Opinion
23-cv-2342 (LJL)
07-23-2024
MT. HAWLEY INSURANCE CO., Plaintiff, v. BUCKEYE REAL ESTATE INVESTMENTS LLC, Defendant.
OPINION AND ORDER
LEWIS J. LIMAN, United States District Judge
Defendant Buckeye Real Estate Investments, LLC (“Defendant” or “Buckeye”) moves pursuant to Federal Rules of Civil Procedure 55(c) and 60(b), Dkt. No. 31, for an order vacating the default judgment entered by this Court against Buckeye on January 29, 2024, Dkt. No. 30. For the following reasons, the motion is granted.
BACKGROUND
Plaintiff is an Illinois corporation with its principal place of business in Illinois. Dkt. No. 12 ¶ 2. Defendant is a Florida limited liability company with its principal place of business in Florida. Id. ¶ 3. Defendant's single member is a natural person who is a resident of Florida. Id. ¶ 4. At all relevant times, Plaintiff insured Defendant under a Commercial and General Liability Policy (No. MGL0190338) (the “Policy”), which was effective from August 9, 2019 to August 9, 2020, and Defendant leased premises located at 21759 State Road 7, Boca Raton, Florida (the “Premises”) to Hobby Lobby Stores, Inc. (“Hobby Lobby”). Id. ¶¶ 1, 8.
On April 5, 2022, a complaint and demand for jury trial was filed in the Circuit Court for the Fifteenth Judicial Circuit in and for Palm Beach County, Florida by Barbara Bush (“Bush”) against Defendant and Hobby Lobby (the “Bush Action”). Id. ¶ 9; Dkt. No. 12-2. On June 6, 2022, a first amended complaint was filed in the Bush Action. Dkt. No. 12 ¶ 10; Dkt. No. 12-3. In the Bush Action, Bush alleges that while she was legally on the premises owned by Defendant and operated by Hobby Lobby, she tripped and fell on a high curb in front of the store, suffering serious injury. Dkt. No. 12 ¶¶ 11-12; Dkt. No. 12-3 ¶¶ 10-21. Bush alleges that she “suffered permanent and catastrophic bodily injury, aggravation/activation of a pre-existing condition, disability, significant scarring and disfigurement, past and future pain and suffering, past and future mental anguish, past and future loss of enjoyment of life, past and future inconvenience, [and] past and future medical bills and attendant care.” Dkt. No. 12-3 ¶¶ 15, 21. In response, Hobby Lobby filed an answer which includes cross-claims against Defendant for contractual and common law indemnification in connection with Bush's claims. Dkt. No. 12 ¶ 14; Dkt. No. 124.
At the time of Bush's alleged injury, the Policy issued by Plaintiff to Defendant was in effect. Dkt. No. 12 ¶ 15. Subject to its terms and conditions, the Policy includes coverage for bodily injury liability subject to a $1 million per-occurrence limit. Id.; Dkt. No. 12-5. The Policy is also subject to a Tenants and Contractors - Conditions of Coverage endorsement (the “Tenants and Contractors Endorsement”). Dkt. No. 12 ¶ 16.
In its Amended Complaint in this action, Plaintiff sought a declaratory judgment that it has no duty to defend or indemnify Defendant in connection with the Bush Action because the injury in the Bush Action arose directly or indirectly from Hobby Lobby's occupation, use, or maintenance of the Premises and Defendant failed to satisfy the Tenants and Contractors Endorsement, which are conditions precedent to coverage under the Policy. Dkt. No. 12 ¶¶ 1, 17-22.
Plaintiff, as Defendant's insurer, is currently defending Defendant in the Bush Action under a reservation of rights. Dkt. No. 34 at 2. Defendant has retained Ruben E. Socarras as outside counsel in the Bush Action and he regularly corresponds with defense counsel Plaintiff assigned to defend Defendant in the Bush Action, Robert O'Malley. Id.
PROCEDURAL HISTORY
Plaintiff filed its complaint in this action on March 20, 2023, Dkt. No. 1, and an electronic summons was issued on March 21, 2023, Dkt. No. 5. On August 28, 2023, the Court held an initial pretrial conference, at which no counsel appeared on behalf of Defendant. The Court directed Plaintiff to file a certificate of service by September 1, 2023, and to file an amended complaint establishing that the Court has diversity jurisdiction of this matter. Aug. 28, 2023 Minute Entry.
For technological reasons, Plaintiff's complaint did not include its exhibits when it was originally filed on ECF. Dkt. No. 6. On April 3, 2024, the Court gave Plaintiff leave to refile its complaint with exhibits, Dkt. No. 7, and, on April 4, 2023, Plaintiff did so, Dkt. No. 8.
On August 31, 2023, Plaintiff filed an Amended Complaint, which pleaded diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). Dkt. No. 12. That same day, Plaintiff also filed an Affirmation of Service, reflecting that service of its initial complaint had been made on Defendant on May 16, 2023, by first-class and certified mail, pursuant to Florida Statutes Section 48.062(4)(b). Dkt. No. 14. On September 20, 2023, Plaintiff filed another Affirmation of Service that its Amended Complaint was served on Defendant on September 20, 2023, by first-class and certified United States mail pursuant to Florida Statutes Section 48.062(4)(b) and that a United States Postal Service receipt acknowledgement had been received from the Office of the Florida Department of State. Dkt. No. 18. On October 5, 2023, Plaintiff filed a Supplemental Affirmation of Service and Affirmation of Compliance. Dkt. No. 19. In that Affirmation of Service, Plaintiff recited that: on September 8, 2023, it had attempted personal service of the Amended Complaint on the registered agent of Defendant but that it was unsuccessful because neither the registered agent nor any other authorized person was on site; on September 12, 2023, Plaintiff attempted service on authorized person Julie A. Dhonau, but service could not be completed because the listed address was a post office box and attempts to locate an alternative address were unsuccessful; and that after those efforts, service was made through the Florida Department of State pursuant to Florida Statutes Section 48.062(4)(b). Id.
The Court held a conference on October 13, 2023, at which no counsel for Defendant appeared. Oct. 13, 2023 Minute Entry. The Court scheduled a hearing on Plaintiff's motion for a default judgment for November 13, 2023. Id. On October 12, 2023, Plaintiff requested a Clerk's Certificate of Default, Dkt. Nos. 20-21, and on October 25, 2023, the Clerk of Court issued a Certificate of Default, Dkt. No. 25. On October 30, 2023, Plaintiff filed a motion for a default judgment along with a declaration in support of the motion and a proposed judgment. Dkt. Nos. 26-28. Plaintiff served the motion on Defendant that same day by overnight delivery to the address listed for Defendant's registered agent for service. Dkt. No. 29. The Court held a hearing on the motion for a default judgment on November 13, 2023, which was attended by counsel for Plaintiff but not by anyone for Defendant. Nov. 13, 2023 Minute Entry.
On January 29, 2024, this Court granted Plaintiff's motion for default judgment. Dkt. No. 30. On February 14, 2024, Defendant filed a motion to vacate the default judgment, along with accompanying memorandum of law and declarations. Dkt. Nos. 31-34. On February 28, 2024, Plaintiff requested an extension to oppose Defendant's motion because the parties were engaged in settlement discussions. See Dkt. No. 36. On April 4, 2024, the Court granted Plaintiff's request for a second extension to oppose the motion to vacate the default judgment. Plaintiff filed its opposition to the motion to vacate the default judgment on May 3, 2024. Dkt. No. 43. Defendant filed a reply memorandum of law in further support of its motion to vacate the default judgment along with an accompanying declaration on May 10, 2024. Dkt. Nos. 4445.
LEGAL STANDARD
A motion to vacate a default judgment is “addressed to the sound discretion” of the district court. New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005) (quoting State St. Bank & Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158, 166 (2d Cir. 2004)); SEC v. McNulty, 137 F.3d 732, 738 (2d Cir. 1998). “[A] Rule 60(b) motion to vacate a judgment may be granted on the basis of ‘excusable neglect,' Fed.R.Civ.P. 60(b)(1), or for ‘any other reason justifying relief from the operation of the judgment,' Fed.R.Civ.P. 60(b)(6); see also Fed.R.Civ.P. 55(c) (providing that default judgments may be set aside in accordance with Rule 60(b)).” Gunnells v. Teutul, 469 F.Supp.3d 100, 102 (S.D.N.Y. 2020). In determining whether a default judgment should be set aside pursuant to Rule 60(b), the court considers: “(1) whether the default was willful; (2) whether the defendant demonstrates the existence of a meritorious defense, and (3) whether, and to what extent, vacating the default will cause the non-defaulting party prejudice.” Green, 420 F.3d at 108 (quoting State St., 374 F.3d at 166-67); see also Henry v. Oluwole, --- F. 4th ----, 2024 WL 3403958, at *4 (2d Cir. July 15, 2024); Gucci Am., Inc. v. Gold Ctr. Jewelry, 158 F.3d 631, 634 (2d Cir. 1998). These factors are applied “more rigorously in the case of a default judgment” rather than in a challenge to the entry of a default, “because the concepts of finality and litigation repose are more deeply implicated in the [default-judgment] action.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). But even still, the Second Circuit has “expressed a strong ‘preference for resolving disputes on the merits.'” Green, 420 F.3d at 104 (quoting Powerserve Int'l, Inc. v. Lavi, 239 F.3d 508, 514 (2d Cir. 2001)). Default judgments are “generally disfavored” and “doubts should be resolved in favor of the defaulting party.” Costello v. Hai Sun Chinese Rest. NY, Inc., 2012 WL 974994, at *3 (E.D.N.Y. Mar. 21, 2012) (citing Enron, 10 F.3d at 96-95); see also Oluwole, 2024 WL 3403958, at *5.
Notwithstanding the above, under Rule 60(b)(4), a court must vacate a default judgment that is void. I.L.G.W.U. Nat. Ret. Fund v. Meredith Grey, Inc., 986 F.Supp. 816, 819 (S.D.N.Y. 1997). “A judgment obtained in the absence of in personam jurisdiction is void, and a court must vacate such a judgment.” Id. (citing Jaffe & Asher v. Van Brunt, 158 F.R.D. 278, 279 (S.D.N.Y.1994), and Kao Hwa Shipping Co., S.A. v. China Steel Corp., 816 F.Supp. 910, 913 (S.D.N.Y.1993)). A court does not have personal jurisdiction over a defendant absent proper service. See Buon v. Spindler, 65 F.4th 64, 73 (2d Cir. 2023); see also Voice Tele Servs., Inc. v. Zee Telecoms Ltd., 338 F.R.D. 200, 202 (S.D.N.Y. 2021) (“A default judgment obtained by way of defective service is void ab initio and must be set aside as a matter of law.”) (internal quotations omitted); Copelco Cap., Inc. v. Gen. Consul of Bol., 940 F.Supp. 93, 94 (S.D.N.Y. 1996); Trs. of Local 531 Pension Fund v. Am. Indus. Gases, Inc., 708 F.Supp.2d 272, 277 (E.D.N.Y. 2010). Thus, if service of process was improper, the Court must grant a motion to vacate a default judgment.
DISCUSSION
In granting the default judgment, this Court determined that Buckeye had been properly served under Florida Statutes Section 48.062. Dkt. No. 30 at 10-13. It is undisputed that Plaintiff served Defendant via the Florida Secretary of State. Dkt. No. 34 at 1, 4. However, Defendant argues that service via the Florida Secretary of State was not proper because resort to such service is allowable under Florida law only after the serving party exercises “reasonable diligence” to complete service via other means described in Florida Statues Section 48.062 and that Plaintiff, in light of certain leads reasonably available to it that Defendant describes in its motion, failed to exercise such due diligence before resorting to service via the Florida Secretary of State. Dkt. No. 34 at 12. Plaintiff argues that its efforts complied with the letter of Florida law with respect to service and diligence and that Buckeye is to blame for Mt. Hawley's inability to effectuate service by other means because Buckeye failed to provide appropriate service information to the Secretary of State. Dkt. No. 43 at 7-8. Plaintiff also suggests that listing a post office box for Nancy Dhonau was willful because prior to 2020, Buckeye listed a residential address for Nancy Dhonau in its annual reports and Defendant provides no explanation for why Nancy Dhonau's address was changed to a post office box in 2020. Id. at 5-6. Plaintiff also argues that under the three discretionary factors, the Court should not exercise its discretion to vacate the default judgment. Id. at 2-12.
In its reply brief and accompanying declaration, Defendant states that the address was changed in 2020 because Nancy Dhonau moved at that time to Atlanta, Georgia. Dkt. No. 45 at 2; Dkt. No. 44 at ¶¶ 5-7.
If service was not proper under Florida law, the Court must vacate the default judgment pursuant to Rule 60(b)(4). Thus, the Court discusses that issue first and, because the Court finds that service was not proper under Florida law, the Court does not reach the discretionary factors under Rule 60(b).
I. Service Under Florida Statutes Section 48.062
The parties do not appear to dispute that Florida's law regarding service of process is applicable here. Florida's statute for service on limited liability companies, Fla. Stat. § 48.062, was recently amended with changes effective on January 2, 2023. See Fla. Stat. § 48.062; see also McGlynn v. Miami Diario LLC, 2023 WL 4251553, at *5 (S.D. Fla. June 29, 2023). The complaint in this case was filed on March 20, 2023, after the new version of the statute went into effect. However, there is case law that the proper reference date for which version of the service statute the court should follow is not when the service was attempted or when the complaint was filed, but when the cause of action accrued. McGlynn, 2023 WL 4251553 at *5-6. The cause of action in this case is for a declaratory judgment that Mt. Hawley has no duty to defend or indemnify Buckeye with respect to an underlying lawsuit. Dkt. No. 12 at 1. The underlying lawsuit was filed in 2022 and therefore the cause of action arose prior to the 2023 amendments to Florida's service of process statutes and the Court should look to the prior versions.
Federal Rule of Civil Procedure 4(h)(1) provides that a corporation must be served in a judicial district of the United States in a manner prescribed by Rule 4(e)(1) for serving an individual or by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and-if the agent is one authorized by statute and the statute so requires-by also mailing a copy of each to defendant. Fed.R.Civ.P. 4(h)(1). In turn, Federal Rule of Civil Procedure 4(e)(1) provides that an individual may be served following state law in the state where the district court is located or where service is made. Fed.R.Civ.P. 4(e)(1).
See, e.g., Fla. PACE Funding Agency v. Pinellas County, 385 So.3d 631, 639-40 (Fla. Dist. Ct. App. 2024) (“A cause of action for declaratory relief accrues when the following conditions have been met: There is a bona fide, actual, present practical need for the declaration; that the declaration should deal with a present, ascertained or ascertainable state of facts or present controversy as to a state of facts; that some immunity, power, privilege or right of the complaining party is dependent upon the facts or the law applicable to the facts; that there is some person or persons who have, or reasonably may have an actual, present, adverse and antagonistic interest in the subject matter, either in fact or law; that the antagonistic and adverse interests are all before the court by proper process or class representation and that the relief sought is not merely giving of legal advice by the courts or the answer to questions propounded from curiosity.”) (internal citations omitted). Once the Bush Action was filed and cross-claims asserted against Defendant, there was clearly a bona fide dispute about whether Plaintiff would indemnify Defendant, as evidenced by Plaintiff defending Defendant in the Bush Action under a reservation of rights. Dkt. No. 34 at 2; cf. Grissom v. Com. Union Ins. Co., 610 So.2d 1299, 1306-07 (Fla. Dist. Ct. App. 1992) (duty to defend is determined by allegations in the complaint against the insured).
However, the Court notes that it would reach the same ultimate conclusion under either version of the statutes.
The 2019 version of Florida Statutes Section 48.062, stated that process on an LLC “may be served on the registered agent designated by the [LLC] under chapter 605.” The statute went on to say that if service could not be made on the registered agent of the LLC because of a failure to comply with chapter 605 or because the LLC has no registered agent or the registered agent cannot with reasonable diligence be served, then process can be served:
(a) On a member of a member-managed limited liability company; (b) On a manager of a manager-managed limited liability company; or (c) If a member or manager is not available during regular business hours to accept service on behalf of the limited liability company, he, she, or it may designate an employee of the limited liability company to accept such service. After one attempt to serve a member, manager, or designated employee has been made, process may be served on the person in charge of the limited liability company during regular business hours.Fla. Stat. § 48.062(2) (2019). The statute then provides that “[i]f after reasonable diligence, service of process cannot be completed under subsection (1) or subsection (2), service of process may be effected by service upon the Secretary of State as agent of the limited liability company as provided for in s. 48.181.” Id. at § 48.062(3). Service on the Secretary of State is referred to as “substituted” service of process. See Tuscan River Est., LLC v. U.S. Bank Tr. Nat'l Ass'n as Tr. of Greene St. Funding Tr., 351 So.3d 1233, 1237 (Fla. Dist. Ct. App. 2022). Thus, the statute laid out a hierarchy of methods of service such that a plaintiff may not resort to service via the Secretary of State under subsection (3) unless it first attempted to comply with subsections (1) and (2), both of which require reasonable diligence. See McGlynn, 2023 WL 4251553, at *6.
In determining whether a plaintiff has exercised “reasonable diligence,” Florida courts have considered “whether the plaintiff has employed knowledge at its command, made diligent inquiry, and exerted an honest and conscientious effort appropriate to the circumstances to acquire the information necessary to effectuate service of process. See Tuscan River, 351 So.3d at 1237-38. Under that standard, substituted service was not proper where a bank plaintiff attempting to serve papers related to a mortgage foreclosure first attempted service at the address listed by the LLC on its deed, then attempted to serve an individual it believed was authorized to accept service on behalf of the LLC but who turned out to no longer be associated with the LLC, and then resorted to substituted service, because the LLC had informed the bank of the identity of its managing member and that managing member's address was listed under his signature on the mortgage document attached to the complaint but the bank made no attempt to effectuate service on him. Id. at 1238. In that context, the plaintiff had failed to follow an “obvious lead.” Id. (citing Dubois v. Butler ex rel. Butler, 901 So.2d 1029, 1030 (Fla. Dist. Ct. App. 2005)); see also Wiggam v. Bamford, 562 So.2d 389, 391 (Fla. Dist. Ct. App. 1990) (failing to make inquiry of defendant's attorney did not satisfy due diligence standard); Torelli v. Travelers Indem. Co., 495 So.2d 837, 838 (Fla. Dist. Ct. App. 1986) (failure to inquire of defendant's known attorney as to defendant's whereabouts was failure to exercise due diligence and thus substituted service was improper).
Other courts have agreed that a plaintiff does not exercise the requisite diligence when she fails to follow obvious leads, even if following those leads requires the plaintiff to go beyond the address the defendant has listed or to make additional inquiries. See Florio v. Success Agency LLC, 2017 WL 8897130, at *5 (S.D. Fla. Oct. 30, 2017) (noting that “[i]n interpreting what constitutes reasonable diligence, courts have required plaintiffs to not merely rely on an address that a defendant lists for its registered agent, member, or manager; instead plaintiffs must demonstrate that they took the initiative to locate alternate addresses at which to serve those individuals by using obvious and available resources”) (internal quotations and citations omitted); Amerilife Grp., LLC v. Amlife Financial, LLC, 2017 WL 8948391, at *2 (M.D. Fla. Dec. 22, 2017) (reasonable diligence not exercised where although plaintiff alleged that registered agent information and address provided to Florida Division of Corporations were inaccurate and invalid, plaintiff failed to show what attempts were made to locate a correct address); Conlon v. U.S. Bank, N.A., 2017 WL 1907220, at *4 (M.D. Fla. April 13, 2017) (noting that a plaintiff's failure to update the address of its registered agent did not negate a defendant's obligation to use initiative to locate him); Coastal Cap. Venture, LLC v. Integrity Staffing Sols., 153 So.3d 283, 285 (Fla. Dist. Ct. App. 2014) (reasonable diligence not exercised and substituted service improper where repeated attempts were made to serve individuals at their home but president of defendant's assignor knew individuals were out of town on extended business trip and failed to ask them where they could be served); Knabb v. Morris, 492 So.2d 839, 841 (Fla. Dist. Ct. App. 1986) (plaintiff did not use due diligence and thus substituted service improper where private investigator hired to locate defendant did not follow obvious lead of contacting occupants who were present in the car that had been in the vehicle accident at issue and whose addresses were listed on accident report); cf. Delancy v. Tobias, 26 So.3d 77, 79-80 (Fla. Dist. Ct. App. 2010) (requisite diligence demonstrated so as to allow substituted service where plaintiff attempted to serve defendant 22 times at his admittedly correct address but was denied access to the front door because the residence was gated).
Here, Buckeye's registered agent was Nancy J. Dhonau and the address provided for her was the Hobby Lobby store. See Dkt. No. 43 at 2. Plaintiff was unable to effectuate service at that address because there were no Buckeye corporate representatives at the Hobby Lobby store. Id. The only other address for Nancy Dhonau listed with the Secretary of State was a post office box. Id. at 3. Plaintiff instructed its process server to make a second attempt at the Hobby Lobby store and instructed the process server to attempt to locate an actual address for Nancy Dhonau. However, neither effort was successful. Id. The process server also attempted to search for an address for Julie Dhonau who is listed with the Florida Secretary of State as an authorized person for Buckeye but was unsuccessful and the only address listed for Julie Dhonau with the Secretary of State was also a post office box. Id. Plaintiff then attempted to serve Nancy Dhonau again at the Hobby Lobby store and attempted to serve Julie Dhonau at the post office box and attempted again to find an alternate address for Julie Dhonau. Id. After filing its Amended Complaint, Mt. Hawley instructed its process server to attempt to serve Nancy Dhonau at the Hobby Lobby store a third time and to attempt to serve Julie Dhonau at the post office box a second time. Id. at 3-4. Plaintiff argues that it was “constrained to repeat the exercise” despite knowing that it “would not be effective” because Buckeye did not provide a bona fide address for service. Id. at 4. Plaintiff states that it again asked the process server to attempt to locate an alternative address for Julie Dhonau but it was unsuccessful. Id. At that point, Mt. Hawley resorted to service through the Secretary of State. Id. Plaintiff then states that it mailed the papers to the registered agent's address with a cover letter advising about the service via the Secretary of State. Id.
Mt. Hawley contends that Buckeye's failure to have proper addresses on file is “willful” or the equivalent. Dkt. No. 43 at 6-7. However, as described above, this is not the correct standard. The Court does not reach the discretionary factors, of which willfulness is one, if service was not first proper under Florida law. Thus, the requisite question as laid out above is not whether Buckeye's failures were “willful” but whether Mt. Hawley exercised the due diligence required by Florida Statutes Section 48.062 before resorting to service via the Florida Secretary of State.
Buckeye essentially alleges that Mt. Hawley failed to follow obvious leads. Dkt. No. 34 at 16. For example, Buckeye notes that Mt. Hawley could have emailed Julie Dhonau since it had been in regular contact with her regarding the ongoing, underlying Bush Action, or Mt. Hawley could have emailed Buckeye's counsel, Socarras, who had been in regular contact with Mt. Hawley regarding the Bush Action, or Mt. Hawley could have emailed Buckeye's counsel, O'Malley, whom Mt. Hawley had assigned to Buckeye in the Bush Action and with whom Mt. Hawley had communicated. Id. Buckeye alleges, and Mt. Hawley does not dispute, that Mt. Hawley never attempted to contact Socarras or O'Malley regarding this action or how it could serve Buckeye, or for an address for Julie or Nancy Dhonau despite the fact that this action was filed over a year after the Bush Action commenced. Id. at 3. Buckeye notes in particular that Mt. Hawley attended a mediation with Julie Dhonau in the related Florida action on January 23, 2024 (i.e., while Mt. Hawley's motion for default judgment was pending in this Court). Id. at 4. Buckeye also notes that Mt. Hawley's counsel in fact sent this Court's default judgment to Defendant's outside counsel in the Bush Action, Socarras, on February 6, 2024, which was how Defendant learned of the action, therefore demonstrating that Mt. Hawley was aware of Socarras's role as Buckeye's counsel and could have simply asked him how to contact Julie or Nancy Dhonau at any prior time. Id. at 4, 17. Defendant also states that it was able to locate the addresses of Julie Dhonau and Nancy Dhonau “within minutes” on the Palm Beach County Property Appraiser website. Id. at 16 n.4.
The Court finds that Plaintiff failed to properly serve Defendant because Plaintiff resorted to service via the Florida Secretary of State without first exercising the reasonable diligence required by Florida Statutes Section 48.062 to serve Buckeye's registered agent or another person publicly listed in the latest annual report.
Buckeye also argues that Plaintiff failed to comply with Florida Statutes Section 48.161 by failing to email Buckeye notice of service and a copy of process, failing to file return receipts showing that delivery of the notice of service and a copy of process was made to Buckeye by certified mail, and failing to file a supplemental affirmation of service containing facts to justify substituted service and showing that it exercised due diligence. Dkt. No. 34 at 17-18. Although Florida Statutes Section 48.161 is not referenced in Section 48.062, compliance with Section 48.161 is required because while Section 48.062 describes when service via the Secretary of State is permitted, it is Section 48.161 that describes the method of effective service. See Lombard v. Another S. Holding Co., LLC, 2019 WL 4712458, at *2 (M.D. Fla. Sept. 11, 2019), report and recommendation adopted 2019 WL 4694535 (M.D. Fla. Sept. 26, 2019). Plaintiff filed a supplemental affidavit of service that stated service and a copy of process were mailed with “return receipt requested” and that service was made via the Secretary of State “after due diligence.” Plaintiff did not file return receipts with the Court. Florida courts have found that service statutes must be strictly complied with, including the return receipt provision. See, e.g., Kirchik v. Cantrust Real Est. Enter., LLC, 2021 WL 7451917, at *3 (M.D. Fla. Dec. 6, 2021); Cash Invs., LLC v. Court Report, LLC, 2021 WL 1948676, at *2 (S.D. Fla. Apr. 27, 2021), report and recommendation adopted 2021 WL 1945859 (S.D. Fla. May 14, 2021). The requirement for a return receipt is inapplicable only where the defendant is “actively refusing or rejecting the substituted service of process,” see Baxter v. Miscavige, 2023 WL 1993969, at *9 (M.D. Fla. Feb. 14, 2023); see also Green Emerald Homes, LLC v. PNC Bank, N.A., 207 So.3d 1027, 1028 (Fla. Dist. Ct. App. 2017), but Plaintiff has not alleged that Plaintiff was evading service. Thus, Plaintiff also failed to properly serve Defendants under Florida Statutes Section 48.161.
In particular, under Florida law, Plaintiff failed to exercise reasonable diligence when it failed to contact any of Defendant's counsel (including the one appointed by Plaintiff) in the Bush Action where Plaintiff was defending Defendant related to the same accident underlying this case. Although Plaintiff argues that its process server could not locate an address for Julie Dhonau, Plaintiff itself was in regular email contact with Dhonau and failed to ask her for an address. Dkt. No. 34 at 3-4.
Mt. Hawley also argues that the claim representative assigned to the related Florida action is separate from the internal Mt. Hawley representative overseeing this action and there was no obligation for them to communicate. Dkt. No. 43 at 8-9. But this argument is unavailing. Knowledge acquired by an agent acting within the scope of its agency is imputed to the principal. See, e.g., Davies v. Owens-Ill. Inc., 632 So.2d 1065, 1066 (Fla. Dist. Ct. App. 1994). In other words, the fact that Mt. Hawley assigned two different employees to this action and the Bush action cannot excuse its failure to exercise reasonable diligence. Mt. Hawley as the principal had the requisite information at its disposal and failed to follow obvious leads to serve Buckeye. Thus, the default judgment is void and the Court must accordingly vacate the default judgment.
CONCLUSION
The motion to vacate the default judgment is GRANTED.
The Clerk of Court is respectfully directed to close Dkt. No. 31.
SO ORDERED.