Day on Torts
Is there anything duller than the rules of service of process? Perhaps not. Unless the only thing standing between you and collection of a $53,000,000 default judgment is application of those rules. Or unless your defense to a $53,000,000 default judgment is failure of service of process. Then Rule 4 starts looking interesting. Or terrifying.
Plaintiff obtained a $53,000,000 default judgment. Defendant corporation attempted to prevent execution on it, saying that process was not served on its registered agent (Caldwell) but rather on his secretary (Daniels), who represented that she was Caldwell’s secretary, had accepted service of process for Caldwell in the past, and would give the papers to Caldwell.
The evidence showed that Defendant did not answer or otherwise respond to the complaint and did not respond to Plaintiff counsel’s inquiries. Nor did it attend the hearing on a motion for a default judgment. Nor did it act after being sent a copy of order granting default judgment. Nor did it attend attend the hearing on the default judgment. Nor did it act after being sent a copy of the final judgment.Only when the judgment was filed in Tennessee to start the execution process did Defendant begin to fight.
The Court said that "It is undisputed that Defendant did not expressly authorize Caldwell’s secretaryto serve as its agent for service of process and had not expressly authorized Caldwell to authorize her to so serve. Therefore, the resolution of the issue turns on whether Caldwell, Defendant’s registered agent, had the authority to authorize his personal secretary to accept service of process without the express authorization of Defendant." [Footnote omitted].
After reviewing applicable statutes and the law, the Court said this: "If a corporation is designated to serve as its registered agent, the registered agent must, as a matter of necessity, appoint others to serve as subagents to fulfill the purpose of the registered agent statute, which is to receive service of process on behalf of the defendant corporation. It must therefore be anticipated that a registered agent may authorize subagents to perform and fulfill its responsibilities as the registered agent. Although Caldwell was an individual and not a corporate registered agent, we find no authority to impose a greater restriction on the utilization of subagents by an individual registered agent than that imposed on a corporate registered agent. We therefore conclude, based on the nature and purpose of the relationship between a Tennessee corporation, such as Defendant, and its registered agent, such as Mr. Caldwell, that registered agents, individual or corporate, have implied authority to appoint subagents, such as Ms. Daniels."
Judgment affirmed.
The case is Rubio v. Precision Aerodynamics, Inc., No. M2005-02348-COA-R3-CV (October 5, 2006). Read the opinion here.
Note to plaintiff’s counsel: I have demonstrated extreme competence at dividing large numbers by three, although my duty to candor requires me to admit that I have not had the opportunity to divide a number by three that had this many digits to the left of the decimal point. I respectfully submit, however, that I can do so and that my fee for such service will be modest. Satisfaction (of the calculation, not the judgment) guaranteed.