Presumption of Proper Service on Corporation by FedEx delivery to Receptionist

by de Ondarza Simmons, PLLC on June 8, 2011

Dougherty Equipment Co., Inc. v. M.C. Precast Concrete, Inc., ___ N.C. App. ____, NO. COA10-646 (N.C. App. Jun. 7, 2011)

Service of Process by FedEx delivery to Corporate Defendant’s Receptionist

In a previous post, we examined the current law on Serving a lawsuit with UPS or FedEx?.

Update! To get our free outline, “Using Designated Delivery Services to Serve Process in North Carolina“, you should click here.

In this post, we discuss a recent case revolving around exactly that method of service of process, which is, of course, available in both real estate disputes, like adverse possession or judicial partition in NC cases, as well as in business disputes like this one.

This is a breach of contract case brought in District Court for failure to pay for equipment, goods, and services, in which the plaintiff equipment supplier sought $46,573.17 plus interest. Plaintiff had the summons issued to the defendant corporation’s registered agent, an individual human being who was also the defendant’s president.  The plaintiff then had the summons and complaint served by FedEx Priority Overnight delivery to the registered agent’s address, which was also the defendant’s principal place of business.  The process package was addressed to the registered agent, but FedEx delivered the package instead to defendant’s employee receptionist, who signed for the package.

When the defendant failed to file a timely answer, the plaintiff moved for and received an entry of default and a default judgment.  Later, the defendant appeared through counsel and moved for relief from the judgment and to dismiss the case.

After the hearing on the defendant’s motions, the Trial Court found several facts, including the following:

8. On June 2, 2009, Plaintiff’s counsel filed a sworn Affidavit of Service stating that she had deposited a service letter and a copy of the Summons and Complaint via Federal Express overnight service addressed to Defendant’s registered agent; that the letter, Summons and Complaint were delivered to the registered agent; and that the Federal Express Confirmation form evidencing delivery on May 27, 2009 was attached to the Affidavit as Exhibit A.

9. Attachment A to the Affidavit of Service is an electronic delivery receipt provided by FedEx indicating that the package containing the Summons and Complaint and addressed to [the registered agent] was delivered to the “Receptionist/Front Desk” and was signed for by “C. West.”

The Trial Court ruled that because the process package had not been delivered directly to the registered agent, the plaintiff had not properly served the defendant pursuant to North Carolina Rule of Civil Procedure 4(j)(6)(d).  The Trial Court then determined “the Default Judgment entered in this action is void”, and granted the defendant’s motions for relief and to dismiss the case. The plaintiff then appealed.

The North Carolina Court of Appeals first set out the relevant rules as follows:

Regarding service of process, Rule 4(j)(6)(d) provides that a domestic corporation may be served

[b]y depositing with a designated delivery service authorized pursuant to 26 U.S.C. § 7502(f)(2) a copy of the summons and complaint, addressed to the officer, director, or agent to be served as specified in paragraphs a. and b., delivering to the addressee, and obtaining a delivery receipt.

N.C. Gen. Stat. § 1A-1, Rule 4(j)(6)(d) (2009). Furthermore,

[b]efore judgment by default may be had on service by registered or certified mail, signature confirmation, or by a designated delivery service authorized pursuant to 26 U.S.C. § 7502(f)(2) with delivery receipt, the serving party shall file an affidavit with the court showing proof of such service in accordance with the requirements of G.S. 1-75.10(a)(4), 1-75.10(a)(5), or 1-75.10(a)(6), as appropriate. This affidavit together with the return receipt, copy of the proof of delivery provided by the United States Postal Service, or delivery receipt, signed by the person who received the mail or delivery if not the addressee raises a presumption that the person who received the mail or delivery and signed the receipt was an agent of the addressee authorized by appointment or by law to be served or to accept service of process or was a person of suitable age and discretion residing in the addressee’s dwelling house or usual place of abode.

N.C. Gen. Stat. § 1A-1, Rule 4(j2)(2) (2009) (emphasis added).

The Court of Appeals held that the presumption in Rule 4(j2)(2) should be read in conjunction with the service requirements of Rule 4(j)(6)(d):

Considered as a whole, Rule 4 includes comprehensive provisions for service of process, and the provisions of Rule 4(j2)(2) clearly apply to service made under any of the applicable provisions of Rule 4. See id. Accordingly, in considering whether service was proper under Rule 4(j)(6)(d), the trial court was required to consider the presumption described in Rule 4(j2)(2).

As the Court of Appeals noted, the presumption is rebuttable, but in this case, the Trial Court

concluded that “[w]hether Mr. West was authorized to receive and sign for mail or FedEx packages on behalf of [the registered agent] and/or Defendant . . . is irrelevant to this Court’s inquiry under Rule 4(j)(6)(d)[.]”

To which the Court of Appeals responded,

This conclusion is in direct contravention with Rule 4(j2)(2) which when applied to these facts raises the presumption that Mr. West was “an agent of the addressee authorized by appointment or by law[.]” N.C. Gen. Stat. § 1A-1, Rule 4(j2)(2).

While defendant contends that Mr. West was neither actually nor impliedly authorized to receive service on behalf of defendant, these are disputed facts which the trial court should have considered rather than dismissing such facts as “irrelevant[.]” Plaintiff attempted to present evidence regarding Mr. West’s authority, as plaintiff subpoenaed Mr. West to testify at the hearing, but Mr. West did not appear and defendant filed a motion to quash plaintiff’s subpoena. Plaintiff also requested “continuance of the hearing for the purpose of questioning Mr. West, through discovery or otherwise” regarding his authority “to receive and sign for mail or FedEx packages” for [the registered agent] or defendant, but the trial court denied plaintiff’s request for continuance because it determined that Mr. West’s authority was “irrelevant[.]” In order to rebut the Rule 4(j2)(2) presumption, defendant would have to demonstrate that Mr. West was not “an agent of the addressee authorized by appointment or by law to be served or to accept service of process[.]” N.C. Gen. Stat. § 1A-1, Rule 4(j2)(2). On remand, the trial court must consider the presumption of proper service raised by Rule 4(j2)(2), and this consideration would properly include evidence regarding Mr. West’s authority, or lack thereof, to receive mail or FedEx packages on behalf of [the registered agent] or defendant. Because the trial court determined that evidence regarding Mr. West’s authority was irrelevant, a new hearing will be necessary on defendant’s motions for relief from judgment and to dismiss.

Links to this case

  • PDF of the slip opinion
  • Westlaw direct link (direct link for those who subscribe to Westlaw) (Not yet available from Westlaw)

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