PS 102 – Chapter 4 – Article 6 – Due Diligence – Wells Fargo v Ngy
SUMMARY
Unpublished Opinion
Court of Appeals for the State of Washington Division One
67240-1-1
Wells Fargo Bank vs Theary Ngy
Facts
In June 2000, Theary Ngy financed her purchase of a used BMW automobile with Wells Fargo. She listed on the loan paperwork as her address her brother’s address in Federal Way.
By 2002, Ngy had moved out of her brother’s house. She worked only part-time and could no longer afford her monthly loan payments. She contacted Wells Fargo, which arranged to repossess the vehicle. The bank sent a tow truck to pick the car up from the address Ngy provided, an apartment in SeaTac, Washington, where she was living.
After the car sold at auction for less than the outstanding loan balance, Wells Fargo filed a lawsuit against Ngy for the deficiency. It hired Advantage Process & Investigators to serve the complaint. Investigator Terry Pappa unsuccessfully tried to locate Ngy.
Ultimately, his employee, Dawn Baldwin, left two copies of the summons and complaint with Ngy’s brother at his Federal Way address. Baldwin also mailed two copies of the documents to Ngy at her brother’s address. Ngy never responded, and the court entered a default judgment against her.
When a garnishment was served on Ngy’s bank account she appealed arguing improper service of process. The trial court denied the motion to quash the writ. Ngy appealed and the Court of Appeals reversed the trial court’s decision.
Specific Issues
Must a defendant be properly served with a summons and complaint in order for the court to have jurisdiction over that defendant? Yes
Must a plaintiff exercise due diligence to locate and serve a defendant before using an alternative method of service. Yes
Reasoning
Under RCW 4.28.080(16), the plaintiff accomplishes service on a person by personally delivering a summons to him or her or by leaving a copy of the summons at his or her usual abode with some person of suitable age and discretion then resident therein. Under RCW 4.28.080(17), if the plaintiff acts with “reasonable diligence” but the defendant for some reason cannot be personally served, mail service may be effected “by leaving a copy at his or her usual mailing address with a person of suitable age and discretion who is a resident, proprietor, or agent thereof, and by thereafter mailing a copy by first-class mail, postage prepaid, to the person to be served at his or her usual mailing address.”
Here, the trial court found that proper abode service did not occur. Thus, the court’s finding of personal jurisdiction depended on the statute’s service by mail provision, making the relevant question whether the trial court erred in determining that service by mail was proper.
The defendant argued that service under 4.28.080(16) was not valid for two reasons.
- Wells Fargo did not exercise reasonable diligence in trying to serve her personally.
- Wells Fargo did not mail the summons and complaint to her “usual mailing address.”
Reasonable diligence requires that the plaintiff make “honest and reasonable efforts to locate the defendant.” While this does not mean that a plaintiff must employ every possible means of contact, he or she must follow up on any information possessed that might reasonably assist in determining the defendant’s whereabouts.
In a similar case, Martin v Meier, the plaintiff sued for damages related to an automobile accident. The alternative service in this case was upheld by the Supreme Court. However, the Supreme Court had noted, “In addition, if plaintiff has information available pertaining to defendant’s whereabouts other than that contained in the accident report, plaintiff must make reasonable efforts to investigate based on that information as well.”
Here, Wells Fargo repossessed Ngy’s car at an address she provided to it. When Wells Fargo, acting through Pappa, later sued Ngy, it made no effort to serve her at the address she had last provided to the bank, the one where it repossessed the car.
Thus, Wells Fargo failed to investigate an address for Ngy in its possession when it commenced its lawsuit. This address was the last known address Wells Fargo had for her. This failure defeats the contention that Wells Fargo acted with reasonable diligence.
The record reflects that Poppa:
- Performed a postal trace and went to the address listed and spoke to the resident (Vanna).
- Recorded the license plate numbers on the vehicles outside that house and traced them back to another relative.
- Followed up at the second address and determined Ngy did not reside there.
- Had statements from Bank of America showing Ngy’s address as her brother Vanna’s residence.
- Significantly, did not investigate the SeaTac address for Ngy and offers no reason why his significant efforts to locate Ngy did not include any investigation of the obvious – that Ngy might be found at the last address she had provided Wells Fargo.
While the plaintiff correctly noted that the law does not require a plaintiff to exhaust every avenue for locating a defendant before resorting to mail service, this does not negate a plaintiff’s clear obligation to investigate known information pertaining to the defendant’s location.
Ruling
Because Wells Fargo, through its agents, did not act with reasonable diligence, service under RCW 4.28.080(16) was improper, and the trial court lacked jurisdiction to enter the default judgment against Ngy.
The Court of Appeals reversed the trial court’s decision and instructed the trial court to quash the garnishment and vacate the default judgment
C4PSE Comment
Based on the information available in the decision it appears the process server conducted reasonable diligence in attempting to complete the service but failed to do the obvious, which was to attempt at the address supplied by the defendant when she allowed her car to be repossessed. However, based on the information available, it is quite possible the server’s client did not provide him with that address.
Good diligence requires access to information and thoughtfulness in applying that information to the real world. In this case we don’t know exactly what information was provided to the process server or what search procedures were conducted. We do know there was a vital piece of information which was not acted upon.
Process servers are often involved in conducting diligence for their clients. It doesn’t matter if it is a collection case or a personal injury case, a process servers efforts are often vital in situations where the service is completed in some alternative manner. There are several things which should be kept in mind.
- There are times when a client will ask a process server to conduct a service in a manner which is not in accordance with statutory and/or case law. Such requests need to be well documented in order to avoid liability issues.
- Time and money can influence the decision making process resulting in a service being done prematurely.
- Clients often have information in their files which is not initially given with the service instructions. Good communications can help make this information available.
- Most important – Do not overlook the obvious.
This is a rough diagram of a typical courtroom in the state of Washington. Courtrooms vary a great deal from city to city and county to county but they all have the same basic structure.
