Jamie Heineck v. Daniel Katz , 509 S.W.3d 116 ( 2016 )

In the Missouri Court of Appeals
Eastern District
DIVISION TWO
JAMIE HEINECK, ) No. ED103557
)
Respondent, ) Appeal from the Circuit Court of
) St. Louis County
vs. )
) Honorable Colleen Dolan
DANIEL KATZ, )
)
Appellant. ) Filed: April 26, 2016
Introduction
Daniel Katz (Appellant) appeals the default judgment of the Circuit Court of St. Louis
County. The trial court ordered Appellant to pay Jamie Heineck (Respondent) damages in the
amount of $12,000 for breach of contract. On appeal, Appellant argues that the trial court erred
by granting Respondent’s motion for default judgment because the trial court did not have
personal jurisdiction over Appellant, and Appellant was never properly served with process.
Additionally, Appellant argues that he was not required to file a motion to set aside the default
judgment in order to confer jurisdiction upon this Court to hear the appeal. We vacate and
remand.
Factual Background
In November 2013, Respondent filed suit against Appellant, alleging breach of an oral
contract. Respondent alleged that, in July 2008, she entered into a contract with Appellant to
wind up the business of Katz Mechanical Inc. in exchange for $60,000, paid in $1,000 monthly
installments. Respondent claimed that Appellant stopped making $1,000 payments in September
2012. Respondent alleged that her acceptance of Appellant’s offer “took place in the County of
St. Louis, State of Missouri.” Respondent sought money damages, court costs and attorney’s
fees.
Respondent attempted service on Appellant, first at an address in St. Charles County,
Missouri. The process server was unable to serve Appellant at that address and attempted to
serve Appellant at his parents’ address. Appellant’s father told the process server that Appellant
no longer lived in the St. Louis area. Respondent then attempted to serve Appellant at an address
in Zionsville, Indiana. Again, Respondent was unsuccessful. Respondent’s third attempt was to
serve Appellant at his parents’ address in St. Louis County, Missouri. Appellant’s father
received the summons at the St. Louis County address.
In April 2015, after Appellant failed to file responsive pleadings, Respondent filed a
motion for default judgment pursuant to Rule 74.05.1 In her motion, Respondent requested that
the trial court enter a judgment against Appellant in the amount of $12,000, as well as $5,000 in
attorney’s fees. Soon thereafter, Appellant filed his “Reply to Motion for Default Judgment”
(hereinafter “reply”). In this reply, Appellant stated that he was appearing “specifically to object
to the jurisdiction of this court[.]” Appellant argued that Respondent’s petition failed to establish
that the trial court had personal jurisdiction over Appellant because the petition: 1) did not state
that Appellant was a resident of St. Louis County; 2) did not state that the cause of action arose
1
All references to Rules are to Missouri Supreme Court Rules (2015).
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out of a business transaction in Missouri; or 3) did not state that the cause of action arose out of a
contract within Missouri. Furthermore, Appellant argued that Respondent’s petition was
insufficient because she failed to plead that Appellant was in the State of Missouri when he made
the offer. Appellant also claimed that service of process was insufficient.2
On May 12, 2015, the trial court entered its order granting, in part, Respondent’s motion
for default judgment. The record does not reflect that the court ruled on Appellant’s reply
motion. On August 28, 2015, the court held an evidentiary hearing on damages. Respondent
testified, and the court concluded that she was entitled to $12,000 in damages. The trial court
also ordered Appellant to pay court costs. This appeal follows.
Discussion
Appellant raises three points on appeal. First, Appellant argues that the trial court erred
by entering a default judgment because Respondent’s petition failed to establish personal
jurisdiction over Appellant. Second, Appellant claims that the trial court erred by entering
default judgment because Appellant was not properly served with process. Third, Appellant
contends that he was not required to file a motion to set aside or vacate the default judgment
because his “Reply to Motion for Default Judgment” raised his legal claims and, therefore, such
a motion “would have been redundant.”
2
“[T]he title of a motion is not dispositive; rather, the contents of the motion must be considered.” Murray v.
Murray, 325 S.W.3d 543, 546 (Mo. App. E.D. 2010). Here, Appellant’s “Reply to Motion for Default Judgment”
was, in substance, an untimely motion pursuant to Rule 55.27(a), which provides:
Every defense, in law or fact, to a claim in any pleading, whether a claim, counterclaim, cross-
claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required,
except that the following defenses may at the option of the pleader be made by motion:
...
(2) Lack of jurisdiction over the person,
...
(4) Insufficiency of process,
(5) Insufficiency of service of process[. ]
3
Respondent counters that this Court does not have jurisdiction to hear this appeal because
Appellant was required to file a motion to vacate or set aside the default judgment. Moreover,
Respondent argues that Appellant waived his right to challenge sufficiency of service of process
and that the trial court did, in fact, have personal jurisdiction over Appellant.
After reviewing the record and the procedural history of the case, we agree with
Appellant that the trial court erred in granting default judgment. However, we do not reach the
merits of Appellant’s arguments. Here, granting a default judgment was simply inappropriate.
Default Judgment under Rule 74.05(a)
In the present case, the trial court entered a default judgment against Appellant, after
Appellant failed to file an answer. Pursuant to Rule 74.05(a), a trial court may enter default
judgment against a defendant under the following circumstances:
When a party against whom a judgment for affirmative relief is sought has failed
to plead or otherwise defend as provided by these rules, upon proof of damages or
entitlement to other relief, a judgment may be entered against the defaulting party.
(Emphasis added).
Here, Appellant did not file a timely responsive pleading. However, Appellant did file
his reply, raising the issues of personal jurisdiction and insufficient service of process, before the
trial court entered default judgment. Rule 74.05(a) requires us to determine whether Appellant’s
reply amounts to Appellant otherwise defending the lawsuit. We conclude that it does.
Missouri courts have noted that Rule 74.05(d) “provides the procedure for setting aside a
judgment that has been entered when a timely response to a petition has not been filed.” Everest
Reinsurance Co. v. Kerr, 253 S.W.3d 100, 104 (Mo. App. W.D. 2008). However, the Rule does
not “contemplate the circumstances where a judgment is improvidently entered after a timely
response to a petition has been filed” or the defendant “otherwise defended” the suit. O’Neill v.
O’Neill, 460 S.W.3d 51, 57 (Mo. App. E.D. 2015). In order to “otherwise defend,” the defendant
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must take “some affirmative action . . . which would operate as a bar to the satisfaction of the
moving party’s claim.” Id. at 57.
Our review of Missouri precedent reveals that most cases in which courts have
determined that a party “otherwise defended” a lawsuit involve defendants who timely filed some
document with the court. See Rule 55.25(a) (providing that “[a] defendant shall file an answer
within thirty days after the service of the summons and petition. . .”). In Kerr, the defendant,
within the time limits provided under Rule 55.25(a), filed a letter with the court clerk, stating he
was “not guilty.” 253 S.W.3d at 101. The Court, after considering the “crude and
nonprofessional” nature of the letter, concluded that the trial court should have allowed the
defendant to amend his answer because the defendant attempted to defend the lawsuit. Id. at
106. Accordingly, the Court concluded that the entry of default judgment against the defendant
was error. Id.
In Beeman v. Beeman, the defendant filed a pro se motion for additional time to file her
response, which the trial court neither granted nor denied. 296 S.W.3d 514, 516 (Mo. App. W.D.
2009). The trial court then entered a default judgment against the defendant. Id. The defendant
filed a motion to set aside or vacate the judgment, which the trial court granted. Id. The plaintiff
appealed. Id. The Court concluded that the trial court should not have entered the default
judgment because the defendant “otherwise defended” the suit by filing a motion for additional
time. Id. at 518. In so holding, the Court emphasized that the defendant took “affirmative action
to deny [the plaintiff’s] claim,” and, therefore, the defendant did not default. Id.
In O’Neill v. O’Neill, this Court concluded that the defendant did not default when she
sought to file her answer with the trial court at the dissolution hearing. 460 S.W.3d at 57. After
receiving a copy of the petition and summons, the defendant did not file a responsive pleading.
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Id. at 54. The defendant appeared at the first scheduled hearing on the petition for dissolution.
Id. The trial court continued the case “to allow [the defendant] opportunity to file responsive
pleadings and/or hire an attorney.” Id. On the day of the second scheduled hearing, the
defendant attempted to file her answer with the trial court; however, the court refused to accept
the pleading and entered a default judgment against the defendant. Id. On appeal, this Court
concluded that a default judgment under Rule 74.05(a) was improper because the defendant had
“otherwise defended” by attempting to file her answer, in accordance with the trial court’s order,
at the second scheduled hearing. Id. at 57.
In the present case, Appellant presented the trial court with his reply before the trial court
entered default judgment. In this reply, Appellant raised the issues of personal jurisdiction and
insufficient service of process, albeit unartfully so, and both defenses “operate as a bar to the
satisfaction of the moving party’s claim.” O’Neill, 460 S.W.3d at 57. We conclude that this
filing fulfilled Appellant’s duty to “otherwise defend” the lawsuit pursuant to Rule 74.05(a).3
Waiver
Next, we must address whether Appellant waived the defenses of lack of personal
jurisdiction and invalid service of process.4 Unlike in Kerr, Beeman, and O’Neill, Appellant did
not raise these defenses within the thirty day time limit provided by Rule 55.25(a). We conclude
that, although his reply was untimely, Appellant did not waive these defenses.
In Crouch v. Crouch, the defendant was served with a petition for dissolution, but “filed
neither a motion contesting the trial court’s personal jurisdiction over him nor any other
responsive pleading.” 641 S.W.2d 86, 87 (Mo. banc 1982). Subsequently, the defendant filed a
3
As noted in Footnote 2, supra, Appellant’s reply was, in substance, a Rule 55.27(a)(2), (4) & (5) motion. The trial
court implicitly overruled this motion. Accordingly, pursuant to Rule 55.25(c), the trial court should have permitted
Appellant ten days after the court’s denial of the motion to file responsive pleadings.
4
Respondent raises this argument regarding service of process in his Point II.
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motion to vacate the judgment, arguing that the trial court did not have personal jurisdiction over
him. Id. The trial court denied the motion. Id. On appeal, the plaintiff argued that the
defendant waived his right to contest personal jurisdiction by failing to appear at the dissolution
proceeding. Id. at 90. Rule 55.27(g)(1)(A) provides that a defendant waives the defense of lack
of personal jurisdiction “if it is neither made by motion under this Rule nor included in a
responsive pleading.” Id. After concluding that the trial court did not have personal jurisdiction
over the defendant, the Court turned to whether the defendant waived the defense. Id. at 90.
Invoking principles of due process, the Court concluded that the defendant did not waive the
defense by failing to appear. Id. This is because “a defendant over whom the trial court could
not otherwise constitutionally acquire jurisdiction does not waive the jurisdictional defense
merely by his nonappearance.” Id. The Court further reasoned:
Were we to hold that [the defendant] waived the personal jurisdiction defense
merely by failing to appear, it would produce the anomalous result that a
defendant who has the right to ignore a judicial proceeding waives that right by
asserting it. Nonappearance, therefore, cannot constitute waiver. Due process
requires that, in the absence of minimum contacts to support personal jurisdiction,
the rule effect a waiver of the jurisdictional defense only if the defendant has
already appeared before the court and has neither timely raised nor otherwise
waived jurisdiction.
Id. See also Worley v. Worley, 19 S.W.3d 127, 129 (Mo. banc 2000) (holding that a defendant
did not waive her defense of insufficiency of process by failing to appear). In the context of a
default judgment, the defendant can only waive a defense under Rule 55.27(g)(1)(A)—lack of
personal jurisdiction—or Rule 55.27(g)(1)(B) —insufficiency of process— if he does “some
overt act constituting a general appearance, by virtue of which the defendant submits himself . . .
to the jurisdiction of the court.” Crouch, 641 S.W.2d at 93.
Here, although Appellant did not raise the defenses of personal jurisdiction and invalid
service of process in a timely response, due process mandates that Appellant did not waive these
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defenses. Crouch, 641 S.W.2d at 93; Worley, 19 S.W.3d at 129. While his reply amounted to
Appellant “otherwise defending” the suit, we cannot conclude that Appellant’s reply was an
“overt act” by which Appellant submitted himself to the jurisdiction of the trial court.
Appellant’s reply explicitly stated that he appeared “specifically to object to the jurisdiction of
this court.” Accordingly, Appellant did not waive the defenses by failing to appear or submitting
himself to the jurisdiction of the court.
Failure to File a Motion to Vacate or Set Aside the Default Judgment
We now turn to the question of whether this Court has jurisdiction to consider this appeal
because Appellant has not filed a motion to vacate or set aside the default judgment with the trial
court.5 Respondent argues that because Appellant did not file a motion to set aside or vacate the
default judgment, this Court does not have jurisdiction to hear the appeal. Appellant argues that
filing a motion to set aside or vacate the default judgment “was not necessary to this appeal”
because Appellant already challenged the court’s jurisdiction in his reply to Respondent’s motion
for default judgment. Appellant argues that a motion to vacate or set aside the default judgment
would have been redundant.
Generally, a default judgment is not appealable. State ex rel. Nixon v. McGee, 213
S.W.3d 730, 732 (Mo. App. W.D. 2007). In ordinary circumstances, a default judgment can only
be appealed if the trial court previously heard a motion to set aside or vacate the judgment.
Barney v. Suggs, 688 S.W.2d 356, 358 (Mo. banc 1985). This is because the trial court “cannot
be said to have committed error when . . . the point of law was never taken into consideration,
but was abandoned, by the acquiescence or default of the party who raised it.” Vonsmith v.
Vonsmith, 666 S.W.2d 424, 424 (Mo. banc 1984) (internal citation omitted). However, if a party
“otherwise defended” a claim but did not appear at trial, we consider the judgment to be on the
5
This issue is discussed in Appellant’s Point III and Respondent’s Point I.
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merits. Nixon, 213 S.W.3d at 731 (citing Cotleur v. Danziger, 870 S.W.2d 234, 237 (Mo. banc
1994)).
Under the circumstances in which a defendant has filed an answer or otherwise defended,
“the Rule 74.05(d) test for setting aside the default judgment is inapplicable, because the default
judgment was improper in the first place.” Kerr, 253 S.W.3d at 104. Rule 74.05(d) “establishes
a means for extricating a defendant from a judgment entered” in situations where a defendant did
not file a responsive pleading or otherwise defend. Id. However, “[t]he procedural requirements
of Rule 74.05(d) do not contemplate the circumstances where a judgment is improvidently
entered” after a defendant files a responsive pleading. Id. In cases where a defendant does
defend the lawsuit, a trial court’s entry of default judgment “must be reversed, regardless of
whether the defendant shows good cause or a meritorious defense.” O’Neill, 460 S.W.3d at 57.
The cases requiring a motion to vacate or set aside a default judgment are inapposite to
the present case, because here, Appellant “otherwise defended” the suit by filing his reply. As a
result, the trial court was presented with points of law, and the policy behind requiring a motion
to vacate or set aside was not implicated. Because Appellant did defend the suit, a prerequisite
for the entry of a default judgment did not exist. Therefore, the default judgment against
Appellant was improvidently granted. Accordingly, the judgment of the trial court was on the
merits, and Appellant was not required to file a motion to vacate or set aside in order for this
Court to have jurisdiction to consider the appeal. Under these circumstances, we will not dismiss
Appellant’s appeal for lack of jurisdiction.
Conclusion
We conclude that Appellant “otherwise defended” the suit, and, as a result, the trial court
erred by entering the default judgment under Rule 74.05(a). Accordingly, the trial court’s
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default judgment is vacated. Additionally, because the record before us is insufficient to
determine the merits of Appellant’s claims, we remand the case to the trial court for a hearing on
Appellant’s raised defenses and further proceedings consistent with this opinion.
_______________________________
Philip M. Hess, Presiding Judge
Gary M. Gaertner, Jr., J. and
Angela T. Quigless, J. concur.
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