Summary – Ramos v. Homeward Residential, Inc.
Ramos v. Homeward Residential, Inc., 223 Cal.App.4th 1434, 168 Cal.Rptr. 3d 114 (2014) – Default Judgment Vacated for Failure to Properly Serve Corporation
The California Court of Appeal ruled that substituted service on a corporation was invalid on its face because the process server failed to indicate that it was served on a person authorized to accept service.
The process server attempted to serve the corporation at a branch office and asked to speak to someone in charge. An employee of the corporation stated that she was in charge and the server handed her the summons and complaint. The employee told the server that she was not authorized to accept service. Thereafter, the process server mailed a copy of the summons and complaint to the corporation, but did not direct it to a corporate officer or individual authorized to accept service.
The trial court ultimately entered a default judgment for $254, 155 against the corporation, and the plaintiff successfully levied that amount on the defendant’s bank account.
The defendant brought a motion to set aside the default and default judgment, and the trial court granted it based upon defective service.
This appeal followed.
The court looked at the statute governing services on corporations under CCP § 416.10. Personal service is accomplished by serving the agent for service, or on one of 11 other officers or managers of the corporation. If personal service cannot be made, CCP § 415.20(a) permits substituted service on a person specified in CCP § 416.10 by leaving a copy of the summons and complaint “in his or her office [emphasis in opinion] … with a person apparently in charge thereof.”
The court, citing Dill v. Berquist Construction Co., 24 Cal.App.4th 1426, 1435-1436, recognized the distinction between the “”party served’ and “person served.” The person served in this context means that the person served is an individual, one having the authority to accept service on behalf of the corporation.
“[T]he distinction between a ‘party’ and a ‘person to be served’ on behalf of that party . . . is central to the statutory scheme governing service of process. ‘The words “person to be served” are words of precision, used throughout the act, intended to refer to the “individual” to be served, and not to the “party.” Here, the process server did not identify on the proof of service any person authorized to accept service on behalf of the corporation, and merely stated that the copy was mailed to the corporation to complete the substituted service. (See image of proof of service here.) Therefore, the proof of service failed to show proper service, and the judgment was void on its face.
The court recognized that strict compliance with service laws is not required. Since 1969, California has adopted a concept of liberal construction for service, wherein minor defects in service are not required if it could be shown that the plaintiff substantially complied with the law and it did not prejudice the rights of the defendant.
Here, the plaintiff did not serve a person specified in CCP § 416.10, nor did she mail it to one of the persons authorized to receive a copy of the summons. Furthermore, the defendant proffered a declaration stating that none of those officers or managers specified in CCP § 416.10 were employed at the office where the documents were served, and no employee there was authorized to receive process.
Therefore, the trial court properly concluded that the plaintiff failed to show that she substantially complied with CCP §§ 416.10 and 415.20(a).
What this means for California process servers is that they may find added scrutiny over substitute services on corporations at branch offices, or offices that have not been officially reflected in corporate filings, or an address where no corporate agent, officer, or manager maintains an office.
It is not uncommon for process servers to receive requests to serve corporations at an address without the name of an agent, corporate officer, or manager authorized to accept service. Upon attempting service, the process server makes an inquiry for someone authorized to accept for documents. Failing that, the server asks for the identity of a person who is authorized to accept service. This is an imperfect and imprecise solution, and will likely result in services that are questioned by both the client and the defendant.
A better practice would be for the client to provide confirmation of the address, either one listed on correspondence or taken from the Secretary of State website, and a name of an agent, corporate officer, or general manager authorized to accept service.