SCV: Post-judgment appearance didn’t waive jurisdiction challenge

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After a landlord obtained a default judgment against a commercial tenant for unpaid rent, the circuit court erred in finding that the guarantor waived any objection to the validity of the default judgment by entering a general appearance during post-judgment enforcement proceedings.

Background

Landlord Brooks & Co. General Contractors Inc. leased office and warehouse space to a commercial tenant, with lease obligations personally guaranteed by Colin McCulley.  In 2016, Brooks & Co. filed a complaint against the tenant and McCulley for unpaid rent, utilities, late fees, interest, and attorney fees and costs. Brooks & Co. served process on McCulley by posting it to his front door, but the record fails to demonstrate that Brooks & Co. followed the additional requirements of Code § 8.01-296(2)(b) to mail a copy of the process and file a certificate of mailing. After neither defendant filed responsive pleadings, Brooks & Co. obtained a default judgment against both.

The court summoned McCulley to appear before a commissioner in chancery to answer debtor’s interrogatories. McCulley’s counsel thereafter contacted the commissioner to request that the date be postponed. In the meantime, McCulley filed a motion to vacate the default judgment in the circuit court on grounds that Brooks & Co. had failed to properly serve the complaint. McCulley concluded his motion by reiterating that he had “made this SPECIAL APPEARANCE for the sole purpose of contesting … personal jurisdiction.”

The circuit court ruled that the “initial service” of process on McCulley “was defective” but that he had “waived any objection to this defect in service by making a general appearance in this case through his post-judgment participation in Debtor’s Interrogatories.” The circuit court held that a general appearance during enforcement proceedings on a final judgment could effectively waive any claim that the judgment was void ab initio. McCulley has appealed.

Post-judgment appearance

McCulley did not waive his right to challenge the default judgment as void ab initio by participating in the debtor’s-interrogatory proceedings.

This court has never held that a general appearance after entry of a final judgment retroactively waives an objection to the court’s failure to obtain personal jurisdiction prior to the entry of the void judgment. A mere general appearance after the entry of a void judgment is too little, too late, to save the judgment. Just as medicine may cure sick people of fatal diseases but not revive them after burial, litigants can “cure” the absence of personal jurisdiction by making a general appearance prior to final judgment but cannot resurrect a void judgment thereafter.

The court holds that a general appearance after the entry of a final judgment that is void ab initio because of the absence of personal jurisdiction does not, by itself, convert the prior void judgment into a valid one. Ruling otherwise would defy logic and common sense.

Equitable estoppel

While a mere general appearance, by itself, is not enough to retroactively validate a judgment that is void for lack of personal jurisdiction as a result of defective service, it is possible for a litigant to forfeit the right to make that challenge to the judgment under the prevailing view, outlined in the Restatement (2d) of Judgments § 66.

This court need not expressly adopt or reject the Restatement’s view, however, because neither of its two prerequisites is present in this case. First, McCulley never “manifested an intention to treat the judgment as valid,” before or after filing his motion to vacate. The motion to vacate expressly denied that McCulley was making a general appearance and stated that he was appearing specially to challenge the validity of the default judgment. That McCulley contacted the commissioner in chancery before filing the motion to vacate, in a successful effort to reschedule the debtor’s interrogatories, did not manifest an intention to accept the validity of the default judgment or even hint at an intention to do so.

Second, nothing in the record indicates that granting the motion to vacate “would impair another person’s substantial interest of reliance on the judgment.” There has been no partial enforcement of the void judgment, no sale of debtor assets to others, no seizure of bank accounts or assets, or the like. A declaration that the default judgment against McCulley is void will affect no third party. The contest appears to be entirely limited to the original parties to the lease dispute.

Reversed and final judgment.

Concurrence

(McCullough, J.) I write separately to highlight the fact that this case does not address, much less resolve, whether an appearance made prior to the entry of judgment before someone who is not a judge constitutes a general appearance that waives any defect in personal jurisdiction. A variety of institutional actors perform valuable functions that assist the courts in handling cases, including clerks of court, mediators, commissioners of accounts, and commissioners in chancery. Appearing before such a person may constitute a general appearance that waives defects in personal jurisdiction, or it may not. A future case will have to answer that question.

McCulley v. Brooks & Co. Gen. Contractors Inc., Record No. 171117, July 19, 2018. SCV (Kelsey), from Richmond City Cir. Ct. (Marchant). VLW No. 018-6-049, 12 pp.