Diversified Distributors, Inc. v. Bell Appliance Service, Inc.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Diversified Distributors, Inc.,       
Respondent,

v.

Bell Appliance Service, Inc., d/b/a Bell Appliance Sales and Service,
and Daniel Paul Bell,        Defendants,

Of whom Bell Appliance Service, Inc., d/b/a Bell Appliance Sales and
Service, is        Appellant.

Appeal From Charleston County

Gerald C. Smoak, Circuit Court Judge

Unpublished Opinion No.  2003-UP-128

Submitted January 10, 2003 – Filed February 18, 2003

AFFIRMED

Frederick J. Newton, of Charleston; for Appellant.

Charles S. Altman and Robert E. Culver, both
of Charleston; for Respondent.

PER CURIAM: Bell Appliance, Inc. (Bell Appliance)
appeals the default judgment entered against it, arguing that Diversified Distributions,
Inc. did not comply with Rule 4, SCRCP, when it purportedly served Bell Appliance
with a summons and complaint. 

FACTS

Bell Appliance is a family-run appliance sales business,
wholly owned by David S. Bell.  Bell Appliance has done business under many
different, although similar, names, such as: Bell Appliance Service, Inc., Bell
Appliance Sales and Service; Bell Appliance Center, Inc.; Bell Furniture Outlet;
and Bell Furniture and Appliance. However, no matter what the name, the sign
on top of the store, the mailing address, and the telephone number were always
the same. 

In this case, Diversified alleges that Bell Appliance,
doing business as Bell Appliance Sales and Service, ordered over $80,000 in
appliances and failed to pay for the goods. Diversified filed a summons and
complaint against Bell Appliance and Daniel Bell. In its attempt to serve Bell
Appliance, Diversified learned that Bell’s registered agent was David S. Bell. 
However, the registered address, 5739 Dorchester Road, Charleston Heights, South
Carolina, did not exist.  Rather than send service to the non-existent address,
Diversified served the summons and complaint via certified mail, return receipt
requested, delivery restricted to Daniel P. Bell, at the Bell Appliance business
address.  Daniel Bell is David Bell’s son and operated the appliance sales business
at the time.  Daniel Bell signed the receipt for delivery. 

In addition to serving Daniel Bell, Diversified sent
a copy of the summons and complaint to Bell Appliance Service, Inc.  Originally,
the summons and complaint were sent with restricted delivery, but the U.S. Postal
service will not send restricted delivery to a corporate entity.  Therefore,
the summons and complaint were sent via certified mail, return receipt requested
to Bell Appliance, and Daniel Bell accepted this service as well.

Neither defendant answered the summons and complaint,
and an Order of Default and Default Judgment was entered in the amount of $111,492.65.
Diversified began to execute its judgment lien upon Bell Appliance’s commercial
property.  Bell Appliance moved to set aside the default judgment, arguing it
was never served.

Bell Appliance argues that David Bell was the sole
owner and operator of Bell Appliance Services, Inc., and that he “got out of
the retail business and went to a . . . landlord type” business before this
action arose. David Bell leased a portion of his building to his son, Daniel,
who ran his own company called “Bell Appliance Sales.” Other businesses also
rented space in David Bell’s building, and all of the businesses received mail
in one large mailbox. David Bell continued to receive mail for Bell Appliance
Services, Inc. in that mailbox too. David Bell asserts that he never received
the summons and complaint for Bell Appliance and that Daniel Bell was an employee
of an entirely separate business at the time the pleadings were received. Therefore,
if Daniel Bell was in fact served with the pleadings, service was not effective
against Bell Appliance.

Judge Smoak denied the motion, finding that Bell Appliance
failed to meet its burden of proving that Daniel Bell was unauthorized to accept
service of process on its behalf.  Bell Appliance appeals.

ISSUES

-
Was Daniel Bell authorized to receive service on behalf of Bell Appliance?

-
Even if Daniel Bell was authorized to receive service, was service proper where
it was delivered via certified mail, return receipt requested but not restricted
to the addressee?

 STANDARD OF REVIEW

“The power to set aside a default is exercised
within the sound discretion of the trial court whose decision will not be disturbed
on appeal absent a clear showing of an abuse of discretion.” Hill v. Dotts,
345 S.C. 304, 308, 547 S.E.2d 894, 896 (Ct. App. 2001) (citations omitted).
  “An abuse of discretion in setting aside a default judgment occurs when the
judge issuing the order was controlled by some error of law or when the order,
based upon factual, as distinguished from legal conclusions, is without evidentiary
support.”  Estate of Weeks, 329 S.C. 251, 259, 495 S.E.2d 454, 459 (Ct.
App. 1997). 

DISCUSSION

Rule 4(d)(3), SCRCP, provides for service
on a corporation by delivering a copy of the summons and complaint to “a managing
or general agent” of the corporation.
[1]   Furthermore, service can be made on a corporation by registered or
certified mail, return receipt requested and delivery restricted to the addressee. 
Rule 4(d)(8), SCRCP.  In determining whether service of process was properly
made, this court examines whether the plaintiff sufficiently complied with the
rules so that the lower court had personal jurisdiction over the defendant and
the defendant had notice of the proceedings.  Roche v. Young Bros., Inc.,
318 S.C. 207, 210, 456 S.E.2d 897, 899 (1995).    

In this case, service on Bell Appliance was received
by Daniel Bell via certified mail, return receipt requested.  However, because
of U.S. Postal Service rules, the delivery of the summons and complaint was
not restricted to the addressee.

Bell Appliance first argues that Daniel Bell was not
authorized to accept service on its behalf.  We disagree.

While it is clear from the record that David Bell,
not Daniel Bell, was Bell Appliance’s registered agent, service on a corporation’s
general or managing agent is sufficient even when the corporation has a registered
agent.  Renney v. Dobbs House, Inc., 275 S.C. 562, 274 S.E.2d 290 (1981). 
Therefore, so long as Daniel Bell was a general or managing agent, he was authorized
to accept service on behalf of Bell Appliance.

The circuit court found that “Daniel P. Bell was operating
and managing Bell Appliance Sales and Service at the business address for Bell
Appliance.  The business used the same phone number, the same signs, the same
name, and the same vendors that Bell Appliance had been using for several years.”
(R. 9) There is ample evidence in the record to support this factual finding. 
David Bell admitted that Daniel operated an appliance business in the same building
in which Bell Appliance had been, the sign on the building never changed, and
a partner in Diversified who dealt with both David and Daniel Bell swore in
an affidavit that he was never informed that Daniel’s business was different
from David’s business.  (R. 87) Therefore, we find the circuit court did not
abuse its discretion in finding that Daniel Bell was a managing agent authorized
to receive service of process on behalf of Bell Appliance.

Bell Appliance next argues that service was improper
because it was not mailed with delivery restricted to the addressee.  We disagree.

A primary purpose of Rule 4, SCRCP, is to assure
the defendant receives reasonable notice of the action.  Roche, 318 S.C.
at 209, 456 S.E.2d at 899.  Exact compliance with the rule is not required to
effectuate service of process.  Id. at 210, 456 S.E.2d at 899 (citations
omitted).  In this case, the fact that delivery to Bell Appliance was not restricted
to the addressee did not undermine the underlying goal of giving notice.   
Daniel Bell, a managing agent of Bell Appliance, accepted delivery of the summons
and complaint. Thus technical compliance with the statute, i.e., restricting
delivery to “an officer, a managing or general agent, or to any other agent
authorized by appointment or by law,” would have been no more likely to provide
notice.  Therefore, Diversified’s service on Bell Appliance was proper even
though the summons and complaint were not sent with delivery restricted to the
addressee. See McCall v. Finney, 294 S.C. 1, 4, 362 S.E.2d 26,
28 (Ct. App. 1987) (stating that this court has long recognized an overriding
rule of civil procedure that “whatever doesn’t make a difference doesn’t matter”).

For the foregoing reasons the
default judgment is

AFFIRMED.

HEARN, C.J., GOOLSBY and
SHULER, JJ., concur.

[1] Specifically, Rule 4(d)(3) states that service can be made “[u]pon
a corporation . . . by delivering a copy of the summons and complaint to an
officer, a managing or general agent, or to any other agent authorized by
appointment or by law .  . . .”