Sаundra McDAVID, Plaintiff--Respondent, v. Murat KIROGLU, an individual; Mega Group International, LLC, a Florida limited liability company; Izopoli Group, LLC, a Florida limited liability company; Florida Floors and Decor, Inc., a Florida corporation, Defendants--Appellants, and Fatma Kiroglu, an individual; Seven Hills Stone and Mosiacs, Inc., a Texas сorporation; Erhan Ogan, an individual; Emerson Fitzgerald, LLC, a Texas limited liability company; and Barbara Fitzgerald, an individual, Defendants.
No. 39254.
Court of Appeals of Idaho.
July 25, 2013.
304 P.3d 1215
Lerma Law Office, P.A., Kenley E. Grover, Boise, for respondent.
Mega Group International, LLC (MGI); Izopoli Group, LLC (Izopoli); Florida Floors and Decor, Inc. (Florida Floors); and Murat Kiroglu, who is the owner, manager, and director of MGI, Izopoli, and Florida Floors (hereinafter referred to collectively as Appellants) appeal from the denial of their motion to set aside default judgment.
I.
BACKGROUND
On January 25, 2010, Saundra McDavid filed a complaint against Apрellants and five other defendants. McDavid alleged numerous claims including breach of warranty, breach of contract, unjust enrichment, and fraud arising from her purchase of travertine pavers and coping. She alleged that the shipment of pavers and coping that Appellants sent her was incompletе, defective, and mismatched. Attorney Brian Knox entered an appearance for Appellants and filed pleadings on their behalf,1 but on December 13, he filed a motion for leave to withdraw as their counsel. The district court entered an order granting the motion on February 17, 2011. Knox filed a certificate of service indicating that he mailed a copy of the withdrawal order to Appellants on March 1. On March 30, McDavid filed a motion for a default judgment against Appellants based on their failure to appear or to appoint new counsel within twenty days following the service of
On July 28, 2011, Appellants filed a motion to set aside the default judgment pursuant to
II.
ANALYSIS
The decision to grant or deny а motion to set aside a default judgment for excusable neglect under Rule 60(b)(1) is reviewed for abuse of discretion. Berg v. Kendall, 147 Idaho 571, 576, 212 P.3d 1001, 1006 (2009); Knight Ins., Inc. v. Knight, 109 Idaho 56, 59, 704 P.2d 960, 963 (Ct.App.1985). Where a default or default judgment is challenged as void under Rule 60(b)(4), we conduct de novo review. McClure Eng‘g, Inc. v. Channel 5 KIDA, 143 Idaho 950, 953, 155 P.3d 1189, 1192 (Ct.App.2006); Reinwald v. Eveland, 119 Idaho 111, 112, 803 P.2d 1017, 1018 (Ct.App.1991).
Here, McDavid sought and obtained a default judgment pursuant to
After the order is entered, the withdrawing attorney shall forthwith, with due diligence, serve copies of the same upon the client and all other parties to the action and shall file proof of service with the court. The withdrawing attorney may make such service upon the client by personal service or by certified mail to the last known address most likely to give notice to the client, which service shall be complete upon mailing.
In this case, it is undisputed that Knox did not serve the withdrawal оrder on the Appellants by personal service or certified mail as specified in Rule 11(b)(3) but, instead, sent it to them by regular mail.
The Idaho Supreme Court has held that a valid default judgment may not be procured pursuant to this rule unless there has been strict compliance with its terms concerning notice to the party whose attorney has withdrawn. Berg, 147 Idaho at 577-78, 212 P.3d at 1007-08; Wright v. Wright, 130 Idaho 918, 921, 950 P.2d 1257, 1260 (1998). See also Fisher Sys. Leasing, Inc. v. J & J Gunsmithing & Weaponry Design, Inc., 135 Idaho 624, 628, 21 P.3d 946, 950 (Ct.App.2001). Judgments taken against a party whose attorney withdrew without strict compliance with the rule are void and must be set aside as a matter of law. Wright, 130 Idaho at 921, 950 P.2d at 1260; Martinez v. Brown, 144 Idaho 410, 412, 162 P.3d 789, 791 (Ct.App.2007); Fisher, 135 Idaho at 628, 21 P.3d at 950.
Appellants argue that the default judgment against them was void because of Knox‘s failure to strictly comply with the service requirements of Rule 11(b)(3). McDavid rеsponds that the case law requiring strict compliance with that rule pertains to the content of the order informing the client of the ramifications of failing to act
In the district court‘s ruling from the bench on Appellants’ motion to set aside the default judgment, it appears that the court disposed of this issue by holding that thе permissive word may in the rule means that it is permissible to serve the withdrawal order by methods other than personal service or certified mail. We conclude that this is a misreading of the rule. After directing that the withdrawing attorney shall forthwith, with due diligence, serve copies of the withdrawal order upon the client, the rule continues by stating, The withdrawing attorney may make such service upon the client by personal service or by certified mail.... We view that sentence as providing the withdrawing attorney with only two alternative means to accomplish service. The purpose of that provision is to require service by means most likely tо bring the withdrawal order to the attention of the client. If other means of service were permitted, there would have been no reason to include that sentence in Rule 11(b)(3) at all. Therefore, we conclude that attorney Knox did not comply with the rule when he served the order on his former client by regular mail. Thus, we must determine whether the strict compliance standard established by case law applies to the manner of service mandated by Rule 11(b)(3).
There are two prior cases in which this Court addressed arguments that a default judgment was void because an attorney did not strictly comply with the service requirements of Rule 11(b)(3). In Fisher, the defendant‘s attorney was permitted to withdraw, but the attorney did not serve the defendant with a copy of the withdrawal order by any means and did not file proof of service with the court. The order itself was also noncompliant with the rule in that it did not notify the client that default judgment could be taken without further notice and that the client‘s claims could be dismissed with prejudice. Although the withdrawal order was not served by the withdrawing attorney, a copy of the order was sent to the defendant by regular mail by the clerk of the court. Default judgment was entered, and the trial court denied the defendant‘s subsequent motion to set aside the judgment. On appеal, we suggested that strict compliance with the service requirement of the rule is necessary when we stated:
Fisher Systems readily admits that Rule 11(b)(3) was not strictly complied with because the withdrawal order was not sent by certified mail or personally served on Davis--it was sent by regular mail by the clerk of the court. Fisher Systems further admits that the withdrawing attorney did not file proof of service with the court, as is required. In addition, the withdrawal order itself was deficient on its face....
Accordingly, we hold that the defaults and default judgments ... were invalid for failure to strictly satisfy the plain requirements of I.R.C.P. 11(b)(3).
Fisher, 135 Idaho at 628, 21 P.3d at 950 (footnote omitted). Thus, in Fisher we found the default judgment invalid due to failure to strictly comply with Rule 11(b)(3), but the lack of compliance was not, as here, solely a failure to properly serve the order, for the content of the order was also deficient.
We again addressed the service requirements of Rule 11(b)(3) in McClure. There, the defendants acknowledged that their withdrawing attorney mailed copies of the order by certified mail to the address they had given to the attorney, but asserted that it was not the address most likely to give them notice and that they had not received actual notice of the mailing. The defendants argued that the default judgment entered against them was consequently void and that the district court erred in denying their mоtion to set aside. On appeal, we reiterated the rule that if the notice requirements of I.R.C.P. 11(b)(3) are not strictly followed, the judgment is void and must be set aside as a matter of law, rather than as a matter of
The issue before us is not whether [the attorney] could have done more to provide notice, nor whether he discharged his duty to his clients under the Idaho State Bar‘s Rules of Professional Conduct; the issue is whether he complied with Rule 11(b)(3). Although some might consider that rule tо be obsolete in view of current communications technology, it is nevertheless the controlling law.
McClure, 143 Idaho at 955, 155 P.3d at 1194.
Recently the Idaho Supreme Court considered an analogous issue with respect to service of process in Elliott v. Verska, 152 Idaho 280, 271 P.3d 678 (2012). There, the plaintiff argued that noncompliance with the mandated method for servicе of a summons and complaint set forth in
We have not held that noncоmpliance with Rules (4)(d)(2) and 4(d)(4) are excused as long as the requirements of due process are met.
....
We did not hold [in Herrera v. Estay, 146 Idaho 674, 201 P.3d 647 (2009)] that the manner of serving process required by Rule 4 can be ignored as long as the defendant in some way receives such notice of the pending lawsuit as would satisfy the requirements of due process. In fact, we held in Campbell [v. Reagan, 144 Idaho 254, 257, 159 P.3d 891, 894 (2007)] that receiving a copy of the summons and complaint in the mail, which would obviously meet the requirements of due process, did not constitute service of the summons and complaint. We stated: [T]he sole consequence of [the defendant‘s] receipt of [the plaintiff‘s] letter was to put him on notice that a claim had been filed against him.... Telford [v. Mart Produce, Inc., 130 Idaho 932, 935, 950 P.2d 1271, 1274 (1998)] stands for the proposition that such notice will not excuse a plaintiff‘s failure to timely serve process. Id. at 257, 159 P.3d at 894.
Elliott, 152 Idaho at 286-87, 271 P.3d at 684-85. Collectively, Fisher, McClure, and Elliott suggest that substantial compliance with the manner of service mandated by Rule 11(b)(3) is not sufficient, even when actual notice has been accomplished.
The policy undеrlying the requirement of strict compliance with Rule 11(b)(3) supports the same conclusion. In Knight, we explained that policy:
Rule 11(b)(3) provides a readily identifiable, straightforward requirement for counsel and the courts to satisfy. Compliance with the rule obviates any need for judges to weigh conflicting evidence of actual notice or to speсulate concerning a litigant‘s state of mind. An entitlement to relief produces consistent, predictable results, unaffected by the varying philosophies that underlie exercises of discretion by individual judges.
Knight, 109 Idaho at 60, 704 P.2d at 964. This policy applies with equal force whether there was a defect in the language of the notice or a defect in the manner of service on the withdrawing attorney‘s client. In either circumstance, absent a requirement of strict compliance, the rule will not provide a readily identifiable, straightforward standard to guide counsel and the trial courts; in some circumstances, courts would be required to determine whether actual notice occurred based on conflicting evidence, or to determine what types of service other than certified mail or personal service would substantially comply with the rule. We note that in this case, it is not clear whether Appellants received actual notice of thе withdrawal or-
Having considered the foregoing authorities and the policies that call for strict compliance with Rule 11(b)(3), we hold that an attorney must strictly comply with the form of service mandated by Rule 11(b)(3). A subsequent default judgment entered against the party whose attorney withdrew will not be valid if the withdrawal order was not servеd in strict compliance.4 Here, it is undisputed that notice was not sent by certified mail or personally served on Appellants as required by Rule 11(b)(3). Consequently, the default judgment secured by McDavid is void and must be vacated.5
Appellants request an award of attorney fees on appeal on the ground that McDavid‘s defense against their motion to set aside the default judgment, and her defense of this appeal, is frivolous.
The district court‘s order denying Appellants’ motion to set aside the default judgment is reversed. Costs to Appellants.
Chief Judge GUTIERREZ and Judge GRATTON concur.