Serving The Corporate Defendant – An IL Case Note

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This case piqued my interest since I recently spent an obscene amount of time trying to serve a defendant in a commercial lease dispute.  It wasn’t until after my process server gave sworn testimony for nearly an hour at an evidentiary hearing that the court finally (and mercifully) put the service issue to bed and allowed us to proceed with prosecuting the case.

A few weeks ago (late June 2014), the First District appeals court examined the importance of proper process service in the context of a petition to vacate a default judgment.  The commercial tenant in Essi v. Fiduccia, 2014 IL App (1st) 120203-U, sued her ex-landlord for wrongful eviction.  After serving the summons and complaint on who she thought was the defendant at his insurance agency office, the plaintiff got a default judgment of nearly $300,000 – a sum comprised of lost profits, lost equipment and punitive damages.  About four months later, the defendant filed a petition to vacate the default judgment.  The trial court granted the petition and plaintiff appealed.

Held: Affirmed.  Trial court properly granted defendant’s petition to vacate the default judgment.

Rules/Reasoning:

The defendant’s petition to vacate the default judgment was properly granted because the defendant was never served.  In Illinois a judgment entered without personal jurisdiction over a party is void and can be attacked at any time and the petitioner doesn’t have to show due diligence or a meritorious defense.  735 ILCS 5/2-1401(f), (¶¶ 28-29).

Code Section 2-203 (735 ILCS 5/2-203) governs service of process on individual and corporate defendants in Illinois.  Permissible service methods are (1) personal service – delivering a copy of process to the defendant personally; or (2) substitute or abode service: leaving a copy of process at defendant’s usual place of abode with someone living there over the age of 13, and informing the person of the contents of the summons.  A corporation can be served by leaving the process with its registered agent or any officer or agent of the corporation found anywhere in the state.  (¶45); 735 ILCS 5/2-203.

A sheriff or process server’s return of service that reflects personal service on a defendant is presumptively valid and can only be overturned by clear and convincing evidence.  Uncorroborated, self-serving testimony of a defendant who claims he wasn’t served is usually insufficient to challenge a sheriff’s or process server’s sworn return.  (¶¶ 29, 36-37).  Conversely, where a defendant does submit a properly supported affidavit contesting service, the plaintiff must have the process server testify at an evidentiary hearing concerning the circumstances surrounding the challenged process service.  (¶ 37).

Here, the sheriff deputy’s return stated that process was served on the defendant at his insurance agency’s office.  But this was only a business address.  The defendant didn’t live there.  Defendant supported his petition to vacate with two affidavits: one from him, the other from his brother who is also defendant’s business partner.  Defendant’s brother testified that he was the only one in the insurance officer at the date and time on the sheriff’s return and accepted the papers because he thought they were insurance documents. Defendant, for his part, testified in his affidavit that he was never served at home and that nobody who lived with him was served.  Plaintiff failed to challenge defendants’ affidavits and didn’t call the sheriff deputy to testify in support of his service return (that showed personal service on the defendant).  The Court held that because plaintiff failed to challenge defendants’ affidavits, defendant met the clear and convincing standard for vacating the default judgment.

Afterwords:

This case illustrates that a default judgment entered without proper service can be attacked at any time.  A sheriff’s return of service is prima facie valid but not inviolable.  If a defendant offers sworn testimony contesting service, the plaintiff should call the sheriff deputy or process server to testify at an evidentiary hearing and elicit testimony on the date, time and circumstances surrounding the service on the defendant.  Then, it’s up to the judge to decide based on whose testimony she finds more believable.

 

Those Slippery People: Six (6) Failed Service Attempts Not Enough For Service by Special Order of Court (IL Law)

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Code Section 2-203.1, titled “Service by Special Order of Court” allows a plaintiff to request service by alternative or “comparable” means when faced with an elusive defendant.  735 ILCS 5/2-203.1.  The statute requires a supporting affidavit that details the specific attempts made to locate a defendant and permits the court to authorize service in a manner that complies with due process.  Id. 

I usually file Section 2-203.1 motions in cases involving high-rise condominium defendants (typically in mechanics’ lien actions).  Some of these condos are impenetrable fortresses it seems; which makes it next to impossible to serve a building resident.  I support the motion with an affidavit of a special process server who details the efforts he made (including dates, times, locations, methods) to serve the defendant. 

If the court grants the motion, I tell the process-server to leave a copy of the summons and complaint with the defendant’s doorman (where a condo is involved) or by leaving process on defendant’s porch or posting on the front door (in case of a house) while also mailing the process to the defendant’s home and place of business (if known).  

But how many times do you have to try to serve a defendant directly before alternate service methods can be employed?  

In Sutton v. Ekong, 2013 IL App (1st) 121975 , the First District vacated a trial court default judgment and held that six unsuccessful service attempts was insufficient to merit service by special order of court. 

The reason: the personal injury plaintiff made no attempt to serve defendant at his easily discoverable business address prior to filing his 2-203.1 motion. 

After his sixth failed attempt, the plaintiff served defendant through the Illinois Secretary of State pursuant to Section 10-301 of the Illinois Vehicle Code: the section that governs serving non-resident defendants.  Ekong, at ¶ 6; 625 ILCS 5/10-301.  

A plaintiff who seeks to invoke special order of court service under Code Section 2-203.1 must strictly comply with that section and a failure to do so results in improper service. 

 The record demonstrated that Defendant’s business address was “easily obtainable” and “in the phone book.”  (¶¶ 21-22).  Evidence of the defendant’s easily found work address was the fact that plaintiff served a citation to discover assets on the defendant at the work address. (¶ 23). 

The First District held that the plaintiff failed to perform the type of search or investigation “an earnest person” trying to serve a defendant would make and should have tried to serve defendant at his business address before seeking alternative service methods. 

The Court distinguished In re Marriage of Schmitt (http://caselaw.findlaw.com/il-court-of-appeals/1123974.html) a divorce case where a plaintiff was allowed to employ alternate service methods after eleven (11) unsuccessful attempts.  (¶ 24).

But here, the Court found that since there was no basis to justify service through the Secretary of State, the trial court never properly acquired jurisdiction over the defendant.  Accordingly, the default judgment is void from its inception.

Take-aways: I feel the plaintiff’s pain on this one.  Slippery defendants can be nightmares to serve through normal channels.  But this case’s lesson is clear: plaintiffs should make thorough and meaningful efforts to investigate a defendant’s whereabouts and try to serve him not only at his home but also his business address. 

Service through the Secretary of State or through comparable methods really should be a last resort.  Where a defendant’s residence or business address is readily obtainable through rudimentary investigation, service by special order of court isn’t warranted and any default judgment based on such service will likely be vacated.