                                Cite as 2016 Ark. App. 121

                ARKANSAS COURT OF APPEALS
                                      DIVISION II
                                     No. CV-15-659


RAYMOND MORGAN and KATIE                        Opinion Delivered   February 24, 2016
MORGAN
                APPELLANTS                      APPEAL FROM THE CLEBURNE
                                                COUNTY CIRCUIT COURT
V.                                              [NOS. CV-11-201, CV-14-190]

                                                HONORABLE TIM WEAVER,
BIG CREEK FARMS OF HICKORY                      JUDGE
FLAT, INC.
                      APPELLEE                  AFFIRMED



                          PHILLIP T. WHITEAKER, Judge

       Appellants Katie and Raymond Morgan appeal the order of the Cleburne County

Circuit Court denying their motion to set aside a default judgment that was entered against

them in 2012. We find no error and affirm.

                                      I. Background

       Appellee Big Creek Farms of Hickory Flat, Inc. (“Big Creek”), and the Morgans

entered into a contract for the construction of a log home in Cleburne County. Construction

commenced in 2008 and was completed in December 2009, at which time the Morgans still

owed Big Creek $25,147.76 Although Big Creek attempted several times to collect the

amount from the Morgans, the Morgans never paid the outstanding balance on the house. As

a result, Big Creek filed a lawsuit against them on September 26, 2011.
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       Despite repeated attempts, Big Creek was unable to obtain service on the Morgans

either in person or by mail. After the circuit court granted a motion for extension of time to

obtain service, Big Creek ultimately obtained service by warning order pursuant to Arkansas

Rule of Civil Procedure 4(f). The Morgans never answered, and the circuit court granted Big

Creek’s subsequent motion for default judgment in April 2012.

       The Morgans discovered the existence of the default judgment in 2013 and filed a

motion to set it aside in November 2014. Big Creek responded, denying that the default

judgment should be set aside. The court denied the Morgans’ motion to set aside the default

judgment. The Morgans timely filed a notice of appeal and now raise four arguments as set

out below.

                                    II. Standard of Review

       Default judgments are governed by Rule 55 of the Arkansas Rules of Civil Procedure.

Rule 55(c) sets forth the circumstances pursuant to which a court may set aside a default

judgment:

               The court may, upon motion, set aside a default judgment previously entered
       for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2)
       the judgment is void; (3) fraud (whether heretofore denominated intrinsic or extrinsic),
       misrepresentation, or other misconduct of an adverse party; or (4) any other reason
       justifying relief from the operation of the judgment. The party seeking to have the
       judgment set aside must demonstrate a meritorious defense to the action; however, if
       the judgment is void, no other defense to the action need be shown.

Ark. R. Civ. P. 55(c) (2015).

       The Morgans raise four arguments on appeal: (1) the default judgment was void for

insufficiency of service of process under Rule 55(c)(2); (2) the extension of time for service


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obtained by Big Creek was improperly obtained under Rule 55(c)(3); (3) they were deprived

of their due-process rights to notice of the lawsuit against them under Rule 55(c)(4); and (4)

if the court concludes that the default judgment should be set aside for a reason other than

being void, the Morgans had a meritorious defense to the lawsuit under Arkansas Rule of

Civil Procedure 55(c).

       In cases where the appellant claims that the judgment is void under Rule 55(c)(2), the

appellate courts will review a trial court’s denial of a motion to set aside default judgment

using a de novo standard. Nucor Corp. v. Kilman, 358 Ark. 107, 118, 186 S.W.3d 720, 727

(2004). In cases where an issue arises under sections (c)(1), (3), or (4) of Rule 55, the trial

court’s denial of a motion to set aside default judgment is reviewed for abuse of discretion. Id.

                              III. Insufficiency of Service of Process

       In their first argument on appeal, the Morgans argue that the default judgment should

have been set aside because it was void for insufficient service of process. Arkansas law is long

settled that valid service of process is necessary to give a court jurisdiction over a defendant.

Shotzman v. Berumen, 363 Ark. 215, 213 S.W.3d 13 (2005); Smith v. Sidney Moncrief Pontiac,

Buick, GMC Co., 353 Ark. 701, 120 S.W.3d 525 (2003); Raymond v. Raymond, 343 Ark. 480,

36 S.W.3d 733 (2001). It is equally well settled that statutory service requirements must be

strictly construed and compliance with them must be exact because they are in derogation of

common-law rights. Shotzman, supra; Carruth v. Design Interiors, Inc., 324 Ark. 373, 921

S.W.2d 944 (1996). The supreme court has held that the same reasoning applies to service

requirements imposed by court rules. Nucor, supra; Carruth, supra. As a result, default


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judgments are void ab initio due to defective process regardless of whether the defendant had

actual knowledge of the pending lawsuit. Nucor, supra; Smith, supra.

       The Morgans challenge the sufficiency of service of process, raising three separate

subheadings under this point: (1) there was no effective personal service pursuant to Arkansas

Rule of Civil Procedure 4(d)(1); (2) there was no effective service by mail pursuant to Rule

4(d)(8); and (3) service by warning order pursuant to Rule 4(f) was deficient. Big Creek does

not dispute that it was unable to effectuate service by either Rule 4(d)(1) or Rule 4(d)(8), and

the circuit court found that service by warning order pursuant to Rule 4(f) was effective. The

only issue before this court, therefore, is whether there was effective service by warning order.

       The Morgans argue that service on them by warning order was deficient because Big

Creek failed to conduct a “diligent inquiry” into their whereabouts. They maintain that Big

Creek’s actions in attempting to find or contact them were insufficient because the company’s

president knew Katie Morgan’s phone number but failed to attempt to contact the Morgans

to determine their current address prior to serving them by warning order. The Morgans thus

contend that Big Creek did not conduct a diligent inquiry; therefore, the service by warning

order was invalid, and the default judgment was void.

       Service by warning order is governed by Arkansas Rule of Civil Procedure 4(f). This

rule permits constructive service by warning order only if the whereabouts of the defendant

are unknown “after diligent inquiry.” A mere recitation in an affidavit that a diligent inquiry

was made is not sufficient. Scott v. Wolfe, 2011 Ark. App. 438, at 7, 384 S.W.3d 609, 613.




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The burden is on the moving party to demonstrate to the court that he actually attempted to

locate the defendant. Id.; Smith v. Edwards, 279 Ark. 79, 648 S.W.2d 482 (1983).

       Given this framework, we examine the steps taken by Big Creek in an attempt to

obtain service on the Morgans. First, Big Creek attempted to obtain personal service upon the

Morgans at their address of 160 Heigle Road, Tumbling Shoals, Arkansas (“the Heigle

address”). The Cleburne County Sheriff’s Department unsuccessfully attempted service at this

address on four separate occasions. Although service was unsuccessful, the sheriff’s department

was able to discover information that the utility bills were being mailed to a Chester Morgan,

whose address was 491 Woodruff 252, McCrory, Arkansas (“the McCrory address”).

       Second, Big Creek hired a private investigator, Jon Hopkins, to research Raymond

Morgan’s whereabouts. The investigation confirmed the McCrory address as a possible

location to serve the Morgans.1 Third, Big Creek attempted personal service at the McCrory

address, where the Woodruff County Sheriff’s Department unsuccessfully attempted service

on three separate occasions. Next, Big Creek attempted to serve the complaint via certified

mail, restricted delivery to addressee only, at the Heigle address. The mail was returned,

marked “Return to Sender, No Such Number.” Big Creek then mailed the complaint and

summons to the Morgans at the Heigle address via first class mail; this mailing was likewise

returned, marked “No Such Number.”




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         Hopkins discovered that a “Raymond Bankster” had recently filled out a credit
application using Raymond Morgan’s information. Hopkins also learned that “Raymond
Bankster” was living at or using the McCrory address.

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       After pursuing these unsuccessful attempts to serve the Morgans, Big Creek obtained

an extension of time in which to effectuate service. Eventually, Big Creek filed an affidavit

for warning order, describing the attempts that had been made at service. The Cleburne

County Circuit Clerk issued the warning order, and the order was published for two

consecutive weeks in the Sun-Times, a Cleburne County newspaper. Big Creek mailed the

affidavit, the warning order, and the complaint and summons to the Morgans at the Heigle

address, return receipt requested with delivery restricted to addressee only, but this mail was

returned marked “Return to Sender, No Mail Receptacle, Unable to Forward.”

       We hold that Big Creek conducted a diligent inquiry into the whereabouts of the

Morgans sufficient to satisfy the constructive-service provision of Rule 4(f). The affidavits of

the process servers and investigators establish that a diligent inquiry was conducted, and the

affidavit for warning order reflected those efforts. We therefore conclude that service was

properly effectuated by warning order.

       The Morgans also argue, however, that the circuit court erred in finding that the

Heigle address was their “last known address” for purposes of Rule 4(f). Rule 4(f)(2) provides

that “[t]he party seeking judgment shall cause the warning order . . . to be mailed, with a copy

of the complaint, to the defendant . . . at his or her last known address by any form of mail

with delivery restricted to the addressee or the agent of the addressee.” The Morgans

complain that when the mail addressed to 160 Heigle Road was returned with a notation of

“no such number,” Big Creek should have then sent the warning order to the Morgans’ “last




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known address”—i.e., the McCrory address—and its failure to inform the court of this address

constituted fraud.

       On this issue, the circuit court found that the Heigle address was the Morgans’ last

known address. The court concluded that, while evidence did establish that utility bills were

being sent to the McCrory address, there was no proof that the McCrory address was a

forwarding address.2 The circuit court’s conclusions are supported by the evidence. The

process servers’ affidavits indicated only that utility bills were being mailed to the McCrory

address, not that mail was being forwarded by the post office from the Heigle address to the

McCrory address. Moreover, in their petition to set aside the default judgment, the Morgans

admitted that they resided at 160 Heigle Road. In sum, the evidence introduced below

supported the circuit court’s decision that the Heigle address, not the McCrory address, was

the Morgans’ “last known address” for purposes of Rule 4(f). Accordingly, we conclude that

the service by warning order was effectuated in compliance with Rule 4(f), and the

subsequently entered default judgment was not void for want of service.

            IV. Motion for Extension of Time to Serve the Summons and Complaint

       In their second argument on appeal, the Morgans assert that the circuit court erred in

granting Big Creek’s motion for extension of time to obtain service for two reasons: (1) Big

Creek failed to show good cause to obtain an extension, and (2) the order does not bear the

signature of the circuit court judge.


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         The circuit court found that if the McCrory address had truly been a forwarding
address, the complaint and summons that had been mailed to the Heigle address would have
been forwarded to the McCrory address, rather than returned to sender.

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       Regarding good cause, the Morgans complain that Big Creek never told the circuit

court that it “knew all along how to contact the Morgans in order to perfect service prior to

the trial court issuing the order for extension of time.” The circuit court never ruled on this

argument, however, and it is therefore not preserved for appeal. See Tillman v. Raytheon Co.,

2013 Ark. 474, at 18, 430 S.W.3d 698, 709 (noting that it is an appellant’s burden to obtain

a ruling to preserve an issue for appeal, and the failure to do so precludes appellate review);

Neal v. Sparks Reg’l Med. Ctr., 2012 Ark. 328, 422 S.W.3d 116.

       With respect to the order extending the time to serve the summons and complaint, the

Morgans question the authenticity of the judge’s signature thereon. The order was signed only

with initials, and the Morgans argue that the handwriting of the initials does not match the

actual signature of the judge, as reflected on other documents filed in the case. At the hearing

on the petition to set aside the default judgment, the circuit court agreed that it did not appear

to be the judge’s signature on the order, but the court concluded that it had no proof that it

was not the judge’s signature or that the judge did not ask his trial-court assistant to sign it.

The court therefore declined to find that the order was improper.

       When a circuit court denies a petition to set aside a default judgment on the basis of

fraud pursuant to Rule 55(c)(3), our standard of review is whether the circuit court abused

its discretion. Wise v. Harper, 2015 Ark. App. 702, ___ S.W.3d ___. Here, the circuit court

was presented with no evidence that the signature on the order was a forgery or that it had

been fraudulently obtained. We are unable to say that the circuit court abused its discretion

in concluding that the signature presented no basis for setting aside the default judgment.


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                                         V. Due Process

       In their third argument on appeal, the Morgans contend that Big Creek failed to

provide notice to them in such a manner that they received adequate notice according to the

guarantees of due process provided by the United States and Arkansas Constitutions. A

plaintiff’s service of process on a defendant, or the defendant’s waiver of service of process, is

necessary in order to satisfy the due-process requirements of the United States Constitution.

Se. Foods, Inc. v. Keener, 335 Ark. 209, 979 S.W.2d 885 (1998). Here, as discussed above, Big

Creek properly served the Morgans by warning order pursuant to Rule 4(f) of the Arkansas

Rules of Civil Procedure. Accordingly, that service of process satisfied due process.

                                    VI. Meritorious Defense

       Finally, the Morgans assert that, in the event this court finds that the default judgment

should have been set aside for a reason other than the judgment being void, they had a

meritorious defense to the action. However, because we have concluded that there is no basis

at all for setting aside the default judgment, it is immaterial whether the Morgans presented

a meritorious defense. See, e.g., West v. West, 103 Ark. App. 269, 272, 288 S.W.3d 680, 683

(2008) (“While it is true that defendants wishing to set aside default judgments must

demonstrate a meritorious defense to the action, the defense in and of itself is not sufficient

without first establishing one of the grounds laid out in Ark. R. Civ. P. 55(c).”) (citing

McGraw v. Jones, 367 Ark. 138, 238 S.W.3d 15 (2006); So. Transit Co. v. Collums, 333 Ark.

170, 966 S.W.2d 906 (1998); Tharp v. Smith, 326 Ark. 260, 930 S.W.2d 350 (1996)).

Accordingly, we do not consider this issue further.


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Affirmed.

KINARD and HIXSON, JJ., agree.
Thomas Law Firm, by: Albert J. Thomas III, for appellants.
Grayson & Grayson, P.A., by: Melanie L. Grayson and Keith L. Grayson, for appellee.




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