February 6, 2019

You Cannot Enforce a Void Judgment; Troxel v. Ward

Category: Indianapolis Law Club | Author: | Share:

A judgment entered without properly serving the defendant is void, and Indiana courts cannot enforce it, even if the judgment is from another state.

Troxel moved from Indiana to Florida in late 2013 or early 2014. In November 2014, a Wisconsin corporation filed a lawsuit against Troxel and his company in Wisconsin, alleging default on a loan. Service was attempted by leaving the complaint and summons at a building Troxel owned in Francesville, Indiana. Troxel did not respond to the complaint and the Wisconsin corporation moved for and obtained a default judgment for just under $500,000.

The judgment was domesticated in LaPorte County, and the company filed an affidavit saying that Troxel lived in La Crosse, Indiana. A summons and complaint were sent to the address given, and they were marked “return[ed] to sender” and “unable to forward.”

Undeterred, the company filed a motion for proceeding supplemental, and sought to garnish stock Troxel owned in a company called Adaptasoft. Notice of the hearing was published in the local paper.

The company then sold its interest to Ward, who sought a court order authorizing the sale of approximately $300,000 in shares of Adaptasoft stock owned by Troxel. The court authorized the sale, and notice of the sale was published in the local paper. Ward purchased the stock at the sale.

After learning that his stock has been sold, Troxel moved to set aside the sale under Rule 60(B). The trial court denied the motion and Troxel appealed.

On appeal, Troxel argued that the Indiana orders were void because he was not properly served. But the Court found that there was a more fundamental error—the Wisconsin order was void, so it could not be enforced by Indiana courts. Trial Rule 4.1(A)(3) allows service may be made on an individual by “leaving a copy of the summons and complaint at his dwelling house or usual place of abode.” But that is not what was done in the Wisconsin case. Rather, the complaint and summons were left at Troxel’s former address, which the process server recognized was “vacant.”

According to Wisconsin law, a court gains personal jurisdiction over a party only by valid personal or substituted service. Wisconsin compels strict compliance with its service rules even though the consequences may appear to be harsh. Because Troxel was not properly served with notice of the Wisconsin lawsuit, the Wisconsin court did not have personal jurisdiction over Troxel when it entered default judgment against him and therefore that judgment is void. Accordingly, any Indiana orders based on the void Wisconsin judgment are also void.

Therefore, the trial court erred by not granting the motion to set aside the sale of the stock.

Lessons:

  1. Indiana courts may not enforce a void judgment.
  2. A judgment obtained against a defendant without personal jurisdiction over the defendant is void.
  3. Rule 60(B) is the mechanism to use if someone is trying to enforce a void judgment against your client.