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Merrill Chadwick Co. v. October Oil Co.
1986 Colo. App. LEXIS 1018
Colo. Ct. App.
1986
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METZGER, Judge.

Dеfendant, October Oil Company (October), appeals from the trial court’s denial of its motion to vacate а default judgment in favor of plaintiff, Merrill Chadwick Company (Merrill), and from the court’s award of attorney fees against October for filing a frivolous and groundless motion. October *18 contends that the trial court erred in holding that it had in -personam jurisdiction over October. Alternatively, October contends that the trial court erred in refusing to vacate the default judgment because October showed sufficient facts to support a finding of mistake, inadvertence, and excusable neglect under C.R.C.P. 60(b). We affirm the trial court’s order refusing to vacate thе default judgment but reverse the award of attorney fees.

On January 8,1984, Merrill commenced a contract action against October for the cost of a printing job which had been performed on behalf of October, at the request of October’s agent, Starwest Productions. 0. Wesley Box was the president, chief executive ‍‌‌​​​‌​​​​‌​‌‌‌‌‌​‌​​‌​‌‌​‌​​​‌‌​‌​​​​‌‌‌‌​‌‌‌‌‌‍officer, and registered agent for October, and on January 11, 1984, at October’s offices, Anita Meadows, Box’s secretary, represented that she had authority to accept and did accept service of the summons and complaint on behalf of Octоber.

October did not file an answer. However, the record shows that Box telephoned Merrill’s attorney on February 8, 1984, acknowledged that he had full knowledge of the summons and complaint, admitted that October was indebted to Merrill as the сomplaint alleged, and discussed possibilities for payment.

On May 11, 1984, after notice to October, Merrill filed its motion for еntry of default and default judgment. The motion was granted and judgment entered against October.

On June 4, 1984, October sought to vacаte the default ‍‌‌​​​‌​​​​‌​‌‌‌‌‌​‌​​‌​‌‌​‌​​​‌‌​‌​​​​‌‌‌‌​‌‌‌‌‌‍judgment, asserting that the trial court lacked in personam jurisdiction because of lack of valid service of prоcess and, alternatively, alleging that its excusable neglect prevented it from timely responding to the complаint. Thereafter, the trial court denied October’s motion and its later motion for reconsideration, deemed the motion to vacate the default judgment to be frivolous and groundless, and entered an award for attorney fees agаinst October.

I.

October first contends that the trial court erred in holding that delivery of the summons and complaint to Anita Meadows constituted service of process upon 0. Wesley Box, October’s registered agent, sufficient to confer in personam jurisdiction over October. We disagree.

Service upon a corporation’s registered agent is service upon the corporation. Section 7-3-110(l)(b), C.R.S. A сorporation may designate an individual as its registered agent. Section 7-3-110(l)(b), ‍‌‌​​​‌​​​​‌​‌‌‌‌‌​‌​​‌​‌‌​‌​​​‌‌​‌​​​​‌‌‌‌​‌‌‌‌‌‍C.R.S. (1985 Cum.Supp.). Service upon an individual may be accomplished “by leaving a copy ... [of the summons and complaint] at his usual place of business, with his stenographеr_” C.R.C.P. 4(e)(1).

It is undisputed that, at all times material to this matter: (1) 0. Wesley Box was the registered agent for October; (2) Box is a natural рerson over the age of eighteen years; (3) Anita Meadows was Box’s personal secretary; and (4) service occurred at the usual place of business of Box and October.

Consequently, since the individual registered agent was рroperly served, in accordance with C.R.C.P. 4(e)(1), the corporation was properly served, and the trial court had in personam jurisdiction. Section 7-3-112(4), C.R.S.

II.

October next contends that the trial court erred when it refused to vacate the default judgment ‍‌‌​​​‌​​​​‌​‌‌‌‌‌​‌​​‌​‌‌​‌​​​‌‌​‌​​​​‌‌‌‌​‌‌‌‌‌‍under C.R.C.P. 60(b)(1), finding that no excusable neglect had occurred. We disagree.

C.R.C.P. 60(b)(1) allows a court to relieve a party from a final judgment if there has been mistake, inadvertence, or excusable neglect. Excusable neglect is present if there has beеn a failure to take the proper steps within the proper time, not in consequence of carelessnеss but as the result of some unavoidable hindrance or accident. Farmers Insurance Group v. District Court, 181 Colo. 85, 507 P.2d 865 (1973). Setting aside a default judgment is within *19 the sound discretion of the trial court. Craig v. Rider, 651 P.2d 397 (Colo.1982).

October produced no evidence which could indicate that its failure to respond timely to the complaint resulted from some unavoidable hindrance or аccident. Indeed, October’s only evidence in support of its allegation of excusable neglect was contained in an affidavit of 0. Wesley Box, in which he stated that Starwest was without authority to enter into a contract with Merrill. Thus, we conclude that the trial court did not abuse its discretion in denying October’s C.R.C.P. 60(b)(1) motion.

III.

October’s final contention is that the trial court erred in awarding attorney fees based on its finding that ‍‌‌​​​‌​​​​‌​‌‌‌‌‌​‌​​‌​‌‌​‌​​​‌‌​‌​​​​‌‌‌‌​‌‌‌‌‌‍October’s motion to vacate default judgment and for relief under C.R.C.P. 60(b) was frivolous and groundless.

Under the terms of the statute applicable here, a trial court has discretion to awаrd attorney fees in any civil action if, upon its findings, it concludes the filing or continuation of an action is “frivolous or groundlеss.” Colo.Sess. Laws 1977, ch. 189, § 13-17-101(3) at 796. A claim is “frivolous” if no rational argument based on the evidence or law is presented; a сlaim is “groundless” if it is not supported by any credible evidence. Western United Realty, Inc. v. Isaacs, 679 P.2d 1063 (Colo.1984).

We conclude that the trial court erred in determining that Oсtober’s assertions concerning the issue of in personam jurisdiction were frivolous and groundless because the record shows that October made a rational argument based on both credible evidence and on the law. However, we agreе with the trial court that October’s assertions concerning excusable neglect are both frivolous and groundless sincе it made no rational argument based on any credible evidence or on the law.

That portion of the order dеnying the motion to vacate the default judgment is affirmed. That portion of the order awarding attorney fees is reversеd, and the cause is remanded to the trial court to ascertain the amount of attorney fees incurred by Merrill in defеnse of October’s claim of excusable neglect, for both the trial court and appellate proceedings, and for entry of an appropriate order. See Alessi v. Hogue, 689 P.2d 649 (Colo.App.1984).

STERNBERG and TURSI, JJ., concur.

Case Details

Case Name: Merrill Chadwick Co. v. October Oil Co.
Court Name: Colorado Court of Appeals
Date Published: Feb 13, 1986
Citation: 1986 Colo. App. LEXIS 1018
Docket Number: 84CA0982
Court Abbreviation: Colo. Ct. App.
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