              This opinion is subject to revision before final
                    publication in the Pacific Reporter

                               2013 UT 61

                                 IN THE

      SUPREME COURT OF THE STATE OF UTAH
                            LARRY SEWELL,
                         Plaintiff and Appellee,
                                    v.
                            XPRESS LUBE,
                       Defendant and Appellant.

                             No. 20120445
                        Filed October 18, 2013

                     Fifth District, St. George
                 The Honorable James L. Shumate
                          No. 110503277

                               Attorneys:
       Nicholas Isaac Chamberlain, St. George, for appellee
  Paul M. Belnap, David E. Brown, Salt Lake City, for appellant

   JUSTICE PARRISH authored the opinion of the Court, in which
    CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE NEHRING,
             JUSTICE DURHAM, and JUSTICE LEE joined.


   JUSTICE PARRISH, opinion of the Court:
                         INTRODUCTION
   ¶1 Xpress Lube appeals from the district court’s order
denying its motion to set aside a default judgment in favor of Larry
Sewell. Sewell fell into a service pit at Xpress Lube, which is a sole
proprietorship of Bruce Anderson. Sewell alleged injuries resulting
from the fall, and his attorney thereafter began negotiating with
Travelers Insurance (Travelers), Anderson’s insurance carrier. When
negotiations proved unsuccessful, Sewell filed suit, naming Xpress
Lube as the only defendant.
   ¶2 A process server left copies of the summons and complaint
with an Xpress Lube employee. Anderson found the summons and
complaint several days later and immediately sent them to his
insurance agent. The agent attempted to fax the complaint to
Travelers, but apparently misdialed the fax number and Travelers
never received it.
                       SEWELL v. EXPRESS LUBE
                        Opinion of the Court

    ¶3 Sewell moved for default judgment, which the district
court granted. Xpress Lube moved to have the default set aside.
The district court denied the motion and entered judgment in favor
of Sewell for all damages alleged in his complaint. Xpress Lube
appeals.
                          BACKGROUND
    ¶4 On January 15, 2011, Sewell fell into a service pit at Xpress
Lube. He was sixty-eight years old, on Medicare, and allegedly
unemployed.1 Xpress Lube is an oil and lube business, of which
Anderson is the sole proprietor. On February 3, 2011, Sewell’s
counsel contacted and informed Anderson’s insurer, Travelers, that
Sewell had been injured and made a demand for damages. Sewell
and Travelers exchanged several settlement offers but were unable
to reach an agreement.
    ¶5 After approximately eight months of negotiations, Sewell
filed suit. Despite the fact that Sewell’s counsel had been negotiating
with counsel for Travelers, Sewell’s counsel did not inform counsel
for Travelers that he was ending negotiations or filing a lawsuit.
The suit named “Xpress Lube, a Utah business entity” as the only
defendant. Anderson was not named as a party.
    ¶6 Sewell hired a process server to serve the summons and
complaint. The process server arrived at Xpress Lube on October 11,
2011, spoke with Brian Deuel, an Xpress Lube employee, and asked
to see the person “in charge.” Deuel informed the process server
that he was not a manager or a person in charge and that one was
not currently available. After several minutes of waiting for a
manager or person in charge to return, the process server left the
summons and complaint with Deuel.
    ¶7 Deuel placed the summons and complaint on Anderson’s
office desk. Several days later, Anderson saw the summons and
complaint and delivered them to his insurance agent. That same
day, the insurance agent attempted to fax a copy of the summons
and complaint to Travelers, but the fax was apparently sent to the
wrong number. Travelers never received the fax and remained
unaware that the complaint had been filed.
    ¶8 On November 21, 2011, just twenty-three days after copies
of the summons and complaint had been left at Xpress Lube, Sewell


   1
     Because there have been no factual findings in this case, the facts
are recited only as they are alleged by the parties.

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                       Opinion of the Court

filed a motion for default judgment. He asserts that a copy of the
motion was mailed to Xpress Lube. But Anderson claims that he did
not receive a copy of the motion for default judgment until
December 8, 2011, when he received it in the mail along with a copy
of the actual default judgment.
   ¶9 The district court had entered the default judgment on
December 6, 2011. Despite the fact that the district court did not
hold any evidentiary hearing on damages, it entered judgment
against Xpress Lube in the amount of $600,000, the full amount
requested by Sewell.2
    ¶10 On December 8, 2011, immediately after receiving copies
of the motion for default judgment and the default judgment itself,
Anderson took both to his insurance agent and learned that the
complaint had never been received by Travelers. That same day,
Travelers retained counsel who contacted counsel for Sewell and
requested that Sewell stipulate to set aside the default. Sewell’s
counsel refused.
    ¶11 On December 21, 2011, Xpress Lube filed a motion to set
aside the default judgment and a proposed answer to Sewell’s
complaint. On April 17, 2012, the district court held a hearing and
announced from the bench its decision to deny the motion.
    ¶12 The following day, Sewell’s counsel submitted a proposed
order reflecting the ruling. The district court entered the proposed
order the very next day—April 19, 2012. Before Xpress Lube learned
that the proposed order had been entered, it filed an objection. The
district court thereafter vacated the order. That same day, Xpress
Lube filed another motion to set aside default judgment, or in the
alternative a motion to reconsider. On May 2, 2012, Sewell again
opposed Xpress Lube’s motion and submitted yet another proposed
order. This new proposed order denied both of Xpress Lube’s
motions to set aside default judgment and included a provision
indicating that Anderson was personally liable for the judgment
against Xpress Lube. The district court signed this proposed order
on May 4, 2012, and entered it on May 8, 2012.
    ¶13 Xpress Lube appeals. It argues that the district court erred
in refusing to set aside the default judgment as void for lack of


   2
    The $600,000 consisted of $45,000 for medical expenses, $420,000
in lost present and future earnings, and $135,000 for pain and
suffering.

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                       SEWELL v. EXPRESS LUBE
                        Opinion of the Court

jurisdiction under rule 60(b)(4) of the Utah Rules of Civil Procedure.
It alternatively argues that the district court erred in refusing to set
aside the default judgment on grounds of mistake, inadvertence, or
excusable neglect under rule 60(b)(1) of the Utah Rules of Civil
Procedure. It finally argues that even if the district court did not err
in refusing to set aside the default judgment, it erred in awarding
Sewell $600,000 in nonliquidated damages without holding an
evidentiary hearing.
   ¶14 We elected to retain this appeal and have jurisdiction
under Utah Code section 78A-3-102(3)(j).
                     STANDARD OF REVIEW
    ¶15 Generally, “a [district] court has broad discretion in
deciding whether to set aside a default judgment.” Lund v. Brown,
2000 UT 75, ¶ 9, 11 P.3d 277. But that discretion is not unlimited and
“should be exercised in furtherance of justice and should incline
towards granting relief in a doubtful case to the end that the party
may have a hearing.” Helgesen v. Inyangumia, 636 P.2d 1079, 1081
(Utah 1981). Indeed, “it is quite uniformly regarded as an abuse of
discretion to refuse to vacate a default judgment where there is
reasonable justification or excuse for the defendant’s failure to
[respond], and timely application is made to set it aside.” Id.
(internal quotation marks omitted).
    ¶16 An appellate challenge to a district court’s refusal to set
aside a default judgment for lack of jurisdiction presents a question
of law, for which no discretion is afforded to the district court. See
Jackson Constr. Co. v. Marrs, 2004 UT 89, ¶ 8, 100 P.3d 1211. See also
Reed v. Reed, 806 P.2d 1182, 1184 n.3 (Utah 1991) (“[W]hether a
person is properly served is a question of law.”).
    ¶17 The issue of whether the district court followed rule 55 of
the Utah Rules of Civil Procedure, which requires an evidentiary
hearing on issues of damages, presents a question of law. We
accordingly give no deference to the district court on this issue. See
Cadlerock Joint Venture II, LP v. Envelope Packaging of Utah, Inc., 2011
UT App 98, ¶¶ 6, 10, 16, 251 P.3d 837.
                             ANALYSIS
     I. THE DEFAULT JUDGMENT IS VOID FOR LACK OF
                     JURISDICTION
   ¶18 Utah Rule of Civil Procedure 60(b)(4) provides that “the
court may in the furtherance of justice relieve a party or his legal
representative from a final judgment, order, or proceeding . . .

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[when] the judgment is void.” “A judgment is void under rule
60(b)(4) if the court that rendered it lacked jurisdiction of the subject
matter, or parties or the judgment was entered without the notice
required by due process.” Judson v. Wheeler RV Las Vegas, L.L.C.,
2012 UT 6, ¶ 18, 270 P.3d 456 (internal quotation marks omitted).
This is true “even absent a separate meritorious defense. The court’s
lack of jurisdiction is alone sufficient to void its judgment.” Id. ¶ 15
(footnote omitted). “A motion under rule 60(b)(4) . . . could succeed
on the basis of a mere showing that the judgment was void because
of some defect in the court’s authority over the case or the parties.”
Id. ¶ 16. Therefore, “[i]f a judgment is entered by a court that lacks
jurisdiction, justice is furthered by setting that judgment aside as
void under rule 60(b)(4).” Id. ¶ 15.
     ¶19 Xpress Lube argues that the judgment is void. Specifically,
it argues that the process server’s decision to simply leave copies of
the summons and complaint with Deuel, a mere employee of Xpress
Lube, did not constitute proper service under rule 4 of the Utah
Rules of Civil Procedure. Sewell disagrees. He argues that the “only
thing that matters is that the employee in question was completely
responsible for all of Appellant’s operations and assets, thus
satisfying [r]ule 4’s requirements for service upon a ‘person in
charge.’”
    ¶20 Sewell’s argument is misplaced because it relies on the
wrong subsection of rule 4. Sewell relies on rule 4(d)(1)(E), which
states that service on a corporation, partnership, or unincorporated
association subject to suit under a common name shall be made “by
delivering a copy of the summons and the complaint to an officer, a
managing or general agent, or other agent authorized by
appointment or by law to receive service of process.” But Xpress
Lube is not a corporation, partnership, or unincorporated
association. Rather, it is a sole proprietorship of Anderson. Thus,
rule 4(d)(1)(E) does not apply.
    ¶21 The defendant named in Sewell’s complaint is “Xpress
Lube, a Utah business entity.” Anderson is the sole proprietor of
Xpress Lube. Because “[a] proprietorship has no formal legal
existence . . .[t]he proper defendant in such a circumstance is the
individual owner of the business.” JAMES J. BROWN, JUDGMENT
ENFORCEMENT § 11.03 (3d ed. 2009). See also Bonneville Billing &
Collection v. Johnston, 1999 UT 92, ¶ 4, 987 P.2d 600 (finding service
proper where an individual doing business as J.C. Johnson Company
was served at his residence). Thus, to serve a sole proprietorship,
the sole proprietor must be served under rule 4(d)(1)(A).

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                      SEWELL v. EXPRESS LUBE
                        Opinion of the Court

    ¶22 Courts in other jurisdictions have similarly held that the
proper defendant in a suit against a proprietorship is the sole
proprietor. For example, in Patterson v. V & M Auto Body, the Ohio
Supreme Court held that a lawsuit may not “be knowingly
maintained against a defendant solely under the fictitious name in
which the defendant does business.” 589 N.E.2d 1306, 1308 (Ohio
1992). In Coldwell Banker Manning Realty, Inc. v. Cushman & Wakefield
of Connecticut, Inc., a Connecticut court concluded that the lower
court lacked jurisdiction because the plaintiff was a nonexistent
entity lacking standing, which made it impossible for the entity to
have “some real interest in the cause of action.” 47 A.3d 394, 397–98
(Conn. App. Ct. 2012) (internal quotation marks omitted). Since “the
trade name of a legal entity does not have a separate legal existence,
a plaintiff bringing an action solely in a trade name cannot confer
jurisdiction on the court.” Id. at 398 (internal quotation marks
omitted). And in Fried v. Wellesley Mazda, the court observed that the
“use of the designation ‘doing business as’ does not create a separate
legal entity that may be made a party defendant.” 2010 Mass. App.
Div. 36, *1 (Mass. Dist. Ct. 2010) (citation omitted). Thus, effective
service required that service be made personally upon Anderson as
sole proprietor of Xpress Lube.
   ¶23 While we acknowledge that Anderson became aware of the
lawsuit when he found copies of the summons and complaint on his
desk, that knowledge does not substitute for proper service.
       Service of summons in conformance with the mode
       prescribed by statute is deemed jurisdictional, for it is
       service of process, not actual knowledge of the
       commencement of the action, which confers
       jurisdiction. Otherwise, a defendant could never
       object to the sufficiency of service of process, since he
       must have knowledge of the suit to make such
       objection. The proper issuance and service of
       summons is the means of invoking the jurisdiction of
       the court and of acquiring jurisdiction over the
       defendant; these cannot be supplanted by mere notice
       by . . . other . . . means.
Murdock v. Blake, 484 P.2d 164, 167 (Utah 1971) (footnotes omitted).
In short, even though Anderson eventually became aware of the
summons and complaint, service was nevertheless insufficient.
   ¶24 Sewell argues that he should be excused from the
requirement of serving Anderson as the sole proprietor of Xpress


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Lube because “[p]rior to the commencement of this case it was not
possible for any person to ascertain who [Xpress Lube] was. No
method, short of instituting legal action, could bear the fruit of
specifically identifying who was behind the operations of [Xpress
Lube].” But counsel for Sewell conceded at oral argument that his
only effort to ascertain the nature of Xpress Lube or the identity of
its owner was to search a list of businesses on a Utah state database.
He did not inquire at Xpress Lube’s business location or ask any of
its employees. He did not search for a business license. And he did
not ask Travelers, with whom he had been negotiating for eight
months. Moreover, although the process server left copies of the
summons and complaint with Deuel, he made no inquires of Deuel
as to the nature of Xpress Lube or the identity of its owner. Under
these facts, we are not persuaded by Sewell’s assertion that it was
impossible for him to ascertain the nature of Xpress Lube.
    ¶25 The district court lacked jurisdiction to enter the default
judgment. To serve a sole proprietorship, the sole proprietor must
be served. That did not happen in this case. As a result, the default
judgment is void under rule 60(b)(4) of the Utah Rules of Civil
Procedure.
  II. THE DISTRICT COURT ALSO ERRED IN FAILING TO
 VACATE THE DEFAULT JUDGMENT UNDER RULE 60(b)(1)
   DUE TO MISTAKE, INADVERTENCE, OR EXCUSABLE
                      NEGLECT
    ¶26 Xpress Lube alternatively argues that the district court
abused its discretion in refusing to grant relief from the default
judgment because its “failure to answer Appellee’s Complaint was
the result of mistake, inadvertence, surprise or excusable neglect,
and absent such mistake the default would not have occurred.”
Specifically, Xpress Lube points out that Anderson delivered the
summons and complaint to his insurance agent as soon as he found
them on his desk and that the failure to answer was the result of his
insurance agent’s error in sending them to the wrong fax number.
    ¶27 Under rule 60(b)(1), “the court may in the furtherance of
justice relieve a party or his legal representative from a final
judgment, order, or proceeding for . . . mistake, inadvertence,
surprise, or excusable neglect.” We have stated that “a movant is
entitled to have a default judgment set aside under 60(b) if (1) the
motion is timely; (2) there is a basis for granting relief under one of
the subsections of 60(b); and (3) the movant has alleged a
meritorious defense.” Menzies v. Galetka, 2006 UT 81, ¶ 64, 150 P.3d


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                       SEWELL v. EXPRESS LUBE
                        Opinion of the Court

480. We consider each of these requirements in turn.
     ¶28 A motion to set aside a default judgment under subsection
(1) is timely if it is made “within a reasonable time and . . . not more
than 3 months after the judgment . . . was entered.” UTAH R. CIV. P.
60(b). There is no dispute that Anderson’s motion was timely. The
default judgment was entered on December 6, 2011. Anderson
moved to have it set aside on December 21, 2011, just fifteen days
later. We therefore move to the next prong of the test.
    ¶29 Rule 60(b)(1) provides for relief from a default judgment
entered as a result of mistake, inadvertence, surprise, or excusable
neglect. To qualify for relief under rule 60(b)(1), a party must show
he has used due diligence. Due diligence is established where the
“failure to act was the result of . . . the neglect one would expect
from a reasonably prudent person under similar circumstances.”
Judson v. Wheeler RV Las Vegas, L.L.C., 2012 UT 6, ¶ 27, 270 P.3d 456
(internal quotation marks omitted). We conclude Xpress Lube also
satisfies this prong of the test.
   ¶30 Xpress Lube asserts:
       From the time of the Incident, [it] attempted to take all
       reasonable steps to resolve [Sewell’s] claims, including
       reporting the Incident to the Insurance Agent before
       any claim was made, relying on Travelers during the
       negotiations, delivering a copy of the Summons and
       Complaint to the Insurance Agent the same day Mr.
       Anderson found them on his desk, and delivering a
       copy of the Motion for Default Judgment and Default
       Judgment to the Insurance Agent the same day Mr.
       Anderson received those documents. . . . Had the
       Insurance Agent not inadvertently or mistakenly sent
       the Summons and Complaint to the wrong fax
       number, an Answer would have been timely filed
       [and] the default would not have occurred.
Moreover, as soon as Mr. Anderson learned that a motion for default
judgment had been filed and default judgment had been entered, he
immediately returned to his insurance agent who retained counsel,
and counsel expeditiously sought to set aside the default. Xpress
Lube also points out that even though its insurer had been
negotiating with counsel for Sewell, counsel for Sewell did not notify
the insurer that it was terminating negotiations or filing suit.
   ¶31 Sewell has not argued that Xpress Lube’s failure to file an


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                        Opinion of the Court

answer was the result of anything more than a simple mistake by its
insurance agent. Instead, Sewell focuses on his interactions with
Travelers prior the initiation of the lawsuit, arguing that Travelers’
“pre-litigation negotiations were in bad faith and sporadic.” But that
is beside the point. The relevant inquiry is whether Xpress Lube’s
failure to answer the complaint was the result of mistake,
inadvertence, or excusable neglect.
    ¶32 Sewell also makes much of his assertion that he mailed the
motion for default to Xpress Lube on November 21, 2011, some two
weeks before the default was entered. But Anderson has testified
that he first received notice of the default proceedings when the
order of default was mailed to him on December 8, 2011. And
immediately upon receiving notice, he took action to have the
default set aside.
    ¶33 Having found that there is a basis for granting relief under
rule 60(b)(1), we now move to the third part of the test, which
requires us to consider whether Anderson has alleged a meritorious
defense. “The assertion of a meritorious defense under rule 60(b)
requires only a clear and specific proffer of a defense that, if proven,
would preclude total or partial recovery by the claimant or
counterclaimant.” Judson, 2012 UT 6, ¶ 23 (internal quotation marks
omitted). This requires “that a party state the basis for its claims or
defenses in short and plain terms.” Id. (internal quotation marks
omitted). “The purpose of the meritorious defense rule is to prevent
the necessity of judicial review of questions which, on the face of the
pleadings, are frivolous.” Lund v. Brown, 2000 UT 75, ¶ 28, 11 P.3d
277 (internal quotation marks omitted). “Thus, where a party
presents a clear and specific proffer of a defense that, if proven,
would preclude total or partial recovery by the claimant or
counterclaimant, it has adequately shown a nonfrivolous and
meritorious defense for the purposes of its motion to set aside a
default judgment.” Id. ¶ 29.
    ¶34 Here, Xpress Lube has alleged several meritorious
defenses. It has argued that Sewell was negligent in walking into the
service pit, that Sewell’s claimed medical damages are not
attributable solely to the fall at Xpress Lube, and that Sewell’s claims
for lost present and future wages are unsupported by the evidence
inasmuch as Sewell was sixty-eight years old and unemployed at the
time of the incident. These defenses are sufficient, if proved, to
“preclude total or partial recovery,” id., and thus qualify as a
meritorious defense. Judson, 2012 UT 6, ¶ 23. Because Xpress Lube
established that its default was the result of mistake, inadvertence,

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                      SEWELL v. EXPRESS LUBE
                        Opinion of the Court

or excusable neglect, the district court abused its discretion in
refusing to set aside the default judgment under rule 60(b)(1). As we
have previously emphasized, “discretion should be exercised in
furtherance of justice and should incline towards granting relief . . .
to the end that the party may have a hearing.” Helgesen v.
Inyangumia, 636 P.2d 1079, 1081 (Utah 1981).
     III. THE DISTRICT COURT ERRED WHEN IT FAILED
          TO HOLD AN EVIDENTIARY HEARING ON
                 UNLIQUIDATED DAMAGES
   ¶35 Xpress Lube alternatively argues that the district court
“abused its discretion by entering a default judgment in the amount
of $600,000 without any hearing or notice of any hearing on
damages.” Sewell counters that an evidentiary hearing was not
required because damages are “sufficiently defined.” We agree with
Xpress Lube.
    ¶36 Under rule 55(b)(2) of the Utah Rules of Civil Procedure,
in a default proceeding, “the court may conduct such hearings or
order such references as it deems necessary and proper” if “it is
necessary to take an account or to determine the amount of
damages.” “As a general rule, a default judgment establishes, as a
matter of law, that defendants are liable to plaintiff as to each cause
of action alleged in the complaint.” Amica Mut. Ins. Co. v. Schettler,
768 P.2d 950, 965 (Utah Ct. App. 1989) (internal quotation marks
omitted). But “it is still incumbent upon the non-defaulting party to
establish by competent evidence the amount of recoverable damages
and costs he claims.” Id. “[E]ven defaulting defendants should
usually be afforded an evidentiary hearing whenever the amount
owed is unliquidated under rule 55(b)(2).” Cadlerock Joint Venture II,
LP v. Envelope Packaging of Utah, Inc., 2011 UT App 98, ¶ 10, 251 P.3d
837.
    ¶37 Although the language of rule 55(b)(2) appears to be
permissive by stating that the court may conduct a hearing on
damages, a district court does not have discretion to avoid a hearing
when the damages are unliquidated, regardless of the allegations in
the complaint. Liquidated damages are those that can be precisely
determined. In such cases, an evidentiary hearing is not always
required. See Novosad v. Cunningham, 38 S.W.3d 767, 773 (Tex. App.
2001) (“A claim is liquidated if the amount of damages can be
accurately calculated by the court from the factual, as opposed to the
conclusory, allegations in the petition and an instrument in
writing.”). But where the damage claim is for other than a sum


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certain, the district court has an “obligation under rule 55(b)(2) to
conduct such hearings and take such evidence as it deems advisable
for determining the damages.” Cadlerock Joint Venture II, LP, 2011
UT App 98, ¶ 11 (internal quotation marks omitted).
    ¶38 Sewell argues that he “specifically laid out damages.” He
is mistaken. The district court entered default against Xpress Lube
in the total amount of $600,000, consisting of $45,000 in medical bills,
$420,000 in lost present and future wages, and $135,000 for pain and
suffering. But the fact that these amounts were requested in the
complaint does not render them certain or liquidated. Personal
injury cases almost always involve elements of “damages [that] are
incomplete or cannot be calculated with mathematical accuracy.”
Canyon Country Store v. Bracey, 781 P.2d 414, 422 (Utah 1989)
(internal quotation marks omitted). This is particularly true where
the damages sought include amounts for pain and suffering, and lost
future wages.
    ¶39 In a case presenting a claim for damages similar to the one
at issue here, the court of appeals noted:
       None of the allegations in [the appellee’s] complaint
       indicate a “sum certain“ from which the [district]
       court could have calculated the particular damages
       awarded—$6,000 for medical expenses, $3,120 for lost
       income, and $20,000 for pain and suffering. Thus, the
       complaint does not present sufficient credible
       evidence to support the [default] judgment [amount].
Salazar v. Chavez, 2012 UT App 177, ¶ 7 n.5, 282 P.3d 1033 (third
alteration in original) (internal quotation marks omitted).
    ¶40 Here, Sewell did not request and the district court did not
hold a hearing on damages. Instead, the district court simply
entered judgment for the full $600,000 in unliquidated damages
prayed for in Sewell’s complaint. In failing to hold such a hearing,
the district court abused its discretion.
                           CONCLUSION
    ¶41 We hold that the district court erred when it declined to set
aside the default judgment. We vacate the default judgment on
three alternative and independent grounds. First, there was no
proper service on Xpress Lube under rule 60(b)(4) because in order
to serve a sole proprietorship, the sole proprietor must be served.
Therefore, the district court lacked jurisdiction and the judgment is
void. Even if the district court had jurisdiction, we would vacate the

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default judgment under rule 60(b)(1) because the motion to set it
aside was timely filed, it was the result of mistake, inadvertence, or
excusable neglect, and Xpress Lube has alleged a meritorious
defense. Finally, the district court erred when it entered default
judgment for the full amount of damages alleged in the complaint
without holding an evidentiary hearing. We therefore reverse and
remand for further proceedings consistent with this opinion.




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