Patriot Commercial Leasing Co. v. Jerry Enis Motors, Inc.
| Docket Number: | 2005-CA-01119-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 05-11-2006 Opinion Author: EASLEY, JUSTICE Holding: AFFIRMED |
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| Additional Case Information: |
Judge(s) Concurring: SMITH, C.J., WALLER, P.J., CARLSON, GRAVES, DICKINSON AND
RANDOLPH, JJ. Non Participating Judge(s): COBB, P.J. AND DIAZ, J. Procedural History: Dismissal Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 04-29-2005 Appealed from: Monroe County Circuit Court Judge: Paul S. Funderburk Disposition: Granted Appellee's Motion to Dismiss Case Number: CV-04-138-PFM |
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| Party Name: | Attorney Name: | |||
| Appellant: | PATRIOT COMMERCIAL LEASING CO. |
SCOTT W. HUNTER, WALTER MICHAEL GILLION |
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| Appellee: | JERRY ENIS MOTORS, INC. d/b/a MAGNOLIA CHEVROLET-BUICK-PONTIAC | MICHAEL DAVIS JONAS, CANDACE COOPER BLALOCK |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Summary of the Facts: | Patriot Commercial Leasing Co. sought to enroll a foreign judgment against Jerry Enis Motors, Inc., obtained in the Court of Common Pleas in Montgomery County, Pennsylvania. Patriot filed a notice of filing in the Monroe County Circuit Court, attached with the authenticated foreign judgment and affidavit. The attached certified foreign judgment indicated a judgment “in the amount of $51,603.39, in favor of the Plaintiff, PATRIOT COMMERCIAL LEASING CO., and against the Defendant, MAGNOLIA CHEVROLETBUICK-PONTIAC, a/k/a JERRY ENIS MOTORS, INC.” Attached to the judgment is a certified copy of a praecipe to enter default judgment. Scott Hunter, Patriot’s attorney licensed in Mississippi, provided the affidavit attached to the foreign judgment pursuant to section 11-7-305. The affidavit provided: (1) “Patriot Commercial Leasing Co. filed a lawsuit against Jerry Enis Motors, Inc., in the Court of Common Pleas in Montgomery County, Pennsylvania, case no. 03-14790" and (2) “[o]n September 24, 2003, judgment was entered against Defendant in favor of Plaintiff in the case, in the amount of $51,603.39.” Enis filed a motion to strike the affidavit of Patriot’s counsel and noticed hearing on the motion. Enis also filed a motion to dismiss Patriot’s efforts to enroll the foreign judgment. The trial court sua sponte ordered that Enis had twenty days to file an amended motion setting forth all of its intended defenses to the enrollment of the foreign judgment. Patriot was ordered to file any response which it deemed necessary to the amended motion within the following twenty days. Enis filed a motion seeking leave from the trial court to file a third-party complaint against Wayne Lemons. Enis filed the third-party complaint against Lemons. Lemons filed a response to Enis’s third-party complaint. A hearing was set and noticed on Enis’s motion to dismiss. The trial court continued the hearing in order to grant the parties additional time to submit any affidavits or other documentary evidence and to allow Enis leave to depose Lemons and submit the transcript of the deposition. After the parties had made additional filings, the court entered its order granting Enis’s motion to dismiss. Patriot appeals. |
| Summary of Opinion Analysis: | Jerry Enis formed Jerry Enis Motors, Inc., in 1980 as a Mississippi corporation. Enis ceased to operate the dealership on June 3, 2002. The dealership was sold to Magnolia Automotive Management, Inc. (Magnolia), a Mississippi corporation. However, Magnolia did not have a GM dealership number required to purchase new GM vehicles. Enis entered a management agreement with Magnolia and Lemons to allow Magnolia to use its GM dealership number to order new vehicles until Magnolia was approved by GM as a dealership. When Magnolia was approved by GM, the sale of the dealership would be concluded. Lemons and Magnolia entered into a management agreement with Enis to undertake the management of Enis’s dealership upon the terms and conditions stated in the management agreement. Pursuant to the terms of the agreement, Magnolia-Lemons was obligated to pay any and all operational expenses of the dealership incurred on or after June 3, 2002, of whatever nature, including but not limited to, floor plan interest, salaries, wages, utility bills, insurance, professional fees, advertising, taxes, rents, leases on equipment and property, the cost of all vehicles, parts and accessories and all other expenses whether of a general, sales or administrative nature which are incurred by Magnolia-Lemons. Magnolia-Lemons made all hiring and firing decisions and was responsible for all operating costs. During the term of the contract, Magnolia-Lemons was only authorized to order all parts and new cars through Enis’s dealership number, and Magnolia-Lemons was fully authorized and empowered to use the said dealership number for these purposes as if it belonged to Magnolia-Lemons. The agreement provided that the stated use of the dealership number was the only legitimate business use authorized. On January 10, 2003, a software lease application was generated that would upgrade other software equipment already under lease to Magnolia and incorporated Magnolia’s outstanding debt on its old software application. The lease agreement was between Magnolia Chevrolet Buick Pontiac and Patriot Commercial Leasing Company. The record does not reflect that Enis ever had any contact with Patriot or had ever previously purchased any software from Patriot. The lease agreement provided that Magnolia would submit to the jurisdiction of the Pennsylvania courts in the event of a dispute. On January 15, 2003, Derek Hollingsworth, another employee and ten-percent owner of Magnolia, executed an addendum to the lease agreement for auto loan 2000 software to change the lessee from Magnolia to Enis as the lessee of the software. The addendum stated, “[t]he lease and all other documents given in conjunction therewith shall now read: JERRY-ENIS MOTORS, INC.” Enis and Lemons both maintained that Hollingsworth had no authority to list Enis in the addendum. On February 14, 2003, Enis and Magnolia entered into a closing agreement for the sale of Enis’s assets to Magnolia. The closing agreement stated that Magnolia had obtained dealership approval from GM. The record does not reflect when Patriot filed its complaint in Pennsylvania, nor does it contain a copy of Patriot’s complaint in Pennsylvania. The record contains only a copy of an affidavit of service upon “Defendant, Jerry Enis Motors, Inc. d/b/a Magnolia Chevrolet-Buick-Pontiac” dated August 20, 2003. The process server stated that on August 18, 2003, he effected personal service on Wayne Lemons co-owner. Lemons testified in his deposition that at the time he was served he was definitively not at Jerry Enis Motors’ place of business. Lemons testified if he was served at the dealership, then it was at the dealership of Magnolia, not Enis. Lemons testified in his deposition that he was never at any time a co-owner of Enis. Enis argued to the trial court and on appeal that Patriot’s suit lacked personal jurisdiction as Magnolia was not Enis’s agent, had no express or contractual authority to bind Enis to the software lease as its agent, nor did Magnolia have apparent authority to bind Enis. As such, Enis claims the wrong party was named in the lawsuit. Patriot argued at trial and on appeal that Magnolia had apparent authority as Enis’s agent to bind Enis, the principal, to the software lease agreement. As such, Patriot contends personal jurisdiction existed and the trial court erred in finding lack of personal jurisdiction. Pennsylvania’s use of apparent authority is consistent with the laws of Mississippi regarding apparent authority under a theory of agency. While a third party cannot rely on the apparent authority of an agent to bind a principal where he has actual knowledge of the limits of the agent's authority, without such actual knowledge, the third party must exercise only reasonable diligence to ascertain the agent's authority. Apparent authority is the power to bind a principal which the principal has not actually granted but which he leads persons with whom his agent deals to believe that he has granted. The record does not demonstrate Enis by his conduct or words held Magnolia- Lemons out to be his agent to Patriot. Neither Jerry Enis nor Jerry Enis Motors, Inc., were ever a co-owner of Magnolia Automotive Management, Inc. Enis ceased to operate the dealership on June 3, 2002, and Enis entered a management agreement with Magnolia and Lemons which allowed Magnolia to use its GM dealership number only to order new vehicles and parts until Magnolia was approved by GM as a dealership. The software lease agreement was between Magnolia Chevrolet Buick Pontiac and Patriot Commercial Leasing Company, not Enis and Patriot. Enis never undertook any representation or action with Patriot to bind Enis to the lease. Likewise, Enis never represented to Patriot that Magnolia had authority to bind Enis to the software lease. The record does not reflect that Enis, or Jerry Enis, were ever contacted regarding the lease. Likewise, Jerry Enis, owner and registered agent of Enis, was never served with process. Therefore, the trial court did not err in granting Enis’s motion to dismiss for lack of personal jurisdiction. Patriot argues that Enis was personally served with a copy of the complaint filed in this matter by way of a process server handing a copy of the complaint to Lemons as a co-owner of Enis. Patriot served Lemons with process. Jerry Enis was not served. According to a printout in the record, the Mississippi Secretary of State listed the registered agent of Jerry Enis Motors, Inc., as Jerry Enis, not Wayne Lemons. Also, another printout in the record from the Mississippi Secretary of State listed Wayne Lemons as the sole registered agent for Magnolia Automotive Management, Inc. Neither Lemons nor Magnolia were ever a co-owner of Jerry Enis Motors, Inc. Likewise, neither Jerry Enis nor Jerry Enis Motors, Inc., were ever a co-owner of Magnolia. Clearly, Enis was not properly served. Pennsylvania law allows service by handing a copy of the summons and complaint at any office or usual place of business of the defendant to his agent or to the person for the time being in charge thereof. Enis no longer operated a dealership at that location. As such, it was not Enis’s usual place of business, nor was Lemons at the time, or any time, in charge of Enis’s business there. Without proper service of process, Patriot lacked personal jurisdiction over Enis. |
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