US v. Ziegler Bolt and Parts Co.

• Decision Date: 12 April 1995
• Docket Number: Slip Op. 95-61,Court No. 93-03-00162.
• Citation: 883 F. Supp. 740
• Parties: UNITED STATES of America, Plaintiff, v. ZIEGLER BOLT AND PARTS COMPANY, Defendant.
• Court: U.S. Court of International Trade

883 F. Supp. 740

UNITED STATES of America, Plaintiff, v. ZIEGLER BOLT AND PARTS COMPANY, Defendant.

Slip Op. 95-61, Court No. 93-03-00162.

United States Court of International Trade.

April 12, 1995.

COPYRIGHT MATERIAL OMITTED

Frank W. Hunger, Asst. Atty. Gen. of the U.S., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, (Patricia L. Petty); Jeffrey Reim, Office of Chief Counsel, U.S. Customs Service, Washington, DC, of Counsel, for plaintiff.

Day, Ketterer, Raley, Wright & Rybolt, Canton, OH (Matthew Yackshaw), for defendant.

OPINION

CARMAN, Judge:

Plaintiff commenced this action to recover civil penalties from defendant for violations of 19 U.S.C. § 1592 (1988) and to recover marking duties for violations of 19 U.S.C. § 1304 (1988). The United States Court of International Trade (CIT or Court) previously denied defendant's motion for summary judgment and plaintiff's motion for partial summary judgment and held, inter alia, there were material questions of fact, which facts were better left for determination at trial. See United States v. Ziegler Bolt & Part Co., Slip Op. 95-3 at 11, 25, 1995 WL 13448 (Jan. 13, 1995). Trial is set for May 1, 1995.

Defendant now moves to quash service of process and to dismiss the complaint for lack of personal jurisdiction. Defendant claims plaintiff failed to effect service of process upon defendant, and therefore, the Court has no personal jurisdiction over defendant. Plaintiff bears the burden of establishing service of process was valid.¹ The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1582 (1988).

FACTS

Upon consideration of defendant's motion, and plaintiff's response thereto, and all other and pleadings had herein,² the Court finds:

Plaintiff commenced this action on March 15, 1993, by sending the summons and complaint to the Clerk of the Court by certified mail return receipt requested pursuant to U.S.CIT R. 5(e) (1993).³ On the same day, plaintiff sent the summons, complaint, and a Notice and Acknowledgement of Receipt of Summons and Complaint (CIT Form 14) to Matthew Yackshaw, Esq., counsel for defendant, by certified mail return receipt requested. Mr. Yackshaw signed page two of CIT Form 14 (Acknowledgement Form), which is reprinted in full below with the text added by Mr. Yackshaw marked in bold:

Court No. 93-03-00162

CIT

Form 14

ACKNOWLEDGEMENT OF RECEIPT OF SUMMONS AND COMPLAINT

I declare, under penalty of perjury, that I received a copy of the summons and complaint in the above-captioned matter at Canton, Ohio by certified mail, return receipt requested, on March 17, 1993.

/s/ Matthew Yackshaw Signature Attorney for Defendant Relationship to Entity/ Authority to Receive Service of Process April 5, 1993 Date of Signature

On April 5, 1993, defendant filed its answer, which included among the several defenses:

EIGHTH DEFENSE

The Court lacks personal jurisdiction over Defendant.

NINTH DEFENSE

The Complaint is barred because of insufficiency of service of process upon Defendant.

(Answer at 2.) Mr. Yackshaw declares he "has never been authorized to accept service of process on behalf of Defendant on any matters, including this case." Defendant served its answer on plaintiff's counsel on April 5, 1993, and included the Acknowledgement Form.

The president and majority shareholder of the Ohio corporation Ziegler Bolt and Parts Company (Ziegler Bolt), William A. Ziegler, Sr., affirms he has served as the statutory agent for Ziegler Bolt from its inception to the present. Mr. Ziegler declares his status as statutory agent is a matter of public record on file with the Ohio Secretary of State's office. He understands Mr. Yackshaw received a summons, complaint, CIT Form 5, and CIT Form 14 from plaintiff's counsel on March 17, 1993. Mr. Ziegler states "No part of the package was ever served upon Ziegler Bolt or me as its statutory agent." He further attests, "No one else, including Matthew Yackshaw and the law firm of Day, Ketterer, Raley, Wright & Rybolt, have sic ever been authorized to accept service of process on behalf of Defendant on any matters, including this case." Plaintiff concedes it has no evidence that the summons and complaint were served on the offices of Ziegler Bolt or on its statutory agent, Mr. Ziegler.⁴

Mr. Yackshaw represented Ziegler Bolt before the United States Customs Service (Customs) at the administrative proceedings that took place before the commencement of this civil action. In a letter dated January 29, 1990, Mr. Yackshaw responded to an administrative summons Customs issued to Ziegler Bolt. Mr. Yackshaw closed the letter stating, "In the future, please forward to me a copy of any information request you may serve upon Ziegler Bolt."

Before this action commenced on March 15, 1993, plaintiff's counsel sent a letter to Mr. Yackshaw informing him that "Ziegler Bolt and Parts Co. and Arthur Paul Ziegler Penalty Case No. 89-4104-20136" had been referred to the Department of Justice for collection. The letter indicated the statute of limitations was set to expire on March 3, 1993, and advised Mr. Yackshaw that "In the event that you are interested in discussing this matter, we will need a waiver of the statute of limitations, to be executed by an appropriate officer of Ziegler as well as by Mr. Ziegler, along with a corporate resolution."

In preparation for trial, the parties filed a proposed pretrial order on January 20, 1995. In Defendant's Statement on Jurisdiction (Schedule B-2) of the proposed pretrial order, the defendant stated:

Defendant contests personal jurisdiction based upon insufficiency of service of process and insufficiency of process. See CIT Rule 12(b)(3) & (4). The time limit for making service of process has expired. See CIT Rule 4(h). Plaintiff never served the Company or the Company's statutory agent with process. See CIT Rule 4(d)(3).

(Proposed Pretrial Order at Sched. B-2.) The defenses raised in Schedule B-2 triggered a request from the Court for the parties to brief the defenses of insufficiency of service of process and insufficiency of process.⁵

CONTENTIONS OF THE PARTIES

Defendant contends plaintiff failed to serve the defendant within 120 days after the action was commenced as required by U.S.CIT R. 4(h). Additionally, defendant maintains plaintiff has not shown good cause why service was not made within that period. (Def.'s Mot. to Quash Service of Process and to Dismiss Compl. (Def.'s Br.) at 3-4, 5 (citing United States v. General Int'l Marketing Group, 14 CIT 545, 742 F.Supp. 1173 (1990)).) Defendant asserts service upon a law firm retained by a corporate defendant is not considered sufficient service unless it is shown the law firm was specifically authorized and designated by defendant to receive service of process. (Id. at 4 (quoting Davis-Wilson v. Hilton Hotels Corp., 106 F.R.D. 505, 508 (E.D.La.1985) and citing Michelson v. Merrill Lynch Pierce, Fenner & Smith, Inc., 619 F.Supp. 727 (S.D.N.Y.1985); Gibbs v. Hawaiian Eugenia Corp., 581 F.Supp. 1269 (S.D.N.Y.1984)).) Defendant maintains "Defendant's attorney was not statutory agent for Defendant and was not authorized to receive service of process." (Id.)

Moreover, defendant rejects any argument that Mr. Yackshaw's signature on the Acknowledgement Form "constitutes or is deemed to be service of process upon Defendant." (Id. at 5.) Defendant maintains that although the instructions in CIT Form 14 may be ambiguous, defendant clarified any ambiguity by raising the affirmative defenses of the lack of personal jurisdiction and the insufficiency of service of process in the answer. (Id.)

Plaintiff generally responds by claiming defendant was properly served in accordance with the Court's rules and that defendant has waived its privilege to assert the defenses of insufficiency of service of process and lack of personal jurisdiction. Plaintiff's first argues it followed the strictures of U.S.CIT R. 4(c)(1)(C)(ii) by mailing the summons and complaint to counsel for defendant, Mr. Yackshaw. Plaintiff maintains that the January 29, 1990, letter from Mr. Yackshaw to Customs and the February 24, 1993, letter from plaintiff's counsel to Mr. Yackshaw indicate Mr. Yackshaw "was representing the defendant regarding the penalty notice that issued in November, 1989, and regarding the Government's subsequent actions to collect the penalty." (Pl.'s Br. at 6.) Thus, when Mr. Yackshaw returned the Acknowledgement Form that accompanied the summons and complaint to plaintiff's counsel, "the Government was led to believe ... that service by mail to Mr. Yackshaw was sufficient and that personal service of the complaint and summons, as provided indicated sic in Rule 4(d)(3), would not be necessary." (Id.) As the plaintiff perceives it,

Because counsel for the defendant, Mr. Yackshaw, timely returned the acknowledgement, with no indication that he was not authorized to accept service on behalf of the defendant, there was no reason for the Government to suspect that service by this method authorized under the Rules was defective in any way.

(Id. at 7; see also id. at 8 ("The acknowledgement of service returned by the defendant contains no suggestion that the defendant did not consent to this type of service.").)

Plaintiff rejects defendant's argument that the Acknowledgement Form should be read in conjunction with the answer, which raised the affirmative defenses of lack of personal jurisdiction and insufficiency of service of process, thereby giving plaintiff notice defendant was contesting service of process. (Id. at 8 (citing Def.'s Br. at 3).) Plaintiff characterizes these two affirmative defenses in the answer as "part of a laundry list of affirmative defenses" and argues,

Because the acknowledgement of service of process was timely returned, there was no reason to interpret the defense of insufficiency of process sic to be more than a part of a listing of all possible

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