Dodco, Inc. v. American Bonding Co.

• Decision Date: 29 October 1993
• Docket Number: No. 93-1053,93-1053
• Citation: 7 F.3d 1387
• Parties: DODCO, INC., Appellee, v. AMERICAN BONDING COMPANY, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1387

7 F.3d 1387

27 Fed.R.Serv.3d 580

DODCO, INC., Appellee, v. AMERICAN BONDING COMPANY, Appellant.

No. 93-1053.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 16, 1993.

Decided Oct. 29, 1993.

Junius Bracy Cross, Jr., Little Rock, AR, argued, for appellant.

Ian W. Vickery, El Dorado, AR, argued, for appellee.

Before BOWMAN, MAGILL, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

PER CURIAM.

American Bonding Company (ABC), an Arizona insurance company authorized to do business in Arkansas, appeals from the district court's judgment for Dodco, Inc. (Dodco), following a bench trial in this suit under the Miller Act, 40 U.S.C. §§ 270a-d. We reverse and dismiss the case for lack of jurisdiction over ABC because of improper service.

In June 1991, Dodco filed this action against ABC and Kenneth Crow, doing business as K.C. Electric (KCE), seeking compensation for asbestos removal Dodco had performed. KCE had contracted with the United States Army Corps of Engineers (Corps) to perform renovations on the Narrows Dam and Reservoir Powerplant in Arkansas; ABC had provided the payment and performance bond for KCE; and Dodco had subcontracted with KCE to remove asbestos from the site. Dodco served only Babb Enterprises, Inc., one of several agents for ABC in Arkansas, through Babb Enterprises's officer Michael Babb.

KCE and ABC answered, asserting, pursuant to Federal Rule of Civil Procedure 12(b)(2), that they had not been properly served and therefore the district court lacked jurisdiction over them. They also denied the material allegations of the complaint. Prior to trial, the district court granted Dodco's motion for a nonsuit against KCE after Dodco conceded that it had not properly served KCE. Dodco continued to assert, however, that it had validly served ABC.

The district court denied ABC's motion to dismiss for improper service. The court held that the service on ABC satisfied Federal Rule of Civil Procedure 4(d)(3) because Babb had exercised more discretion than a typical sales agent (who usually may not accept service). The court found that Babb prepared and wrote bonds for ABC, acted as an "attorney-in-fact" for ABC, and did not have to contact ABC's home office for advice on whether to write a bond or reject the risk. The court noted that ABC had received actual notice of the summons and complaint because Babb forwarded the papers to ABC's counsel. On the merits, the court awarded Dodco damages in the amount of $24,995 plus interest.

ABC now argues that the district court erred when it denied the motion to dismiss for improper service. ABC also argues that the district court erred in entering judgment for Dodco.

We do not need to consider the second argument on appeal, because we believe the district court erred when it held that Dodco had properly served ABC. If a defendant is improperly served, the court lacks jurisdiction over the defendant. See Cohen v. Newsweek, Inc., 312 F.2d 76, 77-78 (8th Cir.1963). How service may be made "is a federal question to be determined according to federal law." Jennings v. McCall Corp., 320 F.2d 64, 69 n. 4 (8th Cir.1963); see also National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 316, 84 S.Ct. 411, 414, 11 L.Ed.2d 354 (1964) (in non-diversity suit, federal law applies to determine whether person is agent for service pursuant to Rule 4).

In 1991, when this action commenced, service could be made "[u]pon a domestic or foreign corporation ... 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...