Summary of Cruz v. Fagor America, Inc.

California Court of Appeal Validates Service on Out-of-State Corporation by Certified Mail when Recipient was Mailroom Clerk

Cruz v. Fagor America, Inc., ___ Cal.Rptr.3d ___, 2007 WL 7234, Cal.App. 4 Dist.,2007.January 03, 2007 – Plaintiff met requirements for service on out-of-state defendant when summons and complaint were mailed via certified mail and signed for by a mailroom clerk, a person authorized to accept mail for the corporation

Plaintiff Alan Cruz sued Fagor America, Inc., an American distributor of a pressure cooker that caused him severe injuries. Plaintiff served the Defendant Fagor, a Delaware corporation by certified mail under CCP§§ 415.40 (service by mail) and 416.10 (service on a corporation). After Fagor didn’t answer the complaint, Cruz took a default judgment.

Nine months later, Fagor filed a motion to set aside entry of the default and default judgment. The court sustained the motion and set them aside.

Cruz served the defendant in New Jersey by mail under CCP § 415.40, addressing the envelope to Patricio Barriga, Chairman of the Board, Fagor America, Inc., a Delaware Corporation, 1099 Wall St., Lynhurst, NJ 07071-3678. The return receipt indicated that it was signed for by Tina Hayes.

The trial court denied Cruz’s initial request to enter default because he failed to establish that the person who signed for the certified mail was authorized to accept service. Cruz subsequently offered evidence that Tina Hayes was a Fagor employee and did have the authority to sign for mail addressed to the corporation. Therefore, the trial court granted the Cruz request.

Fagor filed the motion to set aside the defaults and argued that service was ineffective because 1) there was no proof that service was made on an agent of the corporation; 2) the documents were not delivered to a president, officer, manager, or person authorized by the corporation; and 3) service was not made by in hand delivery.

The trial court agreed with Fagor, concluding that there was no proof that service was delivered to a president, officer, manager, or person authorized by the corporation.

The Appellate court disagreed. Section CCP § 417.20(a) “outlines what proof of service is necessary when serving a nonresident pursuant to section 415.40:

Proof that a summons was served on a person outside this state shall be made:

 (a) If served in a manner specified in a statute of this state, as prescribed by Section 417.10, and if service is made by mail

pursuant to Section 415.40, proof of service shall include evidence satisfactory to the court establishing actual delivery to

the person to be served, by a signed return receipt or other evidence;

Plaintiff’s proof of service indicated that service was directed to “Patricio Barriga, Chairman of the Board” at the address listed with the secretary of state at its service of process address.

“In Johnson & Johnson v. Superior Court (1985) 38 Cal.3d 243, 254, the Supreme Court held that a proper affidavit is one that informs the trial court that that the plaintiff “has completed all acts necessary to effect service.” The plaintiff’s affidavit was properly executed because it showed that the envelope was directed to a person to be served, as listed in CCP § 416.10.

Plaintiff offered the return receipt as evidence of actual delivery to the corporation at the corporate address, and that it was signed for by Hayes. Plaintiff showed evidence that Hayes was authorized to receive mail on behalf of the defendant. As a result, the court stated that the evidence was sufficient to meet the requirements of section 417.20.

“In Neadeau v. Foster (1982) 129 Cal.App.3d 234, 236, 180 Cal.Rptr. 806 ( Neadeau ), the appellate court concluded that there is no requirement that the return receipt be signed by the defendant, and evidence that the return receipt was signed by someone authorized to accept mail on the defendant's behalf is sufficient to establish actual delivery for purposes of proof of service. The defendant in Neadeau made an argument similar to the one Fagor raises, which the appellate court rejected:

“Defendant's major contention is that the default judgment is void on its face because there is no competent evidence in the record to show he was actually served with process. As will be seen, we hold that the California statutory scheme (Code Civ. Proc., §§ 415.40 and 417.20 read together) permits completion of service by mail when the return receipt is signed by a person so authorized by the defendant. The personal signature of the defendant is not required.” ( Neadeau, supra, 129 Cal.App.3d at pp. 236-237, 180 Cal.Rptr. 806, fns. omitted.)”

Lacking evidence to the contrary, the appellate court concluded that service was proper.

“Hayes received the summons and complaint. By virtue of her authority to accept mail on Fagor's behalf, Hayes's notice of the action is imputed to Fagor and its officers.”

The court further distinguished the holding in Dill v. Berquist Construction Co. (1994) 24 Cal.App. 4^th 1426 (Dill). In Dill, the court invalidated service because it was not addressed to a person to be served, namely a president, officer, manager, or person authorized by the corporation. The envelope in Dill was merely addressed to the defendant corporation, and not a person. Therefore, proof of service could not establish that a corporate officer actually received it, or that it was directed to anyone who was authorized to receive it. The plaintiff had not substantially complied with the service statute.

That did not happen in this case. The Plaintiff had substantially complied with the service statute by addressing the envelope to an authorized person, reflected that fact on the proof of service, and established that the person signing for the certified mail had the corporation’s authority to do so.

The rest of the opinion addressed the lack of timeliness of the Defendant’s motion to set aside the default and default judgment, and would not excuse the neglect in waiting over 6 months.

This opinion may simplify service by mail on foreign corporations. It might expand the options for in hand service as well, establishing that a person authorized to receive the corporation’s mail may be only also authorized to receive service of process, especially if the address is a mailing address. It may also establish a lower legal threshold for service, especially if services are to be made electronically. The case may be cited in any other type of permissible certified mail services, such as those in small claims court.