Substituted Service: The Lazy Plaintiff

If you are defense counsel or a claims adjuster, you have likely been there. A client/insured is nowhere to be found. The Florida State Division of Corporations identifies the company as being administratively dissolved. The only reason the complaint is on your desk is the carrier was put on notice through an Accord Page. However, the plaintiff never achieved personal service and did little to try. Instead, service was through the Secretary of State under Chapter 48, Florida Statutes, otherwise known as substituted service.

Lately, plaintiffs’ counsel have resorted to taking this lazy way to serve a defendant. Carriers rarely challenge substituted service. However, plaintiffs rarely satisfy all the requirements of substituted service.

Under Florida law, service of process and personal jurisdiction are two distinct but related concepts. Personal jurisdiction refers to the actions of an individual or corporation and whether the court can exercise jurisdiction over a lawsuit. Service of process is the means by which a party is notified that the court is exercising jurisdiction over the defendant. The purpose of service of process is to provide proper notice to a defendant so that he is answerable to a claim. Substituted service statutes are strictly construed. The two Florida statutes most frequently utilized to obtain substituted service on a dissolved corporation are § 48.161 and § 48.181.

Under these statutes, there is a substantive and procedural component that must be strictly adhered to. A plaintiff must demonstrate the defendant is either a former Florida resident who previously conducted business in Florida who then became a non-resident or the defendant was/is concealing his whereabouts. The plaintiff may serve process on the Secretary of State, with a copy sent by registered or certified mail to the defendant. Once in receipt of the return receipt, the plaintiff must then file the defendant’s return receipt and an affidavit of the plaintiff or his attorney demonstrating compliance. This filing must occur on or before the due date for a response to process.

The Florida courts allow a plaintiff to allege as the basis for substituted service the language of the applicable statute without pleading supporting facts. In Great American Insurance Co. v. Bevis, 652 So.2d 382 (Fla. 2nd DCA 1995), the plaintiff brought suit against Great American’s insured for damages sustained in an auto accident and invoked the substituted service statutes. Great American appealed. The court reversed, in part, because the plaintiff failed to set forth allegations which tracked the language of the applicable statute.

As stated, the method of substituted service on a non-resident, or a resident concealing his whereabouts, requires strict adherence to procedural requirements contained in Section 48.161. However, courts have found implicit in these procedural requirements the requirement of due diligence. The affidavit of the plaintiff or his or her attorney is required under Florida Statute § 48.161, and it must contain sufficient facts demonstrating due diligence on the part of the plaintiff in attempting to locate the defendant and confirm his non-residence or concealment.

The test for determining the sufficiency of substituted service is not whether personal service can be achieved in a given case, but whether the complainant reasonably employed knowledge at his command, made diligent inquiry, and exerted an honest and conscious effort appropriate for the circumstances to acquire the information necessary.

In Tire Group International, Inc. v. Confianca, 776 So.2d 1057 (Fla. 3rd DCA 2001), the Third District stated there was no reason to approve a tactic which permitted the plaintiffs to mail statutory required notices to a defendant’s place of employment without a modicum of effort to ascertain his or her residential address. The court held the due diligence requirement applied to both concealment and a determination as to whether the defendant was a nonresident.

In Knabb v. Morris, 492 So.2d 839 (Fla. 5th DCA 1986), the court held that a plaintiff had failed to investigate certain leads of Knabb’s whereabouts, which were available. Notably, the vehicle accident report contained the addresses of the occupants of the car driven by the appellant during the auto accident.

In Linn v. Kidd, 714 So.2d 1185 (Fla. 1st DCA 1998), the appellee attempted to serve the appellants at two separate addresses in Florida and then utilized substituted service pursuant to Florida Statute § 48.161. The summons and complaint were sent by the Secretary of State via mail but were returned and marked “return to sender attempted – not known.” Thus, no signed return receipt was obtained. The court held that the appellants did not exercise due diligence to locate the appellee as the only effort to locate the appellee was to send the appellee certified letters to an address which a diligent inquiry would have revealed was not the residence.

In Smith v. Leaman, 826 So.2d 1077 (Fla. 2nd DCA 2002), a driver appealed an order of the Circuit Court denying his motion to quash a service of process, contending the plaintiff did not strictly comply with substituted service requirements. The court held that when the failure of delivery of process was not caused by the defendant’s rejection of the mail and where such failure might have resulted from a cause not chargeable to the defendant, the statutory requirements have not been met.

The cases cited above demonstrate that questions regarding due diligence will generally resolve in favor of the defendant. Substituted service is the “exception” to the general rule requiring personal service.

Not only do plaintiffs have to allege the statutory requirements in a complaint and undertake due diligence in attempting to locate the defendant, but they must also strictly comply with additional procedural requirements. Mecca Multimedia v. Kurzbard, 954 So.2d 1179 (Fla. 3rd DCA 2007) (stating “[the] only way Kurzbard [could] avail himself of § 48.181 was to properly plead that Mecca… was concealing… the Complaint, however, did not allege, nor was it amended to allege, any concealment… .”).

Under Florida Statute § 48.161, the plaintiff must serve the Secretary of State and mail a copy of the summons and complaint to the defendant by registered or certified mail. The statute requires the plaintiff to provide the court with the receipt demonstrating the defendant received the document and must file an affidavit of compliance with the court demonstrating facts sufficient to show the defendant was either evading service or is no longer a resident. Moreover, the affidavit of compliance must be filed within the time prescribed for a response to service of process. Failure to timely file an affidavit of compliance warrants quashing substituted service. The return receipt must be signed by the defendant and not by someone who purports to act on the defendant’s behalf.

As the court in Chapman v. Sheffield, 750 So.2d 140, 143(Fla. 1st DCA 2000) stated:

Had the legislature intended to authorize other persons to sign for the defendant in a representative capacity, it could have expressed that intention in the statute. The absence of such a provision supports our conclusion that the defendant must sign the receipt. We recognize that the Court may dispense with the filing of a postal receipt if a substituted service statute is invoked on the ground that the defendant is evading service.

Plaintiffs generally do not follow all requirements of Florida Statute §§ 48.161 and 48.181. First, they fail to set forth facts sufficient to demonstrate non-residence and/or concealment. Second, plaintiffs do not file the return receipt because they take the position that the defendant is evading and, therefore, no return receipt is required. This legal tactic is generally not challenged, even though the affidavit of compliance does not support the allegation of concealment. Moreover, some plaintiffs tend to overlook the filing of the affidavit altogether. The lack of a timely filed affidavit, the absence of facts supporting non-residence and/or concealment, or the failure to obtain a signed return receipt from the defendant demonstrating the receipt of service of process are grounds for dismissal.

Based on the foregoing, it is recommended that defense counsel and claims professionals review the basis for substituted service and whether the requirements have been met. There is a good chance your client might just get dismissed.

*Adam is a shareholder in our Orlando, Florida office. He can be reached at 407.420.4382 or acherman@mdwcg.com.

_{Defense Digest, Vol. 24, No. 2, June 2018. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2018 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}