Hitachi Credit America Corp. v. Tulsa Telecom and Utilities, LLC et al

Filing 99

OPINION AND ORDER by Judge Claire V Eagan that the objection (Dkt. # 94) is hereby granted. The Report and Recommendation (Dkt. # 89) is rejected, and the matter is returned to the magistrate judge for further proceedings. ; refe rring 74 to Magistrate Judge Cleary ; rejecting 89 Report and Recommendation (Re: 94 Objection to Report and Recommendation, 98 Objection to Report and Recommendation, 89 REPORT AND RECOMMENDATION by Magistrate Judge Paul J Cleary , 74 MOTION Application for Order Requiring Garnishee to Answer Garnishment and Pay Any Monies or Property to Plaintiff ) (RGG, Chambers)

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
HITACHI CREDIT AMERICA CORP.,
Plaintiff,
v.
TULSA TELECOM AND UTILITIES, LLC,
et al.,
Defendants,
and
ROCK SOLID DIRECTIONAL BORING
LLC, ATTN: CAVIN COFFELT,
Registered Service Agent,
Garnishee.

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Case No. 09-CV-0056-CVE-PJC

OPINION AND ORDER
On December 10, 2013, Magistrate Judge Paul J. Cleary entered his Report and
Recommendation (Dkt. # 89) (R & R) regarding plaintiff’s Application for Order Requiring
Garnishee to Answer Garnishment and Pay Any Monies or Property to Plaintiff (Dkt. # 74) and
Plaintiff, Hitachi Credit America Corp’s Motion for an Award of Attorney’s Fees Against
Garnishee, Rock Solid Directional Boring, LLC (Dkt. # 82). The magistrate judge recommended
that the motions be granted. An objection (Dkt. #94) was filed to the R & R by the deadline
imposed by the magistrate judge, and plaintiff responded (Dkt. # 98).
I.
A deficiency judgment was entered against defendant Michael Kyles on April 6, 2010, in
favor of Hitachi Credit America Corp. (Hitachi). Dkt. # 64. On June 12, 2013, a garnishment
affidavit was filed and a garnishment summons was issued. Dkt. # 71; Dkt. # 72. The garnishee is

Rock Solid Directional Boring, LLC (Garnishee). Dkt. # 71; Dkt. # 72. Legal documents state that
Garnishee’s address is P.O. Box 307, Catoosa, OK 74015. See Dkt. # 98-1, at 1; Dkt. # 98-2, at 1.
Cavin Coffelt is the registered agent of Garnishee. Dkt. # 94, at 2, 33. The address of Garnishee’s
registered agent, as filed with the Oklahoma Secretary of State, is 26570 Foxen Drive, Claremore,
OK 74019. Id.
Both the garnishment summons and the affidavit list the address of Garnishee as its Catoosa
post office box. Dkt. # 71; Dkt. # 72. Additionally, the certificate of service states that on June 13,
2013, a copy of the affidavit and summons were delivered to the Catoosa post office box. Dkt. #
73, at 1-2. The copies were received and signed for by Coffelt on June 24, 2013. Dkt. # 73, at 3.
In June 2013, Coffelt suffered a serious knee injury. Dkt. # 94, at 2. Coffelt had knee
surgery on July 31, 2013. Id. Coffelt did not work until his rehabilitation was complete. Id.1
Garnishee did not file an answer to the garnishment summons, and an order was entered on
August 7, 2013, setting a show cause hearing for September 18, 2013. Dkt. # 75, at 1-2. A copy
of the order was sent by certified mail to the Catoosa post office box. Dkt. # 77, at 1.2 The certified
mail was refused, because the post office box had been closed for non-payment. Dkt. # 77, at 2; Dkt.

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Garnishee states that Coffelt did not work “[f]rom the date of the injury through the time
necessary for all the rehabilitation for about three months.” Dkt. # 94, at 2. Because of the
ambiguous nature of that sentence, it is unclear whether Coffelt returned to work three
months after his injury or three months after his surgery.

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The certificate of service for the order states that the order was mailed on June 13, 2013.
Dkt. # 77. As the order was not entered until August 7, 2013, the certificate of service lists
the incorrect date. Compare Dkt. # 77, at 1, with Dkt. # 75.
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# 94, at 2.3 A copy of the order and a notice were mailed via first class U.S. mail to the Catoosa post
office box on September 5, 2013, in accordance with Okla. Stat. tit. 12, § 2004(C)(2)(c). Dkt. # 76.
The show cause hearing was held on September 18, 2013. Dkt. # 78. No authorized
representative for Garnishee appeared at the hearing. Id. Magistrate Judge Cleary entered his R &
R on December 10, 2013. Dkt. # 89. The R & R recommends that judgment be entered against
Garnishee. Id. at 7. The R & R was sent to both the Catoosa post office box and the Foxen Drive
address. Id. at 7-8.4 Garnishee filed an objection to the R & R, arguing that it was not properly
served. Dkt. # 94.
II.
The Court must conduct a de novo review of the magistrate judge’s R & R. Under 28 U.S.C.
§ 636(b)(1), a court “shall make a de novo determination of those portions of the report or specified
proposed findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1); see also
Northington v. Marin, 102 F.3d 1564, 1570 (10th Cir. 1996) (“De novo review is required after a
party makes timely written objections to a magistrate’s report. The district court must consider the
actual testimony or other evidence in the record and not merely review the magistrate’s report and
recommendations.”). The Court may “accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1).

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There is nothing in the record to suggest that Hitachi was aware that the post office box had
been closed for non-payment.

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Garnishee states that the Report and Recommendation “for the first time lists the
registered agent of the Garnishee’s address of 26570 Foxen Drive, Claremore, OK
74019.” Dkt. # 94, at 3 (emphasis in original). However, on October 11, 2013, a copy of
plaintiff’s motion for attorney’s fees was mailed to the Foxen Drive address, and a (since
vacated) default judgment was mailed to the Foxen Drive address on October 1, 2013. Dkt.
# 82, at 2; Dkt. # 97, at 1-2.
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III.
Oklahoma law governs the sufficiency of service of process in garnishment proceedings.
Strong v. Laubach, 371 F.3d 1242, 1246-47 (10th Cir. 2004). A garnishment proceeding is
commenced by filing an affidavit. Okla. Stat. tit. 12, §§ 1172, 1173.3. The garnishment summons,
“together with a copy of the judgment creditor’s affidavit, a garnishee’s answer form, notice of
garnishment and request for hearing, and claim for exemptions,” is served as provided for in Okla.
Stat. tit. 12, § 2004. Id. § 1173.3. “Service by mail to a garnishee shall be accomplished by mailing
a copy of the summons and notice by certified mail, return receipt requested, and at the election of
the judgment creditor by restricted delivery, to the addressee.” Okla. Stat. tit. 12, § 2004(C)(2)(b).
A creditor may serve a garnishment summons at the Garnishee’s principal place of business.
Discover Prop. & Cas. Ins. Co. v. Collins, 299 P.3d 510, 513 (Okla. Civ. App. 2013).
An Oklahoma limited liability company’s principal place of business may not be a post office
box. Okla. Sec’y of State, Procedure for Organizing an Oklahoma Limited Liability Company 2
(2012), available at http://www.sos.ok.gov/forms/fm0074.pdf; see also Okla. Stat. tit. 18, § 2005
(requiring an Oklahoma limited liability company’s articles of organization to include “[t]he street
address of its principal place of business”); Smith v. Kroesen, Civ. A. No. 10-5723 (NLH)(AMD),
2013 WL 6187229, at *2 (D.N.J. Nov. 26, 2013) (holding that a post office box cannot be a principal
place of business); Spencer v. Pocono Int’l Raceway, Inc., Civil Action No. 3:12-cv-1050, 2012 WL
2050168, at *2 (M.D. Pa. June 6, 2012) (“[A] P.O. box may not serve as a principal place of
business.”). While the post office box address to which the summons was sent may have been used
by Garnishee in some of its legal documents, it cannot be its principal place of business. Because
the summons was not sent to the principal place of business of the Garnishee, nor the address of the

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Garnishee’s registered agent, Garnishee was not properly served. Judgment cannot be rendered
against Garnishee for failure to answer because Garnishee had not been “duly summoned.” See
Okla. Stat. tit. 12, § 1179.
IT IS THEREFORE ORDERED that the objection (Dkt. # 94) is hereby granted.
IT IS FURTHER ORDERED that the Report and Recommendation (Dkt. # 89) is rejected,
and the matter is returned to the magistrate judge for further proceedings.
DATED this 13th day of February, 2014.

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