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Krogman v. Goodall

Court of Appeals of Tennessee, Nashville

August 29, 2017

LISA MARIE KROGMAN
v.
BOB GOODALL, ET AL.

          Session Date: April 11, 2017

         Appeal from the Circuit Court for Davidson County No. 14C729 Hamilton V. Gayden, Jr., Judge

         In this appeal, the plaintiff sued her former real estate agent and his real estate company for malpractice and negligence in the attempted sale of her home. The trial court granted summary judgment to the defendants upon holding (1) that the plaintiff failed to effectuate service of process on the defendants; (2) that the defendants did not waive the affirmative defense by filing their answers more than 30 days after the complaint was filed, by filing a notice of appearance, and by participating in the litigation; and (3) that the defendants properly pled the affirmative defense in their answers. We affirm the judgment of the trial court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed; Case Remanded

          Christopher K. Thompson, Nashville, Tennessee, for the appellant, Lisa Marie Krogman.

          Robert M. Burns and Brooke McLeod Coplon, Nashville, Tennessee, for the appellees, Bob Goodall and Haven Real Estate, LLC.

          John W. McClarty, J., delivered the opinion of the court, in which Andy D. Bennett and Richard H. Dinkins, JJ., joined.

          OPINION

          JOHN W. MCCLARTY, JUDGE

         I. BACKGROUND

         On February 21, 2014, Lisa Marie Krogman initially filed her lawsuit against her real estate agent Bob Goodall in his individual capacity and vicariously against Haven Real Estate, LLC ("Haven" and collectively "Appellees"). In the complaint, Ms. Krogman alleged professional negligence and malpractice by Mr. Goodall under Tennessee Code Annotated section 47-18-5402(a)(2), a consumer protection provision.[1]Mr. Goodall served as Ms. Krogman's real estate agent during an attempted short sale of her home, but the sale never occurred and foreclosure resulted.

         According to the return on Personal Service of Summons for Haven, on February 27, 2014, a copy of the complaint and summons was sent via certified mail to "Haven Real Estate, LLC, c/o Lance Pugliese, 644 Sage Road N, White House, TN, 37188-9141." Lance Pugliese is the sole and only registered agent of Haven, and he also serves as president of Haven. According to the same return, on February 28, 2014, Vickie Self signed the certified mail address card for Haven. The return reveals that the certified address card was returned on March 10, 2014. The stamps on both the return and the certified address card state March 31, 2014. The affidavit of Ms. Krogman's counsel states that the clerk improperly put February instead of March on Haven's affidavit (we assume he means the return). Ms. Krogman's counsel also asserts that Vickie Self signed the certified address card on March 20, 2014, according to the Case Link system.

         Vickie Self is a clerical assistant for Greg Riley, an affiliated broker and independent contractor who worked as a property manager, we assume, for Haven. Ms. Self was not an authorized agent of Haven, was never given direction or authority to accept legal service of process for Haven, was not an employee of Haven, and was not paid by Haven. Haven had no other authorized agents beside Mr. Pugliese.

         On March 17, 2014, a copy of the complaint and summons was sent via certified mail to "Bob Goodall, c/o Haven Real Estate & Management, 131 Indian Lake Road, Suite 202, Hendersonville, Tennessee 37075." This is another business address for Haven. On March 18, 2014, David Langarod signed the certified mail card for Mr. Goodall. According to Mr. Pugliese's and Mr. Goodall's undisputed testimony, Mr. Langarod worked at the same suite address as Haven, in an insurance broker's office. He was not an employee of Haven, nor was he authorized by Haven to act as an agent of service of process for Haven or any of Haven's independent contractor affiliated brokers. Mr. Goodall was at all times during his association with Haven an independent contractor affiliated broker. Mr. Pugliese and Mr. Goodall were never personally served with the complaint and summons, nor were they served at their business or home addresses. Ms. Krogman never attempted another service of process upon Haven or Mr. Goodall.

         On March 18, 2014, Appellees' counsel, Robert Burns, filed a notice of appearance in the trial court. According to Ms. Krogman's counsel's affidavit, two days later, Appellees' counsel served interrogatories and requests for production of documents on Ms. Krogman. Appellees each filed answers to the complaint on June 18, 2014. In their answers, both Haven and Mr. Goodall stated that they were not properly served with process in this action. In paragraph five under the heading "AFFIRMATIVE DEFENSES, " Haven stated:

Haven affirmatively avers the defenses of insufficiency of process and insufficiency of service of process pursuant to Rule 12.02(5-6), [2] T.R.C.P. Haven affirmatively avers that its designated agent was not personally served with process in this action. Further, based upon the return on service of the summons issued against it in this action, Haven did not authorize, either expressly or on implied basis, that the individual who appears to have signed the certified mail service of summons on Haven's behalf to sign or accept that mail for Haven. The individual whose name and signature appears on the return receipt card had no authority to sign and accept delivery by certified mail service of process in this action, and, accordingly, Haven affirmatively avers that it has not been properly served.

         Mr. Goodall noted in his affirmative defense number 5 that he "affirmatively avers that he was not personally served with process in this action" and that he "did not authorize, either expressly or on implied basis, that the individual who appears to have signed the certified mail service of summons on Mr. Goodall's behalf to sign or accept that mail for him." Mr. Goodall asserted that "[t]he individual whose name and signature appears on the return receipt card had no authority to sign and accept delivery by certified mail service of process in this action." According to Appellees' brief, there appears to have been no specific written discovery interactions between Ms. Krogman and Haven. All interrogatory requests were directed to Mr. Goodall and other defendants, although we note that counsel for Mr. Goodall also represented Haven.

         On February 29, 2016, Appellees filed two separate motions for summary judgment and accompanying statements of material facts, affidavits and exhibits, including affidavits from Mr. Goodall, Mr. Pugliese, and Appellees' counsel Burns. Ms. Krogman filed responses to both along with her own supporting documentation, including an affidavit from her attorney.

         In essence, Appellees argued in both motions that Ms. Krogman did not properly serve the summons and complaint on Appellees in compliance with Rule 4 because the persons who received and signed for the documents were not authorized agents. Further, Ms. Krogman did not obtain issuance of new process within one year, and, thus, she could not rely on the filing of the original lawsuit to toll the statute of limitations for the action, pursuant to Rule 3 of the Tennessee Rules of Civil Procedure. Therefore, the statute of limitations had expired and Appellees were entitled to judgment as a matter of law. Additionally, Appellees argued that participation in the litigation, including filing an appearance and involvement in discovery, did not constitute waiver of process.

         In response, Ms. Krogman argued the issue concerning adequacy of service of process was waived because Appellees evaded service (were aware of it ahead of time due to a letter from another attorney), they waived the affirmative defense by noncompliance with Rule 12 of the Tennessee Rules of Civil Procedure, they waived the defense by actively participating in the lawsuit, and the affirmative defense was not properly raised because the answer was filed too late.

         The trial court heard arguments on May 6, 2016, and the court granted Appellees' motions for summary judgment on May 23, 2016. The court referred to the motions as properly being motions to dismiss, rather than motions for summary judgment. However, the written order provides that it is for "Summary Judgment, " and the motions brought in significant evidence outside of the pleadings, thus making summary judgment appropriate. The trial court held that Appellees had properly pled the affirmative defense of insufficient service of process under Rule 8.03 of the Tennessee Rules of Civil Procedure[3] and provided sufficient notice to Ms. Krogman. Further, the court held that Appellees' participation in the litigation did not constitute a waiver of the affirmative defense. As a result, the court held that the statute of limitations had run on her claim because Ms. Krogman did not properly serve process within ninety days of the filing of the complaint as required by Rule 3 of the Tennessee Rule of Civil Procedure. This timely appeal followed.

          II. ISSUES

         We have consolidated the issues on appeal as follows:

(1) Whether Appellees waived their affirmative defenses of insufficiency of service of process by filing a notice of appearance and by filing its answer approximately two months after initiation of the lawsuit?
(2)Whether Appellees' participation in litigation waived the affirmative defense of insufficiency of service of process?
(3)Whether Appellees properly pled the affirmative defense of insufficiency of service of process by stating the facts supporting the basis for the defense?

         III. STANDARD OF REVIEW

         A trial court's ruling on a motion for summary judgment is reviewed de novo, with no presumption of correctness. Russell v. HSBC Mortgage Servs., Inc., No. M2015-00197-COA-R3-CV, 2016 WL 1588091, at *11 (Tenn. Ct. App. Apr. 15, 2016) (citing Rye v. Women's Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015)). In doing so, "we make a fresh determination of whether the requirements of Rule 56 of the Tennessee Rules of Civil Procedure have been satisfied." Greeze v. Tennessee Farmers Mut. Ins. Co., No. E2016-00792-COA-R3-CV, 2017 WL 1163680, at *4 (citing Estate of Brown, 402 S.W.3d 193, 198 (Tenn. 2013)).

         In Rye, the Tennessee Supreme Court stated our appellate standard ...


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