Service Case Analysis

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In placing the burden upon the party seeking to reopen the judgment, the court merely restores long-established precedent that was not followed in this case in the court of appeals.

As for the issue of who is a managing agent, notwithstanding the court’s adoption of language from other jurisdictions as guidance, the court’s decision may actually make it more difficult to determine who is and is not a managing agent, than if the court merely recited the standard set forth in Carroll. v. Wisconsin Power & Light Co., 273 Wis. 490, 494, 79 N.W.2d 1 (1956):

“a person possessing and exercising the right of general control, authority, judgment, and discretion over the business or affairs of the corporation, either on an overall or part basis, i.e., everywhere or in a particular branch or district (emphasis added). ”

This definition would appear on its face to plainly apply to McGrath, as the branch manager of the Brookfield branch office.

McGrath stated in his affidavit that there were no officers, directors, or managing agents in Wisconsin. Apparently, therefore, whoever McGrath’s supervisor may be, he or she is not located in Wisconsin. Under these facts, Carroll should be interpreted to include McGrath as a managing agent.

However, instead of relying solely on Carroll’s definition, the court also endorsed a variety of definitions from other jurisdictions. Those tests would also seem to apply to McGrath, without need for remand:

“[T]he extent to which the agent has power to exercise independent judgment and discretion in executing the business of the corporation, and whether his position is of such a character and rank as too make it reasonably certain that the corporation will be apprised of the service.” Derrick v. The Drolson Co., 69 N.W.2d 124, 129 (Minn.1955);

“[A] person whose position, rank, duties and responsibilities make it reasonably certain that the corporation will be apprised of service made upon that person.” Nelson v. Stop and Ship Cos., 596 A.2d 4, 6 (Conn.1991).

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It would be unfathomable that a branch manager of a securities company would not be “reasonably certain” to apprise the corporation that he had accepted service of a summons and complaint against the corporation. And, as evidenced by the fact that the corporation told Richards he needed to arbitrate the case, the corporation was in fact apprised of service upon McGrath.

The court also cited with approval, Green v. Morningside Heights Hous. Corp., 177 N.Y.S.2d 760, 761 (1958), which stated that the term “managing agent” was to be given a liberal interpretation, and the probable meaning would include one in charge of a branch office whose powers were general.

Furthermore, the court also cited, in dicta, that there is Wisconsin authority listing factors to consider that suggest that McGrath was not merely a managing agent, but an “officer”: “(1) the individual’s managerial duties; (2) whether the position occupied is one of authority; and (3) whether the individual possesses superior knowledge and influence over another and is in a position of trust.” Modern Materials, Inc. v. Advanced Tooling Specialists, Inc., 206 Wis.2d 435, 442-443, 557 N.W.2d 835 (Ct.App.1996).

Applying these factors, McGrath would seem to plainly qualify as not only a managing agent, but as an officer of the corporation, even if the record is relatively scant.

– David Ziemer

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David Ziemer can be reached by email.