There has been little legislative action in 2008 on bills in California that affect changes to the procedures in 2009. Some changes affect them at a local level, such as the new due diligence requirement in Alameda County, the San Francisco Rent Stabilization Ordinance, and electronic filing rules in several other counties. A new amendment to CCP 2029.010 regarding the issuance of foreign deposition subpoenas was passed but will go into effect in 2010. (See accompanying article.) California Governor Schwarzenegger vetoed a bill sponsored by CALSPro which would have eliminated the distinction in a fix last year of changing the return date for a proof of service to a sheriff after service of a writ of execution or attachment. That change expanded the time to return the proof from five calendar to five court days. Because the law relating to service of earnings withholding orders did not change, some sheriff's offices are distinguishing the return requirement, requiring returns five calendar days after commencing the wage garnishment.

Filing fees for a first appearance are increasing across the board. A new case filing fee will increase in January 1, 2009 to $350. San Francisco, Riverside and Ventura will add local fees to that.

Future Legislation
 
As of this writing, the Governor is planning to call the legislature into special session to raise the sales tax rate by 1-1/2 cents. Desperate for revenue, they are looking for income streams. Taxing the sale of services is being floated around that Sacramento, and if that happens, process servers will be having the charge sales tax on services. You'll need a resale number, and report and pay sales tax collected in a quarterly or yearly tax return.

The California Supreme Court in Edwards v. Arthur Andersen (2008) ____ Cal.4th____ invalidated employee noncompetition agreements unless they fall within a statutory exception. Several states still consider employee noncompetition agreements permissible as long as they are reasonably imposed. This was the case in common law of California, until 1872 when the state rejected the "rule of reasonableness" as a violation of public policy. That policy was ultimately codified in the California Civil Code.

The noncompetition agreement was deemed to be invalid because it restricted the Plaintiff's ability to practice his profession as an accountant.

A Summary of this opinion may be found here.

The full opinion may be found here.

How Does This Decision Affect Process Servers? Process serving companies are vulnerable to loss of business to process servers who serve their papers. In-house employees are in a position to take business away from an employer by starting a business on the employer's client base, or changing jobs and going to work for a competitor, bringing business in tow.

What can a process serving business do to protect its client base?
Other than paying a fair price for service, offering benefits, providing ample vacation time, or otherwise making and keeping an employee happy, you can protect trade secrets and client lists.

A "confidentiality agreement" is an appropriate and reasonable solution because it serves a legitimate business purpose; it is intended to protect the assets and viability of business. Although there is an implied restriction for improper disclosure without one, an agreement between an agency and an independent contractor or employee of a process serving company could further protect that asset. It may cover things like pricing, clients, internal documents, and anything the company deems proprietary.

 It cannot include a noncompetition agreement. If it is included in a contract with an independent contractor, it could be construed that the relationship between the contractor is not one of independence but that of an employee-employer relationship.

An attorney should be consulted as to your own particular requirements because everyone's business needs, ownership structure, and tax situation is different.

CAPPS is no more. By a 29 to 14 vote, the membership voted by one vote to reach a 2/3 margin to change the structure of CAPPS.

The change re-named the association the California Association of Legal Support Professionals (CALSPro) and created 2 main membership categories.

A non-voting business membership may be had for $500 per year, and voting membership is now $200 per year.

The business member receives a prominent listing in the association, non-circulating membership directory and a bold font listing on the CALSPro web site. Individual members may not list a business name and are segregated in an individual membership section of the directory, and integrated by county on the CALSPro web site. The font size appears smaller, and is italicized versus a more prominent, bold, colored font for the name of the business members.

Business members may participate in the association pouch system which, for $250 - $400 per month, allows daily pick and overnight delivery to over 100 process servers throughout California. Individual members may not participate in the pouch system unless they are also a business member.

There has been some resentment among smaller process serving agencies that for years became reliant on the pouch system as a member benefit, and felt leveraged into joining as a higher priced business member.

The association is now clearly geared toward larger process serving agencies rather than smaller ones. The change has "winnowed-out" the small agencies from the business section of the directory , and web listings, where the business members are displayed far more prominently. This has had an impact on smaller process serving businesses who receive work from affiliates within CALSPro and those seeking a server on the CALSPro web site.

CALSPro offers continuing education events that are more business focused, and periodically holds a workshop that is geared toward passing a CALSPro Certification Test. Those events are offered free to Individual Members.

Proof of Service

There have been several recent incidents involving false and forged proofs of service in the news this year. Some haven't made the news, but have resulted in many serious disputes between process servers.

CALSPro is considering a change to the Code of Ethics that would make unethical the signing of a blank proof of service, or signing a proof on behalf of another. It would also make it unethical to induce a notary public to complete a false jurat. This is a misdemeanor under the California Government Code.

The Board of Directors discussed the proposed change at the Board Meeting at Conference and tabled a decision until the next Board Meeting in San Jose on Dec. 6, 2008. If it passes, it will go into effect immediately.

The NAPPS 2009 Annual Conference will be held in Reno, NV on April 30 - May 2, 2009 at the Rio All-Suites Hotel & Casino, 3700 West Flamingo Road, Reno, NV 89103.

The 2010 Conference will be at The Walt Disney World Swan Hotel in Orlando, FL on April 9, 2010 - May 2, 2010.

The 2011 Conference will be at the Hyatt Regency on the Riverwalk, San Antonio, TX on April 28, 2011 - May 1, 2011.

If you even have a 2011 calendar you're doing better than I am.

There are several process server Listserves which provide an entertaining insight on how process servers think and operate across the country. It also may be a place to advertise your service.

Sometimes there is any interesting discussion on thoughtful topics. Sometimes there are idiots posting misinformation, and others who flame them doing so.

Subscribing involves very little effort. Setting it up right can save you a lot of aggravation. The 2 main ones I've found are the servenow-process-servers@yahoogroups.com and the process-server@yahoogroups.com, moderated by Ralph Thomas and Thomas Publications, PI Mall, etc. Both require sign-up with Yahoo Groups and allow a decision whether you want to read the posts online, all clustered into one email together each day, or separately in emails as they come in.

Once you subscribe to the group you'll have access to the archives of the wisdom (and idiocy) of those who have gone before you. It can be a valuable resource.

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Please call our attention to more if you know of any worth reading.