394 P.3d 807
Idaho Ct. App.2016Background
- Secured Investment Corp. (Secured) sued Myers Executive Building, LLC (Myers) in Idaho for breach of a 2011 contract and sought a declaratory judgment to compel arbitration; Myers failed to appear timely and default judgment was entered awarding Secured $100,109.64.
- The 2011 agreement allocated risk to Myers and required arbitration of disputes; Myers previously agreed with Secured to split defense costs in separate litigation but did not pay its share.
- Secured attempted personal service in Washington on Myers’ registered agent, Linda Youngberg, at business and home addresses without success, obtained an order allowing service by publication, published summonses, mailed copies, and emailed the complaint to Youngberg.
- Youngberg forwarded the emailed complaint to California counsel, who said he could not represent Myers in Idaho and that email service was insufficient; Myers took no further action until after default judgment.
- Myers filed a general appearance after default and moved under I.R.C.P. 60(b)(4) (void judgment) and 60(b)(1) (excusable neglect) to set aside the default; the district court denied relief and awarded Secured attorney fees; Myers appealed.
Issues
| Issue | Plaintiff's Argument (Myers) | Defendant's Argument (Secured) | Held |
|---|---|---|---|
| Whether default judgment is void for lack of personal jurisdiction | Myers: General appearance did not waive jurisdiction; if it did, waiver could not retroactively validate the earlier default | Secured: Myers was validly served by publication and later voluntarily submitted to jurisdiction by general appearance | Held: Waiver — Myers’ general appearance (without 12(b) challenge) waived jurisdiction; judgment not void |
| Whether service by publication was improper under I.C. § 5-508 | Myers: Affidavits were defective for not specifically stating no managing/ business agent in Idaho | Secured: Affidavits provided sufficient factual basis showing foreign LLC and failed personal service attempts | Held: Service by publication was proper; affidavits satisfied statutory requirements |
| Whether Myers was entitled to three days’ notice of default judgment under I.R.C.P. 55(b)(2) | Myers: Prior contacts, arbitration attempts, and a phone message constituted an appearance triggering notice | Secured: No responsive court appearance occurred before default; single phone message insufficient | Held: No prior appearance; single disputed phone message insufficient; three-day notice not required |
| Whether default should be set aside for excusable neglect under I.R.C.P. 60(b)(1) | Myers: Youngberg acted reasonably ( relied on California counsel); mistake excusable; also asserted meritorious defense | Secured: Youngberg knew of litigation and failed to secure Idaho counsel or verify service; this was a mistake of law, not excusable | Held: No excusable neglect — Youngberg’s inaction and reliance on non‑Idaho counsel’s statement were not reasonably prudent; motion denied |
Key Cases Cited
- Suitts v. Nix, 141 Idaho 706 (appellate standard for motion to set aside default judgment)
- Flood v. Katz, 143 Idaho 454 (standards for appellate review of discretionary rulings)
- McClure Eng’g, Inc. v. Channel 5 KIDA, 143 Idaho 950 (de novo review for void-judgment claims under Rule 60(b)(4))
- State v. Housel, 140 Idaho 96 (default judgment void where court lacks jurisdiction)
- Catledge v. Transport Tire Co., 107 Idaho 602 (service defects can void default)
- Thiel v. Stradley, 118 Idaho 86 (service/process defects and void judgments)
- Farber v. Howell, 105 Idaho 57 (three-day notice requirement and voidable default judgments)
- Fisher v. Crest Corp., 112 Idaho 741 (effect of defective service and waiver arguments)
- Rhino Metals, Inc. v. Craft, 146 Idaho 319 (general appearance constitutes voluntary submission to jurisdiction)
- Idaho State Police ex rel. Russell v. Real Property, 144 Idaho 60 (fact-based Rule 60(b) review; attorney communication and excusable neglect)
- Gro-Mor, Inc. v. Butts, 109 Idaho 1020 (mistake of law is not excusable neglect)