Changes in Washington Practice Report (#5) / Summons and complaint lost in service

December 4, 2013

Washington State LawThis is installment #5 in a continuing series of Changes in Washington Practice Reports.

In the 2013-2014 edition of Washington Summary Judgment (volume 34 of Washington Practice), Baker has added a new section (section 1:52) to discuss service of process on a foreign company through the Office of the Washington State Insurance Commissioner.

The relevant statute (RCW 4.05.200) is provided along with a cite to an illustrative case (Trinity Universal Insurance Company of Kansas v. Ohio Casualty Insurance Company, 298 P.3d 99 (Wash. Ct. App. Div. 1 2013)).

The initial appellate decision by the Court of Appeals was dated March 18, 2013. However, this decision was subsequently withdrawn and superseded by a revised ruling dated August 19, 2013.

The revised opinion is helpful in the context presented here, because additional commentary was provided regarding issues related to service of a summons and complaint on a company through the Insurance Commissioner.

This case involved a general contractor (Millenium) insured by Ohio, and a subcontractor (Cascade) insured by Trinity. Trinity ended up defending Cascade against a personal injury suit, and settling at a cost of $225,000.

Trinity then brought suit against Ohio for subrogation by Millenium.

Many issues were involved in the case, but the focus here is on service by Trinity on Ohio through the Insurance Commissioner.

As noted by the court: “(The) commissioner forwarded the summons and complaint by certified mail…The commissioner received a return receipt stamped and dated by the registered agent Corporation Service Company (CSC)…. “

However, CSC later stated that it had no record of ever receiving the documents.

Ohio then argued that it was never correctly served.

As found by the court (in footnote 6 of the revised opinion):

Ohio attributes its failure to appear for two possible reasons: (1) the insurance commissioner’s service on CSC was faulty or failed, or (2) CSC itself failed to notify Ohio of the lawsuit…. The first excuse is nonconvincing…(and) the second excuse is similarly unpersuasive….”

“We have repeatedly held that when a company’s failure to respond to a properly served summons and complaint was due to a breakdown of internal office procedure, it is not excusable….”

This ruling is a reminder that the naming of a registered agent must not be treated as a casual matter, and that service companies have a high level of responsibility to assure that all service documents are logged in and provided to the company being represented.

This may be a particular matter of concern where attorneys and companies make use of computerized systems for managing correspondence. It is all-too-easy to lose important records and information when such systems are in place. Constant training, auditing and reviews are necessary whenever such systems are in use.

Additional information about summary judgment may be found in Washington Practice volume 34 , and by making use of the extracts, summaries and other legal resource materials to be found in Methods of Practice, volumes 1 to 1C of Washington Practice, by Cheryl Mitchell and Ferd Mitchell of Mitchell Law Office.