Porter v. Bank

• Decision Date: 20 May 2011
• Docket Number: No. 103,323.,103,323.
• Citation: 257 P.3d 788,45 Kan.App.2d 931
• Parties: William S. PORTER and Burger O'Rourke, Inc., d/b/a Servpro of Bartlesville/Miami, Appellees,v.WELLS FARGO BANK, N.A., Appellant.
• Court: Kansas Court of Appeals

45 Kan.App.2d 931

257 P.3d 788

William S. PORTER and Burger O'Rourke, Inc., d/b/a Servpro of Bartlesville/Miami, Appellees,

v.WELLS FARGO BANK, N.A., Appellant.

No. 103,323.

Court of Appeals of Kansas.

May 20, 2011.

[257 P.3d 788 , 45 Kan.App.2d 931]

Syllabus by the Court

1. If service of process is not properly effected on a defendant, the district court never acquires jurisdiction over the person of the defendant, and any subsequent judgment against that defendant is void ab initio.

2. Jurisdiction over the person of the defendant may be acquired only by issuance and service of process in the methods prescribed by statute or by voluntary appearance.

3. K.S.A. 60–304 makes clear that service on a foreign corporation must be directed to an officer, manager, partner, resident agent, managing agent, general agent (K.S.A. 60–304[e][1] ), the person having charge of the business office (K.S.A. 60–304[e][2] ), or the registered agent for service of process (K.S.A. 60–304[e][3] ).

4. Substantial compliance under K.S.A. 60–204 is not met by serving a foreign corporation by certified mail addressed generally to the corporation at a post office box address.

5. Beck v. Atlantic Contracting Co., Inc., 157 F.R.D. 61 (D.Kan.1994), is discussed and distinguished.

Carrie E. Josserand, of Lathrop & Gage LLP, of Overland Park, and Amy E. Morgan, of Polsinelli Shughart PC, of Overland Park, for appellant.Jeffery A. Chubb, of Emert, Chubb, & Gettler, of Independence, for appellee Burger O'Rourke, Inc., d/b/a/ Servpro, and William J. Fitzpatrick, of Fitzpatrick & Bass, of Independence, for appellee William S. Porter.

Before GREENE, C.J., PIERRON and ARNOLD–BURGER, JJ.

GREENE, C.J.

Wells Fargo Bank, N.A., appeals the district court's denial of its motion to set aside a default judgment for actual and punitive damages in favor of William S. Porter and Burger O'Rourke, Inc., d/b/a Servpro of Bartlesville/Miami (Servpro), arguing service of process was defective, notice of the default judgment was not effected as required by K.S.A. 60–254(c), and the award of punitive damages was improper. Concluding that service of process was never effected on Wells Fargo Bank, the district court obtained no personal jurisdiction over Wells Fargo Bank and the judgment was void and must be vacated.

Factual and Procedural Background

When his home was damaged by fire in 2007, Porter's homeowners' insurer, Upland Mutual Insurance Company, indemnified the claim and sent Porter a check for $33,191.41 payable jointly to Porter and his mortgagee, Wells Fargo Bank. Porter mailed the check to Wells Fargo for endorsement in February 2008, requesting return of the check so that proceeds could be used for payment of Porter's restoration contractor, Servpro. The check was mailed by Porter to the address appearing in a Wells Fargo form for “certification for completion of repairs,” which directed that “all information pertaining to your claim” should be directed to “Wells Fargo Home Mortgage, P.O. Box, 4455, Springfield, OH 45501–4455.”

After repeated written and oral requests to Wells Fargo to endorse and return the check, Porter and Servpro filed suit against Wells Fargo in October 2008. Service of process was attempted in two ways: (1) Summons was sent via certified return receipt mail addressed to a Wells Fargo office in Eagan, Minnesota; and (2) summons was sent via certified return receipt mail addressed to the post office box in Springfield, Ohio, consistent with the directions on the form referenced above. The summons sent to Minnesota was never returned and was apparently lost or mishandled by the Post Office. The summons sent to Ohio was delivered to the post office box address on October 14, 2008, and the return receipt was apparently signed by Harold D. Bowen (or Brown), but the signature was in part illegible, with no agency or office indicated.

Notably, the record reflects that Wells Fargo had a registered agent in the state of Kansas listed on the Secretary of State's website. The listing included a Sioux Falls, South Dakota, mailing address for the company, and a Topeka, Kansas, mailing address for its registered agent in Kansas.

Wells Fargo never responded to Porter's lawsuit, so Porter filed a motion for default judgment. Porter's motion was filed November 19, 2008, and requested a hearing for December 1, 2008. The default motion was again served on Wells Fargo at the Springfield post office box address. Porter's default motion also included a claim for exemplary damages.

The district court granted default judgment in favor of Porter, finding that (1) Wells Fargo was properly served, (2) punitive damages should be allowed, and (3) $50,000 in punitive damages should be awarded. Wells Fargo did not learn of the default judgment until one of its “outside attorneys—who was litigating a separate foreclosure action (Case No. 09 CV 38 I) against plaintiff William S. Porter and his wife Barbara A. Porter—alerted them that the Porters' answer in that action references a judgment obtained against Wells Fargo” in this case. Wells Fargo then moved to set aside the default judgment, claiming it was not properly served.

The district court declined to set aside the default judgment against Wells Fargo. The court again determined that service on Wells Fargo was proper, noting that service to the post office box address satisfied service requirements because the summons and petition were left “at any business office of the defendant with the person having charge thereof.” The district court also determined that the award of damages was proper.

Was Service of Process Properly Effected on Wells Fargo Bank?

Although Wells Fargo argues on appeal that the district court proceedings were defective in numerous regards, we focus first on the question of proper service of process. Obviously, if service of process was never properly effected on Wells Fargo, the district court never acquired jurisdiction over the person of the defendant, and the subsequent judgment is void ab initio. See Hopkins v. State, 237 Kan. 601, 604–05, 702 P.2d 311 (1985); Wallace v. Microsof Corp., 563 F.Supp.2d 1197, 1202 (D.Kan.2008), rev'd in part on other grounds 596 F.3d 703 (10th Cir. 2010).

Jurisdiction over the person of the defendant may be acquired only by issuance and service of process in the methods prescribed by statute or by voluntary appearance, and a review of jurisdiction is de novo. Kansas Bd. of Regents v. Skinner, 267 Kan. 808, 812, 987 P.2d 1096 (1999).

Statutory Overview

We begin by examining the statutes governing service of process at the time of the attempted service on Wells Fargo. Service on a corporation was governed by K.S.A. 60–304(e), which provided:

“ Corporations, domestic or foreign limited liability company, domestic or foreign limited partnership, domestic or foreign limited liability partnership, and partnerships. Upon a domestic or foreign corporation, domestic or foreign limited liability company, domestic or foreign limited partnership, domestic or foreign limited liability partnership or upon a partnership or other unincorporated association, when by law it may be sued as such, (1) by serving an officer, manager, partner or a resident, managing or general agent, or (2) by leaving a copy of the summons and petition at any business office of the defendant with the person having charge thereof, or (3) by serving any agent authorized by appointment or required by law to receive service of process, and if the agent is one authorized by law to receive service and the law so requires, by also mailing a copy to the defendant. Service by return receipt delivery on an officer, partner or agent shall be addressed to such person at the person's usual place of business.” (Emphasis added.)

Service outside the state by return receipt delivery was governed by K.S.A. 2008 Supp. 60–308(d), which provided:

“ Service by return receipt delivery. (1) Service of any out-of-state process by return receipt delivery shall include service effected by certified mail, priority mail, commercial courier service, overnight delivery service, or other reliable personal delivery service to the party addressed, in each instance evidenced by a written or electronic receipt showing to whom delivered, date of delivery, address where delivered, and person or entity effecting delivery. (2) The party or party's attorney shall cause a copy of the process and petition or other document to be placed in a sealed envelope addressed to the person to be served in accordance with K.S.A. 60–304, and amendments thereto, with postage or other delivery fees prepaid, and the sealed envelope place in the custody of the person or entity effecting delivery. (3) Service of process shall be considered obtained under K.S.A. 60–203, and ame...