Malloy v. Smith
2017 Ark. App. 288
| Ark. Ct. App. | 2017Background
- Plaintiffs Bruce and Jan Smith sued New York residents Patrick Malloy and John Callaghan in Cleburne County, Arkansas, alleging breach of contract and seeking damages for about $300,000 loaned to their son’s business.
- The Smiths personally served summonses at the defendants’ New York business addresses on June 29 and July 1, 2015, and mailed copies on July 13; proofs of personal service were filed in Arkansas on July 16, but separate proofs of mailing were not filed within twenty days.
- Malloy and Callaghan did not answer; the Smiths obtained a default judgment after a damages hearing and an order was entered awarding $285,346.91 plus interest.
- The defendants later filed a joint answer and moved to set aside the default judgment, arguing (1) service was defective under New York law, (2) Arkansas Rule of Civil Procedure 4(b) was not strictly followed (summons form omitted defendant address), and (3) the default should be set aside for excusable neglect (Malloy’s alleged serious illness May–Oct 2015); Callaghan argued he shared Malloy’s defense under the common-defense doctrine.
- The circuit court denied the motion to set aside after a hearing; defendants appealed.
Issues
| Issue | Plaintiff's Argument (Smith) | Defendant's Argument (Malloy/Callaghan) | Held |
|---|---|---|---|
| Whether service complied with New York CPLR § 308(2) | Service effected by delivery to a person of suitable age at business and mailing within 20 days — perfected | Service was not perfected because proof of mailing was not filed as required, rendering judgment void | Service was sufficient under New York law; filing proof of personal service met § 306/308(2) requirements and proof of mailing filing is not required to perfect service |
| Whether Arkansas Rule 4(b) required defendant address on summons form | Form complied; defendants were identified by name | Omission of defendant address on official form renders summons not "directed to" defendant and voids service | Rule 4(b) satisfied by naming defendants; official-form blank for address is not fatal where identity is clear |
| Whether Malloy showed excusable neglect to set aside default (and meritorious defense) | Malloy was incapacitated by illness June–Oct 2015; physician affidavit supports excusable neglect | Court should deny—failure to attend to business is not excusable neglect | Trial court did not abuse discretion; it found the affidavit/testimony not credible and held failure to attend to business is not excusable neglect; motion denied |
| Whether Malloy’s illness defense inured to Callaghan (common-defense) | Callaghan urged Malloy’s excuse should inure to him | Smiths disputed applicability; court need not reach because excusable-neglect prong failed | Court did not rule on the common-defense issue because excusable-neglect failed; affirmed |
Key Cases Cited
- Shotzman v. Berumen, 363 Ark. 215 (2005) (official form and exact compliance with Rule 4(b) analyzed; misnomer can be fatal)
- Smith v. Sidney Moncrief Pontiac, Buick, GMC Co., 353 Ark. 701 (2003) (statutory and rule-based service requirements must be strictly construed)
- Maple Leaf Canvas, Inc. v. Rogers, 311 Ark. 171 (1992) (failure to attend to business does not constitute excusable neglect)
- Earls v. Harvest Credit Management, 460 S.W.3d 795 (Ark. 2015) (summons must state correct response time; facial errors can void summons)
- Builder One Carpet One v. Wilkins, 128 S.W.3d 828 (Ark. App. 2003) (misnomer analysis in service disputes)