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Morgan v. Big Creek Farms of Hickory Flat, Inc.

Court of Appeals of Arkansas, Division I

February 24, 2016

RAYMOND MORGAN and KATIE MORGAN, APPELLANTS
v.
BIG CREEK FARMS OF HICKORY FLAT, INC., APPELLEE

          APPEAL FROM THE CLEBURNE COUNTY CIRCUIT COURT. NOS. CV-11-201, CV-14-190. HONORABLE TIM WEAVER, JUDGE.

          For APPELLEE: KEITH L GRAYSON.

         For APPELLANT: ALBERT JANNEY THOMAS.

         PHILLIP T. WHITEAKER, Judge. KINARD and HIXSON, JJ., agree.

          OPINION

          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.

          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 ...

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