Choice Hotels Intl v. Bonham

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CHOICE HOTELS INTERNATIONAL,
INCORPORATED, a Delaware
Corporation,
Plaintiff-Appellee,
No. 96-2717
v.
GALEN T. BONHAM, SR.; JOANNA R.
BONHAM,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Catherine C. Blake, District Judge.
(CA-95-2275-CCB)
Submitted: September 9, 1997
Decided: September 30, 1997
Before WILKINS, WILLIAMS, and MOTZ, Circuit Judges.
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Vacated and remanded by unpublished per curiam opinion.
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COUNSEL
John H. Harman, John F. Davis, COGGINS, HARMAN & HEWITT,
Silver Spring, Maryland, for Appellants. James G. Healy, Silver
Spring, Maryland, for Appellee.
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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
Appellants Galen T. and Joanna R. Bonham ("Bonhams") appeal
from the district court's order denying their motion filed pursuant to
Fed. R. Civ. P. 60(b)(4), for relief from a default judgment entered
against them in a breach of contract action filed in the district court
for the District of Maryland by Choice Hotels International, Inc.
("Choice"). The Bonhams contend that process was not properly
served upon them, thereby depriving the court of personal jurisdiction
and rendering the default judgment void. We vacate the district
court's order denying relief on the Rule 60(b)(4) motion and remand
with instructions to vacate the default judgment.
Generally, we review the denial of a motion for relief from judg-
ment pursuant to Rule 60(b) for an abuse of discretion. See Heyman
v. M.L. Mktg. Co., 116 F.3d 91, 94 (4th Cir. 1997). But where, as
here, the district court denied a Rule 60(b)(4) motion to set aside a
judgment as void, our review is de novo. See New York Life Ins. Co.
v. Brown, 84 F.3d 137, 142 (5th Cir. 1996).
To succeed on a Rule 60(b) motion, a movant first"``must show
that his motion is timely, that he has a meritorious defense to the
action, and that the opposing party would not be unfairly prejudiced
by having the judgment set aside.'" National Credit Union Admin. Bd.
v. Gray, 1 F.3d 262, 264 (4th Cir. 1993) (quoting Park Corp. v. Lex-
ington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987)). After meeting the
threshold considerations,1 the movant must then satisfy one of the six
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1 A showing of "exceptional circumstances" sometimes is noted as a
fourth threshold. See Gray, 1 F.3d at 264 (citing Werner v. Carbo, 731
F.2d 204, 207 (4th Cir. 1984)).
2
grounds for relief in Rule 60(b). See National Credit Union Admin.
Bd., 1 F.3d at 266. The Bonhams satisfied the threshold criteria.2
We next must determine whether the Bonhams met one of the
grounds set forth in Rule 60 by establishing that the default judgment
is void. Id. A judgment is void only if the court that rendered judg-
ment lacked jurisdiction over the subject matter or the parties or in
circumstances in which the court's action amounts to a violation of
due process. See Schwartz v. United States, 976 F.2d 213, 217 (4th
Cir. 1992). "Valid service of process is a prerequisite to a district
court's assertion of personal jurisdiction." Swaim v. Moltan Co., 73
F.3d 711, 719 (7th Cir.), cert. denied, ___ U.S. ___, 64 U.S.L.W.
3818, 64 U.S.L.W. 3821 (U.S. June 10, 1996) (No. 95-1622); see
Printed Media Servs., Inc. v. Solna Web, Inc., 11 F.3d 838, 843 (8th
Cir. 1993).
The parties agree that Choice attempted to serve the Bonhams
under the law of the state in which service was effected--Missouri.3
See Fed. R. Civ. P. 4(e)(1). The Bonhams claim that there was no
valid service of process because Choice failed to follow the proce-
dures established by state law. Specifically, they assert that each
return of service was defective on its face because it did not set forth
the time, place, and manner of service as required by Mo. Sup. Ct. R.
54.20(a)(1), nor did the returns show that the deputy sheriff offered
and the Bonhams refused to accept service as required by Mo. Sup.
Ct. R. 54.20(f).
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2 The Bonhams' Rule 60(b)(4) motion was timely filed. See New York
Life Ins. Co., 84 F.3d at 142-43 (noting that void judgment may be chal-
lenged at any time); Hertz Corp. v. Alamo Rent-A-Car, Inc., 16 F.3d
1126, 1130 & n.8 (11th Cir. 1994) (collecting cases adopting rule). Next,
the Bonhams were not required to establish the existence of a meritorious
defense. See Broadcast Music, Inc. v. M.T.S. Enters., Inc., 811 F.2d 278,
280 (5th Cir. 1987); Covington Indus., Inc. v. Resintex A.G., 629 F.2d
730, 733 n.3 (2d Cir. 1980). Finally, Choice will suffer "no disadvantage
. . . beyond that suffered by any party which loses a quick victory."
Augusta Fiberglass Coatings, Inc. v. Fodor Contracting Corp., 843 F.2d
808, 812 (4th Cir. 1988).
3 According to the district court's docket sheet, the Bonhams did not
voluntarily make an appearance or waive service under Fed. R. Civ. P.
4(d).
3
The Bonhams correctly note that the returns of service do not set
forth the time, place, and manner of service. The returns only state
that on December 15, 1995, the deputy sheriff served the Bonhams by
delivering the summons to each of them at "RESIDENCE--UNDER
RULE 54.20F." The deputy did not serve the Bonhams personally nor
did he specify the address of the residence, and the record does not
reflect that the residence at which the deputy left the summons and
complaint was, in fact, the Bonhams' residence.
Choice also failed to comply with Rule 54.20(f). The deputy never
personally served anyone--not Defendants, their agents, or a family
member over the age of fifteen. See Mo. Sup. Ct. R. 54.13(b)(l). After
several unsuccessful attempts to serve the Bonhams, the deputy
returned to the residence. The deputy heard a man's voice he thought
was Mr. Bonham's and saw a woman he thought lived there. When
no one answered the door, the deputy announced to the dwelling that
Defendants had been served, and he left. This is insufficient. See
Walker v. Gruner, 875 S.W.2d 587, 589 (Mo. Ct. App. 1994) (noting
that "Rule 54.20(f) contemplates an attempt by the server to person-
ally serve a defendant and defendant's refusal to physically accept the
copies of the summons and [complaint]"). Because the Bonhams were
not personally served and because they did not physically refuse ser-
vice, there was no valid service of process. See Mo. Sup. Ct. R.
54.20(f). Moreover, service of process was not properly effected
under Fed. R. Civ. P. 4(e)(2). The district court therefore did not have
jurisdiction over the parties. See Swaim, 73 F.3d at 719. Accordingly,
we find that the default judgment is void. See Schwartz, 976 F.2d at
216.
We therefore vacate the district court's order denying relief under
Rule 60(b)(4) and remand the case to the district court with instruc-
tions to vacate the default judgment. We dispense with oral argument
because the facts and legal contentions are adequately presented in the
materials before the court and argument would not aid the decisional
process.
VACATED AND REMANDED
4