Phoenix of Hartford, Inc. v. Harmony Restaurants, Inc.
| Decision Date | 13 January 1977 |
| Docket Number | No. 1,CA-CIV,1 |
| Parties | PHOENIX OF HARTFORD, INC., an Insurance Company, Appellant, v. HARMONY RESTAURANTS, INC., an Arizona Corporation, Appellee. 3184. |
| Court | Arizona Court of Appeals |
The sole issue in this appeal is the validity of service of process on a former agent of the appellant foreign insurance corporation. The appeal is from the trial court's order refusing to set aside the default judgment entered against appellant, and holding service to have been proper.
The substance of the trial court's reasoning was that the general provisions of Rule 4(d) providing for service of summons on agents of corporations superseded the specific provisions of our Insurance Code requiring service of process on foreign insurance companies to be made exclusively upon the director of insurance. The trial court also held that under agency principles of apparent authority, the agency relationship continued to exist for purposes of service of process under the Rules of Civil Procedure.
We find it unnecessary to determine the latter agency question, for in our view the applicable requirement for service is that set forth in the Insurance Code, A.R.S. § 20--221, and that service on an agent rather than the director of insurance was improper. We, therefore, reverse the trial court's decision.
A.R.S. § 20--221(B) makes a clear distinction between the manner in which service of process is to be effected against a foreign insurance company as opposed to a domestic insurer. 1 With respect to a foreign insurance company, the statute categorically requires that service be made 'only by service of process upon the director.' 2 Appointment of the director to receive service is required of all authorized insurers in the state. There is no doubt in this case that the appellee could have served the director but did not do so.
The dispositive issue in this case is whether, despite the provision of our Insurance Code requiring exclusive service upon the director, a party may nevertheless validly serve an agent of the company in accordance with the Rules of Civil Procedure applicable generally to corporations. Our rules of procedure and statutes should be harmonized wherever possible and read in conjunction with each other. Enactment of general provisions in rules does not necessarily imply repeal of specific statutory provisions dealing with the same subject. See State v. McCarrell, 80 Ariz. 240, 295 P.2d 1086 (1956); Arizona Corporation Commission v. Catalina Foothills Estates, 78 Ariz. 245, 278 P.2d 427 (1954).
The language of A.R.S. § 20--221 by its terms takes into account the Rules of Civil Procedure by providing that for domestic insurance companies, service of process may be made in accordance with the method generally applicable to corporations. However, with respect to foreign insurers, the statute provides that service on the director is the only method of service. The effect of the trial court's holding was to obliterate the statutory distinction between the manner in which foreign as opposed to domestic insurers are to be served. Such a result does such violence to the express statutory provision as to give it no effect whatsoever. This we decline to do. See State v. McCarrell, supra.
Service upon insurance companies is a common subject of legislation in this country. Many states provide that service of process may be made on a state official, but do not make that method of service exclusive. Other states, apparently a minority, have statutes similar to Arizona's requiring that service should be made only on the agency head. See 20 Appleman on Insurance § 11554.
The conclusion we reach in this case is in accord with decisions of other jurisdictions holding that statutes similar...
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