Mikhail Goloverya v. Nextgear Capital, Inc. (mem. dec.) ( 2015 )

MEMORANDUM DECISION
Dec 28 2015, 8:48 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Mario Garcia David J. Jurkiewicz
Christopher H. Weintraut Nathan T. Danielson
Brattain Minnix Garcia Bose McKinney & Evans LLP
Indianapolis, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Mikhail Goloverya, December 28, 2015
Appellant-Defendant, Court of Appeals Case No.
29A05-1508-CC-1215
v. Appeal from the Hamilton Superior
Court
Nextgear Capital, Inc.,
The Honorable Steven R. Nation,
Appellee-Plaintiff. Judge
Cause No. 29D01-1501-CC-141
Bradford, Judge.
Case Summary
[1] In 2013, Appellee-Plaintiff Nextgear Capital, Inc. made a commercial loan
(“the Loan”) in the amount of $100,000.00 to G Auto Sales, Inc., of which
Appellant-Defendant Mikhail Goloverya was president. Goloverya had
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recently executed an individual guaranty (“the Guaranty”) in favor of Nextgear
in which he guaranteed payment of G Auto Sales’s liabilities to Nextgear. G
Auto Sales defaulted on the Loan, and Nextgear filed a complaint seeking to
enforce the Guaranty against Goloverya. Nextgear caused the trial court clerk
to serve the complaint on Goloverya at an address on Grasshopper Street in
Warminster, Pennsylvania (“the Grasshopper Address”), the address
Goloverya provided in connection with the Loan and listed on the Guaranty.
[2] The complaint and summons were sent to the Grasshopper Address and signed
for by Goloverya’s mother. Goloverya received the complaint and summons
within a week afterwards, and telephoned an attorney for Nextgear and
informed him that he had received them. Nextgear made no further attempts at
service, and Goloverya did not respond to the complaint in the trial court. Over
thirty days later, Nextgear filed its motion for default judgment. The trial court
entered judgment in favor of Nextgear, and, after Goloverya’s attempt to appeal
was untimely, he filed a motion to set aside the judgment, which the trial court
denied. Goloverya appeals, contending that the judgment in favor of Nextgear
is void for lack of personal jurisdiction due to legally deficient service of the
complaint and summons. We affirm.
Facts and Procedural History
[3] In August of 2013, Goloverya, who operated G Auto Sales in New Jersey,
executed the Guaranty in favor of Nextgear guaranteeing certain of G Auto
Sales’s obligations to Nextgear. The Guaranty listed the Grasshopper address
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as the address to which notices to Goloverya were to be sent. In September of
2013, G Auto Sales obtained the Loan, in the amount of $100,000.00, from
Nextgear, an obligation subject to the Guaranty.
[4] As of December 31, 2014, G Auto Sales had defaulted on the Loan and owed
$284,717.02. On January 9, 2015, Nextgear filed suit against Goloverya on the
Guaranty. Nextgear sent copies of the complaint and summons to the
Grasshopper address via certified or registered mail. On January 13, 2015, the
complaint and summons were received at the Grasshopper Address and signed
for by Goloverya’s mother. On January 20, 2015, an attorney for Nextgear
received a telephone call from Goloverya, in which he admitted that he had
received the complaint and summons. Nextgear made no further attempts to
serve Goloverya with copies of the complaint and summons. Goloverya,
however, filed no response to the complaint at this point.
[5] On February 20, 2015, Nextgear moved for default judgment, and the trial
court entered default judgment in favor of Nextgear on February 27, 2015. On
March 28, 2015, Goloverya filed a notice of appeal, which this court dismissed
on April 16, 2015. On June 17, 2015, Goloverya filed a motion to set aside
judgment pursuant to Indiana Trial Rule 60, which the trial court denied on
July 27, 2015.
Discussion and Decision
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[6] Goloverya contends that the trial court lacked personal jurisdiction over him
because he was not properly served. Indiana Trial Rule 4.1 governs service on
individuals and provides, in part, that
[s]ervice may be made upon an individual, or an individual
acting in a representative capacity, by … sending a copy of the
summons and complaint by registered or certified mail or other
public means by which a written acknowledgment of receipt may
be requested and obtained to his residence, place of business or
employment with return receipt requested and returned showing
receipt of the letter[.]
[7] Moreover, as we have explained,
“Personal jurisdiction is the court’s power to bring a person into
its adjudicative process and render a valid judgment over a
person.” Keesling v. Winstead, 858 N.E.2d 996, 1000 (Ind. Ct.
App. 2006) (citation omitted). Without effective service of
process, a trial court does not obtain personal jurisdiction over a
defendant. Goodson v. Carlson, 888 N.E.2d 217, 220 (Ind. Ct.
App. 2008). “The existence of personal jurisdiction over a
defendant is … a constitutional requirement to rendering a valid
judgment, mandated by the Due Process Clause of the
Fourteenth Amendment to the United States Constitution.”
Munster v. Groce, 829 N.E.2d 52, 57 (Ind. Ct. App. 2005). Once
the party contesting jurisdiction, usually the defendant,
challenges the lack of personal jurisdiction, the plaintiff must
present evidence of a court’s personal jurisdiction over the
defendant, but “the defendant ultimately bears the burden of
proving the lack of personal jurisdiction by a preponderance of
the evidence, unless that lack is apparent on the face of the
complaint.” LePore v. Norwest Bank Indiana, N.A., 860 N.E.2d
632, 634 (Ind. Ct. App. 2007).
Norris v. Pers. Fin., 957 N.E.2d 1002, 1006-07 (Ind. Ct. App. 2011).
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[8] In this case, Goloverya’s challenge to personal jurisdiction arises in the context
of the trial court’s denial of his motion for relief from judgment. Trial Rule
60(B) provides, in relevant part, as follows: “On motion and upon such terms
as are just the court may relieve a party or his legal representative from a
judgment, including a judgment by default, for the following reasons: … the
judgment is void[.]” A judgment rendered where service of process was
inadequate is void for want of personal jurisdiction. See Stidham v. Whelchel,
698 N.E.2d 1152, 1155 (Ind. 1998).
When a defendant argues a lack of personal jurisdiction, the
plaintiff must present evidence to show that there is personal
jurisdiction over the defendant. Anthem Ins. Companies, Inc. v.
Tenet Healthcare Corp., 730 N.E.2d 1227, 1231 (Ind. 2000). The
defendant ultimately bears the burden of proving the lack of
personal jurisdiction by a preponderance of the evidence, unless
the lack of jurisdiction is apparent on the face of the complaint.
Id. The existence of personal jurisdiction over a defendant is a
question of law and a constitutional requirement to rendering a
valid judgment, mandated by the Due Process Clause of the
Fourteenth Amendment to the United States Constitution. Id. at
1237. Thus, we review a trial court’s determination regarding
personal jurisdiction de novo. Id. at 1238. To the extent a trial
court may make findings of jurisdictional facts, these findings are
reviewed for clear error if they were based on in-court testimony.
Id. at 1238. If, however, only a paper record has been presented
to the trial court, we are in as good a position as the trial court to
determine the existence of jurisdictional facts and will employ de
novo review as to those facts. Id. at n. 12.
Munster, 829 N.E.2d at 57. Here, we have been provided with a paper record
and will therefore review relevant jurisdictional facts de novo.
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[9] Goloverya contends that Nextgear rendered inadequate service of process
because it sent the complaint and summons to the Grasshopper address, which
is not his residence. It is undisputed that the Grasshopper address was not
Goloverya’s residence at the relevant time, so Nextgear’s attempt to serve
Goloverya did not comply with the requirements of Trial Rule 4.1. Nextgear,
however, argues that any defect in service was cured. Trial Rule 4.15(F)
provides that “[n]o summons or the service thereof shall be set aside or be
adjudged insufficient when either is reasonably calculated to inform the person
to be served that an action has been instituted against him, the name of the
court, and the time within which he is required to respond.” The question,
then, is whether service at the Grasshopper address was reasonably calculated
to inform Goloverya of the lawsuit. Under the circumstances of the case, we
conclude that it was.
[10] Nextgear mailed the complaint and summons to the Grasshopper address,
which had been specifically provided by Goloverya as the address for notices
pursuant to the Guaranty approximately eighteen months previously. Despite
being in a contractual relationship with Nextgear, Goloverya never notified
Nextgear that he had moved. One week after the complaint and summons
were received at the Grasshopper address, Goloverya notified Nextgear’s
counsel that he was in actual possession of the complaint and summons. In our
view, this last fact is of particular importance. We have explained that
“although actual notice alone will not cure defective service, it may be
considered in determining whether the notice was reasonably calculated to
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inform an organization of the action.” Nw. Nat. Ins. Co. v. Mapps, 717 N.E.2d
947, 955 (Ind. Ct. App. 1999). See also Matter of Paternity of R.L.W., 643 N.E.2d
367, 369 (Ind. Ct. App. 1994) (“However, the actual knowledge of the person
served is relevant and probative to an inquiry into the likely efficacy of the
service employed.”).
[11] In so concluding, we conclude that Mills v. Coil, 647 N.E.2d 679 (Ind. Ct. App.
1995), trans. denied, on which Goloverya relies, is distinguishable. In that case,
Mills and Coil were involved in a traffic accident, and Mills filed suit
approximately two years later, serving Coil at Coil’s Fort Wayne address. Id. at
679-80. Coil, however, had moved to Ohio three months previously with no
intention of returning. Id. at 680.
[12] We rejected Mills’s argument that his service was reasonably calculated to
provide notice, noting that “[s]ervice upon a defendant’s former residence is
insufficient to confer personal jurisdiction.” Id. at 681 (citing Poteet v. Bethke,
507 N.E.2d 652, 654 (Ind. Ct. App. 1987)). In rejecting Mill’s argument, we
identified the following fact as particularly relevant: “Mills served Coil at a
two-year-old address without any independent reason to suspect Coil might still
be there.” Id. at 681.
[13] This case is distinguishable from Mills, because of the prior relationship between
the parties and Goloverya’s actual notice of the lawsuit. Although Nextgear
used an eighteen-month-old address, it was an address provided by Goloverya
himself as required by the terms of the Guaranty. Because of their contractual
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relationship with Goloverya, we conclude that Nextgear had more reason to
rely on the Grasshopper address’s accuracy and currency than would a party
that had no previous relationship with the other party, as apparently was the
case in Mills. Moreover, Goloverya notified Nextgear’s counsel of his
possession of the summons and complaint, which is evidence that Nextgear’s
method was reasonably calculated to provide Goloverya with notice.1 Under
the totality of circumstances in this case, we conclude that Nextgear’s service on
the Grasshopper address was reasonably calculated to provide notice to
Goloverya. Consequently, the trial court properly denied Goloverya’s motion
to set aside the default judgment against him.
[14] The judgment of the trial court is affirmed.
Baker, J., and Pyle, J., concur.
1
We think it would be somewhat absurd to punish Nextgear for not making further attempts at service once
Goloverya informed it that he had the summons and complaint. Our caselaw frequently stresses the exercise
of diligence in service cases, which is perfectly understandable. See, e.g., Munster v. Groce, 829 N.E.2d 52, 61
(Ind. Ct. App. 2005) (“Harris’ bare-bones affidavit [of diligence in attempting service] does not permit the
conclusion that due diligence was used to locate Groce’s current whereabouts, or that service via the
Secretary of State, using an address that apparently was known to be invalid, was reasonably calculated to
provide Groce notice of this lawsuit.”). We believe, however, that there are few attorneys who would have
pursued the matter further under the circumstances of this case.
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