Monday, July 5, 2010

Less Than 60 Days to Judgment Day: Court of Appeals Grants Default Judgment for Failing to Answer in 30 Days, In Spite of Acknowledgment of Service, Answer Filed Before Motion

The Court of Appeals affirmed a default judgment in a case where the attorney for the defendant thought he had 60 days to answer the complaint after executing an acknowledgment of service.  Satnum Waheguru Corp. d/b/a/ Foothills Chevron v. The Buckhead Community Bank, Case No. A10A0395, 10 FCDR 1982, Decided June 16, 2010.  In this case, Buckhead Community Bank ("BCB") filed suit on a promissory note against Satnum.  On March 17, 2009 BCB filed suit.  On March 31, 2009, Satnum's counsel signed an "Acknowledgment of Service" of the summons and complaint.  This acknowledgment was filed on April 15, 2009.  On May 26, 2009, counsel for BCB "certified" that it had received Satnum's acknowledgment of service but had not been served with Satnum's answer.  Satnum fileds its answer three days later on May 29, 2009 -- less than 60 days after the signing of the acknowledgment.

On July 8, 2009, BCB moved for a default judgment on the ground that Satnum failed to timely file an answer to the complaint.  Satnum responded that it timely filed its answer within the 60 days as allowed by OCGA § 9-11-4(d).  The trial court ruled that OCGA § 9-11-4(d) was not implicated by the waiver at issue and therefore Satnum was required to answer within 30 days as set forth in OCGA § 9-11-12(a), which it had not done.  The court granted the default judgment.  Satnum appealed, arguing that pursuant to OCGA § 9-11-4(d) he was entitled to a 60 day answer deadline.  The Court of Appeals disagreed.

The court ruled that because there was no statement invoking OCGA § 9-11-4(d), the acknowledgment executed by Satnum had been executed under OCGA § 9-10-73 instead.  OCGA § 9-10-73 simply states that "the defendant may acknowledge service or waive process by a writing signed by the defendant or someone authorized by him."  It does not mention any change in the deadline to answer set forth in OCGA §9-11-12(a).  The procedures for waiving service in OCGA § 9-11-4(d) set forth the way that a plaintiff may avoid the cost of service of a summons and sets forth which defendants have a duty to avoid unnecessary service costs.  Section 9-11-4(d)(3) states that a plaintiff may notify such a defendant of the filing of the action and request that the defendant waive service of a notice and sets forth specific rules for the form of the request.  The rules require that the the request (A) be in writing (B) by first class mail or other reliable means (C) mailed with a copy of the complaint identifying the court (D) make specific reference to this code section and shall inform the defendant, by means of the text prescribed in subsection (l) of the Code section, of the consequences of compliance and of failure to comply with the request; (E) set forth the date the request is sent and (F) allow a reasonable time to return the waiver, at least 30 days from the date sent or 60 days if the addressee is out-of-state.   In turn OCGA § 9-11-4(d)(5) states that a defendant that returns the waiver in a timely manner has until 60 days after the date on which the request was sent to answer the complaint.

The request for acknowledgment of service sent in this case, drafted by BCB and submitted to Satnum, (1) made no reference to OCGA § 9-11-(4) and (2) did not use the form set forth in subsection (l) of the statute.  Therefore, found the court, the answer was due in 30 days and not 60, and the default judgment was affirmed.

What this means is that defendants cannot gain themselves 60 days to answer a complaint merely by offering to acknowledge service of a complaint they know has been filed.  Furthermore, even if a plaintiff requests a waiver of service, agreeing to the waiver is not mandatory unless the plaintiff follows the procedures of OCGA § 9-11-4.  Finally, if the plaintiff does not follow OCGA § 9-11-4 but requests a waiver of service and the defendant agrees to it, the defendant still has only 30 days to answer the complaint absent some other agreement to extend the time to answer.

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