Opinion
No. CV97 0347984 S
July 18, 2008
MEMORANDUM OF DECISION MOTION TO SET ASIDE DEFAULT JUDGMENT AND TO DISMISS THE COMPLAINT
The defendant Professional Service Group, Inc. ("PSG") has moved to set aside the default entered against it on or about October 17, 2003, the subsequent judgment as a result of said default and further moves to dismiss the complaint against it. PSG argues that the court lacks personal jurisdiction as to PSG because the plaintiff never effectuated proper service of process upon PSG
PSG states that the identity of the statutory agent for service of process was readily available and on file in the office of the Connecticut Secretary of State. Further the state marshal who was charged with service of process by the plaintiff was aware that the defendant PSG was headquartered in Houston, Texas. Despite this knowledge, PSG argues that no reasonable attempt was made to identify the designated statutory agent for service of process for PSG in Connecticut, and PSG's statutory agent was never served. Rather, the state marshal purportedly resorted simply to serving the Secretary of State's Office. Moreover, PSG claims that no attempts were made by the plaintiff to provide PSG with any actual notice of the lawsuit until 2007, seven years after the writ, summons and complaint citing in PSG as an additional defendant, were filed in court. PSG claims the court lacks jurisdiction over PSG because service of process was not made in accordance with General Statutes § 33-411. PSG accordingly, requests that the court open the default judgment because the judgment was rendered without jurisdiction over PSG See, Wilkinson v. Boats Unlimited, Inc., 236 Conn. 78, 83 (1996). PSG asserts it has valid defenses to the plaintiff's claims.
Additionally, PSG states that since April 21, 1997, PSG, a Minnesota corporation, with a principal office in Texas, has been registered as a foreign corporation with the Connecticut Secretary of State, and has appointed the CT Corporation System as its statutory agent for service of process.
I Facts
The plaintiff was an employee of the City of Bridgeport's Water Pollution Control Authority ("WPCA") during or about 1997. In 1997, the WPCA contracted with PSG to operate the WPCA's waste water treatment facility in Bridgeport. The plaintiff claims that PSG allegedly breached its contract by failing to offer employment to the plaintiff and the plaintiff was terminated in November 1994. After hearings before the State Board of Mediation, the plaintiff was reinstated and returned to work in February 1997. Subsequently, the plaintiff was released from his position in March 1997, for alleged medical reasons. The plaintiff's legal action against the City of Bridgeport was filed in 1997. Subsequently, permission was granted to the plaintiff to cite in PSG as an additional defendant with a return date of July 25, 2000. On October 17, 2003, a default judgment was entered against PSG for failure to appear. The case was tried to a jury against the WPCA alone on discrimination claims which ultimately resulted in a plaintiff's verdict against the WPCA and PSG The jury awarded the plaintiff a verdict for $50,000, as against PSG The case was affirmed by the Connecticut Supreme Court. Jackson v. Water Pollution Control Authority of the City of Bridgeport, 278 Conn. 692 (2006). The Supreme Court's decision reveals that PSG was a named defendant, but did not appear, and a default judgment had been entered against PSG The Supreme Court noted that the trial court record "is silent regarding the reason for [PSG's] absence." Id., 690, n. 1.
The plaintiff had also filed a complaint with the CHRO alleging racial discrimination. The plaintiff brought suit against the defendants after the CHRO gave a release of jurisdiction.
A verdict was also rendered in favor of the plaintiff as against the defendant City of Bridgeport. See Jackson v. Water Pollution Control Authority of the City of Bridgeport, 278 Conn. 692 (2006).
"The plaintiff, who was employed by the defendant city water pollution control authority, had suffered certain injuries for which he received workers' compensation benefits. After the plaintiff's employment with the authority was terminated, the state board of mediation and arbitration Page 693 ordered that the plaintiff be reinstated. Subsequently, the plaintiff's union filed a complaint with the state board of labor relations claiming that the authority improperly had refused to reinstate him. Additionally, the plaintiff filed a complaint with the commission on human rights and opportunities, alleging that the authority had refused to reinstate him because of his race and physical disability. Thereafter, the parties entered into a settlement agreement in which the authority agreed to reinstate the plaintiff, he agreed to withdraw all pending grievances, and the parties agreed to negotiate the issue of back pay or to have it resolved by the commission. Throughout the negotiations, the plaintiff claimed that, despite his injuries, he was capable of performing his duties as a sewage plant attendant. Shortly after the plaintiff had resumed working, the authority suspended him, citing his physical limitations in connection with certain job functions, and relieved him of his duties until his medical condition could be evaluated, which never occurred. Thereafter, the city hired the defendant P Co. to privatize the authority's operations. P Co. rehired the employees of the authority who had been laid off, with the exception of the plaintiff, who did not receive notice of the privatization and the subsequent rehiring. Thereafter, the plaintiff brought an action seeking to recover damages for, inter alia, discrimination on the basis of race and physical disability in connection with the termination of his employment in violation of the Connecticut Fair Employment Practices Act." Jackson v. Water Pollution Control Authority of the City of Bridgeport, supra, 278 Conn. 692-93.
An evidentiary hearing before this court on the subject motions was commenced on December 10, 2007, when the court heard argument, along with testimony from Kathleen Lynch, a senior paralegal with Wasco, LLC. ("Wasco"), a sister company of PSG Her job responsibilities involve corporate and litigation functions and include keeping all of Wasco's entities registered in various states, including PSG In addition, she manages all corporate records. Lynch commenced her employment with Wasco in 2004. She testified that the CT Corporation has been the registered agent for service of process for PSG continuously since April 1997 to the present time. When a suit is served against PSG, the CT Corporation immediately notifies her office electronically of the lawsuit and ships the paper copy of the writ, summons and complaint to her office by overnight mail. Other lawsuits can be received directly at her office in Houston, Texas, by certified mail. Once received, the case is assigned to legal counsel in Connecticut. In effect, she manages all corporate records.
An inspection of documents from the Secretary of State reveals that PSG was registered as a foreign corporation under the name of "PSC, Professional Services Group, Inc." ("PSC"). PSG was registered in this manner because the name Professional Services Group, Inc. was unavailable. Lynch concedes that PSG has no documentation from the Connecticut Secretary of State indicating that PSG was registered in any name other than the registration documents for "PSC," doing business as Professional Services Group, Inc.
PSG concedes that it has never filed or registered a trade name certificate in any town or municipality within Connecticut, despite Lynch's testimony that PSC was doing business as Professional Services Group, Inc. in Connecticut.
A copy of the March 22, 1997, contract between PSG and the WPCA which was admitted into evidence reveals that the name PSC, Professional Services Group, Inc. never appears in the contract. The contract bears the name of Professional Services Group, Inc. The contract indicates that PSG's home office was located in the State of Texas.
On or about June 14, 2007, in an attempt to collect the judgment against PSG, plaintiff's counsel wrote to the President of PSG, at PSG's principal office in Houston, Texas, informing PSG that on January 30, 2004, the jury had rendered a verdict in favor of the plaintiff for $50,000, as against PSG On or about June 20, 2007, plaintiff's counsel provided the corporate law department of Veolia Water North America, an affiliate of PSG, a copy of the marshal's return of service in this matter. The return of service indicated that the marshal originally served Clara Mancini of another corporation named Professional Services Group, Inc. located in Monroe, Connecticut, but then notes that this company "is not connected with the City of Bridgeport Water Pollution Control Authority," and that the Professional Services Group, Inc., that is connected to the City of Bridgeport Water Pollution Control Authority is based in the State of Texas." The state marshal then attempted to make service upon the defendant PSG by serving the Secretary of State pursuant to General Statutes § 33-929.
Professional Services Group, Inc. of Monroe, Connecticut is registered with the Secretary of State.
The plaintiff's prior legal counsel testified that because he determined that PSG was not registered to do business in Connecticut, "I had to serve the Secretary of State." However, the Secretary of State's Office has no record that the state marshal effectuated service with their office on either PSG or PSC. The marshal and the plaintiff's prior legal counsel were not aware that PSG was registered in Connecticut as PSC, Professional Services Group, Inc. and had designated the CT Corporation as its agent for service of process in Connecticut. Prior legal counsel testified that he could have served PSG at its principal office in Texas by certified mail, but that he was unaware that the principal office was in Texas. Thereafter, no other method of service was attempted.
State Marshal Nikola, who had served 23 years as a detective with the Bridgeport Police Department, stated that upon receipt of the legal papers from legal counsel, he attempted to serve Andrew Abate, an employee of the WPCA with the writ, summons and amended complaint for PSG at the WPCA's principal office on Seaview Avenue in Bridgeport, Connecticut. The return of service indicates that while Abate accepted service for the WPCA, the return of service does not indicate that Abate accepted service for PSG or PSC. Abate testified that he did not know that PSG was operating in Connecticut as PSC. Thereafter, as recited earlier herein, he served Clara Mancini of Professional Services Group, Inc. located in Monroe, Connecticut, but then notes that this company "is not connected with the City of Bridgeport Water Pollution Control Authority," and that the Professional Services Group, Inc., that is connected to the City of Bridgeport Water Pollution Control Authority is based in the State of Texas." The state marshal then attempted to make service upon the defendant PSG by serving two copies on the Secretary of State pursuant to General Statutes § 33-929 on June 29, 2000. He testified that he never received a copy back from the Secretary of State or any acknowledgment of this service from the Secretary of State. No further service on PSG or PSC was attempted by state marshal Nikola.
II Standard of Law A Motion to Reopen
"A motion to open a default judgment is governed by Practice Book § 17-43 and General Statutes § 52-212."
Practice Book § 17-43(a) reads as follows:
(a) Any judgment rendered or decree passed upon a default or nonsuit may be set aside within four months succeeding the date on which notice was sent, and the case reinstated on the docket on such terms in respect to costs as the judicial authority deems reasonable, upon the written motion of any party or person prejudiced thereby, showing reasonable cause, or that a good cause of action or defense in whole or in part existed at the time of the rendition of such judgment or the passage of such decree, and that the plaintiff or the defendant was prevented by mistake, accident or other reasonable cause from prosecuting or appearing to make the same. Such written motion shall be verified by the oath of the complainant or the complainant's attorney, shall state in general terms the nature of the claim or defense and shall particularly set forth the reason why the plaintiff or the defendant failed to appear. The judicial authority shall order reasonable notice of the pendency of such written motion to be given to the adverse party, and may enjoin that party against enforcing such judgment or decree until the decision upon such written motion.
General Statutes § 52-212 reads as follows:
(a) Any judgment rendered or decree passed upon a default or nonsuit in the Superior Court may be set aside, within four months following the date on which it was rendered or passed, and the case reinstated on the docket, on such terms in respect to costs as the court deems reasonable, upon the complaint or written motion of any party or person prejudiced thereby, showing reasonable cause, or that a good cause of action or defense in whole or in part existed at the time of the rendition of the judgment or the passage of the decree, and that the plaintiff or defendant was prevented by mistake, accident or other reasonable cause from prosecuting the action or making the defense.
(b) The complaint or written motion shall be verified by the oath of the complainant or his attorney, shall state in general terms the nature of the claim or defense and shall particularly set forth the reason why the plaintiff or defendant failed to appear.
(c) The court shall order reasonable notice of the pendency of the complaint or written motion to be given to the adverse party, and may enjoin 11672 him against enforcing the judgment or decree until the decision upon the complaint or written motion.
In deciding a motion to reopen judgment of default pursuant to General Statutes § 52-212, the court must use a two-prong test. Tsitardis v. Tsitardis, 100 Conn.App. 115, 118-19 (2007). To qualify for relief from default judgment: (1) there must be a showing that a good defense, the nature of which is set forth in the motion, existed at the time that judgment was rendered and (2) the party seeking to set aside the judgment must have been prevented from making the defense because of mistake, accident, or other reasonable cause. A. Secondino Son, Inc. v. LoRicco, 19 Conn.App. 8, 13 (1989).
It is established that under the second prong of the test set forth in § 52-212 that a defendant seeking to reopen a default must make a showing that the defense [used to satisfy the first prong] was not at that time raised by reason of mistake, accident or other reasonable cause. Eastern Elevator Co. v. Scalzi, 193 Conn. 128, 131 (1984); Rino Gnesi Co. v. Abriglio, 83 Conn.App. 707, 712 (2004). In making that determination, "[n]egligence is no ground for vacating a judgment and the denial of a motion to open a default judgment should not be held an abuse of discretion where the failure to assert a defense was the result of negligence." McCarthy v. Ward Leonard Electric Company, 104 Conn.App. 535, 546 (2007), quoting from Woodruff v. Riley, 78 Conn.App. 466, 471, cert. denied, 266 Conn. 922 (2003).
B Motion to Dismiss
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Cox v. Aiken, 278 Conn. 204, 210-11, 897 A.2d 71 (2006). "One who is not served with process does not have the status of a party to the proceeding . . . A court has no jurisdiction over persons who have not been made parties to the action before it." Security Ins. Co. of Hartford v. Lumbermens Mutual Casualty Co., 264 Conn. 688, 722, 826 A.2d 107 (2003). Where a particular method of service of process is directed by statute, that method must be followed and unless service of process is made by such method, the court to which the process is returnable does not acquire jurisdiction. Board of Education v. Local 1282, 31 Conn.App. 629, 632 cert. granted in part, 227 Conn. 909 (1993). A motion to dismiss is the proper procedural device to assert a lack of personal jurisdiction and insufficiency of process. Practice Book § 10-31; Ziska v. Water Pollution Control Authority, 195 Conn. 682, 687 (1985). "Personal jurisdiction is not like subject matter jurisdiction, which can be raised at any time and by the court on its own motion . . . Unless the issue of personal jurisdiction is raised by a timely motion to dismiss, any challenge to the court's personal jurisdiction over the defendant is lost." (Internal citations omitted; internal quotation marks omitted.) Rock Rimmon Grange v. Bible Speaks Ministries, 92 Conn.App. 410, 415-16, 885 A.2d 768 (2005).
III Discussion
Normally, the court would first address the defendant PSG's motion to reopen the default judgment of October 17, 2003 before addressing the issues in the motion to dismiss. However, to reopen the default, the court must determine if PSG was prevented from asserting a valid defense and was prevented from doing so because of mistake, accident or reasonable cause, other than negligence. Therefore, the court addresses the merits of the motion to reopen the default judgment and the motion to dismiss in a concurrent, simultaneous analysis.
In filing the motion to reopen the default judgment, PSG's counsel has verified under oath that PSG was never served with a copy of the writ, summons and amended complaint, which has been discussed herein. PSG asserts that it had a valid defense to the claims of the plaintiff. Specifically, PSG states that "PSG owed no contractual duty to the plaintiff, nor did the PSG fail to perform any of the applicable covenants of the contractual relationship alleged by the plaintiff to have been breached." This defense existed at the time the default judgment was entered.
The record establishes that PSG never received a copy of the writ, summons and complaint and was not aware of the pending action and the subsequent jury trial which resulted in the judgment against PSG in the amount of $50,000. In determining this the court finds the failure to assert this defense was not the result of negligence on the part of PSG The motion to reopen or set aside the default judgment dated July 20, 2007 was timely filed in that plaintiff's counsel notified PSG of the $50,000 jury verdict or about June 14, 2007, by writing to the President of PSG, at PSG's principal office in Houston, Texas, in an attempt to collect the $50,000 verdict.
As stated to obtain relief from a judgment rendered after a default, two things must concur. There must be a showing that (1) a good defense, the nature of which must be set forth, existed at the time judgment was rendered, and (2) the party seeking to set aside the judgment was prevented from making that defense because of mistake, accident or other reasonable cause. "Since the conjunctive `and' meaning `in addition to' is employed between the parts of the two-prong test, both tests must be met." (Citation omitted; internal quotation marks omitted.) Berzins v. Berzins, 105 Conn.App. 648, 654, 938 A.2d 1281 (2008); Postemski v. Landon, 9 Conn.App. 320, 324-25, 518 A.2d 674 (1986). PSG has satisfied the first prong of the necessary test.
The second prong of the necessary tests requires that the court determine whether the plaintiff effectuated service on PSG pursuant to General Statutes § 33-929 (formerly § 33-411), which was repealed effective January 1, 1997. General Statutes § 33-929 reads as follows in relevant parts:
§ 33-929 was formerly § 33-411, which was repealed effective January 1, 1997.
(a) The registered agent of a foreign corporation authorized to transact business in this state is the corporation's agent for service of process, notice or demand required or permitted by law to be served on the foreign corporation. When the registered agent is other than the Secretary of the State and his successors in office, service may be effected by any proper officer or other person lawfully empowered to make service by leaving a true and attested copy of the process, notice or demand with such agent or, in the case of an agent who is a natural person, by leaving it at such agent's usual place of abode in this state.
(b) A foreign corporation may be served by any proper officer or other person lawfully empowered to make service by registered or certified mail, return receipt requested, addressed to the secretary of the foreign corporation at its principal office shown in its application for a certificate of authority or in its most recent annual report if the foreign corporation: (1) Has no registered agent or its registered agent cannot with reasonable diligence be served; (2) has withdrawn from transacting business in this state under section 33-932; or (3) has had its certificate of authority revoked under section 33-936.
(c) When the Secretary of the State and his successors in office have been appointed a foreign corporation's registered agent, a foreign corporation may be served by any proper officer or other person lawfully empowered to make service by leaving two true and attested copies thereof together with the required fee at the office of the Secretary of the State or depositing the same in the United States mail, by registered or certified mail, postage prepaid, addressed to said office. The Secretary of the State shall file one copy of such process and keep a record of the date and hour of such receipt. He shall, within two business days after such service, forward by registered or certified mail the copy of such process to the corporation at the address of its principal office as last shown on his records.
(h) This section does not prescribe the only means, or necessarily the required means, of serving a foreign corporation.
The state marshal and plaintiff's prior legal counsel were both on notice that PSG maintained its offices in Houston, Texas. The state marshal acknowledged that the PSG that was connected to the WPCA was in Texas. Plaintiff's counsel had a copy of the contract between the WPCA and PSG prior to May 9, 1999, and the contract contained information identifying PSG's principal office as being in Houston, Texas. The plaintiff could have proceeded pursuant to General Statutes § 33-929(b), but failed to do so. The plaintiff allegedly attempted to effectuate service pursuant to § 33-929(c), but can offer no documentary proof or receipts that the marshal filed two true and attested copies with the Secretary of State or that the Secretary of State ever acknowledged receipt of the necessary copies. The Secretary of State, therefore, never mailed a copy to PSG at its principal office. Lastly, there is no evidence that PSG ever appointed the Secretary of State as its registered agent, which is required before the plaintiff could avail himself of § 33-929(c).
The court makes this finding after its review of the Amended Complaint dated May 4, 1999, wherein provisions of the contract are recited by the plaintiff in the Fourth Count.
The court is cognizant of the confusion the plaintiff confronted regarding PSG's registering with the Secretary of State as PSC, Professional Services Group, Inc. The plaintiff raises several potentially valid points regarding whether PSG by registering as PSC, and conducting business in Connecticut as PSC, was in compliance with certain state laws. This event frustrated the plaintiff in his attempt to effectuate service of process pursuant to § 33-929(a). However, again, the plaintiff could have utilized the provisions of § 33-929(b) had the plaintiff conducted a reasonably diligent search to ascertain an address for or location of the principal office of PSG.
Connecticut General Statutes § 33-929 requires due diligence on the part of the party bringing an action to locate the agent for service of a foreign corporation being served before serving the Secretary of State as agent for service. Reasonable diligence "requires pursuit of leads of information reasonably calculated to make personal service possible." MGA Inc. v. Citibank, Superior Court, judicial district of Stamford-Norwalk at Stamford No. CV95 0146901 S (Aug. 14, 2000, Karazin, J.). "In order to establish diligence to discover the party's whereabouts, it is not necessary to establish all possible or conceivable means have been used, but an honest and reasonable effort to find the defendant must generally be disclosed." (Citations omitted; internal quotation marks omitted.) Id., quoting Dickal v. Shelton Savings Bank, Inc., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. 326552 (July 22, 1996, Hauser, J.).
IV Conclusion
This court has been requested to reopen a default judgment that is more than five years old. Since the default judgment was entered, the action was tried to a jury which rendered its verdict and the case has been affirmed by our Supreme Court in Jackson v. Water Pollution Control Authority of the City of Bridgeport, supra, 278 Conn. 692. Nonetheless, the defendant PSG has raised the question of the court's personal jurisdiction over it. Thus, PSG has the right to raise that issue irrespective of the four-month time limit codified in General Statutes § 52-212 and Practice Book § 17-4. American Honda Finance Corp. v. Johnson, 80 Conn.App. 164, 167 (2003). "The court possesses the inherent authority to at any time . . . open and modify a judgment rendered without jurisdiction." (Internal quotation marks omitted.) Id., 168; Bove v. Bove, 77 Conn.App. 355, 367, 823 A.2d 383 (2003); Wilkinson v. Boats Unlimited, Inc., 236 Conn. 78, 83-84, 670 A.2d 1296 (1996).
The court concludes the plaintiff did not serve the defendant PSG, a foreign corporation in accordance with General Statutes § 33-929. PSG therefore was prevented from appearing and asserting a valid defense to the claims of the plaintiff. A. Secondino Son, Inc. v. LoRicco, supra, 19 Conn.App. 13. Therefore, PSG has satisfied both prongs of the necessary test to successfully reopen and set aside the judgment of default. Berzins v. Berzins, supra, 105 Conn.App. 654. The motion to reopen the default judgment is hereby granted.
However, the inquiry does not end with the reopening of the default judgment. Because the plaintiff did not comply with the requirements of General Statutes § 33-929, service of process was not properly effectuated and the defendant PSG was never properly served. Thus, the court lacks personal jurisdiction over PSG The motion to dismiss is also granted for lack of personal jurisdiction and insufficiency of process. Ziska v. Water Pollution Control Authority, supra, 195 Conn. 687 (1985).