Cent. Insurers of Gren., Inc. v. Greenwood

• Decision Date: 31 May 2018
• Docket Number: NO. 2016–IA–01367–SCT,2016–IA–01367–SCT
• Court: Mississippi Supreme Court
• Parties: CENTRAL INSURERS OF GRENADA, INC. v. William GREENWOOD d/b/a Antique Wood Company of Mississippi

268 So.3d 493

CENTRAL INSURERS OF GRENADA, INC.

v.William GREENWOOD d/b/a Antique Wood Company of Mississippi

NO. 2016–IA–01367–SCT

Supreme Court of Mississippi.

May 31, 2018

ATTORNEYS FOR APPELLANT: THOMAS L. CARPENTER, JR., GULFPORT, CARR ALLISON

ATTORNEYS FOR APPELLEE: DREW M. MARTIN, CHUCK McRAE

BEFORE WALLER, C.J., COLEMAN AND MAXWELL, JJ.

WALLER, CHIEF JUSTICE, FOR THE COURT:

¶ 1. By interlocutory appeal, Central Insurers of Grenada, Inc., challenges the Warren County Circuit Court's denial of its motion to dismiss William Greenwood's complaint against it for insufficient service of process. Finding error in the trial court's determination that the Mississippi Commissioner of Insurance was authorized to accept service of process on Central's behalf, we reverse the trial court's judgment and remand this case for further proceedings.

FACTS

¶ 2. Central is a Mississippi corporation licensed by the Mississippi Insurance Commissioner to operate as an "insurance producer."¹ On July 10, 2013, William Greenwood, the owner of Antique Wood Company of Mississippi, filed a complaint in Hinds County Circuit Court against Central and three other defendants, alleging breach of contract, conspiracy, and bad faith due to the defendants' refusal to provide coverage under a commercial liability insurance policy Greenwood had purchased from them.² Greenwood's complaint acknowledges that Central is a Mississippi corporation, identifies Lynn Simmons Grim as Central's registered agent for service of process, and lists an address in Grenada County, Mississippi, where Grim may be served. However, Greenwood did not personally serve process on an officer or registered agent of Central, nor did he mail a copy of the complaint and summons directly to Central or its registered agent.³ Instead, on August 9, 2013, Greenwood's process server served a copy of the complaint and summons on an employee of the Mississippi Commissioner of Insurance. The Commissioner's legal process clerk then forwarded a copy of the complaint and summons, along with a notification letter, to Central via certified mail.

¶ 3. Central filed its answer to the complaint on October 14, 2013, raising the affirmative defense of "failure and/or insufficiency of service of process." Central also filed a separate motion to dismiss for insufficient service of process on November 11, 2013. In its motion, Central argued that it could not be served through the Commissioner and that Greenwood never served its registered agent for service of process. Central asked the trial court to dismiss Greenwood's claims against it with prejudice due to Greenwood's failure to correct the improper service of process after receiving notice of such in Central's answer, and due to the expiration of the statute of limitations. This motion was scheduled for a hearing in January 2014.

¶ 4. Prior to the hearing on Central's motion to dismiss, another defendant in the case filed a motion to transfer venue. The trial court granted this motion on January 23, 2014, and ordered Greenwood to choose between Rankin and Grenada Counties as the new venue for the case. The trial court also rejected Greenwood's assertion that Warren County was a proper choice of venue. This Court granted Greenwood's petition for interlocutory appeal and reversed the trial court's judgment, finding that Warren County was an appropriate venue for the case and that Greenwood's choice of permissible venue options controlled.

Greenwood v. Mesa Underwriters Specialty Ins. Co. , 179 So.3d 1082, 1087 (Miss. 2015). On remand, the case was transferred to Warren County Circuit Court.

¶ 5. After the transfer of venue was complete, Central noticed for a hearing its motion to dismiss. The parties submitted briefs in support of and in opposition to the motion, and a hearing was held on August 24, 2016. During the hearing, Greenwood argued that Central was an "insurance company" subject to the supervision of the Commissioner under Section 83–5–1 of the Mississippi Code. See Miss. Code Ann. § 83–5–1 (Rev. 2011). As such, Greenwood contended the Commissioner was authorized by law—specifically, Section 83–5–11—to receive service of process on Central's behalf. Miss. Code Ann. § 83–5–11 (Rev. 2011). In response, Central asserted that Section 83–5–11 did not apply to it because it did not operate as an "insurance principal." Central also argued that no provision of Title 83 of the Mississippi Code required it to appoint the Commissioner as its agent for service of process.

¶ 6. Following the hearing, the trial court entered an order denying Central's motion to dismiss. The basis of the trial court's ruling was that Central was a "solicitor and deliverer of application for insurance" under Section 83–21–37 of the Mississippi Code. See Miss. Code Ann. § 83–21–37 (Rev. 2011). Thus, the trial court concluded that " MRCP Rule 4(h) would have been satisfied by service of the summons and complaint upon the registered agent with the Secretary of State ... or service of the summons and complaint upon the Commissioner of Insurance pursuant to Section 83–21–37, as was done in the case sub judice." The trial court also found that Central had admitted receiving the notice of service required by Section 83–5–11.

¶ 7. Aggrieved by the trial court's decision, Central filed a petition for interlocutory appeal, which this Court granted. On appeal, Central argues that the trial court erred as a matter of law in finding that Greenwood's service of process on the Commissioner was authorized by Section 83–21–37. In addition, Central argues that Section 83–5–11 does not apply to it because it is not an "insurance company." And finally, Central contends that Greenwood's claims against it should be dismissed with prejudice due to Greenwood's failure to serve its registered agent prior to the expiration of the statute of limitations.

STANDARD OF REVIEW

¶ 8. This Court applies a de novo standard of review to the trial court's decision to grant or deny a motion to dismiss. McClain v. Clark , 992 So.2d 636, 637 (Miss. 2008). This Court also reviews matters of statutory interpretation de novo. Chandler v. McKee , 202 So.3d 1269, 1271 (Miss. 2016).

DISCUSSION

I. Whether Greenwood's service of process on Central through the Insurance Commissioner was proper.

¶ 9. "The existence of personal jurisdiction ... depends on the presence of reasonable notice to the defendant that an action has been brought." Kulko v. Cal. Superior Court , 436 U.S. 84, 91, 98 S.Ct. 1690, 56 L.Ed.2d 132, 140 (1978). "Service of process is simply the physical means by which [personal] jurisdiction is asserted." DeMelo v. Toche Marine, Inc. , 711 F.2d 1260, 1264 (5th Cir. 1983). Rule 4 of the Mississippi Rules of Civil Procedure provides that legal process may be served on a domestic corporation like Central "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process." Miss. R. Civ. P. 4(d)(4) (emphasis added). Such delivery may be accomplished by process server, by sheriff, or by first-class mail. See Miss. R. Civ. P. 4(c)(1)–(3). "[I]t must appear that any agent who accepts service must be shown to have been authorized to bind his principal by the acceptance of process...." Broadcast Music, Inc. v. M.T.S. Enters., Inc. , 811 F.2d 278, 281 (5th Cir. 1987) (quoting Schwarz v. Thomas , 222 F.2d 305, 308 (D.C. Cir. 1955) ).⁴

¶ 10. Here, it is undisputed that Greenwood never served process directly on an officer, managing agent, or general agent of Central. The question before us, then, is whether the Mississippi Commissioner of Insurance is an "agent authorized by appointment or by law to receive service of process" for Central. Miss. R. Civ. P. 4(d)(4). In denying Central's motion to dismiss, the trial court found that service of process on the Commissioner was proper under Section 83–21–37 of the Mississippi Code because Central "was the solicitor and deliverer of application for insurance to the Plaintiffs ...." On appeal, Central argues that the trial court's interpretation of Section 83–21–37 is erroneous.

¶ 11. Section 83–21–37 is a provision of the Unauthorized Insurers Process Law, the stated purpose of which is to provide Mississippi plaintiffs with a method of "substituted service of process" upon "insurers not authorized to do business in this state." Miss. Code Ann. § 83–21–35. (Rev. 2011). Section 83–21–37 automatically appoints the Commissioner as the agent for service of process for "unauthorized or alien" insurers that perform certain acts within this state:

(1) the issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business therein, (2) the solicitation of applications for such contracts , (3) the collection of premiums, membership fees, assessments, or other considerations for such contracts, or (4) any other transaction of insurance business ....

Miss. Code Ann. § 83–21–37 (Rev. 2011) (emphasis added). Service of process on the Commissioner "is of the same legal force and validity as personal service of process in this state upon such insurer." Id. Here, the trial court found that Central had performed the first two acts listed in Section 83–21–37, which authorized the Commissioner to receive service of process on Central's behalf. But for Section 83–21–37 to apply, an "unauthorized or alien insurer" must perform the actions listed above. Id. Central falls into neither of these categories.

¶ 12. Because Section 83–21–37 does not apply to Central, a domestic corporation authorized to do business in this state, we find that the trial court erred in finding that Greenwood properly effectuated service of process on Central by "service of the summons and complaint upon the Commissioner of Insurance pursuant to Section 83–21–37."

¶ 13. Greenwood essentially concedes that Section 83–21–37 has no direct application in this...