Holli Lundahl , 334 P.3d 558 ( 2014 )

IN THE SUPREME COURT, STATE OF WYOMING
2014 WY 110
APRIL TERM, A.D. 2014
September 5, 2014
HOLLI LUNDAHL,
Appellant
(Plaintiff),
v.
S-13-0273
ROBERT GREGG, VICKY GREGORY,
KATHLEEN GITTENS, and WELLS
FARGO BANK,
Appellees
(Defendants).
Appeal from the District Court of Uinta County
The Honorable Dennis L. Sanderson, Judge
Representing Appellant:
Holli Lundahl, pro se.
Representing Appellees:
No appearance.
Before BURKE, C.J., HILL, KITE*, and DAVIS, JJ., and CRANFILL, D.J.
*Chief Justice at time of expedited conference.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building,
Cheyenne, Wyoming 82002, of typographical or other formal errors so correction may be made
before final publication in the permanent volume.
KITE, Justice.
[¶1] Holli Lundahl appeals from a district court order dismissing her case for failing to
properly serve the defendants within ninety days of filing the complaint. She contends
service was proper on three of the defendants and the fourth defendant waived any
objection to lack of proper service. She further contends the district court erred in failing
to enter a default against the defendants. Finally, she asserts the district judge was biased
against her and should have transferred the case to another district court as she requested.
We reverse and remand for further proceedings consistent with this opinion.
ISSUES
[¶2] We paraphrase Ms. Lundahl’s statements of the issues as follows:
1. Whether Robert Gregg waived any objection to lack of proper service by
making a general appearance and moving for dismissal of the claims against him without
asserting lack of personal jurisdiction.
2. Whether Vicky Gregory and Kathleen Gittens were properly served as
provided in Wyo. Stat. Ann. § 5-1-107 and W.R.C.P. 4(l)(1).
3. Whether Wells Fargo Bank (Wells Fargo) was properly served as provided
in Wyo. Stat. Ann. § 17-28-104(b).
4. Whether the district court erred in denying her request for entry of default
against Wells Fargo, Ms. Gittens and Ms. Gregory.
5. Whether the district court erred in declining to transfer the case to another
district court.
FACTS
[¶3] Ms. Lundahl filed her complaint against the four defendants on January 25, 2013, in
Uinta County, Wyoming. She alleged that they conspired to fabricate a mental
incompetency determination in connection with criminal proceedings filed against her in
Utah. The clerk of district court issued summonses for each of the defendants the same
day the complaint was filed. The record on appeal contains affidavits signed by someone
named Helen Nelson stating that she had served copies of the summons and complaint on
Ms. Gregory personally and by mail at her residence in Salt Lake City, Utah on March
16, 2013; on Ms. Gittens personally and by mail at her residence and by mail at her place
of employment in Logan, Utah on March 14, 2013; on Mr. Gregg by certified mail at an
address in Fort Worth, Texas on March 23, 2013; and on Wells Fargo by facsimile at its
legal department in Maricopa County, Arizona on March 23, 2013. The affidavits bear
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the stamp of Utah notary public Steven Rey Fritts; however, they are signed Steven-
Ray:Fritts.
[¶4] None of the defendants answered the complaint within thirty days of service as
required under W.R.C.P. 12. On August 12, 2013, Ms. Lundahl filed a pleading to which
she attached original certified mail return receipts for service on Mr. Gregg and Wells
Fargo. In contrast to the affidavits of service filed earlier, the return receipts showed
service on Mr. Gregg on March 25, 2013, rather than March 23, 2013, and on Wells
Fargo by certified mail rather than facsimile on March 26, 2013, rather than March 23,
2013. In her pleading, Ms. Lundahl stated that the receipts were inadvertently mailed to
her rather than the clerk of court as contemplated by W.R.C.P. 4(l)(2).1
[¶5] On August 27, 2013, over five months after the dates the affidavit and return receipt
indicated he had been served, Mr. Gregg filed a pro se motion to dismiss the claims
against him, asserting no evidence existed that he had harmed Ms. Lundahl. Concluding
that Mr. Gregg’s statements in his motion meant he was no longer involved in the alleged
conspiracy against her, Ms. Lundahl moved to dismiss her claims against him without
prejudice. She asked the district court to enter certificates of default against the
remaining defendants. The district court declined to enter the certificates and did not rule
on Ms. Lundahl’s motion to dismiss the claims against Mr. Gregg.
[¶6] In September 2013, Ms. Lundahl filed a motion asking the district court to
reconsider its refusal to enter the defaults or, in the alternative, transfer the case to
another county “where a fair trial can be had.” She subsequently filed a motion to
transfer the case to Teton County pursuant to W.R.C.P. 40.1(a)(1), asserting the Uinta
County district judge was prejudiced against her. On November 1, 2013, citing Rule
203(b) of the Uniform Rules for District Courts, the district court entered an order
dismissing the complaint on the ground that none of the defendants had been properly
served with process and nine months had passed since the complaint was filed.2 It does
not appear from the record that a hearing was conducted prior to the dismissal and the
district court’s order contains no findings supporting dismissal. Ms. Lundahl appealed
from the order of dismissal.
STANDARD OF REVIEW
1
Both return receipts are addressed to Elham Nelson in Meridian, Idaho, not to the clerk of court. The
return receipt for service on Mr. Gregg is not marked “Restricted Delivery” as required by Rule 4 and the
Wells Fargo return receipt contains a California address, rather than the Arizona address stated on the
affidavit of service.
2
Rule 203(b) provides: “Cases on file for 90 days without service on the defendant will be dismissed by
the court. Upon application to the court before the expiration of 90 days, and showing good cause, the
time may be extended.”
2
[¶7] Proper service of process is necessary to acquire personal jurisdiction over a
defendant under the due process provisions of both the federal and state constitutions.
Gookin v. State Farm Fire and Cas. Ins. Co., 826 P.2d 229, 232 (Wyo. 1992), citing
Wyo. Const. art. 1, § 6; U.S. Const. amend. XIV, § 1. We review factual determinations
relating to service of process by accepting the evidence of the prevailing party as true and
giving that party the benefit of all favorable inferences that can fairly be drawn from the
evidence while disregarding conflicting evidence. Rosty v. Skaj, 2012 WY 28, ¶ 22, 272
P.3d 947, 955 (Wyo. 2012). Where the facts of service are not in dispute, the issue of
adequate service of process is a matter of law and is reviewed de novo. Id. We likewise
review a district court’s application of court rules de novo. Tafoya v. Tafoya, 2013 WY
121, ¶ 7, 309 P.3d 1236, 1238 (Wyo. 2013).
DISCUSSION
1. Service of Process.
[¶8] The federal constitution restrains state court actions against non-resident defendants.
Gookin, 826 P.2d at 232.
The Due Process Clause of the Fourteenth Amendment
operates as a limitation on the jurisdiction of state courts to
enter judgments affecting rights or interests of nonresident
defendants. It has long been the rule that a valid judgment
imposing a personal obligation or duty in favor of the plaintiff
may be entered only by a court having jurisdiction over the
person of the defendant. The existence of personal
jurisdiction, in turn, depends upon the presence of reasonable
notice to the defendant that an action has been brought, and a
sufficient connection between the defendant and the forum
State to make it fair to require defense of the action in the
forum. (internal citations omitted).
Id., quoting Kulko v. Superior Court of California In and For City and County of San
Francisco, 436 U.S. 84, 91, 98 S. Ct. 1690, 1696, 56 L. Ed. 2d 132, reh’g denied 438
U.S. 908, 98 S. Ct. 3127, 57 L. Ed. 2d 1150 (1978).
[¶9] A court does not acquire personal jurisdiction over a party that has not been
properly served. Rosty, ¶ 22, 272 P.3d at 955.
A summons is “the means of compelling a defendant to
subject his person to the jurisdiction of the court from which
the summons issues.” Strict compliance with the
requirements of service of process is mandatory. Any
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omissions of statements that are required under W.R.C.P. 4
are fatal and such omission prevents the trial court from
obtaining jurisdiction of the defendant. A judgment entered
without proper service of the summons is void and subject to
attack directly or collaterally.
Id., quoting Hoke v. Motel 6 Jackson & Accor N. Am., Inc., 2006 WY 38, ¶ 7, 131 P.3d
369, 374 (Wyo. 2006).
[T]he burden of proof to establish the validity of the service is
on the party on whose behalf the service is accomplished.
See 4 Wright and Miller, Federal Practice and Procedure, §
1083, p. 384 (1969), and cases cited therein. Normally,
however, the process server’s return will provide a prima
facie case as to the facts of service, and the burden shifts to
the defendant to rebut the proof.
Rosty, ¶ 25, 272 P.3d at 956.
[¶10] The following provisions governed service of process on Ms. Gregory, Ms. Gittins
and Mr. Gregg:
§ 5-1-107. Personal jurisdiction; service of process outside
state.
(a) A Wyoming court may exercise jurisdiction on any basis
not inconsistent with the Wyoming or United States
constitution.
(b) When the exercise of personal jurisdiction is authorized
by this section, service may be made outside this state and
proved according to the Wyoming Rules of Civil Procedure
or any order of the court.
Rule 4. Process.
....
(l) Other service; personal service outside the state; service
by registered or certified mail. – In all cases where service by
publication can be made under these rules, or where a statute
permits service outside this state, the plaintiff may obtain
service without publication by either of the following
methods:
(1) Personal Service Outside the State. – By delivery
to the defendant of copies of the summons and complaint.
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(2) Service by Registered or Certified Mail. – Upon
the request of any party the clerk shall send by registered or
certified mail a copy of the complaint and summons
addressed to the party to be served at the address given in the
affidavit required under subdivision (f) of this rule. The mail
shall be sent marked ‘Restricted Delivery’, requesting a return
receipt signed by the addressee or the addressee’s agent who
has been specifically authorized in writing by a form
acceptable to, and deposited with, the postal authorities.
When such return receipt is received signed by the addressee
or the addressee’s agent the clerk shall file the same and enter
a certificate in the cause showing the making of such service.
[¶11] Ms. Lundahl contends first that Mr. Gregg waived any objection based upon
improper service of process when he filed his motion to dismiss without asserting the
objection. Wyoming law is clear that when a defendant appears voluntarily, without
questioning the court’s personal jurisdiction, that appearance is the equivalent of proper
service of process. Operation Save America v. City of Jackson, 2012 WY 51, ¶ 54, 275
P.3d 438, 456 (Wyo. 2012). By not questioning the court’s personal jurisdiction when he
filed his motion to dismiss, Mr. Gregg waived his objection and submitted himself to the
jurisdiction of the court. The district court erred in dismissing the claims against him on
the basis of improper service of process. 3
[¶12] Ms. Lundahl next asserts the district court erred in dismissing her claims against
Ms. Gregory and Ms. Gittens because they were properly served at their out of state
places of residence as provided in § 5-1-107 (LexisNexis 2013) and W.R.C.P. 4(l)(1).
Personal service of process on non-residents at their place of residence is expressly
provided for in Rule 4(l)(1). However, in the present case, questions of fact exist as to
the validity of the service on Ms. Gregory and Ms. Gittens. As noted, although the
affidavits of service bear the stamp of a Utah notary, his name is misspelled on the
signature line. We conclude this inconsistency is sufficient to call into question whether
the affidavits of service establish a prima case as to the validity of service. On remand,
Ms. Lundahl, as the party asserting the validity of the service, will have the burden of
proving its validity.
3
The pro se motion to dismiss filed in Mr. Gregg’s name is suspicious. In the event it could be
determined that Mr. Gregg did not file it, the waiver rule would not apply and the discussion that follows
in the text of this opinion would also apply to the affidavit of service concerning Mr. Gregg. That is, Ms.
Lundahl would have the burden to prove service of process on Mr. Gregg was valid. We also note that
the district court could have dismissed the claims against Mr. Gregg pursuant to W.R.C.P. 41(b)(2) which
provides for involuntary dismissal by the court when an action is not prosecuted or brought to trial by due
diligence. On remand, dismissal under that rule is still an option.
5
[¶13] Ms. Lundahl also contends service on Wells Fargo was proper. Rule 4(d)(4)
provides for service of process upon a corporation:
by delivery of copies to any officer, manager, general agent,
or agent for process. If no such officer, manager or agent can
be found in the county in which the action is brought such
copies may be delivered to any agent or employee found in
such county. If such delivery be to a person other than an
officer, manager, or general agent or agent for process, the
clerk, at least 20 days before default is entered, shall mail
copies to the corporation by registered or certified mail and
marked “restricted delivery” with return receipt requested, as
its last known address.
[¶14] Alternatively, the following statutory provision applies to service on a corporation:
§ 17-28-104. Service on business entity.
(a) A business entity’s registered agent, or the natural
person having an agency relationship with the registered
agent as provided in W.S. 17-28-101(a), shall accept service
of process, notice, or demand required or permitted by law
that is served on the entity.
(b) If a business entity has no registered agent, or the
agent cannot with reasonable diligence be served, the entity
may be served by registered or certified mail, return receipt
requested, addressed to the entity at its principal office.
Service is perfected under this subsection at the earliest of:
(i) The date the entity receives the mail;
(ii) The date shown on the return receipt, if signed,
either manually or in facsimile, on behalf of the entity; or
....
(c) A business entity may be served as provided in this
section or as provided in the Wyoming Rules of Civil
Procedure.
[¶15] The affidavit of service suggests Wells Fargo was served by facsimile. Service by
facsimile is not allowed under either the statute or the rule. Ms. Lundahl later produced a
return receipt indicating service was accomplished by certified mail. However, the
affidavit of service for Wells Fargo suffers from the same inconsistency as the affidavits
for Ms. Gregory and Ms. Gittins—the notary signature does not match the spelling on the
notary stamp. The Wells Fargo affidavit also indicates a different service date than the
date on the certified mail return receipt. Questions exist concerning whether the affidavit
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of service on Wells Fargo established a prima case of valid service and Ms. Lundahl must
prove its validity.
2. Entry of Default
[¶16] Ms. Lundahl contends the district court erred in not entering defaults against Ms.
Gregory, Ms. Gittins and Wells Fargo. W.R.C.P. 55(a) provides as follows:
(a) Entry. – When a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise
defend as provided by these rules and that fact is made to
appear by affidavit or otherwise, the clerk shall enter the
party’s default.
Pursuant to this provision, the clerk was required to enter a default against Ms. Gregory,
Ms. Gittins and Wells Fargo upon presentation of affidavits indicating they had failed to
plead or otherwise defend. As we have said, the difficulty in this case is that the
affidavits of service raise factual questions about the validity of service. Until Ms.
Lundahl has proven service was valid, no default should be entered.
3. Motion to Transfer
[¶17] In her final issue, Ms. Lundahl asserts the district court erred in not granting her
motion to transfer the case to a court in another county. She filed the motion pursuant to
W.R.C.P. 40.1(b)(2), which provides in pertinent part as follows:
(2) Disqualification for Cause. – Whenever the
grounds for such motion become known, any party may move
for a change of district judge on the ground that the presiding
judge: . . . (E) is biased or prejudiced against the party or the
party’s counsel. The motion shall be supported by an
affidavit or affidavits of any person or persons, stating
sufficient facts to show the existence of such grounds.
This provision requires a motion for disqualification for cause to be supported by
affidavit. Nothing in the record indicates Ms. Lundahl’s motion was supported by an
affidavit. For that reason alone, the district court did not err in declining to grant the
motion. Additionally, although Ms. Lundahl asserted in her motion that the Uinta County
district judge was prejudiced against her because he refused to enter defaults in this and
another case, that assertion is insufficient to show prejudice. Particularly where, as here,
legitimate questions exist as to the validity of service of process, the district judge’s
decision not to enter defaults was justified.
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[¶18] The case is reversed and remanded for a hearing to determine the validity of
service of process.
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