GOLD COAST PROPERTY MAINTENANCE v. STOVALL COMPANY INC (2025)

Gold Coast Property Maintenance (“Gold Coast”) appeals the denial of its motion to set aside a default judgment in a garnishment proceeding filed by Stovall & Co. Inc. (“Stovall”). Gold Coast appeals, arguing that the trial court committed reversible error by: (1) holding that Gold Coast was required to file an answer with defenses or move to open default prior to seeking to set aside a judgment pursuant to OCGA § 9-11-60(d)(1) for lack of personal jurisdiction; and (2) failing to dismiss the garnishment action against Gold Coast for lack of personal jurisdiction.¹ For the reasons that follow, we vacate and remand for further proceedings consistent with this opinion.

In March 2024, Stovall filed this garnishment action in the Superior Court of Paulding County, naming Erik Rieffel as defendant and Rieffel's employer, Gold Coast, as garnishee. Gold Coast is a Florida corporation. On April 24, 2024, Stovall served Gold Coast with a copy of the affidavit and summons of continuing garnishment at its sole office and principal place of business in Lake Worth, Florida. After Gold Coast failed to file an answer, Stovall filed a motion for default judgment against Gold Coast pursuant to OCGA § 18-4-10, which the trial court granted on August 14.

Gold Coast then filed its motion to set aside the default judgment pursuant to OCGA § 9-11-60(d)(1) and to dismiss the case pursuant to OCGA § 9-11-12(b)(1) for lack of personal jurisdiction. In support of its motion, Gold Coast attached the affidavit of Robert Rapson, its owner, swearing that Gold Coast is not registered to do business in the State of Georgia and has no contacts with the State. Stovall filed its response, arguing that Gold Coast waived personal jurisdiction by failing to file a timely answer. The trial court denied Gold Coast's motion, stating that it “[would] not reopen this case to set aside the judgment as [Gold Coast] did not timely file an answer with defenses nor move[ ] to open default.” Gold Coast filed an application for discretionary review of that order, which we granted. This appeal follows.

1. Gold Coast first argues that the trial court erred by holding that it was required to file a timely answer with defenses or move to open default prior to seeking to set aside the default judgment pursuant to OCGA § 9-11-60(d)(1) for lack of personal jurisdiction.

“Absent an abuse of discretion, we will not reverse a trial court's refusal to set aside a default judgment. Nevertheless, the standard of review for a question of law on appeal is de novo for which this Court owes no deference to the trial court's legal ruling and applies the plain legal error standard of review.” Ameriprise Holdings, Inc. v. McCampbell, 371 Ga. App. 323, 323, 899 S.E.2d 509 (2024) (citation, punctuation, and footnotes omitted).

Here, it appears that the trial court erred in refusing to set aside the default judgment on the basis that Gold Coast did not timely answer or move to open default. Specifically, it appears that the trial court relied on the fact that Gold Coast did not comply with OCGA § 18-4-24(a). If a garnishee fails to file an answer within 45 days of service of the garnishment summons, then default occurs as a matter of right. OCGA § 18-4-21. Thereafter,

the plaintiff shall serve the garnishee ․ with a copy of such default judgment. On a motion filed not later than 90 days from the date the garnishee was served with such default judgment, the garnishee may, upon payment of any costs paid by the plaintiff to the clerk of court for the initiation of the action, and service on the garnishee, have such default judgment modified so that the amount of such default judgment shall be reduced to an amount equal to $50.00 plus 100 percent of the amount by which the garnishee was indebted to the defendant, including all money or other property belonging to the defendant which came into the garnishee's hands [during a certain period of time].

OCGA § 18-4-24(a). The trial court's apparent reliance on Gold Coast not complying with OCGA § 18-4-24(a) was in error.

Gold Coast was not required to comply with OCGA § 18-4-24(a) prior to filing a motion to set aside the default judgment for lack of jurisdiction pursuant to OCGA § 9-11-60(d)(1), which explicitly provides that “[a] motion to set aside may be brought to set aside a judgment based upon ․ [l]ack of jurisdiction over the person.” Indeed, OCGA § 9-11-60(f) provides that “[a] judgment void because of lack of jurisdiction of the person or subject matter may be attacked at any time.” In Ameriprise Holdings, Inc. v. McCampbell, 371 Ga. App. at 327-28 (2), 899 S.E.2d 509, this Court held that a garnishee is not required to first answer or move to modify a default judgment under OCGA § 18-4-24(a) before moving to set aside the default judgment under OCGA § 9-11-60. This Court explained that: (1) no language in either statute requires a party to comply with OCGA § 18-4-24 as a precondition to obtaining relief pursuant to OCGA § 9-11-60; and (2) the two statutes serve different purposes, as OCGA § 18-4-24 specifically provides a procedure for a garnishee to have a judgment entered against it modified, while OCGA § 9-11-60 specifically provides a procedure for a garnishee to have a judgment entered against it set aside. Id. See also Oxmoor Portfolio, LLC v. Flooring & Tile Superstore of Conyers, 320 Ga. App. 640, 642-43 (1), 740 S.E.2d 363 (2013) (reaching the same conclusion as to OCGA § 18-4-24’s predecessor statute). Accordingly, we vacate the trial court's order and remand for consideration of Gold Coast's motion to set aside the default judgment pursuant to OCGA § 9-11-60(d).²

2. Gold Coast also argues that the trial court erred by failing to dismiss the garnishment action against it for lack of personal jurisdiction because it has no relevant contacts with the State of Georgia. However, the trial court did not address whether it had personal jurisdiction over Gold Coast, and the trial court should resolve this issue in the first instance upon remand. See Dockery v. Haedong Industries Co., 355 Ga. App. 436, 439 (1), 844 S.E.2d 496 (2020) (determination of whether defendant showed a lack of personal jurisdiction to set aside a judgment under OCGA § 9-11-60(d) should be made by the trial court in the first instance).

Judgment vacated and case remanded.

FOOTNOTES

1.   Stovall did not file an appellee brief in this case and was not required to do so. See Ga. Ct. App. R. 23(b) (“Appellees are encouraged but, other than the State in a criminal case, are not required to file a brief.”).

2.   Although not addressed by Gold Coast on appeal, we reject Stovall's argument below that Gold Coast waived the defense of lack of personal jurisdiction by failing to raise it in a timely answer. “[W]hile a default operates as an admission of the well-pled factual allegations in a complaint, it does not admit the legal conclusions contained therein.” Ward v. Marriott Int'l, 352 Ga. App. 488, 490 n.1 (1), 835 S.E.2d 322 (2019). This garnishment case was initiated by Stovall's filing of an “Affidavit of Continuing Garnishment,” and that affidavit does not contain any well-pled factual allegations that would support the trial court's exercise of personal jurisdiction over Gold Coast.

Padgett, Judge.

Doyle, P. J., and Markle, J., concur.