Background
Kimberly Syoboda sued Family Stops USA, LLC in Sebastian County Circuit Court. A process server delivered the summons and complaint to Elizabeth Owens, a cashier at a Family Stops location, and marked the return as service on an authorized agent. Syoboda obtained a default judgment after Family Stops did not respond.
Before the damages hearing, the circuit court questioned whether service was valid because the Secretary of State listed J.T. Smith as Family Stops’ registered agent. The process server testified that she did not serve Smith and had served Owens because Owens was the only person working at the store. The circuit court vacated the default judgment for insufficient service.
The Court’s Holding
The Arkansas Court of Appeals affirmed. Syoboda did not strictly comply with Arkansas Rule of Civil Procedure 4(f)(6), which governs service on LLCs, because Owens was not shown to be a registered agent, manager, member, managing or general agent, or other authorized person.
Nor could Syoboda rely on Arkansas Code section 4-20-113(c), which permits service on a person in charge at a regular business location only after the statutory method in section 4-20-113(b) has been pursued. Syoboda did not first attempt service by registered or certified mail to a governor of the entity at its principal office. Without valid service, the default judgment was void, and the circuit court could vacate it even without a party’s Rule 55 motion.
Key Takeaways
- Service requirements for an LLC must be strictly and exactly followed.
- Serving a cashier merely because she is the only employee present does not establish authority to accept service.
- A default judgment entered without valid service is void and may be vacated sua sponte.
Why It Matters
The decision underscores that a plaintiff cannot bypass statutory service steps simply because a listed agent’s address appears vacant. Counsel seeking a default judgment should ensure the record establishes service on a person authorized by rule or statute before relying on a return of service.