David J. Fried v. Wellesley Mazda, and another, March 9, 2010
2010 Mass. App. Div. 36
Personal Jurisdiction, G.L.c. 93A, Motion to Vacate Default Judgment, Service of Process, Certified Mail
The plaintiff, Fried, was a customer of the defendants. The defendants are Hometown Auto Framingham, Inc. (“Hometown Auto”) and Wellesley Mazda. Hometown Auto is a Massachusetts corporation doing business as Wellesley Mazda. The defendants failed to respond to the complaint in a timely manner and default judgment against the defendants was entered. The Appellate Division reversed the denial of the defendants' motion to vacate default judgment and returned the case for trial.
Facts
While operating a “loaner” car he had obtained from Hometown Auto, doing business as Wellesley Mazda, Fried struck the vehicle of Grimes. Fried paid Grimes $2,226.40 in exchange for a release of liability. Fried then sued Hometown Auto and Wellesley Mazda for knowing and willful violations of G.L.c. 93A and “retaliation.”
In February 2008, Fried served Hometown Auto (MA corporation), and Wellesley Mazda by certified mail. The former was served through its registered agent located in Boston. The latter was served at its Wellesley address. The record contains signed return receipt cards for both defendants. No answer to the complaint was filed. A default judgment was entered against the defendants on April 2, 2008. Attorney Worboys filed his notice of appearance as counsel for the defendants on April 8, 2008, and later discovered that a default judgment had been entered.
On May 21, 2008, the defendants moved to vacate the default judgment as void under Rule 60(b) because (1) Wellesley Mazda is merely a trade name of Hometown Auto, not a separate legal entity that could be sued, and (2) as a domestic corporation, neither Hometown Auto, nor its agent could be served properly by mail. The defendants also asserted excusable neglect. A supporting affidavit by the president of Hometown Auto detailed his receipt of the summons and complaint, and the circuitous route that the documents embarked upon before coming to the attention of Attorney Worboys. The trial judge had denied the defendants' motion to vacate the default judgment after noting the month and a half in between the receipt of the complaint and the filing of responsive pleading.
Default judgment against Wellesley Mazda
The defendants argued, and Fried conceded, that the default judgment entered against Wellesley Mazda was void because Wellesley Mazda was merely a trade name of Hometown Auto, not a separate entity subject to suit. Use of the designation “doing business as” does not create a separate legal entity that may be made a party defendant. The Appellate Division reversed the denial of the defendants' motion to vacate the default judgment entered against Wellesley Mazda.
Personal Jurisdiction
The defendants asserted that the default judgment entered against Hometown Auto was void for lack of personal jurisdiction because of Fried's failure to effect service of process in compliance with Mass. R. Civ. P., Rule 4. Proper service of process under Rule 4 is necessary for a court to acquire personal jurisdiction over a defendant, and for a party to satisfy the due process requirements of notice and an opportunity to be heard.
Service of process by certified mail on Hometown Auto's agent did not constitute good service under Rule 4. As Hometown Auto is a domestic corporation, Fried should have made service upon the corporation by a person authorized by law or specially appointed by the court for this purpose. Rule 4(c). However, personal jurisdiction may be waived by conduct, express submission, or extended inaction. “Technical deficiencies” in service may be ignored.
Hometown Auto received actual notice of the lawsuit well before the entry of a default judgment against it, and defendants failed to demonstrate that they were prejudiced by the technically deficient service, because they did not show that the Boston agent would have notified Hometown Auto more quickly had process been delivered to the agent by sheriff. In essence, personal jurisdiction was waived and the technically deficient service may be ignored here.
Clerk’s authority to enter a default judgment
The defendants' final argument was that the trial judge abused his discretion in denying their motion to vacate the default judgment pursuant to Mass. R. Civ. P. 60(b). The Appellate Division did not reach the issue because the court find that the default judgment was entered erroneously.
A district court clerk may enter a default judgment only when the plaintiff's claim against a defendant is for a “sum certain or for a sum which can by computation be made certain” (liquidated damages). Mass R. Civ. P., Rule 55(b)(3). Fried claimed damages resulting from an alleged G.L.c. 93A violation and retaliation. Though Fried reduced his claim for damages to a certain number, damages in this case is not of a “sum certain.” Damages had not been agreed to by the defendants beforehand, and facts in this case were insufficient to arrive at a calculation.
The clerk was authorized to enter a default pursuant to Mass. R. Civ. P. 55(a). Upon such a default, the defendant would have been able to move to set aside entry of the default “[f]or good cause shown.” Mass. R. Civ. P. 55(c). The reasons required to set aside a default under Rule 55(c) are far less onerous than the grounds required to vacate a default judgment pursuant to Mass. R. Civ. P. 60(b).
The defendants' supporting affidavit detailing the confusion caused by the improper service, the defendants' timely motion to vacate after learning of the default judgment, and the meritorious defense asserted allowed the Appellate Division to determine that the defendants had met their burden in demonstrating good cause to set aside entry of the default.
The denial of the defendants' motion to vacate default judgment was reversed and the case was returned for trial.
- Prepared by AYK
