Villavaso v. S.H. Anthony Inc.

309 So.3d 587

Sean A. VILLAVASO, L. Murphy's Trucking Service Inc. and SAV Trucking Services LLC, Appellants

v.S.H. ANTHONY INC., Appellee

NO. 2019-CA-00981-COA

Court of Appeals of Mississippi.

December 15, 2020

ATTORNEY FOR APPELLANTS: JAMES L. FARRIOR III

ATTORNEY FOR APPELLEE: MICHAEL JAMES THOMPSON JR.

BEFORE WILSON, P.J., LAWRENCE AND McCARTY, JJ.

WILSON, P.J., FOR THE COURT:

¶1. L. Murphy's Trucking Service Inc. (Murphy Trucking), a Louisiana corporation, entered into a contract with S.H. Anthony Inc. (Anthony), a Mississippi corporation. The contract provided that any disputes would be arbitrated in Gulfport, Mississippi. A dispute arose and was arbitrated in Gulfport. The arbitrator ruled in favor of Anthony, and the Harrison County Circuit Court entered a judgment confirming the award. However, Murphy Trucking had been administratively dissolved by the time of the court's judgment, and Anthony was unable to collect the judgment.

¶2. Anthony then filed a complaint against Murphy Trucking, SAV Trucking Services LLC (SAV), and Sean A. Villavaso, the owner of SAV and a former part owner of Murphy Trucking. Anthony alleged that the court should pierce the corporate veil and hold Villavaso personally liable, that SAV was a continuation of Murphy Trucking, and that Murphy Trucking had fraudulently transferred assets to avoid the judgment against it. After the defendants failed to answer the complaint, Anthony obtained a default judgment against them. Five months later, the defendants filed a motion to set aside the default judgment, arguing that they were never served with process and had a colorable defense to Anthony's complaint. Another five months later, the defendants filed a second motion to set aside the default judgment, this time alleging that they were not subject to personal jurisdiction in Mississippi. After a hearing, the circuit court denied the defendants’ motions to set aside the default judgment. For the reasons discussed below, we find no error and affirm.

FACTS AND PROCEDURAL HISTORY

¶3. Anthony had a contract to do construction work at the Orleans Parish Prison in New Orleans. In September 2011, Anthony subcontracted with Murphy Trucking to supply and deliver pumped river sand to the job site. Although Murphy Trucking's work would be performed in Louisiana, the subcontract included a Mississippi choice-of-law clause and provided that any disputes would be arbitrated in Gulfport. Villavaso signed the agreement on behalf of Murphy Trucking. A dispute later arose and was submitted to arbitration in Gulfport. Villavaso attended the arbitration on behalf of Murphy Trucking. In September 2015, the arbitrator entered an award in favor of Anthony and ordered Murphy Trucking to pay Anthony $357,495.81. In October 2015, Anthony filed a motion to confirm the arbitration award in the Harrison County Circuit Court. Murphy Trucking was served (by personal service on Villavaso) but failed to respond, and in February 2016 the circuit court entered a judgment confirming the arbitration award. The judgment awarded Anthony $361,417.33 plus post-judgment interest.

¶4. Meanwhile, on November 7, 2015, the Louisiana Secretary of State administratively dissolved Murphy Trucking for failure to file its annual report. At the time of dissolution, Villavaso was Murphy Trucking's president. Two related Louisiana corporations—Murphy Heavy Equipment Company and Murphy Dredging Company—were also administratively dissolved around the same time.

¶5. In May 2016, Anthony discovered that Murphy Trucking had been dissolved. Anthony then filed a complaint against Murphy Trucking, SAV, and Villavaso (hereinafter, collectively, "the Villavaso parties"). Anthony sought "specific performance" of its contract with Murphy Trucking, i.e., payment of the judgment confirming the arbitration award. Anthony also alleged that Villavaso knowingly and intentionally dissolved Murphy Trucking in order to avoid paying the judgment,¹ that SAV was simply a continuation of Murphy Trucking, and that Murphy Trucking had fraudulently transferred assets to Villavaso or SAV to avoid paying the judgment. Based on those allegations, Anthony argued that Villavaso and SAV were also liable for the judgment.

¶6. Proofs of service were filed showing that a process server personally served Villavaso with three summonses and copies of the complaint—one each for Villavaso, Murphy Trucking, and SAV—in Jefferson Parish, Louisiana, on July 24, 2016. In October 2016, Anthony filed an application for entry of default, and the clerk entered a default against the Villavaso parties. Anthony then filed a motion for a default judgment, and on November 29, 2016, the circuit court entered a default judgment against the Villavaso parties for $392,586.49 plus post-judgment interest.

¶7. Over five months later in April 2017, the Villavaso parties filed a motion to set aside the default judgment. They argued that Villavaso had not been served with the summonses and complaints. In an affidavit, Villavaso claimed that he was not at home when the process server allegedly served him in July 2016. In another affidavit, Villavaso's girlfriend, Kasi Lamarque, claimed that she had "personally received the Summons and Complaint from the process server that day." The Villavaso parties also alleged that they had a "bona fide, good faith colorable defense to the claim at issue and the amount of damages sought." However, their motion failed to disclose or provide any information about the alleged defense.

¶8. Anthony filed a response to the Villavaso parties’ motion and an affidavit from the process server, Scott Meunier. Meunier again affirmed that he personally served Villavaso on July 24, 2016, with summonses and copies of the complaint for Villavaso, Murphy, and SAV. Meunier stated that he did not serve a female or anyone other than Villavaso. He stated that during prior attempts at service, he had "encountered a female occupant at [Villavaso's] address, but on ... July 24, 2016, [he] only encountered ... Villavaso."

¶9. In September 2017, the Villavaso parties filed additional motions to set aside the default judgment and dismiss the complaint.² These motions alleged, for the first time, that the court lacked jurisdiction over the Villavaso parties because they had never done business in Mississippi and were not subject to service of process in Mississippi. In response, Anthony argued that the Villavaso parties waived their objections to personal jurisdiction by failing to raise the issue in their prior motion to set aside the default judgment. Anthony also argued that the Villavaso parties were subject to personal jurisdiction in Mississippi under the long-arm statute, Miss. Code Ann. § 13-3-57 (Rev. 2019).

¶10. Strangely, the Villavaso parties’ September 2017 motions also stated that they "would ... show that [Villavaso] was in fact served with process in this action at his address in the State of Louisiana, as shown by the Proof[s] of Service filed in this action." In other words, the Villavaso parties’ new motions directly contradicted the denial of service that was the basis of their original motion. Anthony's response to the motions, which was also filed in September 2017, noted this contradiction, observing that the Villavaso parties "ha[d] now confessed that service was sufficient" but "ha[d] provided no explanation whatsoever for making the unsubstantiated allegations [denying service] in [their] first motion."

¶11. For the next eighteen months, there was little action in the case. On March 13, 2019, the Villavaso parties filed "corrected" motions to set aside the default judgment and dismiss the complaint. The "corrected" motions amended the September 2017 motions to state that the Villavaso parties would "show that the Plaintiff alleges that [Villavaso] was in fact served with process in this action at his address in the State of Louisiana, as shown by the Proof[s] of Service filed in this action." In other words, the corrected motions walked back the Villavaso parties’ prior confession of service.³

¶12. At a hearing on March 14, 2019, Villavaso testified that he became a part owner of Murphy Trucking in 2014—after he signed the contract between Murphy Trucking and Anthony but before the arbitration. Villavaso testified that he was authorized to sign the contract on behalf of Murphy Trucking, and he later became a part owner of the company with his uncle, Lamont Murphy. He testified that he attended the entire arbitration in Gulfport as Murphy Trucking's only corporate representative.

¶13. Villavaso testified that he is also the sole owner of SAV, which he started in 2011. SAV is in the same business as Murphy Trucking, i.e., it "hauls materials." Villavaso testified that "[SAV] would work for [Murphy Trucking] as a subcontractor." In addition, SAV kept some of its trucks at Murphy Trucking's principal place of business. Nonetheless, Villavaso maintained that "SAV ... was independent from ... Murphy Trucking" and that there was no "relationship" between the companies.

¶14. Villavaso testified that he has lived at the same address in Metairie (Jefferson Parish), Louisiana since 2006. He denied that he was served with process in this case. Villavaso claimed that he was at work the entire day he was allegedly served (July 24, 2016). He stated that his employees could verify this, but he did not obtain affidavits from any of them. As noted above, Kasi Lamarque submitted an affidavit stating that she "personally received the Summons and Complaint from the process server on [July 24, 2016]." However, Villavaso's testimony at the hearing contradicted Lamarque's affidavit. Villavaso testified:

Q. [In] Exhibit B to your motion to set aside [the] default judgment, [Lamarque] signed an affidavit stating that there was no process server that brought the complaint to your residence on that day?

A. Correct.

¶15. Villavaso denied that Murphy Trucking was administratively dissolved in 2015. He testified...