Ward v. Marriott Int'l, Inc.

352 Ga.App. 488

835 S.E.2d 322

WARD

v.MARRIOTT INTERNATIONAL, INC.

A19A0826

Court of Appeals of Georgia.

October 24, 2019

Ugwonali Law Group, Adanna Urunwa Ugwonali, Atlanta, for Appellant.

Drew Eckl & Farnham, Stevan A. Miller, Gwendolyn D. Havlik, for appellee.

Hodges, Judge.

Plaintiff Thelma Ward ("Ward"), on behalf of her decedent spouse, Jimmie Ward, appeals from a trial court order granting Marriott International, Inc.’s ("Marriott") motion to dismiss for lack of personal jurisdiction and effectively denying her motion for default judgment. Because the trial court improperly applied existing law governing personal jurisdiction in Georgia and allowed Marriott to circumvent the strict requirements to open default, we reverse the dismissal of this case and remand to the trial court to proceed with Ward’s motion for entry of default judgment.

The record shows that on August 29, 2017, Ward, a Georgia resident, sued Marriott in Cobb County State Court for simple negligence and negligence per se after a handicap shower seat broke, causing Jimmie to suffer injuries. The injuries were sustained at a Marriott hotel in Texas. Ward’s complaint alleged that

Defendant Marriott ... is a corporation duly registered to conduct business in the State of Georgia. It is subject to the jurisdiction of this Court and may be served through its registered agent, Corporate Creations Network Inc. at 2985 Gordy Parkway, 1st Floor, Cobb, Marietta, Georgia 30066, USA.

An affidavit of service indicates that Marriott was personally served through an authorized agent at that address on August 30, 2017.

Marriott failed to answer the complaint, and on November 1, 2017, Ward moved for the entry of default judgment. The following day, Marriott answered the complaint and asserted a number of defenses, including lack of personal jurisdiction. The answer claimed that Marriott was "without sufficient information to form a belief as to the truthfulness of the allegations contained in" many paragraphs of the complaint. Marriott also served Ward with interrogatories and requests for the production of documents.

On November 21, 2017, three weeks after Ward moved for the entry of default, Marriott filed a number of documents: an amended answer, a demand for jury trial, a request for discovery that admitted Marriott was in default for failing to timely file an answer, and, most importantly for purposes of this appeal, a motion to dismiss for lack of personal jurisdiction. Ward opposed the motion to dismiss and moved to strike Marriott’s answer. Following oral argument on the pending motions, the trial court granted Marriott’s motion to dismiss for lack of personal jurisdiction, effectively denying Ward’s motion for default judgment. In three related enumerations, Ward challenges the propriety of the trial court’s grant of Marriott’s motion to dismiss and denial of her motion for default judgment.

This case presents the following jurisdictional issue: Can a foreign corporation registered and authorized to do business in Georgia avoid default by filing a motion to dismiss for lack of personal jurisdiction after its time to open default as a matter of right has passed? A thorough analysis of existing Georgia default and personal jurisdiction law mandates that we answer the question in the negative.

1. Georgia default law . Under Georgia law, a defendant must answer a complaint within 30 days after service of the summons and complaint upon it, unless otherwise provided by statute. OCGA § 9-11-12 (a). Failure to do so results in an automatic default:

If in any case an answer has not been filed within the time required by this chapter, the case shall automatically become in default unless the time for filing the answer has been extended as provided by law. The default may be opened as a matter of right by the filing of such defenses within 15 days of the day of default, upon the payment of costs. If the case is still in default after the expiration of the period of 15 days, the plaintiff at any time thereafter shall be entitled to verdict and judgment by default, in open court or in chambers, as if every item and paragraph of the complaint or other original pleading were supported by proper evidence[.]

OCGA § 9-11-55 (a). Accordingly, because Marriott failed to answer the complaint for 64 days, Ward was automatically entitled to default judgment as if every item and paragraph of her complaint were supported by proper evidence.¹ See Sidwell v. Sidwell , 237 Ga. App. 716, 717 (1), 515 S.E.2d 634 (1999). In fact, Marriott admitted in its subsequently filed request for discovery that "[t]he above-styled case is in default as [Marriott] failed to file a timely Answer."

"After the 15-day grace period for opening default as a matter of right under OCGA § 9-11-55 (a), a trial court has no discretion to open default" unless the defendant complies with the conditions of OCGA § 9-11-55 (b). (Citation and punctuation omitted.) Samadi v. Fed. Home Loan Mortgage Corp. , 344 Ga. App. 111, 115 (1), 809 S.E.2d 69 (2017). In addition, if default is not opened, the issue of liability is concluded, and the only issue a defendant can defend against is the amount of damages. Flanders v. Hill Aircraft & Leasing Corp. , 137 Ga. App. 286, 287, 223 S.E.2d 482 (1976) (reversing trial court, which allowed a defaulting defendant to present evidence regarding the right of recovery).

That being said, default may be opened at the discretion of the trial court if certain requirements are met:

At any time before final judgment, the court, in its discretion, upon payment of costs, may allow the default to be opened for providential cause preventing the filing of required pleadings or for excusable neglect or where the judge, from all the facts, shall determine that a proper case has been made for the default to be opened, on terms to be fixed by the court. In order to allow the default to be thus opened, the showing shall be made under oath, shall set up a meritorious defense, shall offer to plead instanter, and shall announce ready to proceed with the trial.

OCGA § 9-11-55 (b).

Here, Marriott filed an answer, amended answer, discovery requests, demand for jury trial, and a motion to dismiss. In its request for discovery, Marriott alleged it filed a motion to open default, but it is undisputed that no such motion was ever filed. In fact, the trial court’s order indicates that Marriott "has repeatedly stated that they do not need to open Default because there is no jurisdiction." We thus turn to an overview of Georgia’s personal jurisdiction law.

2. Georgia personal jurisdiction law . In Georgia, "[a]llowing a case to go to default judgment is no better than allowing a case to be tried on the merits before coming in with a technical defense." (Citation and punctuation omitted.) Cotton v. Ruck , 157 Ga. App. 824, 278 S.E.2d 693 (1981). Thus, a properly served defendant who wishes to rely on an affirmative defense, such as lack of personal jurisdiction or venue,² must assert the defense in a timely filed answer or in a motion to dismiss prior to default. See id. "When the party has received actual notice of the suit there is no due process problem in requiring him to object to the improper [jurisdiction or] venue within the period prescribed[.]" (Citation and punctuation omitted.) Williams v. Mells , 138 Ga. App. 60, 61, 225 S.E.2d 501 (1976) (physical precedent only); Aiken v. Bynum , 128 Ga. App. 212, 213 (2), 196 S.E.2d 180 (1973) (physical precedent only); cf. United Grocery Outlet v. Bennett , 292 Ga. App. 363, 365, 665 S.E.2d 27 (2008) (citing principle from Williams ).

(a) Resident defendants . To circumvent Georgia default and personal jurisdiction law, including its failure to request that default be opened and comply with the requirements of OCGA § 9-11-55 (b), Marriott argues that the law stated above does not apply to foreign, nonresident corporations. First of all, contrary to Marriott’s assertion in this case, Marriott is considered a resident corporate defendant, as opposed to a nonresident corporate defendant, under existing Georgia law. A nonresident corporation is defined, in part, under the Georgia Long Arm Statute as "a corporation which is not organized or existing under the laws of this state and is not authorized to do or transact business in this state at the time a claim or cause of action under Code Section 9-10-91 arises." OCGA § 9-10-90. Both the Supreme Court of Georgia and this Court previously have held that the Georgia Long Arm Statute does not apply to corporations authorized to do business in Georgia. See Allstate Ins. Co. v. Klein , 262 Ga. 599, 600-601, (422 S.E.2d 863) (1992) (foreign corporation authorized to do business in this State is not a "nonresident" for purposes of personal jurisdiction as that term is defined in the Long Arm Statute); Cherokee Warehouses v. Babb Lumber Co. , 244 Ga. App. 197, 199, (535 S.E.2d 254) (2000) (same; case involved a Tennessee corporation that was registered to do business in Georgia and maintained a registered agent in Georgia for service of process); see also Innovative Clinical & Consulting Svcs. v. First Nat. Bank of Ames, Iowa , 279 Ga. 672, 674, n. 2, 620 S.E.2d 352 (2005) (noting that the Klein case involved "jurisdiction over a defendant who was a Georgia resident so that OCGA § 9-10-91 was wholly inapplicable").

As a resident, such a foreign corporation may sue or be sued to the same extent as a domestic corporation. Therefore, a plaintiff wishing to sue in Georgia a corporation authorized to do business in Georgia is not restricted by the personal jurisdiction parameters of OCGA § 9-10-91, including the requirement that a cause of action arise out of a defendant’s activities within the state.

(Footnote omitted.) Klein , 262 Ga. at 601, 422 S.E.2d 863.

As the Supreme Court of Georgia noted in Klein , 262 Ga. at 601, n.2, 422 S.E.2d 863, this conclusion is consistent with OCGA § 14-2-1505, which sets forth the statutory...