Carlson v. Bos

• Decision Date: 09 June 1987
• Docket Number: No. 19189,19189
• Citation: 740 P.2d 1269
• Parties: Albert E. CARLSON, Plaintiff and Respondent, v. Sheila Rae BOS and State Farm Insurance, Defendants and Appellants.
• Court: Utah Supreme Court

Page 1269

740 P.2d 1269

Albert E. CARLSON, Plaintiff and Respondent, v. Sheila Rae BOS and State Farm Insurance, Defendants and Appellants.

No. 19189.

Supreme Court of Utah.

June 9, 1987.

Michael Dyer, Salt Lake City, for defendants and appellants.

Ray Ivie, Provo, for defendant and appellant State Farm Ins.

Richard Johnson, Provo, for plaintiff and respondent.

ZIMMERMAN, Justice:

Plaintiff Albert E. Carlson sued defendant Sheila Rae Bos for injuries he received in an automobile accident. Believing that Bos did not live in Utah, he attempted, on two separate occasions, to serve her with the complaint under the substitute service of process provisions contained in Utah's nonresident or departed resident motorist statute. Utah Code Ann. § 41-12-8 (1981). ¹ Five years into the litigation, Bos appeared specially and moved to quash service and to dismiss the action for lack of jurisdiction. The trial court denied the motion, and this Court granted Bos permission to take an interlocutory appeal from that ruling. We reverse and remand for further proceedings.

In January of 1978, plaintiff Carlson was injured when he was involved in a car accident with defendant Bos and one Todd Christensen. Carlson filed suit against both Bos and Christensen in August of 1980, approximately two and one-half years after the accident.

Because Carlson believed that Bos was not residing in Utah when the action was commenced, ² he sought to obtain personal jurisdiction over her by attempting to comply with section 41-12-8 of the Code. That statute provides that service of process may be made upon a nonresident motorist or a resident who has departed from the state "by serving a copy upon the secretary of state or by filing a copy in his office with payment of a $2.00 fee." Within ten days of the filing, the plaintiff also must send notice of the substituted service, together with an affidavit of compliance with the Act, to defendant at his or her last known address by registered mail. Id.

In an effort to comply with section 41-12-8, Carlson filed the summons and complaint with the secretary of state and sent notice of the action to Bos by certified mail at the Provo address listed on the two and one-half-year-old police accident report. ³ The affidavit of compliance that accompanied the mailed notice stated only that Carlson had served the secretary of state and had sent notice to Bos. It did not affirmatively aver that Bos was out of state, nor did it explain how Carlson had obtained or verified the address to which the notice was sent or state that the address was current. The record does not reveal whether the notice sent to Bos was returned to the sender.

Two years later, after Christensen settled, an amended complaint was filed. The amended complaint alleged that Bos was uninsured and added a claim against State Farm Insurance, Carlson's uninsured motorist carrier. Carlson again attempted to serve Bos pursuant to section 41-12-8. He served the complaint on the secretary of state, sent copies to the then four and one-half-year-old address listed on the accident report, and prepared an affidavit of compliance identical to the first one. Again, the record does not indicate whether the information sent to Bos in Provo was returned to the sender.

Bos did not become aware of the pending suit until shortly before the scheduled trial date of March 21, 1983, when she was located by State Farm, Carlson's uninsured motorist carrier. She entered a special appearance seeking to quash service of process. The trial court ruled that Carlson had substantially complied with section 41-12-8 and that the substituted service effected had been sufficient to confer personal jurisdiction on the court.

On appeal, Bos claims that Carlson's attempt to gain jurisdiction over her through use of the procedure set forth in section 41-12-8 should be found ineffective because Carlson made no diligent attempt to locate her in Utah or to discover her current address. Bos contends that unless section 41-12-8 is construed as requiring a plaintiff to engage in a diligent search for an absent defendant's current address, absent defendants will be denied due process of law under the fourteenth amendment of the United States Constitution. ⁴

Although not cited by either party, this Court's decision in Graham v. Sawaya, 632 P.2d 851 (Utah 1981), is directly pertinent to the issue presented here. There this Court, in reliance on the United States Supreme Court's decision in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950), broadly stated and appeared to hold that published process accompanied by mailed notice to a last known address "does not measure up to the constitutional standard for an in personam judgment." Graham v. Sawaya, 632 P.2d at 854. ⁵

Today, we uphold section 41-12-8's substitute service provisions. In so doing, we must and do disavow Graham to the extent that it bases the form of notice required by the federal constitution on whether the action is labeled in rem or in personam. This also leads us to reject Graham 's conclusion that substitute service accompanied by mailed notice sent to a last known address can never satisfy the requirements of due process, as those requirements are explained in Mullane. ⁶ For this reason, it is appropriate that we give a detailed description of the historical rationale for basing the form of notice required on the distinction between in personam and in rem actions. This leads directly to an explanation of why that rationale no longer has any vitality.

Federal procedural due process restrictions assure, to the extent possible, that the defendant will have the opportunity to appear and to be heard. Grannis v. Ordean, 234 U.S. 385, 34 S.Ct. 779, 58 L.Ed. 1363 (1914). Service of process implements the procedural due process requirement that a defendant be informed of pending legal action and be provided with an opportunity to defend against the action.

While personal service of process guarantees that a defendant will be notified of pending legal action, this ideal is not always obtainable and early United States Supreme Court decisions recognized that it is not always necessary. For example, in the landmark case of Pennoyer v. Neff, 95 U.S. (5 Otto) 714, 24 L.Ed. 565 (1877), the Supreme Court invalidated a personal judgment against a nonresident who had been served by publication. There the Court did not distinguish between a court's jurisdictional authority to adjudicate a controversy and the type of notice due the defendant. Instead, Pennoyer was based on the theory of "territorial jurisdiction," under which a court could exercise its authority only if the defendant or defendant's property was "present" within the forum state.

Under the territorial jurisdiction theory, a state lawfully could not serve process on a party outside the state's territorial boundaries. Id. at 720-23. The law generally required that a party receive personal service of process to be subject to a court's in personam ⁷ jurisdiction. Id. at 724. A court could exercise in personam jurisdiction, therefore, only if the party was within the state's territorial boundaries and, thus, was subject to personal service of process. Id. However, if the party was absent from the state, Pennoyer permitted the court to exercise in rem ⁸ jurisdiction over the party's in-state property upon published process. In a subsequent decision, the Court explained that personal service was not required in an in rem proceeding because a landowner is presumed to be informed concerning the status of his or her property. Ballard v. Hunter, 204 U.S. 241, 262, 27 S.Ct. 261, 269, 51 L.Ed. 461 (1907). Later cases interpreting Pennoyer have held that federal due process does not mandate personal service to absent defendants in in rem proceedings, but requires only that the substitute service be likely to reach the defendant. See, e.g., Grannis v. Ordean, 234 U.S. 385, 397, 34 S.Ct. 779, 784, 58 L.Ed. 1363 (1914); McDonald v. Mabee, 243 U.S. 90, 92, 37 S.Ct. 343, 344, 61 L.Ed. 608 (1917). However, this did not change the requirement of Pennoyer that when the proceeding was in personam, personal service within the state was necessary.

With International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the notion of territorial jurisdiction gave way to a concept of jurisdiction based on a party's minimum contacts with the forum state. While the minimum contacts standard enlarged a court's authority to assert in personam jurisdiction over individuals not present in the state, the form of the notice required to apprise such parties of the proceedings continued to vary, depending on whether the action was characterized as in personam or in rem.

Shortly after International Shoe, the Supreme Court abandoned the in rem/in personam distinction as a basis for determining the appropriateness of any given form of notice. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). In Mullane, the Court observed that as a general matter, it had become very difficult to properly distinguish between an in personam and an in rem action due to the rise in importance of intangible forms of property and the development of new legal proceedings. Id. at 312, 70 S.Ct. at 656. The meaningfulness and utility of this classification scheme had become particularly questionable in the context of service of process. Id.

The Mullane case itself was a good example of the problems that the in rem/in personam distinction created when trying to decide what form of notice was required. There, the question was whether published notice to beneficiaries of a common trust fund concerning a hearing to settle the fund's accounts satisfied federal due process requirements. The Court noted that the proceeding, which involved closing the fund and settlement of the beneficiaries' potential interests in suing their trustee for...