Johnson v. Cintas Corp. No. 2Johnson v. Cintas Corp. No. 2
Lead Opinion
¶ 1. This is a review of a published decision of the court of appeals, Johnson v. Cintas Corp. No. 2,
¶ 3. We disagree with Johnson on both counts and therefore affirm.
¶ 4. We conclude that service in this case was fundamentally defective because Johnson failed to name Cintas No. 2 as a defendant in his summons and complaint, contrary to
I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE
¶ 5. On April 12, 2007, Johnson filed a summons and complaint against Cintas; United Healthcare; Marvin Crandall (Crandall); and XYZ Corporation, a fictitious name designating Crandall's automobile liability insurer.
¶ 6. In his complaint, Johnson alleged that on July 2, 2006, he was riding as a passenger in his own vehicle driven by Crandall with Johnson's permission when Crandall negligently operated the vehicle, causing it to collide with another vehicle. Johnson alleged that as a result of the accident, he was permanently injured, experienced pain and suffering, incurred past and future medical expenses, and had a loss of earning capacity.
¶ 7. In addition, Johnson claimed that both he and Crandall qualified as insureds under Cintas's automobile liability insurance coverage and consequently were entitled to benefits payable by Cintas. Cintas's refusal to pay any benefits, according to Johnson, constituted a breach of contract and bad faith.
¶ 8. On April 19, 2007, Johnson served his summons and complaint upon the registered agent for Cintas No. 2, a wholly owned subsidiary of the named defendant, Cintas. Unlike Cintas No. 2, Cintas is neither registered nor licensed to do business in Wisconsin and does not have a registered agent for service of process in Wisconsin. Cintas is a foreign public corporation, incorporated under the laws of Washington with a principal place of business in Ohio.
¶ 9. Neither Cintas nor Cintas No. 2 answered Johnson's complaint. Accordingly, Johnson's counsel filed an affidavit of no answer, and on June 15, 2007, Johnson moved for default judgment against Cintas. Like his summons and complaint, Johnson's motion for default judgment was
¶ 10. On July 2, 2007, Cintas, through its counsel in Illinois,
¶ 11. Alternatively, assuming the circuit court found that Cintas was properly served, Cintas maintained that default judgment would still be inappropriate because Cintas's failure to answer was unintentional and because Cintas had a valid defense to Johnson's claims. Specifically, Cintas alleged that the accident that injured Johnson was a result of both Johnson and Crandall being intoxicated.
¶ 12. Three days later, on July 5, 2007, Johnson filed a letter with the circuit court, acknowledging receipt of Cintas's emergency motion to dismiss Johnson's motion for default judgment and expressing his intention to amend his summons and complaint by changing the named defendant from Cintas to Cintas No. 2. Furthermore, relying on this court's decision in Hoesley v. La Crosse VFW Chapter,
¶ 13. On July 6, 2007, the circuit court held a hearing on Johnson's motion for default judgment, at which only counsel for Johnson and counsel for Cintas were present. Johnson moved to orally amend his summons and complaint to name Cintas No. 2 as the correct defendant. The circuit court granted Johnson's motion to amend and then immediately granted default judgment in favor of Johnson and against Cintas No. 2. The circuit court denied that Cintas No. 2 was entitled to notice of the amended summons and complaint. The court reasoned that the amendment did not have the effect of bringing in Cintas No. 2 as a new party since Cintas No. 2 was the entity served with the original summons and complaint.
¶ 14. On July 20, 2007, Cintas No. 2 filed an answer to both Johnson's complaint and amended complaint and moved to intervene and to set aside the default judgment. That same date, by letter, the circuit court responded to Cintas No. 2, advising Cintas No. 2 that it need not intervene because the court already determined that it was a party to the action. The circuit court further stated that it would not accept the filing of Cintas No. 2's answer because default judgment had already been entered. Still, the court indicated that it would be willing to consider a motion for relief from the judgment under
¶ 15. Cintas No. 2 heeded the circuit court's suggestion and moved to vacate the default judgment under
¶ 16. On September 11, 2007, the circuit court held a hearing on Cintas No. 2's motion to vacate the default judgment and granted the motion, finding that Cintas No. 2's failure to answer was due to mistake or excusable neglect under
¶ 17. Nearly a year later, on August 19, 2008, Johnson filed a motion for reconsideration of the circuit court's order vacating the default judgment.
¶ 18. The circuit court agreed with Johnson. Accordingly, on February 10, 2009, the circuit court issued a written decision granting Johnson's motion to reconsider the court's order vacating the default judgment. The court determined that the facts in this case are akin to those in Hoesley,
¶ 19. Cintas No. 2 appealed, and the court of appeals reversed. Johnson,
¶ 20. The court of appeals rejected Johnson's argument that he simply misnamed the correct defendant. Id., ¶ 14. Instead, the court of appeals determined Johnson named the incorrect legal entity. Id., ¶ 15. As a result, the court of appeals ruled that the amendment of Johnson's pleadings had the effect of bringing a new party into the action, "[r]egardless of how Cintas No. 2 held itself to the public." Id. Absent service of the amended summons and complaint, the court of appeals concluded that the circuit court lacked the requisite personal jurisdiction to enter a default judgment against Cintas No. 2. See id., ¶¶ 15-17. The court of appeals therefore reversed the default judgment and remanded the cause to the circuit court for further proceedings. Id., ¶ 17.
¶ 21. Johnson petitioned this court for review. We accepted on May 25, 2011.
II. STANDARD OF REVIEW
¶ 22. In this case, the circuit court granted Johnson's motion to reconsider the court's order vacating the default judgment against Cintas No. 2. The determination of whether to vacate a default judgment is within the circuit court's sound discretion. Ness v. Digital Dial Commc'ns, Inc.,
III. ANALYSIS
¶ 23. Wisconsin Stat. ch. 801 governs civil procedure as it relates to the commencement of an action. Wisconsin Stat.
¶ 24. A summons serves two purposes. First, a summons provides notice to the defendant that an action has been commenced against the defendant. Ness,
¶ 25. Given that a defendant's constitutional right to due process is at stake, " 'Wisconsin requires strict compliance with its rules of statutory service, even though the consequences may appear to be harsh.'" Am. Family,
¶ 26. In keeping with the above rule, our courts have recognized a distinction between service that is fundamentally defective, such that the court lacks personal jurisdiction over the defendant in the first instance, and service that is merely technically defective. See Schaefer v. Riegelman,
¶ 27. We appreciate that the line between a fundamental defect and a technical defect can be a fine one. Accordingly, we look to case law for guidance.
¶ 28. In American Family, this court held that a complainant's failure to comply with the requirements of
¶ 29. The instant case implicates the first of the four requirements identified in
¶ 30. In Bulik, the complainant failed to name the defendant in the summons as required by
¶ 31. Arrow moved to vacate the default judgment, arguing that the summons was defective because it did not name Arrow as a defendant. Id. The circuit court denied Arrow's motion, pointing out that Arrow was identified as a defendant in the body of the complaint. Id.
¶ 32. Arrow appealed, and the court of appeals reversed. Relying on
¶ 33. Conversely, in Hoesley, this court held that the plaintiffs summons and complaint properly conferred personal jurisdiction on the circuit court over the defendant Thomas Rooney Post No. 1530, Veterans of Foreign Wars of the United States (Thomas Rooney Post No. 1530, VFW), even though the summons and complaint mistakenly named the defendant as "La Crosse VFW Chapter, Thomas Rooney Post."
¶ 34. In that case, the plaintiff filed a personal injury lawsuit after allegedly falling on property owned by Thomas Rooney Post No. 1530, VFW, a corporation located in La Crosse. Id. at 501. However, the plaintiffs summons and complaint incorrectly referred to the defendant as an "association" and listed its name as "La Crosse VFW Chapter, Thomas Rooney Post." Id. at 502. The plaintiff served her summons and complaint upon the post commander. Id. at 501. Thomas Rooney Post No. 1530, VFW then moved to dismiss the action for lack of personal jurisdiction, arguing that neither the summons nor the complaint correctly identified the defendant's name and corporate character. See id. at 501-02. The circuit court denied the motion. Id. at 502.
¶ 35. Thomas Rooney Post No. 1530, VFW appealed, and this court affirmed. The court concluded that a mere misnomer in a summons and complaint may be corrected by amendment at any stage of the lawsuit, including after a default judgment is entered:
The general rule is that if the misnomer or misdescription does not leave in doubt the identity of the party intended to be sued, or, even where there is room for doubt as to identity, if service of process is made on the party intended to be sued, the misnomer or misdescription may be corrected by amendment at any stage of the suit, or even after judgment, and a judgment taken by default is enforceable.
Id. (internal quotations omitted). The court underscored the difference between an amendment that merely corrects the defendant's name and one that has the effect of bringing a new party into the action: " '[I]f the effect of the amendment is to correct the name under which the right party is sued, it will be allowed. However, if it is to bring in a new party, it will be refused.'" Id. at 503 (quoting Ausen v. Moriarty,
¶ 36. By comparison, in Parks v. West Side Railway Co.,
¶ 37. The West Side Railroad Company appealed to this court, arguing that the amendment to the summons and complaint did not have the legitimate effect of correcting a party's name but rather had the improper effect of discharging one party as defendant and substituting another. Id. at 221. The court disagreed, commenting that the defendant's argument "does not appeal strongly to a mind which is looking at the substance of things, rather than the mere form." Id. Had the West Side Railway Company never existed, the court reasoned, the amendment would have "no doubt" been unobjectionable. Id. at 221-22. The court determined that the result should be no different when the company maintained only a "nominal existence, without property or franchises." Id. at 222. As far as the court was concerned, "the corporation which was operating the electrical power house and railroad was sued in th[e] action, with a slight mistake in [the] name, which the [circuit] court properly corrected." Id.
¶ 38. Having set forth the applicable law, we turn now to the instant case. Johnson urges us to conclude that the circuit court appropriately reconsidered its order vacating the default judgment against Cintas No. 2. Specifically, relying on Hoesley, Johnson maintains that he merely misnamed Cintas No. 2 as Cintas in his summons and complaint, and therefore, his pleadings were only technically defective. He argues that the defect did not prejudice Cintas No. 2 because, pursuant to the circuit court's finding, Cintas No. 2 was served with the summons and complaint. We disagree.
¶ 39. We conclude that the circuit court erred as a matter of law when it reconsidered its order vacating the default judgment against Cintas No. 2. Johnson's failure to name Cintas No. 2 as a defendant in his summons and complaint, contrary to
¶ 40. This case is resolved by a straightforward application of the above-stated law. As made clear by both American Family and Bulik, a complainant's failure to name a defendant in the summons and complaint in accordance with
¶ 41. While Johnson relies on Hoesley to support his position that his summons and complaint were only technically defective, the opposite is true: Hoesley supports our conclusion that Johnson's pleadings were fundamentally defective. Hoesley instructs that a misnomer in a summons and complaint constitutes a technical defect when an amendment to the pleadings would result in merely correcting the name under which the right party is sued, as opposed to bringing an entirely new party into the action. See
¶ 42. Johnson does not quarrel with the fact that his summons and complaint named the wrong party, Cintas, and that the party he intended to sue, Cintas No. 2, is an independent legal entity. Instead, Johnson maintains that when the party intended to be sued is the entity served, as Cintas No. 2 was in this case, the distinction between a fundamental and technical defect should not depend upon the mere "happenstance" of whether the misnomer in the summons and complaint corresponds to another, existing legal entity. So long as the right party is the entity served, Johnson contends, the purpose of the summons is fulfilled. According to Johnson, this court's decision in Ness,
¶ 43. While Johnson's argument may seem appealing on the surface, it lacks support in the law. To begin with, as articulated by the court of appeals in Bulik, a summons that does not name the party intended to be sued fails, as a matter of law, to give notice to that party that an action has been commenced against it. See
¶ 44. Furthermore, our decision in Ness does not stand for the proposition that Johnson suggests. The sole issue in Ness was whether, under
¶ 45. The facts in Ness were procedurally complex and largely immaterial to the case now before us. For our purposes today, it is sufficient to recount the following. A
¶ 46. The garnishees twice moved to vacate the default judgment on the grounds of excusable neglect. Id. at 598-99. They also twice filed a proposed answer to the original complaint, alleging that the only amount at issue was the amount collected from Wisconsin consumers. Id. While the circuit court denied their first motion to vacate the default judgment, id. at 598, the court granted the second, id. at 599. As articulated by this court, the circuit court "vacated the judgment solely on the ground that the original complaint on which the default judgment was based was superseded by the amended complaint. . . ." Id. at 599. Because the garnishees filed their proposed answer within 20 days of the filing of the amended complaint pursuant to
¶ 47. The receiver appealed, and the court of appeals reversed, concluding that an amended complaint does not supersede the original complaint in regard to any defaulting party, unless the amended complaint presents an additional claim for relief. Id. The garnishees appealed to this court, and we affirmed. Id. at 595. Citing the plain language of
¶ 48. Presumably, it is that footnote on which Johnson hangs on to argue that his summons and complaint were only technically defective. Johnson submits that "Ness is indistinguishable from this case": like the receiver in Ness whose pleadings mistakenly named as defendant the Wisconsin-based U.S. Billing instead of the Texas-based U.S. Billing, see id. at 597-98, Johnson's pleadings mistakenly named as defendant Cintas instead of Cintas No. 2. It follows, according to Johnson, that because we deemed the amendment in Ness merely a technical change, then so too should we deem Johnson's amendment a mere technical change. While we appreciate some of the procedural similarities between Ness and the instant case, we do not regard Ness as controlling on the issue before us today: whether Johnson's pleadings were fundamentally or technically defective. As our foregoing discussion makes apparent, the Ness court never analyzed whether the circuit court had personal jurisdiction over the Texas-based U.S. Billing as a result of the receiver's failure to name that specific corporation in his original garnishment complaint. Indeed, the Ness court made a point to state that the Texas-based U.S. Billing "did not assert any defense to the plaintiffs garnishment action," jurisdictional or otherwise. See id. at 598. Again, the sole issue in Ness was whether, under
¶ 49. Finally, Johnson contends that even if we conclude that his failure to name Cintas No. 2 constituted a fundamental defect, we ought to nevertheless construe his pleadings as only technically defective on the grounds that Cintas No. 2 held itself out as Cintas. In support of his argument, Johnson points to the circuit court's specific findings that Johnson served his summons and complaint upon Cintas No. 2 and that the misnomer in the pleadings was "due entirely to the actions of [Cintas No. 2] in terms of the business name it choose [sic] to operate under in the state of Wisconsin and in relation to [Johnson]." Under such circumstances, Johnson asserts, fairness demands that we construe his pleadings as conferring upon the circuit court personal jurisdiction over Cintas No. 2. Again, we decline Johnson's invitation for the simple reason that his argument is without support in the law.
IV CONCLUSION
¶ 50. We conclude that service in this case was fundamentally defective because Johnson failed to name Cintas No. 2 as a defendant in his summons and complaint, contrary to
The decision of the court of appeals is affirmed.
Notes
The Honorable David M. Bastianelli presided.
See
All subsequent references to the Wisconsin Statutes are to the 2007-08 version unless otherwise indicated.
According to the record before this court, the circuit court was later apprised of the fact that Cintas's counsel appeared before the court without first seeking pro hac vice admission as required by SCR 10.03(4) (b).
Alternatively, Johnson moved for sanctions as a result of Cintas No. 2's alleged failure to comply with Johnson's discovery requests.
In 1998, the legislature amended
Citing this court's recent decision in Tews v. NHI, LLC,
In reconsidering its order to vacate the default judgment against Cintas No. 2, the circuit court relied in large part upon the South Carolina Court of Appeals' decision in McCall v. IKON,
As the court of appeals in the instant case aptly noted, see Johnson v. Cintas Corp. No. 2,
By comparison, as we have already explained, " Wisconsin requires strict compliance with its rules of statutory service ....'" Am. Family Mut. Ins. Co. v. Royal Ins. Co. of Am.,
Dissenting Opinion
¶ 52. {dissenting). It may be that in some instances, there is a "fine line" between fundamental and technical defects. Majority op., ¶ 27. However, this case falls squarely on the technical side of that line.
¶ 53. A straightforward application of the rules set forth in Hoesley
I
¶ 54. The majority acknowledges that a mere misnomer in the summons and complaint does not deprive the circuit court of jurisdiction over the misnamed defendant. Majority op., ¶¶ 33-35 (citing Hoesley v. La Crosse VFW Chapter,
¶ 55. The majority's dodge results in a new bright-line rule: When a plaintiff misnames a party and the misnomer happens to be the correct name of another legal entity, the defect is transformed from technical to fundamental.
II
¶ 56. A mistake in the intended defendant's name is a technical defect, and it does not deprive the court of jurisdiction as long as the intended defendant was served and suffered no prejudice as a result of the misnomer.
¶ 57. The Hoesley court explained the "general rule" of misnomers as follows: "[I]f the misnomer or misdescription does not leave in doubt the identity of the party intended to be sued, or, even where there is room for doubt as to identity, if service of process is made on the party intended to be sued, this misnomer or misdescription may be corrected by amendment at any stage of the suit, or even after judgment, and a judgment taken by default is enforceable." Id. at 502.
¶ 58. A straightforward application of this standard reveals that there was a misnomer in this case. Here, Johnson served the registered agent of his employer, Cintas Corporation No. 2, with an authenticated copy of the summons and complaint. In that summons and complaint, Johnson correctly identified the address of the defendant. However, the name on the summons and complaint read "Cintas Corporation" rather than "Cintas Corporation No. 2."
¶ 59. On its face, the omission of the designation "No. 2" appears to be nothing more than a mistake. Had the complaint named "Cintas Corporation No. 3," "Cintas #2 Corporation," or even "Sintas Corporation No. 2," there is little doubt that the error in naming would be considered a mere misnomer under Hoesley. Accordingly, the question would be whether the defendant was prejudiced by that mistake.
¶ 60. The wrinkle in this case is that there happens to exist a separate corporation with the name "Cintas Corporation." For the majority, that fact transforms an otherwise technical defect into one that is fundamental.
Ill
¶ 61. The majority's new bright-line rule is contrary to precedent. In addition to contravening Hoesley, as discussed above, it is difficult to reconcile the majority's rule with Parks,
¶ 62. In that case, there existed two separate corporations: West Side Railway Co. and West Side Railroad Co. Id. at 219-20. The plaintiff mistakenly named West Side Railway Co. rather than the related West Side Railroad Co. Id. at 219. When Parks moved to amend the summons and complaint by striking "way" and replacing it with "road," West Side Railroad Co. objected. Id. at 221. It asserted that
¶ 63. Despite the mistake and the existence of a separate corporation bearing the name West Side Railway Co., the Parks court refrained from concluding that an amendment to correct the name from Railway to Railroad would have the effect of bringing in a new party. Rather, it asserted that "[n]o doubt can be entertained that if there had been no corporation bearing the name of the West Side Railway' Company, the amendment would have been unobjectionable." Id. at 221-22. It concluded that the intended defendant was sued "with a slight mistake in name, which the court properly corrected" by amendment. Id. at 222.
¶ 64. The majority attempts to distinguish Parks on the ground that West Side Railway Co. maintained only a "nominal existence." Majority op., ¶ 41. It is not clear, however, why this distinction would make any difference. Under the majority's analysis, "the facts remain that [Parks] named [West Side Railway] instead of [West Side Railroad] in his summons and complaint, and our courts recognize [West Side Railroad] as a legal entity that exists independently of [West Side Railway]." See id., ¶ 49.
IV
¶ 65. Additionally, when the majority's new rule is tested against analogous scenarios, it creates unreasonable and unnecessary results. Imagine a plaintiff who, intending to sue John Smith Sr., serves him with a summons and complaint that mistakenly omits the designation, "Sr." When considered in light of Hoesley, the omission would appear to be nothing more than a misnomer.
¶ 66. Nevertheless, under the majority's analysis, it would appear that John Smith Sr. could successfully claim that the misnomer was a fundamental defect merely by opening a telephone book and locating a man named "John Smith." Under the majority's analysis, John Smith Sr. could assert that an amendment to correct his name had the effect of bringing him in as a new party.
¶ 67. I expect that the majority would not countenance such an unreasonable result. Perhaps the majority would distinguish this scenario on the ground that there is no relationship between John Smith Sr. and the John Smith in the telephone book. If so, this hypothetical reveals what is truly at stake.
¶ 68. Corporate separateness is a shield that protects a corporation from the liabilities of separate but related entities. Here, however, the majority transforms the shield of corporate separateness into a sword. Under the majority's analysis, a corporation can use the name of a related entity as a trade name, induce plaintiffs to name that trade name in the summons and complaint, fail to answer the complaint, and then escape any consequence for the default by claiming lack of jurisdiction. The law should not sanction such an abuse of the principles of corporate separateness and legal process.
¶ 69. Ultimately, I conclude that the majority's new rule is wholly unnecessary, given that existing law is well equipped to handle any confusion or lack of notice that results from a misnomer. If a plaintiff serves but misnames the defendant, the plaintiff who made the mistake has the burden to prove that the defendant was not prejudiced as a result. Am. Family Mut. Ins. Co. v. Royal Ins. Co. of Am.,
¶ 70. Because the majority dodges the applicable standards regarding mere misnomers, sidesteps precedent, and crafts an unreasonable and unnecessary new rule, I respectfully dissent.
Hoesley v. La Crosse VFW Chapter,
Parks v. West Side Ry. Co.,
The majority's new rule mirrors the rule proposed by Cintas Corporation No. 2 during oral argument: "If there is only one entity in the world that could possibly be referred to by that misnomer, that is [the] Hoesley [case], and [the summons and complaint are] not [fundamentally] defective. If in fact there is another entity ..., if there is another one just like that, it may well be [fundamentally] defective."
In a different context, this court has acknowledged that a slight mistake in naming a defendant does not necessarily cause that defendant any confusion about whether it was the party against which the plaintiff intended to file suit. See Tews v. NHI, LLC,
In full, the summons and complaint named the defendant as follows: "CINTAS CORPORATION a domestic corporation 9828 South Oakwood Park Drive Franklin, WI 53132."
The majority cites to Bulik v. Arrow Realty, Inc. of Racine,
In Bulik, the defect was the failure to name the defendant in the original summons at all. The plaintiff was injured when she fell in the parking lot of a store operated by Zayre Corporation.
Likewise, in American Family, there was no defect in naming the defendant. Rather, the defendant was correctly named in a summons and complaint, but the summons and complaint were not authenticated as required by statute.