Case Law Update: Georgia Court Of Appeals Addresses Issues With Substituted Service Upon The Secretary Of State

In a recent decision by the Georgia Court of Appeals, Hooks v. McCondichie Properties 1, LP,, 330 Ga. App. 583, 767 S.E.2d 517 (2015), the Court was given an opportunity to address some important questions relating to service of process.  In particular, the Court resolved competing arguments concerning the proper application and procedure for substituted service upon the Secretary State of Georgia.

In Hooks, the plaintiff, a police officer, was injured while responding to a burglary call at property owned by McCondichie.  He brought suit against McCondichie on December 12, 2013.  Subsequently, service was attempted on two occasions at the address provided by the Secretary of State for McCondichie’s registered agent.  However, at this address was what appeared to be a “virtual office.”  The office contained only a receptionist who could not accept service and who made no effort to contact the registered agent.  Later, the process server learned that the registered agent’s principal place of business was located at another address.  Moreover, the standard contract for tenancy at the registered office warned clients not to use the location as a registered office.

As a result, the Plaintiff made substituted service upon McCondichie through the Secretary of State and forwarded a copy of the Complaint to the registered agent at the virtual office through a commercial courier service.  Not surprisingly, the package sent to the virtual office was returned to the Plaintiff’s attorney.  After McCondichie failed to answer the Complaint, the trial court granted Plaintiff a default judgment.  McCondichie then moved to set aside and vacate the default judgment pursuant to OCGA § 9-11-60(d)(1).  Although the trial court found that Plaintiff exercised reasonable diligence in attempting service, the default was opened because the trial court was persuaded that Plaintiff failed to comply with OCGA § 14-9-104 (g) because forwarded process via “statutory overnight delivery,” as defined in OCGA § 9-10-12(b)(3) requires a signed receipt from the addressee or an agent of the addressee.  No such signed receipt was obtained by the Plaintiff.

On appeal, McCondichie first argued that the record evidence did not support a finding that McCondichie failed to maintain a registered office, thereby permitting substituted service on the Secretary of State. The Court of Appeals disagreed.  In so doing, the Court noted that the Code requires that a registered office be “continuously maintained.”  Further, the address of the business office of the registered agent should be the same as the address of the registered office.  The Court of Appeals held that substituted service was proper because the office was not continuously maintained and because the registered agent’s principal place of business was elsewhere.

Having resolved that service upon the Secretary of State was proper, the Court of Appeals was left to examine whether the Plaintiff properly executed such service.  The trial court found that Plaintiff did not properly execute service because it did not also properly forward process by “statutory overnight delivery,” which required, according to the trial court, a receipt for the delivery signed by the addressee or an agent of the addressee.  The Court of Appeals disagreed with the trial court and determined that OCGA § 14-9-104 (g) only requires the plaintiff to certify that suit papers have been forwarded by registered mail or statutory overnight delivery.  It does not require “notice”, proven by a signed receipt, upon a defendant.  Indeed, such would entirely defeat the purpose of substituted service.  The Court of Appeals held that OCGA § 9-10-12(b), the statute upon which the Defendant relied, was inapplicable and inconsistent with OCGA § 14-9-104 (g).

In summary, the Hooks case stands for the proposition that substituted service on the Secretary of State is available where the registered agent does not “continuously maintain” an office at the registered address.  This can be established if it is shown that the registered agent’s principal place of business is elsewhere than at the registered address.  Second, Hooks confirms that a signed receipt of delivery of suit papers is not required to take advantage of substituted service under OCGA § 14-9-104 (g).  Only Plaintiff’s certification that suit papers have been forwarded, rather than confirmation of delivery, is necessary.

Douglas R.  Kendrick