Xcel.

As a result,

TriVis was not properly served under the Minnesota statute.
Xcel argues that the plain reading of the statute conflicts
with Minn. Stat. §§ 303.16 and 303.17.

5

Xcel notes that, in

contrast to § 303.16, which requires a withdrawing corporation to
revoke the authority of its registered agent in Minnesota to
receive

service

of

process,

§

303.17

contains

no

language

indicating that an agent’s authority to accept service of process
is terminated on the revocation of the corporation’s certificate of
authority to transact business.

Therefore, Xcel argues, the

secretary of state could properly mail service of process to
TriVis’ registered Minnesota address.

But § 303.17 does not

address, one way or the other, whether revoking a corporation’s
certificate of authority affects its capacity to be served in
Minnesota.

Because § 303.17 does not address how a foreign

corporation should be served, it cannot conflict with a plain
reading of § 5.25, which specifically addresses the issue.2

See

Walker v. Hartford Life & Accident Ins. Co., 831 F.3d 968, 973 (8th
Cir. 2016) (internal quotation and citation omitted) (“When the
language of a statute is plain and unambiguous, it is assumed to
manifest legislative intent and must be given effect.”).
Xcel further contends that, even if TriVis was not properly
served, its “numerous and alternative attempts” to notify TriVis of
the lawsuit satisfied any due process concerns.

2

Def.’s Opp’n Mem.

Morever, the court is not persuaded that a plain reading of
§ 5.25 ignores the remedial purpose of the statute. Although, Xcel
argues that the statute’s remedial purpose is “evident on its
face,” this is far from the case. Def.’s Opp’n Mem. at 25. There
is no evidence to suggest that the Minnesota legislature enacted
the statute so that Minnesota citizens could more easily serve
process on foreign corporations.
6

at 27.

But this cannot excuse the failure to properly serve

TriVis.

Indeed, even if Xcel’s attempts provided TriVis with

actual notice of the suit, this would not cure any deficiencies in
the service of process.

See Sieg v. Karnes, 693 F.2d 803, 807 (8th

Cir. 1982) (“[A] federal court is without jurisdiction to render
personal judgment against a defendant if service of process is not
made in accordance with applicable federal or state statutory
requirements.

This principle remains true despite any actual

notice a defendant may have of the lawsuit.”); see also Hubbard v.
Citi Mortg., Inc., No. 13-2189, 2014 WL 1309112, at *5 (D. Minn.
Mar. 31, 2014) (“[A]ctual notice or receipt of service does not
amount to effective service of process that otherwise fails to
comply with the Minnesota Rules of Civil Procedure.”).

As a

result, the state court lacked personal jurisdiction over TriVis,
and the default judgment is void.3
Finally, Xcel contends that TriVis did not move to vacate the
default judgment within a reasonable period of time.
Civ. P. 60(c)(1).

See Fed. R.

Although TriVis could have brought the motion

sooner, the court finds that the delay is not so great as to
justify denying relief, especially given the large judgment amount.

3

Because the court finds that the default judgment is void,
it will not address TriVis’ alternative arguments that the judgment
should be vacated under Fed. R. Civ. P. 60(b)(1) or 60(b)(6).
7

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1. Defendant’s motion to vacate default judgment [ECF No. 15]
is granted; and
2.

The order for default judgment [ECF No. 1-3] is vacated.

Dated: December 21, 2016
s/David S. Doty
David S. Doty, Judge
United States District Court

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