C504750P LLC v. Baker

2017 UT App 36THE UTAH COURT OF APPEALS
C504750P LLC,
Appellee,
v.
STACI BAKER,
Appellant.
Opinion
No. 20150826-CA
Filed February 24, 2017
Fourth District Court, Provo Department
The Honorable James R. Taylor
No. 140401249
Gregory N. Hoole, Attorney for Appellant
Wm. Kelly Nash and Kimberly N. Baum, Attorneys
for Appellee
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES
MICHELE M. CHRISTIANSEN and KATE A. TOOMEY concurred.
ORME, Judge:
¶1 Appellant Staci Baker challenges the district court’s denial
of her motion for relief from a default judgment. We affirm.
¶2 Baker purchased a forty percent interest in a parcel of
land (the Property) for $5,070 at a tax sale in 2013. The other
sixty percent interest in the Property remained with its original
owner. Approximately one year after Baker purchased her
interest in the Property, the original owner entered a real estate
purchase contract (the REPC) to sell the Property to C504750P
LLC (C5). Under the REPC, C5 was to buy all of the Property,
including Baker’s interest, for $15,000. See Utah Code Ann. § 59-
2-1351.7 (LexisNexis 2015) (stating that the sale of property
previously subject to a tax sale cannot be prevented by the tax
C504750P v. Baker
sale purchaser if that purchaser owns less than forty-nine
percent and will receive the greater of its purchase price plus
twelve percent interest or its pro rata share of the sales price).
¶3 Shortly thereafter, Baker received a letter notifying her of
her right to a pro rata share of the purchase price of the Property
and inviting her to attend a closing for the Property where she
would sign a quitclaim deed for her interest in exchange for
forty percent of the $15,000 purchase price—approximately an
eighteen percent return on her investment. Baker’s husband
replied to the letter on her behalf, stating that Baker would not
cooperate with the sale. In light of Baker’s refusal to participate,
C5 placed the $15,000 in escrow, obtained a quitclaim deed from
the original owner, and sued Baker for specific performance
under the REPC.
¶4 After filing its complaint, C5 began its efforts to serve
Baker with process. Over an eighteen-day period, C5 repeatedly
tried to serve Baker at her last known address, where the
previous letter had been sent. On five occasions—on varying
days of the week and at different times each day—a process
server (Server) attempted personal service at Baker’s residence.
During these attempts, Server saw people in the house and cars
in the driveway, but no one ever answered the door.1 On one
occasion, Server even saw a man working in the home’s office
and made eye contact with him, but after Server knocked and no
one answered, Server saw that the blinds to the office had been
closed. Server also spoke with several neighbors, all of whom
1. A litigant is not privileged to avoid lawful process. Cf. D’Aston
v. D’Aston, 790 P.2d 590, 592–93 (Utah Ct. App. 1990)
(concluding that an ‚order of contempt was properly entered‛
even though appellant’s counsel rather than appellant was
served with the Order to Show Cause, and despite ‚the
importance of actual notice in contempt proceedings,‛
‚*b+ecause appellant ha*d+ purposefully hidden to avoid service
of process and notice of the contempt proceedings‛).
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told him that Baker resided at the house. On another occasion,
Server left his business card so that Baker could contact him, but
she did not. Meanwhile, a paralegal who worked for C5’s
counsel did an electronic address search to verify that Baker’s
last known address was still this address and mailed a certified
letter to Baker with return receipt requested. The letter was
returned unclaimed. As a result of these many failed attempts at
service, Server recommended that C5 seek permission to use an
alternative method to serve Baker.
¶5 Following Server’s advice, C5 requested approval from
the district court to serve Baker through publication. See Utah R.
Civ. P. 4(d)(5)(A). In support of its request, C5 submitted a
declaration of nonservice from Server and a declaration from the
paralegal regarding the certified letter. With regard to the
request, the district court made the following findings of fact:
1. [Baker] has avoided personal service and there
are no other means to personally serve [Baker].
2. The whereabouts of [Baker] are either unknown
and cannot be ascertained through reasonable
diligence, or there exists good cause to believe
that [Baker is] avoiding service of process, and
service by normal means is unreasonable and
impracticable under the circumstances.
The district court authorized C5’s request, requiring publication
on two occasions on consecutive weeks ‚in a newspaper of
general circulation in Utah County, Utah.‛ In accordance with
the district court’s order, C5 published its notice in The Daily
Herald. Baker did not file an answer, and the district court
entered default judgment against her. The judgment quieted title
to the Property, obligated C5 to pay Baker her share of the
proceeds, and awarded C5 its costs and fees—totaling
$5,126.20—to be deducted from Baker’s share of the proceeds.
20150826-CA 3 2017 UT App 36C504750P v. Baker
¶6 Notice of the judgment was then mailed to Baker’s last
known address. Shortly thereafter, the mailed notice having
apparently reached her, Baker moved the court to set aside the
judgment. Citing rule 60(b) of the Utah Rules of Civil Procedure,
Baker claimed that the order allowing service through
publication was void because C5 ‚failed to use reasonable efforts
to serve‛ her. The district court denied that motion. Baker
appeals, arguing that she was entitled to relief because she was
not afforded due process, as she was not properly served prior
to entry of the judgment; because the fee award in the judgment
was not proper in that she was not a party to the contract
containing the attorney fee provision; and because she has a
meritorious defense to the underlying claims that entitles her to
have the default judgment set aside.
¶7 ‚A district court has broad discretion to rule on a motion
to set aside a default judgment under rule 60(b) of the Utah
Rules of Civil Procedure,‛ so we generally review such a denial
for an abuse of discretion. Menzies v. Galetka, 2006 UT 81, ¶ 54,
150 P.3d 480. But when considering whether a judgment is void,
as Baker’s argument suggests, we apply a heightened standard
of review, affording ‚the district court . . . no discretion . . .
because the determination that a judgment is void implicates the
court’s jurisdiction.‛ Migliore v. Livingston Fin., LLC, 2015 UT 9,
¶ 25, 347 P.3d 394. We review the court’s underlying findings for
clear error and its conclusions of law for correctness. Menzies,
2006 UT 81, ¶ 55.
¶8 Baker claims that she was entitled to relief from the
default judgment because C5’s use of service by publication
meant that the judgment was entered without notice, which due
process requires, thereby depriving the district court of personal
jurisdiction over Baker.2 She asserts that the district court’s order
2. ‚*T+he burden of demonstrating a lack of jurisdiction lies on
the party challenging jurisdiction.‛ Jackson Constr. Co. v. Marrs,
2004 UT 89, ¶ 9, 100 P.3d 1211.
20150826-CA 4 2017 UT App 36C504750P v. Baker
permitting service by publication was erroneous because the
United States Supreme Court ‚assailed service by publication as
a constitutionally impermissible means of service.‛ She then
incorrectly contends that publication could never have been a
proper means of service here because there were other means,
such as service by mail, that were not utilized.3 See infra ¶ 9. In
making this argument she uses the language of rule 60(b)(4),
claiming that she is entitled to relief because ‚the judgment is
void.‛ See Utah R. Civ. P. 60(b)(4). She also cites the catchall
provision in rule 60(b)(6), which permits relief from a judgment
for ‚any other reason that justifies relief.‛ Id. R. 60(b)(6).
¶9 We first consider Baker’s argument that the judgment is
void. If a ‚judgment [is] entered without the notice required by
due process,‛ it is void and rule 60(b)(4) provides a basis for
relief. Judson v. Wheeler RV Las Vegas, LLC, 2012 UT 6, ¶ 18, 270
P.3d 456. ‚Due process requires notice ‘reasonably calculated,
under all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to
present their objections.’‛ United Student Aid Funds, Inc. v.
Espinosa, 559 U.S. 260, 272 (2010) (quoting Mullane v. Central
Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). This is most
commonly accomplished either by a process server, who renders
personal service, or by mail to a known address. But ‚where
there exists good cause to believe that the person to be served is
avoiding service of process‛ and the litigants have demonstrated
their reasonable efforts to locate the party to be served,
alternative service, such as by publication, may be appropriate.
Utah R. Civ. P. 4(d)(5). The rules of civil procedure afford ‚the
court . . . discretion to order the type of process, so long as the
process it chooses meets the constitutional requirement.‛
Bonneville Billing v. Whatley, 949 P.2d 768, 772 (Utah Ct. App.
1997) (emphasis in original).
3. In making this last point, Baker ignores C5’s unsuccessful
effort to reach her at her residence via certified mail.
20150826-CA 5 2017 UT App 36C504750P v. Baker
¶10 Alternative service is constitutionally sufficient if the
district court finds that the ‚litigants . . . first [undertook]
reasonably diligent efforts to locate the party to be served.‛ Jackson
Constr. Co. v. Marrs, 2004 UT 89, ¶ 11, 100 P.3d 1211 (emphasis
added). Plaintiffs exercise reasonable diligence if they ‚take
advantage of readily available sources of relevant information‛
to locate defendants. Id. ¶ 20. In a case where a plaintiff
identified two possible addresses for the defendant and
demonstrated its persistent efforts to serve the defendant by
certified mail and by personal service at each address, we
concluded it had exercised reasonable diligence. See Smith
Springs, LLC v. Fullingim, 2006 UT App 488U, para. 6. See also
Ooida Risk Retention Group, Inc. v. Bhangal, No. 2:14-CV-168, 2016
WL 2596026, at *2 (D. Utah May 5, 2016) (concluding that a
plaintiff exercised reasonable diligence when it hired private
investigators, attempted to serve the defendant, and surveilled
the defendant).
¶11 It is inadequate, however, for litigants to focus on only
one or two sources without also pursuing other leads as to the
whereabouts of the party to be served. See Jackson Constr. Co.,
2004 UT 89, ¶ 20. Thus, a plaintiff who undertook only to mail
process, which was subsequently returned ‚undeliverable,‛ to
an address obtained from the county recorder without verifying
that address through resources such as the phonebook, did not
demonstrate reasonable diligence. Id. ¶ 21. See also Bonneville
Billing, 949 P.2d at 769–70, 775 (concluding that the plaintiff had
not exercised due diligence when it only served the defendant at
a business address in Salt Lake City even though the constable,
who was charged with serving the defendant, was unsuccessful
in serving the defendant there and noted that he had received
information that the defendant was working in California).
¶12 C5 was reasonably diligent in its efforts to serve Baker. As
in Smith Springs, C5 made persistent efforts to contact and serve
Baker by utilizing various methods. See 2006 UT App 488U, para.
6. On five occasions, Server went to what he believed to be
Baker’s address based on her husband’s previous response on
20150826-CA 6 2017 UT App 36C504750P v. Baker
her behalf to the letter sent to her there. During these trips,
Server sought information regarding her whereabouts from
neighbors, observed the goings-on within the house for signs
that someone who could receive process was present, and left a
card to inform her of how to reach him. C5 also sought to
corroborate its belief that Baker’s last known address continued
to be her address by conducting an online search and then
sending certified mail to her at that address. It was only after all
these steps were taken that Server conveyed his professional
recommendation that C5 seek court approval to use an
alternative method of service.
¶13 C5’s efforts were more extensive than the inadequate
efforts in Jackson Construction Co. of mailing process to one
address, the reliability of which was not in any way
corroborated. See 2004 UT 89, ¶ 21. Here the address was
corroborated by Baker’s husband’s letter prior to litigation, the
neighbors’ statements to Server, and the online search. And
while Baker insists that service by mail should have been tried
before service by publication could be proper, she does not
explain why service by regular mail would be effective when
even a certified letter was returned unclaimed. In other words,
she has suggested no other reasonably diligent conduct that C5
could have undertaken. See id. ¶ 9 (‚*T+he burden of
demonstrating a lack of jurisdiction lies on the party challenging
jurisdiction.‛). Thus, the district court’s order permitting service
by publication was not erroneous under the circumstances and
does not void the default judgment.
¶14 Second, Baker contends that ‚*i+f there were ever a reason
justifying relief from a judgment under rule 60(b)(6), it would be
to ensure a person’s constitutional guarantee to due process was
afforded to them.‛ While we do not disagree that one of the
purposes of rule 60 is to protect the due process rights of
litigants, see Menzies v. Galetka, 2006 UT 81, ¶ 63, 150 P.3d 480(‚Rule 60(b) is an equitable rule designed to balance the
competing interests of finality and fairness.‛), Baker has not
satisfied the test for rule 60(b)(6), which requires ‚*f+irst, that the
20150826-CA 7 2017 UT App 36C504750P v. Baker
reason be one other than those listed in subdivisions (1) through
([5]); second, that the reason justify relief; and third, that the
motion be made within a reasonable time,‛ Laub v. South Central
Utah Tel. Ass’n, 657 P.2d 1304, 1306–07 (Utah 1982) (emphasis
omitted). She has not demonstrated that her 60(b)(6) claim is
distinct from her argument that the judgment was void for lack
of due process, which falls under rule 60(b)(4). Thus, she fails to
satisfy the test’s first requirement, and, as a result, rule 60(b)(6)
does not provide her a basis for relief.
¶15 Baker next contends that the attorney fee award in the
default judgment is also grounds for relief from the judgment.
She claims that ‚*i+t is axiomatic that a person is not bound by
the terms of an agreement to which she is not a party.‛ And
while this may be true, she has provided no citations to
authority supporting her assumption. In fact, the only citations
she provided set out the general rule that Utah permits attorney
fees to the prevailing party only if authorized by statute or
contract. Her reply brief provides no further guidance. She
asserts that C5 ‚led the trial court into committing plain error‛—
again without any citations to law or analysis of facts
demonstrating why this was plain error. Without any such
guidance, we decline to consider this issue further. See Utah R.
App. P. 24(a)(9) (requiring an appellant’s brief to include
‚citations to the authorities, statutes, and parts of the record
relied on‛); State v. Thomas, 961 P.2d 299, 305 (Utah 1998)
(determining that an issue was inadequately briefed where the
appellant provided only bare citations without any ‚*a+nalysis of
what [the cited] authority requires [or] how the facts of [the] case
satisfy these requirements‛).4
4. In her reply brief, Baker also asserts that she is entitled to her
fees on appeal because C5’s brief was ‚frivolous‛ as it
‚contain*ed+ multiple misstatements of material fact.‛ She then
proceeds to identify six ways in which ‚*a+ppellee’s brief is not
grounded in fact‛ or is otherwise inaccurate, stating that C5’s
(continued<)
20150826-CA 8 2017 UT App 36C504750P v. Baker
¶16 Finally, Baker suggests that she is entitled to relief
because she has a meritorious defense to C5’s claims against her.
But the existence of a meritorious defense is not, by itself, a
justification for relief under rule 60(b). See Judson v. Wheeler RV
Las Vegas, LLC, 2012 UT 6, ¶ 14, 270 P.3d 456. Rather, it is merely
one part of the test for relief under rule 60(b): ‚‘justice’ is
generally furthered by granting such a motion upon (1) a
showing that there is an explicit basis for granting relief under
one of the subsections of 60(b); and (2) an allegation of a
meritorious defense.‛ Id. (emphasis added). Thus, we will only
‚consider the issue of meritorious defense *if we are+ satisfied
that a sufficient excuse *under rule 60(b)+ has been shown.‛
Aspenbrook Homeowners Ass’n v. Dahl, 2014 UT App 99, ¶ 10, 329
P.3d 822 (second alteration in original) (citation and internal
quotation marks omitted). Because Baker has made no such
showing, we decline to consider whether she has a meritorious
defense.
¶17 Affirmed.
(2017 UT App 36