Colleton Preparatory Academy, Inc., which operates a small private school in Walterboro, South Carolina, filed suit in the United States District Court for the District of South Carolina on March 24, 2003, against Beazer East, Inc. and Hoover Treated Wood Products, Inc., alleging claims for negligence and violation of the South Carolina Unfair Trade Practices Act arising from alleged damage to roof trusses and sheathing on several Colleton buildings caused by fire-retardant substances.
On or about June 6, 2003, Colleton filed an amended complaint substituting Hoover Universal, Inc. for Hoover Treated Wood Products, Inc. Colleton served the summons and amended complaint on Hoover Universal by certified mail through its registered agent, The Corporation Company, which accepted service on June 23, 2003. The Corporation Company negligently failed to forward the suit papers or notify Hoover Universal of the lawsuit, so Hoover Universal did not file a timely answer.
Colleton moved for entry of default, and the clerk entered default against Hoover Universal on August 5, 2003. Hoover Universal learned of the lawsuit by coincidence on October 8, 2003, during a conversation about a separate case with a paralegal in one of Colleton's lawyers' offices, and nine days later filed a motion to quash service of process and to set aside the entry of default.
The district court denied both motions. With the consent of the parties, the district court bifurcated the claims, and Colleton filed a new complaint naming only Hoover Universal on February 20, 2004. The district court struck Hoover Universal's answer to the new complaint. The district court conducted a two-day non-jury damages trial beginning January 31, 2005, and after post-trial motions and certification of questions to the South Carolina Supreme Court, entered judgment for Colleton on March 25, 2009, awarding $871,690.15 in damages plus $290,563.38 in costs and attorney's fees. Hoover Universal appealed.
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