Webster Industries, Inc. v. Northwood Doors, Inc.
244 F. Supp. 2d 998 · District Court, N.D. Iowa · 2003
Facts
Webster Industries, Inc. and other plaintiffs provided goods and services to Northwood Doors, Inc. Northwood Doors, Inc. became insolvent and failed to pay for these goods and services, leading to the plaintiffs asserting forty claims against Northwood Doors, Inc. and several allegedly related defendants. These defendants include Partridge River Superior, Inc., Partridge River, Inc., Partridge River Holdings, Inc., Superior Dimension and Doors, L.L.C., China Hardwood Import Products, L.L.C., and Andrew Richey. Andrew Richey is the registered agent for most corporate defendants and is believed by plaintiffs to have fled to China, though defendants contend he is conducting business in Hong Kong.
Procedural history
This lawsuit was originally filed in the Iowa District Court for Worth County and was subsequently removed to this federal court by one of the defendants. The Clerk of Court entered default against several defendants on January 28, 2003, based on the plaintiffs' motion for default. The defendants then filed a motion to reconsider or for relief from the entry of default, arguing they were never properly served. This court is now considering the plaintiffs' motion for default judgment and the defendants' motion to set aside the default.
Issue
Did the plaintiffs properly serve the defendants, thereby justifying the entry of default and default judgment, or should the entry of default be set aside due to insufficient service of process?
Holding
The court denied the plaintiffs' motion for default and default judgment and granted the defendants' motion for relief, setting aside the Clerk of Court's entry of default because the plaintiffs failed to properly serve the defendants under applicable federal and state rules.
Rule
Under Federal Rule of Civil Procedure 55(a), a clerk may enter default when a party fails to plead or otherwise defend, but the court may set aside an entry of default for "good cause shown" under Rule 55(c). Proper service of process is a prerequisite for default, and Federal Rule 4 allows service pursuant to the law of the state where the district court is located (Iowa) or where service is effected. For service by publication under Iowa Rule 1.310, an affidavit stating personal service cannot be had must be filed before publication, and under Iowa Rule 1.313, publication must occur in a newspaper of general circulation in the county where the petition is filed. Failure to comply with these jurisdictional requirements renders service ineffective, thus providing good cause to set aside the default.
Read the full opinion on CourtListener
Case brief last reviewed . Prepared by CaseReader from the published opinion.