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New LLC v. Bauer

Court of Appeals of Missouri, Western District, First Division

November 12, 2019

NEW LLC, Respondent,
MIKE BAUER, Appellant.

          Appeal from the Circuit Court of Jackson County, Missouri The Honorable Justine E. Del Muro, Judge.

          Before: Edward R. Ardini, Jr., Presiding Judge, Mark D. Pfeiffer, Judge and Cynthia L. Martin, Judge.


          Cynthia L. Martin, Judge.

         Mike Bauer ("Bauer") appeals from a judgment denying his Rule 74.06(b)(4)[1]motion to set aside a default judgment entered in favor of New LLC as void for want of personal and subject matter jurisdiction. Because Bauer sustained his burden to establish that the summons relied on to effect service of process on him had expired and had not been extended, the trial court lacked personal jurisdiction to enter a default judgment. The judgment denying Bauer's Rule 74.06(b)(4) motion is reversed, and this matter is remanded for further proceedings consistent with this opinion.

         Factual and Procedural Background

         On April 20, 2017, New LLC filed a petition alleging that it had been hired by Bauer to perform stucco work on property Bauer owned in Kansas City, Missouri ("real property"), and that Bauer had refused to pay $26, 295, the outstanding balance owed for the work. Count One sought to declare New LLC's mechanic's lien to be a first and prior lien on the real property, and to foreclose the mechanic's lien. Count Two sought a personal judgment against Bauer in the amount of $26, 295, plus interest, costs, and fees, on a theory of breach of contract.

         New LLC filed a motion to appoint Earl Clayton Ruhl ("Ruhl") as a special process server. New LLC filed a request for an alias summons[2] on May 4, 2017. On May 18, 2017, the trial court granted the motion for appointment of a special process server and issued an alias summons. On June 28, 2017, New LLC filed another request for an alias summons, which was issued on June 29, 2017.

         On August 30, 2017, New LLC filed a return of the summons. The return was signed by Ruhl. The return indicated the summons was being returned "non est," a Latin term meaning "could not be found." In the portion of the return describing service efforts, Ruhl directed the trial court to "see [his] attached summary of attempted service." Ruhl's summary stated:

I, Earl Clayton Ruhl, a court approved process [server] (PPS17-0637), was employed by Attorney Rick Davis to serve court papers to Mr. Mike Bauer at 13230 SE Raytown [Road], Kansas City, MO. Upon arriving at [the] given address I discovered that it was a very large house under construction and no one lived there. I talked to a neighbor who lived across the street. I told him who I was and why I was there. He informed me that he was a lawyer and knew Mike Bauer. He told me that Mr. Bauer would make every attempt to avoid me and if I did make contact, he would deny being Mr. Bauer. The neighbor also told me Mr. Bauer drove a white Ford [F]-150 pickup a couple of years old. I relayed this information to Mr[.] Davis.
A few days later Mr. Davis e-mailed me with the correct address of Mr. Bauer's residence at Loch [Lloyd] Country Club. I traveled to the new address and upon arrival I observed two cars in an open garage and two vehicles parked in the driveway[, ] one of which was a white Ford [F]-150 a couple years old. I rang the doorbell and knocked and waited 5 to 10 minutes with no response. Over the course of about 45 minutes I repeated this 3 times without success. I emailed Mr. Davis about my progress and left the premises. I returned to Mr. Bauer's home four more times with no success. On one of these visits I was questioned by a security patrol guard who said he was a retired police officer and gave me a card and told me to call a Mr[.] Joe Hays, also a retired police officer, who knew of Mr. Bauer's arrivals because Mr. [Hays] worked the late shift. I called this number over the course of several days and always got a recording from the property manager. On August 17th I went back to [the] Loch Lloyd guard shack to see if I had the correct phone number. I did not and the guard gave me the correct one and gave me permission to go to Mr. Bauer's home. Still no response so I left Loch Lloyd. At this time I thought that since I was just a few minutes from the construction site I might be able to catch Mr. Bauer there. Arriving at the Raytown Rd. address, the gates were open and there were . . . No Trespassing signs posted so I drove down the road to the parking area. I saw two vehicles there. One was painters who were just leaving and the other a white Ford [F]-150 pickup. The remaining man quickly walked away from me. I waited a few minutes and then walked to the front of the house where I saw the same man on a bobcat hauling gravel. He came within ten feet of me and I asked if he was Mr. Bauer. The man looked at me and quickly drove away. I returned to my vehicle and waited about 45 minutes. Not seeing the man return to the pile of gravel that was near my vehicle, I emailed Mr[.] Davis and proceeded to leave the construction site. I was stopped by a man in his mid[-]twenties with a very large Rottweiler dog in his car. He told me he was asked by Mr. Bauer to watch over the site and neighbors had called him about a red Jeep (my vehicle) suspiciously park[ed] there. I thought this [was] strange since I was parked in [the] back of [the] house and the lot was so large that no neighbors could possibly see my Jeep. The "caretaker" of the house ordered me to leave because he was going to lock the gate. I left and again e-mailed Mr. Davis.

         Relying on Ruhl's summary in his return of service, New LLC filed a motion for default judgment on September 20, 2017. New LLC argued that Bauer made a concerted effort to avoid and refuse Ruhl's attempts at service on August 17, 2017, and that pursuant to Rule 54.20(f), the refusal of service constituted valid service of process. New LLC then argued that Bauer was in default, as he had not timely answered the petition within thirty days of service on August 17, 2017.

         The trial court entered a default judgment on October 3, 2017, in favor of New LLC and against Bauer in the amount of $26, 295, plus the costs of the action, attorney fees in the amount of $1, 324, and post-judgment interest at the statutory rate ("default judgment"). The default judgment also declared that New LLC had a valid first and prior lien against the real property in the same amount, and authorized New LLC to request a fieri facias pursuant to section 429.250[3] to order a sale and conveyance of the real property.

         On July 7, 2018, Bauer filed a motion to set aside the default judgment ("motion to set aside") pursuant to Rule 74.06(b)(4). Bauer argued that the default judgment was void because it was entered without personal jurisdiction. Bauer argued that the June 29, 2017 summons expired on July 30, 2017, thirty days after it was issued. Bauer thus argued that attempts at service after that date were ineffective to confer personal jurisdiction. Bauer acknowledged that pursuant to Rule 54.21, the effectiveness of a summons can be extended by court order for up to ninety days after the summons is issued, but argued that New LLC never sought or secured an order extending the summons. The motion further argued that because New LLC failed to register as a foreign limited liability company pursuant to section 347.153, it was prohibited by section 347.163 from maintaining a suit or action in Missouri courts.

         In response to the Rule 74.06(b)(4) motion, New LLC argued that Rule 54.21 authorizes the time for service of a summons to be extended from thirty to ninety days by order of the court, but does not require a written motion requesting an extension or a formal order granting an extension. New LLC noted that Bauer was served between the thirtieth and sixtieth day after issuance of the June 29, 2017 summons. New LLC argued that when the trial court found in its October 3, 2017 default judgment that "Defendant was validly served pursuant to [Rule] 54.20(f)," the trial court was effectively extending the time for service of the summons from thirty to ninety days pursuant to Rule 54.21. New LLC also argued that Bauer was aware of the default judgment given successful efforts to garnish a small amount of money from one of Bauer's bank accounts and to levy against real property Bauer owned. New LLC did not address Bauer's assertion that the default judgment should be set aside because New LLC had not registered in the State of Missouri as a foreign limited liability company.

         On August 6, 2018, the trial court entered a summary order denying Bauer's Rule 74.06(b)(4) motion. Bauer filed a motion to reconsider on August 29, 2018. The motion to reconsider briefly repeated the argument that the default judgment was void because the trial court did not have personal jurisdiction over Bauer. The motion to reconsider expanded on the argument addressing New LLC's failure to register as a foreign limited liability company, and claimed that as a result, the trial court lacked subject matter jurisdiction over New LLC's action.

         On October 24, 2018, the trial court entered an order denying Bauer's motion to reconsider. The order made no findings or conclusions regarding personal jurisdiction, but did expressly find that New LLC had the legal capacity to sue in the state of Missouri because it was not obligated to register as a foreign limited liability company.

         On December 4, 2018, Bauer filed a motion asking the trial court to denominate the August 6, 2018 order as a judgment for purposes of appeal.[4] The trial court granted the motion on December 18, 2018, and declared that the August 6, 2018 ...

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