Opinion handed down June 16, 2015
Ray Charles Bate and Deborah Bate were both majorly injured in a car accident.[2] The Bates sued Greenwich Insurance Company (“Greenwich”), an authorized foreign insurance company under Missouri law.[3] The Director of Missouri Department of Insurance (“Director”) was designated as Greenwich’s registered agent for acceptance of service of process within the state.[4] The Director was served, and the Director forwarded the paperwork to Greenwich via first-class mail.[5] Greenwich did not respond to the suit, and default judgment was entered in favor of the Bates.[6] Over two years later, Greenwich made a limited appearance and filed an amended motion to set aside the default judgment as void.[7] The trial court agreed with Greenwich and set aside the default judgment as void[8] The Supreme Court of Missouri reversed the trial court’s finding, holding the service was proper under Missouri law.[9]
I. Facts and Holding
After the Bates were both greatly injured in a car accident,[10] they sued Wells, the driver of the other automobile, and recovered a judgment for a total of $3 million.[11] The Bates then sued defendant Greenwich Insurance Company, “seeking underinsured motorist coverage under a policy allegedly issued to Charles Bate's employer by Greenwich.” [12] Greenwich is an authorized foreign insurance company under Missouri Revised Statutes Section 375.906.[13] The Director was designated as Greenwich’s agent for acceptance of service of process within the state of Missouri.[14] Following suit by the Bates, the Director was given a copy of the petition and summons by the sheriff.[15]
The Director “forwarded the petition and summons to Greenwich via first class mail and filed an affidavit of service with the trial court pursuant to 20 C.S.R 800–2.010.”[16] Greenwich did not answer the petition and default judgment was entered against Greenwich in the amount of the judgment against Wells.[17] Over two years later, Greenwich made a limited appearance and filed an amended motion to set aside the default judgment as void due to lack of personal jurisdiction over Greenwich.[18] In the amended motion, Greenwich argued that “service of process was invalid because the Bates did not comply with the service of process and proof of service requirements in Rules 54.15 and 54.20.”[19]
The Bates argued that Missouri Supreme Court Rule 54.18 afforded them the ability to effect service under Section 375.906 and that they did so.[20] Greenwich countered that “service under section 375.906 is supplemented by the service of process and proof of service requirements in Rule 54.15 and Rule 54.20 or, alternatively, that section 375.906 was inapplicable to the Bates' claims.”[21] The trial court agreed with Greenwich and set aside the default judgment as void, stating “there was no valid service of process and therefore no personal jurisdiction” over Greenwich.[22] The Missouri Court of Appeals for the Western District affirmed the decision below, and the Supreme Court of Missouri subsequently granted transfer.[23]
II. Legal Background
In order “to invoke a court's jurisdiction, service of process must conform to the manner established by law.”[24] The court “must first look to applicable statutes and rules to determine whether effective service of process was made.”[25]
Under Section 375.906.1, “a foreign insurance company doing business in Missouri must execute an irrevocable power of attorney authorizing the Director to acknowledge or receive service of process on its behalf ‘in any action against the company, instituted in any court of this state.’”[26] That same section also states, “[t]he insurer consents by law that service on the Director constitutes personal service on the company itself.”[27] Under Section 375.906.2, “[s]ervice is effectuated by delivery of the petition and summons to the director.”[28] Under Section 375.906.5, “[o]nce the Director has been served process on the insurer's behalf, the Director must forward the process “by first class mail prepaid and directed to the secretary of the company.”[29] In addition, “[t]he Director must keep a permanent office record showing the names of the parties, the appropriate court, and the day and hour that service was made.”[30] Finally, “the Department of Insurance has adopted a regulation requiring that when service is made pursuant to section 375.906, the Director must also forward an affidavit of service to the appropriate court. 20 CSR 800–2.010.”[31]
The Bates and Greenwich argued two alternative theories in regards to proper service of process under Missouri law.[32] Greenwich argued that Missouri Supreme Court Rules 54.15 and 54.20 supplemented the legal framework above.[33] Rule 54.15(b) states that “when service of process is made on the director of insurance, the Director must give notice to the defendant by forwarding a copy of the summons and petition ‘by registered or certified mail requesting a return receipt signed by addressee only.’”[34] Rule 54.20(c) states that “‘[t]he notice specified in Rule 54.15’ shall be proved by an affidavit of compliance filed by the Director in the court where the action is pending. The affidavit must be attached to the papers to which it relates and include the return registered or certified mail receipt.”[35]
The Bates argued that under Rule 54.18, Section 375.906 provided the proper framework for service of process on authorized foreign insurance companies.[36] Rule 54.18 states that “[w]here a statute contains provisions for a method of service, service may be made pursuant to the provisions of the statute or as provided by these Rules.”[37] Rule 54.18, “by its terms[,] permits statutory service in lieu of service under the rules.”[38]
III. Instant Decision
The Supreme Court of Missouri agreed with the Bates, holding that Section 375.906 “provides both a method of service of process on a foreign insurance company and a provision for notice to the defendant.”[39] The method of service is to the Director, and notice must be made via first-class mail.[40] Regulation “20 CSR 800–2.010 requires the Director to file an affidavit in the trial court proving that the terms of section 375.906 were met [in this case].”[41] Rule 54.18 allows a statute like Section 375.906 to provide the framework of service and all of the requirements of that Section were met.[42]
The Court noted that “Rule 54.20(c) . . . only applies when notice is given under Rule 54.15. Here, notice was given under section 375.906 in accordance with the method of service provided for in that statute.”[43] Pursuant to Section 375.906, the “Director followed that statute and the department of insurance's own regulations when giving notice to Greenwich by first class mail and filing an affidavit of compliance with the trial court. No additional requirement of a return receipt needed to be met.”[44]
IV. Comment
The legal framework proposed by Greenwich seemed to be a hodgepodge of cherry-picked rules. Rule 54.18 clearly states that if a statute contains provisions regarding service of process, that statute provides another means of service in addition to the Missouri Supreme Court Rules. Rule 54.20 only applies to Rule 54.15. Nowhere in the Rules did it state that Rules 54.15 and 54.20 were in addition to whatever rules were set out in the Missouri Revised Statutes.
- Ross Freeman
[3] Id.
[23] Bate v. Greenwich Ins. Co., No. WD76086, 2014 WL 1677670 (Mo. Ct. App. Apr. 29, 2014), reh'g and/or transfer denied (May 27, 2014), transferred to Mo. S. Ct. sub nom. Bate v. Greenwich Ins. Co., 464 S.W.3d 515 (Mo. 2015) (en banc), reh'g denied (Aug. 18, 2015).
[24] Bate v. Greenwich Ins. Co., 464 S.W.3d 515, 517 (Mo. 2015) (en banc) (citing Strong v. Am. States Preferred Ins. Co., 66 S.W.3d 104, 106 (Mo. Ct. App. 2001)).
