Hon. Patricia S. Curley
Service upon an agent in lieu of personal service on the individual is permissible, where the process server served a person claiming to be the defendants agent, pursuant to sec. 801.11(1)(d), the Wisconsin Court of Appeals held on Nov. 4.
On June 5, 2002, Mared Industries, Inc., filed a complaint against Alan Mansfield, individually, and d/b/a Diamond Blade Warehouse, alleging breach of contract and intentional interference with contractual relations.
Mansfield is the president of Diamond Blade Warehouse, Inc., an Illinois corporation, with a warehouse facility in Buffalo Grove, Illinois.
On June 10, 2002, William K. Monsen, an Illinois process server, delivered two authenticated copies of the summons and complaint to Michael Levy, an employee of Diamond Blade Warehouse, at the Buffalo Grove facility.
Monsen maintains that Levy told him that he was authorized to accept service on behalf of both Mansfield and Diamond Blade Warehouse. Neither Mansfield nor Diamond Blade Warehouse, Inc.s registered agent was served personally.
Mansfields and Mareds attorneys spoke on the telephone afterwards to discuss the case, but no answer was ever filed by Mansfields attorney. After the time for filing expired, Mared moved for default judgment, and the motion was granted by Milwaukee County Circuit Court Judge Maxine A. White.
Mansfield then filed a motion to reopen the default judgment, alleging that neither Mansfield nor Diamond Blade Warehouse was properly served. The court granted the motion as to Mansfield, but denied it as to Diamond Blade.
The court concluded that the service on Diamond Blade Warehouse was sufficient, because omission of corporate status from service papers does not defeat jurisdiction, because amendments can be made to the pleadings at any time to indicate corporate status.
Mared then moved to amend and appropriately identify the corporate defendant as Diamond Blade Warehouse, Inc. Diamond Blade Warehouse then moved the court to reconsider the denial of its motion to reopen the default judgment.
The trial court partially vacated its earlier order, and granted Diamond Blade Warehouses motion to reopen and vacate the default judgment. Ultimately, the trial court dismissed the action in its entirety, concluding that neither party was properly served.
What the court held
Case: Mared Industries, Inc. v. Alan Mansfield, individually, and d/b/a Diamond Blade Warehouse, No. 03-0097.
Issue: Can personal jurisdiction be exercised over a natural person who was not personally served, even though no statute authorizes such service?
Can a complaint be amended to add a corporation, when the original complaint only named an individual “doing business as” a company name?
Holding: Yes. Where an employee of the individual insisted he was authorized to accept service, the process server could reasonably rely on that insistence.
No. The designation “doing business as” does not create an entity distinct from the individual operating the business.
Counsel: Christopher J. Conrad, Brookfield, for appellant; Glenn L. Udell, Chicago, Ill.; Beth Ann Berger Zerman, Chicago, Ill.; Michael J. Cohen, Milwaukee; Catherine A. Grogan, Milwaukee, for respondent.
Mared appealed, and the court of appeals affirmed the dismissal of the action against Diamond Blade, in a decision by Judge Patricia S. Curley, but reversed as to Mansfield individually, holding that service on him was sufficient.
The court of appeals held that the service of Mansfield individually was sufficient to confer jurisdiction, and reversed the dismissal
The court acknowledged that Wisconsins civil procedure rules require that the service of a summons in a manner prescribed by statute is a condition precedent to a valid exercise of personal jurisdiction. State v. Moline, 170 Wis. 2d 531, 539, 489 N.W.2d 667 (Ct. App. 1992).
The court determined that jurisdiction was present because the service of Mansfield via Levy satisfied sec. 801.11(1)(d), which allows for service, In any case, by serving the summons in a manner specified by any other statute upon the defendant or upon an agent authorized by appointment or by law to accept service of the summons for the defendant.
Mansfield argued that service was improper because it was not in a manner specified by any other statute. Mansfield asserted, Plaintiffs transparent attempt to rewrite the statute by reading out the service specified by any other statute requirement in favor of an independent basis for service on an authorized agent of a non-disabled adult natural person is wholly without support and cannot be accepted.
The court rejected that argument, finding that the statute unambiguously permits service upon an agent in the absence of an authorizing statute. The court reasoned, A plain reading of the statute indicates that subsection (d) presents two additional alternatives for the service of a summons: (1) in a manner specified by any other statute upon the defendant; or (2) upon an agent authorized by appointment or by law to accept service of the summons for the defendant(emphasis in original).
Citing Fontaine v. Milwaukee County Expressway Commission, 31 Wis. 2d 275, 143 N.W.2d 3 (1966), which interpreted the predecessor statute to sec. 801.11, the court held, according to Fontaine, it appears that there must be a prima facie showing of agency, and a lack of proof to the contrary, for service to be proper under Wis. Stat. sec. 801.11(1)(d) (or Wis. Stat. sec. 262.06(1)(d)).
Reviewing the facts, the court found it was undisputed that, despite the process servers protestations that he needed to serve Mansfield personally, Levy insisted that he had authorization to accept service for him. The only contradictory evidence was a conclusory affidavit by Mansfield that Levy lacked such authority.
The court thus turned to whether it was reasonable for the process server to believe that the service on Levy was proper, and held that it was.
Mared argued it was reasonable, citing Horrigan v. State Farm Insurance Co., 106 Wis. 2d 675, 317 N.W.2d 474 (1982), in which the court held that when an individual holds himself out to a process server as one who is authorized to accept service, the process server has the right to rely upon that representation.
Mansfield argued that reliance on Horrigan is misplaced because the defendant there was a corporation, rather than a natural person, asserting, [t]he accuracy or inaccuracy of the process servers `perception of Levys authority to accept service for Mansfield is not the issue. [Mared] simply cannot, as a matter of law, achieve service of process on a non-disabled adult natural person in this manner.
The court rejected Mansfields argument with the following sentence: Yet, pursuant to Wis. Stat. sec. 801.11(1)(d), service can be achieved in this manner.
The court acknowledged that Horrigan is not directly applicable, because it does not involve a natural person, but found the process servers reliance to be reasonable, nonetheless.
The court concluded, If a process server cannot rely upon repeated confirmations from an individual regarding his or her authority to accept service on behalf of another individual, and a reasonable belief that that person is actually authorized to do so, the option of serving an individuals authorized agent would be rendered impractical and almost futile. Moreover, under the circumstances, a reasonable process server would have believed Levys assertion. He went to the identified business address, spoke to a secretary and told her his purpose. Shortly thereafter, Levy appeared and claimed to be an agent for both parties.
Finally, the court noted that Mansfield provided no reasonable excuse for failing to file a timely answer to the complaint. Accordingly, the court held that Mansfield was properly served, and reinstated the default judgment against him.
However, the court affirmed the dismissal of the complaint against Diamond Blade.
A complaint may be amended to correct a mistake in the name of a party, but it may not be amended if the effect is to bring in a new party.
Prior precedent provides: [T]he designation, `d/b/a means doing business as and is merely descriptive of the person or corporation who does business under some other name; it does not create or constitute an entity distinct from the person operating the business. Binon v. Great N. Ins. Co., 218 Wis.2d 26, 35, 580 N.W.2d 370 (Ct.App.1998)(quoting Jacob v. West Bend Mut. Ins. Co., 203 Wis.2d 524, 537 n.7, 553 N.W.2d 800 (Ct.App.1996).
Accordingly, the court held that Diamond Blade Warehouse, Inc., was never properly named and joined as a defendant in the pleadings. As such, it could not be properly served, personal jurisdiction is lacking, and the complaint against it was properly dismissed.
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