Root, Harry H., III

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University of Florida Levin College of Law

Florida Law Review Volume 18 Issue 1 Article 9 June 1965 Civil Procedure: Service of Process on the Foreign Corporation Harry H. Root III Follow this and additional works at: https://scholarship.law.ufl.edu/flr  Part of the Law Commons Recommended Citation Harry H. Root III, Civil Procedure: Service of Process on the Foreign Corporation, 18 Fla. L. Rev. 145 (1965). Available at: https://scholarship.law.ufl.edu/flr/vol18/iss1/9 This Article is brought to you for free and open access by UF Law Scholarship Repository. It has been accepted for inclusion in Florida Law Review by an authorized editor of UF Law Scholarship Repository. For more information, please contact kaleita@law.ufl.edu. LEGISLATIONCIVIL PROCEDURE: SERVICE OF PROCESS ON THEFOREIGN CORPORATIONSection 47.16 of the Florida Statutes, commonly known as the"Long-Arm" statute,' gives Florida courts jurisdiction over foreigncorporations2 engaging in a business or business venture in the state.3This section was passed in 1951 to take advantage of InternationalShoe Co. v. Washington4 which extended the reach of state jurisdic-tion to nonresidents, natural and corporate, having certain "mini-mum contracts" with the forum state. The statute deems such corpo-rations to have appointed the secretary of state of Florida as itsagent to receive process, and prescribes that service shall be made bymailing the process to the secretary of state, "provided that if aforeign corporation has a resident agent in the state, service of pro-cess shall be had upon such resident agent as now provided by stat-ute."5 The actual serving of process under the statute should be amere mechanical task, but because the statute fails to define "resi-dent agent" and therefore fails to specify the circumstances underwhich service shall not be made on the secretary of state, servingprocess becomes an involved, confusing undertaking.Since the confusion stems from the failure of section 47.16 todefine "resident agent," the plaintiff must look elsewhere in thestatutes for a definition of the term. Chapter 47 of the FloridaStatutes contains four provisions describing agents of foreign corpo-rations6 upon whom service may be made. Sections 47.171 and1. "Long-Arm" is a term of uncertain origin generally used to describestatutes expanding state jurisdiction over nonresidents. See Thode, In Personamjurisdiction; Article 2031b, the Texas "Long-Arm" Jurisdiction Statute; and theAppearance to Challenge Jurisdiction in Texas and Elsewhere, 42 TEXAs L. REv.279, 304 (1964).2. FLA. STAT. §47.16 (1963) also applies to nonresident individuals andpartnerships, but the service of process problems discussed in this comment arelimited to foreign corporations.3. FLA. STAT. §47.16 (1963) should not be confused with FIA. STAT. §613.01,which requires foreign corporations to qualify with the secretary of state beforetransacting business in the state. FLA. STAT. ch. 613 deals with the regulationof foreign corporations actively engaged in business in the state and providespenalties and a prohibition against maintaining suit for failure to qualify. FLA.STAT. §47.16 is concerned with permitting suit against less active foreign corpora-tions, including those engaged in a business venture or a "single act." Never-theless, the language of FLA. STAT. §47.16 seems to include both qualified andnonqualified foreign corporations.4. 326 U.S. 310 (1945). For subsequent cases relating to state jurisdiction seeHanson v. Denkla, 357 U.S. 235 (1958); McGee v. International Life Ins. Co., 355U.S. 220 (1957).5. FRA. STAT. §47.16 (1) (1963).6. These four provisions apply to both domestic and foreign corporations.1965]1Root: Civil Procedure: Service of Process on the Foreign CorporationPublished by UF Law Scholarship Repository, 1965UNIVERSITY OF FLORIDA LAW REVIEW47.17 (5) refer to agents transacting business in the state;7 section47.17 (4) concerns business agents, resident in the state; and section47.35 requires corporations qualified under section 613.01 to transactbusiness in the state to file with the secretary of state the name of anagent to receive process.8 None of these provisions specifically usethe term "resident agent," but two other sections,9 unrelated toservice of process, do use the term to refer to the designated agentrequired by section 47.35. This strongly indicates that "residentagent" in section 47.16 was intended to mean an agent specificallydesignated by the corporation pursuant to section 47.35. If thisinterpretation is correct, the plaintiff's dilemma is solved. He mayeasily determine which course to take by inquiring of the secretaryof state whether the defendant corporation has qualified to transactbusiness in the state under section 613.01 and has designated an agentpursuant to section 47.35. If the corporation has qualified and hassuch an agent registered with the secretary of state, the plaintiff mustserve the agent; if not, he must serve the secretary of state.The United States Fifth Circuit Court of Appeals, however, ap-parently chose a different interpretation in Deiray Beach AviationCorp. v. Mooney Aircraft, Inc.,'0 a leading case involving section47.16. In that case the defendant was not qualified to transact businessunder section 613.01. In allowing service on the defendant's dis-tributor as its "resident agent,"" the court seemed to construe "resi-dent agent" to mean "agent transacting business in the state" (section47.17 (5)) or "business agent, resident in the state" (section 47.17 (4)) .Under this interpretation, the plaintiff must ascertain whether therelationship between an agent and the corporation is such as tocreate in the agent a "legal or moral duty ... to report and properlyhandle a summons."' 2 Since such a determination may require aknowledge of the defendant's internal organization, the plaintiff mustoften await a court decision before the sufficiency of such service canbe ascertained. The burden is further increased by the mutually ex-7. The similarity of FLA. STAT. §§47.17 and .171 (5) (1963) may be attributedto legislative history. FLA. STAT. §47.17 was repealed in 1957 and replaced byFLA. STAT. §47.171 (Fla. Laws 1957, ch. 57-97), but when FLA. STAT. §47.17 wasreenacted in 1959 (Fla. Laws 1959, ch. 59-46) FLA. STAT. §47.171 remained on thebooks.8. Compare MODEL Bus. CORP. Acr. ANN. §§106, 108 (1960). For the dis-tinction between "transacting business" under FLA. STAT. §§613.01 and 47.16(1963) see note 3 supra.9. FLA. STAT. §47.50 (1963) (resignation of resident agents); FLA. STAT. §608.38(1963) (office and resident agent).10. 332 F.2d 135 (5th Cir.), cert. denied, 379 U.S. 915 (1964).11. Id. at 142.12. Mason v. Mason Prod. Co., 67 So. 2d 762, 763 (Fla. 1953).[Vol. XVIII2Florida Law Review, Vol. 18, Iss. 1 [1965], Art. 9https://scholarship.law.ufl.edu/flr/vol18/iss1/9LEGISLATIONclusive language of section 47.16, which implies that service can bemade on the secretary of state only if the defendant has no residentagent in the state.13 Therefore, under the court's interpretation of"resident agent," an incorrect choice by the plaintiff between servingthe secretary of state or one of the various agents of the defendantcorporation may lead to invalid service, causing delay and incon-venience.'14 Thus, under the Delray Beach rationale, service of pro-cess under the Long-Arm Statute becomes more than the mere me-chanical task contemplated by the statute.In passing the Long-Arm Statute to expand and facilitate amen-ability of service over nonresidents, the legislature certainly did notintend to afford the defendant a procedural loophole and to make theactual service of process more difficult for the plaintiff. In addition,since Florida's statute is frequently construed in other jurisdictions,where adequacy of service is questioned in actions to enforce Floridajudgments,' 5 clear language is essential to insure an interpretationthat comports with the purposes of the statute. Under the presentstatute, with its unclear language and resulting confusion, these goalsare not attained. Therefore, certain legislative changes are needed toclarify the method of service of process and give greater effect tothe Long-Arm Statute.Any statute involving service of process against foreign corpora-tions must satisfy the constitutional due process requirement of no-tice.16 As a guideline, the United States Supreme Court has decreedthat the statutory method of service must be "reasonably calculatedto give [the defendant] actual notice of the proceedings and an op-portunity to be heard."'17 The statute must also be able to with-stand the strict construction traditionally given such substitutedservice statutes.'8 Even when the defendant receives actual notice,the service will be quashed if the statute does not reasonably guaranteeactual notice's or if the statute is not strictly followed.20 It is essential,therefore, that the statute prescribe clearly and fully the manner ofgiving such notice, removing all ambiguities that may subject theservice to adverse court interpretation.13. Lake Erie Chem. Co. v. Stinson, 162 So. 2d 545 (2d D.C.A. Fla. 1964)(dictum); Note, 10 U. FLA. L. REv. 345, 353 (1957).14. See Note, 10 U. FLA. L. Rxv. 345, 353 (1957).15. E.g., Delray Beach Aviation Corp. v. Mooney Aircraft, Inc., 332 F.2d 135(5th Cir.), cert. denied, 379 U.S. 915 (1964); Berkman v. Ann Lewis Shops, Inc.,246 F.2d 44 (2d Cir. 1957).16. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950).17. Milliken v. Meyer, 311 U.S. 457, 463 (1940).18. See Wuchter v. Pizzutti, 276 U.S. 13 (1928).19. Ibid.20. Bond v. Golden, 273 F.2d 265 (10th Cir. 1959).1965]3Root: Civil Procedure: Service of Process on the Foreign CorporationPublished by UF Law Scholarship Repository, 1965UNIVERSITY OF FLORIDA LAW REVIEWFlorida employs the most far-reaching and easily administeredmethod of substituted service 21 that has been upheld by the courts.22The Florida method involves service of process upon the secretary ofstate followed by notice to the defendant by registered mail. Thisstatutory scheme should be retained, for it provides a means of proofthat actual notice was received by requiring a return receipt signedby the defendant.23 Furthermore, it is designed to reach practicallyall defendants, since under the Florida statutes, if the defendant can-not be reached by mail he can be given notice through personal de-livery by a state officer of either Florida or the state in which the de-fendant is located.2 4 The present basic method seems to permit asbroad a method of service as is practicable under the constitutionalstandards. The problem lies in the alternative methods provided bythe present statute.Although substituted service on the secretary of state could be theexclusive method, it would be an unnecessary inconvenience in caseswhere the defendant foreign corporation has qualified to transactbusiness in the state under section 613.01 and has named an agentto receive process. Under the present statute, foreign corporationswith resident agents are excluded from substituted service. But since"resident agent" has been interpreted to include a variety of agents,great confusion has arisen regarding when a corporation has a residentagent on whom service should be made or when substituted serviceis the correct method. To correct this, the term "resident agent"should be clearly defined as an agent officially designated by thecorporation to receive process under section 47.35, thereby eliminatingconfusion regarding when service should be made on someone otherthan the secretary of state. Since the corporation specifically con-sents to service upon such a designated agent, this method clearlymeets the requirements of due process.2 5 Once "resident agent" isclearly defined, the statute would provide the plaintiff a means ofservice free of ambiguity.It is not suggested that service of process under the Long-ArmStatute be strictly limited to service upon the secretary of state or aresident agent, for it may sometimes be more convenient for the plain-tiff to serve an officer, director, or agent of a foreign corporation asprovided by section 47.17. The provisions of section 47.17 are madecumulative to all existing laws by subsection 47.17 (7). Thus serviceupon officers, directors, or agents of a foreign corporation can be made21. FLA. STAT. §47.30 (1963).22. E.g., McGee v. International Life Ins. Co., 355 U.S. 220 (1957).23. FLA. STAT. §47.30 (1963).24. Ibid.25. See Washington v. Superior Court, 289 U.S. 361 (1933).[N7ol. XVIII4Florida Law Review, Vol. 18, Iss. 1 [1965], Art. 9https://scholarship.law.ufl.edu/flr/vol18/iss1/9LEGISLATIONin addition to the methods provided in section 47.16. Since this isnot made dear in the Long-Arm statute itself, such a cumulativeprovision should be incorporated into section 47.16 to assure thatthe Long-Arm Statute's methods of service will not be interpreted asprecluding service by any other authorized method.2 6 This pro-vision would be solely for the convenience of the plaintiff, who wouldbear the risk of the sufficiency of service under these other methods,and it is presumed that plaintiffs would use this additional methodonly when it would dearly result in sufficient service.Thus, the proposed revision would provide for service on thesecretary of state except in cases in which the defendant has designateda resident agent, supplemented by a provision allowing service byany other method authorized in the statutes. The result of thisamendment would be to (1) free the courts from having to make un-necessary determinations of who is a resident agent; (2) relieve plain-tiffs of the burden of choosing a method that may later be held de-fective; and (3) guarantee that defendants are accorded the full andfair notice required by due process. Until such a plan is adopted,the full reach of Florida's long arm will not be realized.It is therefore recommended that the last two sentences of section47.16 (1) be amended to read as follows by adding the italicizedwords:Service of process shall be in accordance with and in the samemanner as now provided for service of process upon nonresidentsunder the provision of section 47.30. Provided that if a foreigncorporation has in the state a resident agent designated pursuantto section 47.35, service of process shall be had upon such residentagent as now provided by statute. Provided further that nothingcontained herein shall preclude service by any method nowauthorized by statute.27HARRY H. RooT, III26. See Mason v. Mason Prod. Co., 67 So. 2d 762 (Fla. 1953).27. The proposed amendment would render FLA. STAT. §47.171 (1963) super-fluous since a foreign corporation without a resident agent could be served throughthe secretary of state or *by the methods provided in FLA. STAT. §47.17, and adomestic corporation without a resident agent could be served under FLA. STAT.§47.17.1965]5Root: Civil Procedure: Service of Process on the Foreign CorporationPublished by UF Law Scholarship Repository, 1965

Civil Procedure: Service of Process on the Foreign Corporation

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Civil Procedure: Service of Process on the Foreign Corporation

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