17-2516 Craig Cunningham v. Michael Montes, et al.

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7^th Circuit Court of Appeals

Case Name: Craig Cunningham v. Michael Montes, et al.

Case No.: 17-2516

Officials: FLAUM, EASTERBROOK, and MANION, Circuit Judges.

Michael Montes owns two houses, one in California and the other in Wisconsin. After filing this suit, Craig Cunningham arranged for service of process at the Wisconsin address. No one came to the door. The process server called Montes, who refused to provide his current location. After an ex parte submission from Cunningham, the district judge authorized service by publication. 2017 U.S. Dist. LEXIS 26804 (W.D. Wis. Feb. 27, 2017). Cunningham then published notice in periodicals that circulate only in the Midwest. When Montes did not answer the complaint, the district court entered a default.

After learning about this case from a defendant in another of Cunningham’s suits, Montes asked the court to set aside the default. See Fed. R. Civ. P. 55(c). The judge declined, writing that “Montes has rather persistently sought to evade service in both California and Wisconsin”, 2017 U.S. Dist. LEXIS 111115 at *5 (W.D. Wis. July 18, 2017), and entered a judgment for more than $175,000.

Montes filed an affidavit stating that his principal residence is the house in California and listing all dates when he and his wife were in Wisconsin during 2016 and the first half of 2017. If the statements in the affidavit are true, then Montes was in California when the process server arrived in Wisconsin. Cunningham suspects that Montes is lying; maybe the district judge does too, but the judge did not find that the statements in this affidavit are false. If Montes is playing a shell game—claiming to be in Wisconsin when process servers arrive in California, and in California when process servers arrive in Wisconsin—that would support a finding that he is evading service. Given the lack of any effort to serve him in California, however, it would be difficult to make such a finding in this case. Montes appeared in this litigation promptly after learning of its existence; that is a mark in his favor. We cannot exclude the possibility that he has tried to play games, but the absence of any factual finding to that effect (after adversarial rather than ex parte procedure) requires further proceedings. Unless new evidence shows that Wis. Stat. §801.11(1) has been satisfied despite Cunningham’s decision not to attempt service in California, the de- fault must be vacated and the case decided on the merits.

Vacated and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.