This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).


Thomas Eul,


A & A Liquors of St. Cloud, Inc.,
d/b/a Tom's 9th Avenue Bar,

Centennial Liquor Shoppe,

Eugene Myers,

David Williams,

Allen Smith,

Filed October 12, 1999
Affirmed; motion granted
Shumaker, Judge

Stearns County District Court
District Court File No. C0982290

Amy J. Doll, Fluegel, Helseth, McLaughlin, Anderson & Brutlag, Chtd., 215 Atlantic Avenue, P.O. Box 527, Morris, MN 56267-0527 (for respondent Eul)

Michael Milligan, Quinlivan & Hughes, 400 South First Street, Suite 600, P.O. Box 1008, St. Cloud, MN 56302 (for appellant)

Terri L. Hommerding, Candlin & Wright, 3800 West 80th Street, Suite 1500, Bloomington, MN 55431-4429 (for respondent Centennial Liquor Shoppe)

Eugene Myers, Minnesota Correctional Facility, P.O. Box 55, Stillwater, MN 55082 (respondent pro se)

Bradford Colbert, 875 Summit Avenue, Room 371, St. Paul, MN 55105 (for respondent Williams)

Allen Smith, Jr., Minnesota Correctional Facility, P.O. Box 10, Stillwater, MN 55082-0010 (respondent pro se)

Considered and decided by Davies, Presiding Judge, Willis, Judge, and Shumaker, Judge.

U N P U B L I S H E D   O P I N I O N


This is an appeal from the district court's denial of appellant's motion to vacate a default judgment. The district court rejected appellant's contention that respondent Eul committed fraud in service of process. We affirm.


On May 24, 1996, respondent Thomas Eul and companions Eugene Myers, David Williams, and Allen Smith drank alcoholic beverages from 11:30 a.m. until 4:00 p.m. at appellant A & A Liquors of St. Cloud, Inc., d/b/a Tom's 9th Avenue Bar (Tom's Bar). The men also bought alcoholic beverages from the Centennial Liquor Shoppe and drank them. In the early evening, the men went to a beach area, where Myers, Williams, and Smith beat Eul, severely and permanently injuring him.

Tom's Bar is a Minnesota corporation with its registered office and principal place of business in Stearns County. The corporation does not have an authorized agent for service of process registered with the state. Tom L. Baker is the corporation's sole owner and agent. He resides in Benton County at 4550 125th Street N.W., Rice, Minnesota 56367, and he is listed at that address in the local telephone directory.

On September 10, 1997, Eul mailed the Notice of Claim prescribed by Minn. Stat. § 340A.802 to Tom's Bar, and it was returned "Unclaimed." Eul's representative then personally served the notice on the bar on September 17, 1997.

On May 22, 1998, two days before the statute of limitations for dram shop claims was about to expire, Eul delivered to the Stearns County sheriff a summons and complaint for service on Tom's Bar. The complaint named the three individual assailants as defendants on assault and battery claims, and Tom's Bar and the Centennial Liquor Shoppe as defendants on dram shop claims.

The sheriff was unsuccessful in his attempt to serve Tom's Bar. In his Certificate of Unserved Process, he stated: "No one at Tom's Bar willing to accept papers. Have been advised by Mr. Baker not to accept any service."

On June 26, 1998, Eul mailed copies of the summons and complaint to Tom's Bar and to Tom L. Baker. The mailing to Baker contained the correct street address and zip code but the wrong city, St. Cloud instead of Rice. Both mailings were returned on July 1, 1998, marked "Refused." According to postal procedures, post offices may deliver mail to a correct street address with a correct zip code even if the city is incorrectly designated. Furthermore, only the addressee may "refuse" a delivery.

Eul also enlisted the aid of a process server to serve Tom's Bar. The process server swore that he attempted to serve process at Tom's Bar seven times and at Baker's residence six times. He also swore that he and Baker arranged by telephone to meet on several occasions but Baker never appeared. Baker swore that he had "no knowledge" of ever speaking with the process server and that he did "not recall" any attempts to serve him at his residence or at Tom's Bar.

Ultimately, Eul published the summons in the St. Cloud Times, the official Stearns County publication, for three consecutive weeks beginning July 2, 1998.

When Tom's Bar failed to answer, Eul moved for a default judgment. The district court heard the motion on November 9, 1998, and granted the judgment. Fifteen days later, Tom's Bar moved to vacate the default judgment under Minn. R. Civ. P. 60.02(c), alleging that Eul had obtained the judgment by fraud. Tom's Bar contended that Eul had incorrectly listed Baker's address, had never tried to serve Baker in the county of his residence, and had delivered the summons and complaint to the Stearns County sheriff rather than the Benton County sheriff. Tom's Bar also argued:

Tom Baker has a history of routinely accepting service of lawsuits against Tom's Bar. In fact, he was served without difficulty in two lawsuits within the last year, venued in Benton County, arising out of a fatal accident.

In two memorandums, and in affidavits and exhibits in support of the motion to vacate the default judgment, Tom's Bar focused exclusively on the validity of the service of process and did not address the question of whether the bar had any defense on the merits to the dram shop claim.

Noting that "the record is instead replete with thwarted and failed attempts to serve Defendant Tom's Bar and its owner and sole agent Tom Baker," the court found that Eul had properly served the bar and had committed no fraud in the service of process. The court denied the motion to vacate and observed:

There must be some limitation upon the sporting theory of justice which appears to be the practice of Tom's Bar in respect to this lawsuit.


Motion to Strike and for Attorney Fees

Tom's Bar attempted to augment the record on appeal with evidence not presented in the district court, with references to information outside the record, and with new arguments made for the first time in its reply brief. Eul has moved to strike the augmented record and has requested attorney fees as a sanction against Tom's Bar.

On pages 15 and 16 of its brief, Tom's Bar paraphrased statements that the district court made during the hearing on the motion to vacate. However, Tom's Bar failed to file a transcript of that hearing for this appeal. Therefore, there is no record on appeal of the alleged statements. Evidence not contained in the record may not be considered on appeal and must be stricken. Municipal Utils. Comm'n v. Electric Power Ass'n, 452 N.W.2d 699, 703 (Minn. App. 1990).

Tom's Bar added an appendix to its reply brief containing excerpts of depositions taken after the entry of the default judgment. On the basis of those excerpts, the bar argued for the first time in its reply brief a defense on the merits to the dram shop claim. Tom's Bar also raised in the reply brief a new argument regarding a bond requirement under Minn. R. Civ. P. 55.01(d).

The deposition excerpts were not part of the evidence presented to the district court and cannot be considered on appeal. Municipal Utils. Comm'n, 452 N.W.2d at 703; Hasan v. McDonald's Corp., 377 N.W.2d 472, 473 (Minn. App. 1985). Furthermore, the appellate rules require that the reply brief "be confined to new matter raised in the brief of the respondent." Minn. R. Civ. App. P. 128.02, subd. 3. Issues not raised or argued in an appellant's brief are waived and cannot be raised in a reply brief. Zimmerman v. Safefco Ins. Co. of Am., 593 N.W.2d 248, 251 (Minn. App. 1999). Issues raised for the first time in a reply brief should be disregarded. Id. at 248. Finally, arguments unsupported by the record are subject to the sanction of an award of attorney fees. Minn. Stat. § 549.211 (1998).

The augmented record supplied by Tom's Bar on appeal is stricken and we award to Eul $500 in attorney fees.

Default Judgment

In reviewing the denial of a motion to vacate a default judgment, a reviewing court must determine whether the trial court abused its discretion. Foerster v. Folland, 498 N.W.2d 459, 460 (Minn. 1993). Reopening of default judgments is to be liberally undertaken so that disputes can be resolved on their merits. Sand v. School Serv. Employees Union, Local 284, 402 N.W.2d 183, 186 (Minn. App. 1987) (citing Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 30, 53 N.W.2d 454, 455-56 (1952)), review denied (Minn. Apr. 29, 1987). However, the right to be relieved of a default judgment is not absolute. Howard v. Frondell, 387 N.W.2d 205, 207 (Minn. App. 1986), review denied (Minn. July 31, 1986). It is within the trial court's discretion to set aside a default judgment and judgment will not be reversed absent a clear abuse of discretion. Id. at 207-08.

The record supports the district court's conclusion that Eul committed no fraud in serving process on Tom's Bar. Eul was entitled to have the sheriff of Stearns County serve process on Tom's Bar. Minn. R. Civ. P. 3.01 provides:

A civil action is commenced against each defendant * * * (c) when the summons is delivered to the sheriff in the county where the defendant resides for service, but such delivery shall be ineffectual unless within 60 days thereafter the summons is actually served on that defendant or the first publication thereof is made.

Tom's Bar is a corporation with its principal place of business in Stearns County. A private domestic corporation resides in the county where it has its principal place of business. Thomas v. Hector Const. Co., 216 Minn. 207, 212, 12 N.W.2d 769, 773 (1943). Eul delivered the summons to the Stearns County sheriff on May 22, 1998, and it was first published on July 2, 1998, 41 days after delivery. Because all efforts to serve the bar and Baker were thwarted by Baker's avoidance, Eul was entitled to serve process by publication. See Minn. R. Civ. P. 4.04(a)(1) (service by publication permissible when defendant keeps himself concealed within state to avoid service). Eul committed no fraud in serving process on Tom's Bar.

In addition to failing to show fraud under Minn. R. Civ. P. 60.02(c), Tom's Bar failed to satisfy two of the four criteria that courts apply to motions to vacate default judgments. A party seeking to vacate a default judgment must show that he (1) has a reasonable defense on the merits; (2) has a reasonable excuse for his failure to answer; (3) has acted diligently after notice of entry of the judgment; and (4) that the opposing party will not suffer substantial prejudice if the judgment is vacated. Sand, 402 N.W.2d at 186.

Tom's Bar has presented no reasonable excuse for its failure to answer, saying only that it had no notice of the lawsuit. Proper published service was effective notice. Nor has Tom's Bar offered any defense on the merits to the dram shop claim.[1] Cf. Gelco Corp. v. Crystal Leasing, Inc., 396 N.W.2d 672 (Minn. App. 1996) (trial court properly denied motion to vacate default judgment where appellant did not have a reasonable defense on the merits).

Affirmed; motion granted.

[1] The stricken deposition excerpts, which are vague and ambiguous, do not show a defense on the merits. At best they point to dram shop liability of an additional defendant.