Doran Law Office v. Stonehouse Rentals, Inc.
678 F. App'x 733
| 10th Cir. | 2017Background
- Doran Law Office sued Stonehouse Rentals, Inc. for unpaid legal fees; attempts to personally serve Stonehouse’s president and resident agent, Salah Ibrahim, failed after a month of process-server efforts at three locations.
- Doran then sent the complaint by certified mail to Stonehouse’s registered office (Ibrahim’s rural “Fall Leaf Home”); postal records show multiple delivery attempts and notices, mail being picked up, but certified items unclaimed.
- After unsuccessful service attempts, Doran asked the Kansas Secretary of State to accept service; the Secretary sent certified mail to the Fall Leaf Home that was returned unclaimed.
- Default judgment entered against Stonehouse for failure to respond; additional lawsuit-related mailings to the Fall Leaf Home were retrieved by someone.
- Stonehouse (through Ibrahim) claimed not to have known of the suit until efforts to sell property in 2015; it moved under Fed. R. Civ. P. 60(b) to set aside the default judgment.
- The district court denied relief; the Tenth Circuit affirmed, rejecting arguments that service was invalid, that failure to answer was excusable neglect, and that extraordinary circumstances warranted relief under Rule 60(b)(6).
Issues
| Issue | Plaintiff's Argument (Doran) | Defendant's Argument (Stonehouse) | Held |
|---|---|---|---|
| Personal jurisdiction / service validity | Doran used reasonable diligence (process server + certified mail; Secretary of State service permissible) | Service was inadequate; Doran did not exercise reasonable diligence before invoking Secretary of State service | Service adequate; Secretary of State acceptance valid; no void judgment for lack of jurisdiction |
| Excusable neglect (Rule 60(b)(1)) | Stonehouse had control of registered address; failure to monitor mail not excusable; prejudice and delay weigh against relief | Stonehouse lacked notice of the suit, so its failure to respond was excusable | No excusable neglect: delay excessive, prejudice to Doran, and district court’s bad-faith finding not clearly erroneous |
| Relief for extraordinary circumstances (Rule 60(b)(6)) | N/A regarding other equities; Stonehouse contended Doran’s fees were excessive and thus relief warranted | Excessive fees (argument why judgment should be set aside as inequitable) | No extraordinary circumstances; fee award had factual basis; Rule 60(b)(6) relief denied |
| Standard of review | N/A | N/A | Abuse of discretion review for 60(b) generally; de novo for jurisdictional (60(b)(4)) question |
Key Cases Cited
- United States v. Bigford, 365 F.3d 859 (10th Cir. 2004) (default judgments are void if entered without personal jurisdiction)
- Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97 (U.S. 1987) (proper service of process is required for personal jurisdiction)
- Hukill v. Okla. Native Am. Domestic Violence Coal., 542 F.3d 794 (10th Cir. 2008) (standard of review for denial of motion to set aside default judgment)
- V.T.A., Inc. v. Airco, Inc., 597 F.2d 220 (10th Cir. 1979) (de novo review applies to Rule 60(b)(4) voidness determinations)
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (U.S. 1993) (factors for excusable neglect analysis)
- Pelican Prod. Corp. v. Marino, 893 F.2d 1143 (10th Cir. 1990) (carelessness by litigant or counsel is not excusable neglect)
- Gonzalez v. Crosby, 545 U.S. 524 (U.S. 2005) (Rule 60(b)(6) requires extraordinary circumstances)
- Cashner v. Freedom Stores, Inc., 98 F.3d 572 (10th Cir. 1996) (Rule 60(b)(6) relief reserved for unusual or compelling circumstances)
- Jennings v. Rivers, 394 F.3d 850 (10th Cir. 2005) (contrast case where lack of notice supported relief)
- United States v. Torres, 372 F.3d 1159 (10th Cir. 2004) (reason for delay is the most important Pioneer factor)