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| You Auto Know ® - Newsletter |
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March, 2006: The New Lawsuit |
Scenario: You receive the mail, and included in the mail are two certified letters, the first being addressed to the dealership, and the other to a former employee, who was terminated seven months ago. You sign for both certified letters. Upon review, you discover that the letters contained a new lawsuit, naming the dealership and a former employee as defendants. What effect, if any, does your signature have on the dealership and the terminated employee? What should you do now?
Under Ohio Rule of Civil Procedure 4.1(A), a return receipt signed by any person is evidence of proper service under the Civil Rules. Civ.R. 4.2(F) governs service of process on a corporation, and it states a corporation can be properly served in the following three ways: "by serving the agent authorized by appointment or by law to receive service of process; or by serving the corporation by certified or express mail at any of its usual places of business; or by serving an officer or a managing or general agent of the corporation." In general, the test for determining whether a party was properly served is whether service of process was "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Akron-Canton Regional Airport Authority v. Swinehart (1980), 62 Ohio St.2d 403, 406, 406 N.E.2d 811, citing Mullane v. Central Hanover Bank & Trust Co. (1950), 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865. (Emphasis in original.)
The question then becomes what is considered “reasonably calculated?” In a recent Court of Appeals opinion, the court found that even service on a dissolved corporation at the corporation’s former address was proper because it was “reasonably calculated” to reach its intended recipient.
So, by signing for the complaint, the dealership will be considered properly served. But what about the former employee? There is case law in Ohio that states service upon former employee of a company at the company's business address was not made in a manner reasonably calculated to give employee notice of action and, thus, did not comport with due process, where the employee had not been employed for the company for seven months. Bloundt v. Schindler Elevator, 2003-Ohio-2053.
However, it is always better to err on the side of caution when served with legal documents. As always, once you have received a new lawsuit, forward it to your counsel immediately. If you fail to take action, the court may issue a default judgment against you and award the Plaintiff the damages sought by the complaint. Once a judgment is issued, it may be impossible to overturn the court’s judgment if the Plaintiff can show that the complaint was properly served upon the dealership. The Eighth District Court of Appeals has held that “the neglect of an individual to seek legal assistance after being served with court papers is not excusable.” Therefore, it is imperative that you immediately contact legal counsel when you receive notice of a lawsuit. It is also advised that you place your insurance carrier on notice relative to the lawsuit in order to protect you regarding same. In most instances, your insurance company will only pay for the cost of litigation, i.e. attorneys’ fees but will not pay for damages. Also, follow up with both counsel and your insurance agent to ensure that your interests are being served.
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Copyright © 2005 Robert A. Poklar
Having been a Chevrolet dealer, Robert A. Poklar's business background and experience in the automotive industry aid him in his representation of numerous Ohio automotive dealerships. He also represents after-market service companies, trade organizations, dealers advertising associations and corporations. Pursuant to certain ethical standards, this may be construed as advertising. |
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