Opinion
No. 36727-1-II.
November 12, 2008.
Appeal from a judgment of the Superior Court for Mason County, No. 07-2-00042-2, James B. Sawyer II, J., entered August 22, 2007.
Reversed and remanded by unpublished opinion per Hunt, J., concurred in by Van Deren, C.J., and Quinn-Brintnall, J.
UNPUBLISHED OPINION.
Leanna Shipp appeals the superior court's dismissal of her wrongful termination lawsuit against Mason General Hospital Foundation and Treasures Thrift Store. The trial court ruled that it lacked personal jurisdiction over the Foundation because Shipp's attempted service of process was invalid under RCW 4.28.080(9). Shipp argues that the superior court erred in (1) granting the Foundation's motion to dismiss on the basis of improper service of process; (2) denying Shipp's motion to vacate the judgment dismissing her lawsuit; and (3) denying Shipp's motion for a continuance. Holding that the Foundation received valid service of process under RCW 4.28.080(9), we reverse and remand.
FACTS I. Wrongful Termination
Mason General Hospital Foundation operates as a non-profit corporation in the State of Washington. The Foundation includes Treasures Thrift Store ("Treasures") as one of the hospital's fund-raising activities and lists Treasures as an "also known as" name on its corporate registration materials filed with the Secretary of State.
Leanna Shipp worked at Treasures as a full-time employee from January 2001 until her termination on January 24, 2004. Her duties included manual labor, such as carrying boxes up-and-down stairs, moving furniture, delivering furniture to customers' homes, and collecting donated merchandise.
On several occasions, between 2001 and 2003, Shipp informed the Foundation's managers that she suffered from work-related wrist pain. On January 16, 2003, Shipp met with a Treasures supervisor to discuss her injuries and the possibility of filing of a worker's compensation claim. Shortly thereafter, a medical specialist diagnosed Shipp with nerve injury in both hands and completed paperwork for her worker's compensation claim. On January 19, Shipp contacted her supervisor to discuss her worker's compensation application.
Several days later, on January 24, the Foundation terminated Shipp from her position at Treasures.
Neither the record on appeal nor the parties' briefs state a reason for Shipp's termination.
II. Procedure
On January 19, 2007, Shipp sued the Foundation, seeking damages for wrongful termination of employment, outrageous conduct, and back pay.
A. Background
The Foundation's "Application to Register as a Charitable Solicitation," kept on file at the Secretary of State's office, (1) lists Joan Hayes as one of the "officers or persons accepting responsibility for the organization"; (2) also lists Foundation President Peg Stock and Vice President Laurie Buhl in the same category as Hayes; (3) lists Leigh Bacharach as the organization's "individual with expenditure authority" and includes her contact information; and (4) also names Bacharach as the contact person for the Foundation's Trust Directory. In addition, the Foundation's bylaws refer to Bacharach as the "Chief Development Officer." And various executive meeting minutes include Bacharach's reports and recommendations.
According to Bacharach, the Foundation's staff knew that Shipp had initiated a lawsuit before Bacharach received service at the Foundation's office. For example, the Foundation's Executive Committee minutes from March 1, 2007, included an "Update on the Leanna Shipp lawsuit," which stated in part: "A new lawsuit has been filed; the Foundation has not yet been served with papers." As Bacharach later testified, the Foundation's employees expected to hear about the lawsuit, (1) "Because we were waiting [to be served]. They were waiting for it," Clerk's Papers (CP) at 136; (2) she and the Foundation's president, Peg Stock, had gone together to the courthouse to make photocopies of Shipp's summons and complaint before she (Bacharach) received service of Shipp's summons and complaint at the Foundation office; and (3) Bacharach's supervisors had directed anyone who received service to report to the Foundation's management.
In Bacharach's deposition, she testified, "They just said, `Has anyone got served,' and everyone went, `No,' and they said, `Well, if anyone gets served let us know.'" CP at 137.
B. Service of Process
Shipp hired process server Les Kandel to serve a copy of the summons and complaint on the Foundation. On April 6, 2007, Kandel arrived at the Foundation and asked for Joan Hayes. When staff members told Kandel that Hayes was absent from the office that day, Kandel then asked to speak to the office manager. In response, Leigh Bacharach stood up, identified herself to Kandel by stating, "I'm the manager of this office," CP at 136, signed for the summons and complaint, and notified her supervisors "right away" about having received these documents. CP at 136.
C. Motion to Dismiss
The Foundation moved to dismiss Shipp's lawsuit, claiming that Bacharach was not authorized to accept service of process on its behalf. Shipp moved for a continuance, claiming that the Foundation had failed to respond to her discovery request to depose the Foundation's president, Peg Stock. The Foundation subsequently filed declarations from Bacharach and Stock, asserting that Bacharach did not serve as a manager or an officer and that she had only limited authority to expend funds and to speak for the Foundation. On August 22, 2007, Shipp moved unsuccessfully to compel Stock's deposition.
The lower court denied Shipp's motion for a continuance and granted the Foundation's motion to dismiss. Shipp then moved to vacate the judgment of dismissal, but the court denied this motion.
Shipp appeals the dismissal of her lawsuit against the Foundation.
ANALYSIS
Shipp argues that the lower court erred in granting the Foundation's motion to dismiss for lack of personal jurisdiction based on invalid service of process. She contends that the Foundation received valid service of process when Bacharach received her (Shipp's) complaint and summons on behalf of the Foundation under the following circumstances: (1) Bacharach represented to the process server that she was authorized to accept documents on behalf of the Foundation's registered agent, Joan Hayes, who was not present; (2) Bacharach also represented herself to the process server as "the manager of this office" when Kandel arrived with the documents; and (3) after accepting service, Bacharach immediately notified the Foundation's officers, who had been expecting such service.
The Foundation counters that the lower court properly granted its motion to dismiss because Bacharach was not authorized to receive service on the Foundation's behalf. In support of this argument, the Foundation claims that Bacharach (1) exercised only "limited oversight" in spending; (2) participated in meetings only to fulfill her duties to the hospital; and (3) worked under the designation of "staff," which does not confer agency status.
We agree with Shipp.
I. Standard of Review
A lower court's ruling on personal jurisdiction is a question of law, which we review de novo when the underlying facts are undisputed. Precision Lab. Plastics, Inc., v. Micro Test, Inc., 96 Wn. App. 721, 725, 981 P.2d 454 (1999) (citing Lewis v. Bours, 119 Wn.2d 667, 669, 835 P.2d 221 (1992)). When the lower court decides questions of personal jurisdiction based solely on affidavits and discovery, only a prima facie showing of jurisdiction is required. Precision Lab., 96 Wn. App. at 725 (citing MBM Fisheries, Inc. v. Bollinger Mach. Shop Shipyard, Inc., 60 Wn. App. 414, 418, 804 P.2d 627 (1991)).
II. Erroneous Dismissal Based on Service of Process
To be valid, service of process must comply with statutory requirements. Thayer v. Edmonds, 8 Wn. App. 36, 40, 503 P.2d 1110 (1972), review denied, 82 Wn.2d 1001 (1973). Under Washington law, actual notice alone does not establish valid service of process. Haberman v. Wash. Pub. Power Supply Sys., 109 Wn.2d 107, 177, 744 P.2d 1032 (1987). Nonetheless, defendants have a duty not to evade service and to accept validly tendered service. Gross v. Sunding, 139 Wn. App. 54, 64, 161 P.3d 380 (2007) (citing Thayer, 8 Wn. App. at 41)). A. Statutory Requirements: Service on "Managing Agent"
RCW 4.28.080(9) provides the following requirements for service of process on a corporation:
If the suit be against a company or corporation other than those designated in the preceding subdivisions of this section, to the president or other head of the company or corporation, the registered agent, secretary, cashier or managing agent thereof or to the secretary, stenographer or office assistant of the president or other head of the company or corporation, registered agent, secretary, cashier or managing agent.
Shipp argues that RCW 4.28.080(9) authorizes Bacharach to be served as a manager of the Foundation or as an "office assistant" to the registered agent, Joan Hayes. As Bacharach repeatedly stated in her deposition, although she served as the office manager for the Foundation, she did not act as "an assistant to" Joan Hayes. But this distinction about whether Bacharach acted as Hayes' assistant is immaterial because RCW 4.28.080(9) expressly authorizes service of process to be made on a corporation's "managing agent," and the record shows that Bacharach performed this role for the Foundation.
Bacharach's role at the Foundation falls squarely into this "managing agent" category, examined under Johanson v. United Truck Lines, 62 Wn.2d 437, 383 P.2d 512 (1963). Although Bacharach may not have served as the Foundation's registered agent, nor exercised express authority to receive service of process on the Foundation's behalf, she qualified as one of the Foundation's "managing agents" because she played a "substantial part" in the management of office affairs, as we explain below. See Johanson, 62 Wn.2d at 440.
B. Johanson
In Johanson, the Washington State Supreme Court held that a "managing agent" under RCW 4.28.080(9) can be defined as "one who `must have some substantial part in the management of its affairs generally or in a particular district or locality. . . .'" Johanson, 62 Wn. 2d at 440. There the issue was whether Trotter, a temporary manager of a corporation's small branch, could be considered as a "managing agent," authorized to receive service of process for the corporation under RCW 4.28.080(9). The Supreme Court held that Trotter qualified as a "managing agent" under RCW 4.28.080(9) because he (1) participated substantially in the branch's management; (2) exercised the authority to hire and to fire most of the employees at his branch; (3) had previously received service of process at the branch; and (4) had never denied his authority to accept service of process, especially when the registered agent was not present and able to receive service of process. Johanson, 62 Wn. 2d at 440.
Like Trotter, (1) Bacharach served as the Foundation's "office manager," took part in office affairs as the corporation's Chief Executive Officer, and had authority to sign checks, to issue reports, and to participate in executive meetings; (2) although the Foundation argues that Bacharach did not make hiring and firing decisions, the record shows that Bacharach participated in hiring discussions and made hiring recommendations? see, for example, the Foundation's January 11, 2007 Executive Committee minutes, which state: "Leigh [Bacharach] would like to hire someone to file twice a month for the Development Office," CP at 77; (3) although Bacharach had not previously received service of process at the Foundation office, she had previously collected Shipp's summons and complaint when she accompanied Stock to the courthouse to obtain these documents; (4) Bacharach not only failed to deny that she had authority to accept service of process on the Foundation's behalf, but also expressly told Kandel that she could accept service, which she did. See Johanson, 62 Wn. 2d at 440 (Trotter was a "managing agent" for the purposes of RCW 4.28.080 because, among other things, Trotter never denied his authority to be served).
Furthermore, Bacharach's managerial position appears to have been more permanent than Trotter's temporary branch manager position.
The Foundation argues that Bacharach was not a "managing agent" as defined in Johanson, because she did not have hiring and firing authority. This is incorrect. Nowhere in Johanson does the Court propose that the managing agent's status should be determined by his/her hiring and firing authority. Johanson, 62 Wn.2d 437. Instead, the Court highlighted the managing agent's role of overseeing office affairs, treating hiring/firing as one of many factors to assess when determining whether management authority exists. Johanson, 62 Wn. 2d at 440-42.
See also Sunding, 139 Wn. App. at 64 (noting that defendants have a duty not to evade service).
When Kandel entered the Foundation office, the person designated to receive legal process, Hayes, was absent. Telling Kandel that Hayes was absent, Bacharach offered to sign for the summons and complaint; she told him she would take the papers in Hayes' place as the "manager of this office," and that she would notify the Foundation "right away" about receiving legal process. True to her word, after accepting these documents, Bacharach immediately notified the Foundation, which was already aware of Shipp's lawsuit, was expecting service of process, and had previously notified and instructed its employees about what to do if they were served. CP at 136-37.
Bacharach already knew about Shipp's lawsuit before receiving the summons and complaint from Kandel. In her deposition, Bacharach explained that she had previously gone with the Foundation's president, Peg Stock, to retrieve the summons and complaint from the clerk's office.
Bacharach's deposition contains this information; Peg Stock's declaration does not address the trip that she and Bacharach made to the clerk's office, nor does it mention the Foundation's advisement and instruction to employees about Shipp's lawsuit.
By advising its employees to be on the lookout for legal process and to report service immediately to management, the Foundation implicitly authorized its employees to receive service of process on its behalf. Furthermore, the Foundation's president, Peg Stock, specifically took Bacharach with her to obtain Shipp's summons and complaint from the court clerk's office, further evincing the Foundation's intent to make Bacharach a recipient of legal process for this lawsuit. In short, Bacharach retained apparent, if not direct, authority to receive service of process on the Foundation's behalf.
The extent of Bacharach's managerial duties and her participation in executive matters falls under Johanson's definition of "managing agent" because she clearly played a "substantial part" in the management of [the Foundation's] affairs. Johanson, 62 Wn. 2d at 440. For these reasons, we hold that Bacharach qualified as a "managing agent" under RCW 4.28.080(9) and thereby received valid service of process on the Foundation's behalf.
Accordingly, we reverse the superior court's dismissal of Shipp's action for insufficient service of process and remand to the superior court for further proceedings.
Because we reverse the superior court's dismissal of Shipp's action, we do not address her remaining arguments.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
QUINN-BRINTNALL, J., VAN DEREN, C.J., concur.