IN THE COURT OF COMMON PLEAS OF LANCASTER COUNTY, PENNSYLVANIA CIVIL DIVISION

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1 Beacon SALES ACQUISITION, Inc.; QUALITY ROOFING SUPPLY CO., Inc. v. CAROTENUTO BROWN llc.- No Madenspacher, J Jan. 8, Civil Action- Motion to Open Summary Judgment- Failure to Respond- Issues of Service- Service of Process on Corporations- Court entered Default Judgment against Defendant in August of Defendant argued that Default Judgment was improper because Plaintiff failed to effectuate service of process on an registered agent as required under Pa R. Civ. Pro Service was properly effectuated on Defendant s authorized agent consistent with Pa. R. Civ. Pro. 424 (3) (Agent Authorized in Writing). Accordingly, Defendant s motion was denied. Opinion No January 8, 2015 Copies To: Craig A. Hirneisen, Esquire Carotenuto Brown, LLC IN THE COURT OF COMMON PLEAS OF LANCASTER COUNTY, PENNSYLVANIA CIVIL DIVISION BEACON SALES ACQUISITION, INC. formerly : QUALITY ROOFING SUPPLY CO., INC : Plaintiff, : : No. CI v. : : CAROTENUTO BROWN LLC, : Defendant, : : By Madenspacher, J. Opinion Pending before the Court is Defendant s Motion in Objection to Judgment Against Carotenuto Brown LLC for Failure to Make Appearance. Defendant s motion was filed in 1

2 response to a Default Judgment entered in favor of the Plaintiff, Quality Roofing Supply Company Inc. (hereinafter Quality Roofing) 1 on August 13, Plaintiff s Complaint alleges that in April of 2011, the Defendant, Carotenuto Brown LLC (hereinafter CBL) submitted a credit application to Quality Roofing in an effort to secure a credit account for the purchase of building materials. (Plaintiff s Complaint Pg.2). CBL s credit application was accepted, and a contract for the purchase of goods on credit was signed by both parties. (Plaintiff s Complaint Ex. A). During the period of November 2011 to November 2013 CBL purchased various building materials from Quality Roofing through its credit account. With each purchase Quality Roofing sent CBL an invoice reflecting the outstanding balance, and the terms of future repayment. (Plaintiff s Complaint Ex. B). The Complaint alleges that CBL has failed to pay a significant portion of its outstanding balance within the contracted time-frame. As of March 21, 2014, Plaintiff is seeking payment on the overdue account in the amount of $114, (Plaintiff s Complaint Pg. 3 Par. 16.) In Defendant s pro-se motion to open default judgment CBL argues that Quality Roofing failed comply with Pennsylvania Rules of Civil Procedure in its attempt to serve Defendant with a copy of the original complaint. 2 Specifically, Defendant states that service was not made on an authorized agent as is required under Pa. R. Civ. P. 424 (3). An overview of the facts regarding Plaintiff s attempts to tender service are outlined below. Factual and Procedural Background 1 The Court notes that Beacon Sales Acquisition Inc. and Quality Roofing Supply Co. Inc. have since merged and that Beacon Sales is now the aggrieved party in this action. In an effort to limit confusion, Plaintiff will be referred to as Quality Roofing for purposes of this litigation. 2 Pa. R. Civ. P Service of Process: Corporations and Similar Entities 2

3 On March 26, 2014 Plaintiff filed its original Complaint with the Prothonotary of Lancaster County. After commencement of the action Quality Roofing, through the use of Lancaster and Bucks County Sheriff s Office, attempted to serve the Defendant with a true and correct copy of the Complaint at 730 East Street Road, Warminster, Pa. 3 During the month of April, 2014 Bucks County Sheriffs made four separate attempts to serve CBL at the Warminster address. 4 On each occasion Deputies observed cars parked in Defendant s lot but were unable to locate any agents of CBL for delivery of the Complaint. In the Return of Service letter filed by Bucks County, Deputies noted that on the final attempt a vehicle began to pull into the driveway then fled the area upon seeing the Sheriff s vehicle. (See Plaintiff s Response Ex. A.) After attempts on the Warminster location proved unsuccessful, Plaintiff redirected service efforts to Defendant s office at 401 East Pennsylvania Boulevard, Feasterville, Pa. It should be noted that the Feasterville address is cited in Defendant s filing as CBL s regular place of business, and the only location, CBL argues, where Plaintiff was permitted to tender service. (See Defendant s Motion Pg.2 Par.5). In May of 2014 Bucks County Deputies attempted to serve the Feasterville office on three different occasions. 5 On each attempt Deputies noted that CBL employees could be seen inside the building; yet when Deputies knocked and attempted to effectuate service, employees refused to answer the door, continuing CBL s pattern of evading and eluding Plaintiff s legal action. (See Plaintiff s Response Ex. A) In a final effort to secure service on CBL, Plaintiff sent a true and correct copy of the Complaint to United States Corporation Agents, Inc. (hereinafter USCA). USCA is listed on 3 Pa. R. Civ. P. 400 (d)- Persons to Make Service 4 Plaintiff s Response Ex. A 5 Plaintiff s Response Ex. 3

4 CBL s Certificate of Organization as the Registered Office Address of the company. 6 On July 9, 2014 Tobey McInally, acting on behalf of USCA, accepted service from Lehigh County Deputies as an agent of CBL. There is nothing in Defendant s filing, nor the record, to indicate that USCA failed to forward notice of the Complaint to the Defendant. Defendant s motion argues that USCA could not accept service on behalf of CBL because USCA is not an authorized agent of CBL. Thus, any service upon USCA does not constitute service on the Defendant. Defendant further states that Quality Roofing was well aware of the company s regular place of business, yet failed to serve the Defendant at that address. 7 Accordingly, Defendant maintains that because Quality Roofing failed to serve a copy of the complaint with a known agent of CBL, the Default Judgment entered against it was improper and should be vacated. 8 Legal Analysis For the court to open a default judgment the petitioner [Defendant] must demonstrate: 1) a prompt filing of a petition to open the default judgment; 2) a reasonable excuse or explanation for its failure to file a responsive pleading; and 3) a meritorious defense. Smith v. Morrell Beer Distributors, Inc. 29 A.3d 23, 25 (Pa. Super. 2011). A default judgment shall not be disturbed unless all three criteria have been met. Myers v. Wells Fargo Bank, N.A., 986 A.2d. 171, 176 (Pa. Super. Ct. 2009). In the present case Defendant s prayer for relief relies on the notion that Quality Roofing s failure to tender valid service is a meritorious defense. Thus, at the outset of Defendant s motion we must examine Quality Roofing s actions as they relate to service of the Complaint. If Plaintiff s method of service is in accord with Pennsylvania Rules of Civil East Pennsylvania Boulevard, Feasterville, Pa 8 Pa R. C. Pro

5 Procedure, then Defendant has failed to demonstrate a meritorious defense. Id. If Plaintiff s service if found to be at odds with Pennsylvania s service procedure; the Court will further examine Defendant s motion with an eye towards whether Defendant was reasonable in failing to file a responsive pleading, and whether Defendant s subsequent filing was nonetheless prompt. See Morrell Beer Distributors, Inc., supra. Service of Complaint on Carotenuto Brown LLC. Service of process is the mechanism by which a court obtains jurisdiction over a defendant. Sharp v. Valley Forge Medical Center and Heart Hospital, Inc., 422 Pa. 124, 221 A.2d 185 (1966). In the absence of valid service, a court lacks personal jurisdiction over the party and is powerless to enter judgment against that party. U.K. LaSalle, Inc. v. Lawless, 618 A.2d 447 (1992). Where service of process is defective, the remedy is to set aside the defective service and allow plaintiff the opportunity to perfect service; thereby vesting the court s jurisdiction in the proceeding. Weaver v. Martin, 440 Pa.Super. 185, 655 A.2d 180 (1995). The rules relating to service of process must be strictly followed to ensure a Defendant has been adequately advised of the claims against him. Dubrey v. Izaguirre, 454 Pa.Super. 504, 685 A.2d 1391 (1996). In determining what methods of service are proper, we must first determine what type or class of Defendant the action is against. Understanding the status of the Defendant at the outset guides the Court in determining which methods of service are proper and which methods are improper. Take for example an ordinary claim of negligence between two parties. Plaintiff files his complaint with the local prothonatary and now seeks to serve the defendant. What rule must plaintiff follow to ensure the defendant is properly served? What methods are available to the 5

6 plaintiff to accomplish this goal? Where the defendant is a natural person, as is the case in this hypothetical, plaintiff may serve the defendant in a variety of ways. Those methods include: handing a copy of the complaint directly to the defendant. (Pa. R. Civ. Pro. 404(a)(1)). Handing a copy of the complaint to any adult member of the defendant s residence. (Pa. R. Civ. Pro. 404 (a)(2)(i)). Handing a copy of the complaint to the defendant s residence manager, or to defendant s agent at his place of business. (Pa. R. Civ. Pro. 404(a)(2)(i)(ii)). Each one of these methods amounts to an acceptable alternative to ensure Defendant is provided notice of the action. No one method is preferable to any other in the eyes of the law. Rather, each provides the plaintiff a different avenue to accomplish same the goal. That goal being, to effectuate service of the complaint on an adverse party. Thus, our evaluation of Quality Roofing s service must start by establishing what type of defendant is present in the action. Once the status of the Defendant is known. The court can compare the method of service used by the Plaintiff with the methods available to him under the law. (Pa. R. C. Pro (Service Generally)). In the present action CBL is a Limited Liability Company registered with the Pennsylvania Department of State as a business entity. Thus, Plaintiff in this case is bound by the methods of service enumerated in Pa. R. Civ. Pro. 424 (Service of Process- Corporations and Similar Entities). Rule 424 states three separate avenues which Plaintiff may use to perfect service on a corporation or similar entity. Service of original process upon a corporation or similar entity shall be made by handing a copy to any of the following persons provided the person served is not a plaintiff in the action: (1) An executive officer, partner or trustee of the corporation or similar entity, or (2) The manager, clerk or other person for the time being in charge of any regular place of business or activity of the corporation or similar entity, or 6

7 (3) An agent authorized by the corporation or similar entity in writing to receive service of process for it. (Pa. R. Civ. Pro. 424). It follows then that if Quality Roofing s method of service is consistent with any of those enumerated above. The service of the complaint upon CBL is valid and Defendant s objection is overruled. Recalling the previously stated facts, there were three different methods attempted by Quality Roofing in its effort to serve CBL. Defendant s motion argues that the only location valid service could be achieved was the business address at 401 East Pennsylvania Boulevard, Feasterville, Pa. (Defendant s Motion pg. 2 Par. 6). Defendant s statement is true, service at that business address would be valid under Pa R. Civ. Pro. 424(2). However, it is not the only means available to Plaintiff in attempting to perfect service. (Pa. Civ. R. Pro. 424(1)(3)). CBL and its employees went through great lengths to thwart Deputies attempt to complete service of process at the Feasterville location. CBL ignored Deputies at the front door; ignored notices posted to the office building; and even ignored s sent to by Plaintiff s Counsel urging the Defendant to cooperate with service providers. (Plaintiff s Response Ex. A, B). When repeated attempts proved futile, Plaintiff began examining other avenues through which proper service could be achieved. Evaluation of Quality Roofing s Method of Service Ultimately Plaintiff effectuated service on CBL through delivery of the Complaint to Defendant s commercially registered office provider in Lehigh County. The rules governing the operation of an LLC require that each business entity wishing to attain limited liability status in Pennsylvania have and continuously maintain in this Commonwealth a registered office which may, but need not, be the same as its place of business. 15 Pa. C.S This requirement can 7

8 be met in one of two ways. A corporation may list their place of ordinary business, or instead may choose to retain a commercial registered office provider to accept service on behalf of the company. see 15 Pa. C.S and 15 Pa. C.S The decision by an entity to list a commercial registered office provider has its benefits and its repercussions. Using a registered office provides companies the benefit of enjoying limited liability without the need to establish a brick and mortar workplace in Pennsylvania. However, by choosing to establish a registered office provider under 109, the company provides that entity with the authority to act as its agent and accept service of process on the company s behalf. CBL in its filing of the certificate of organization had two options. 9 One, was to list the Pennsylvania Boulevard address as its primary place of business. The other was to follow the provisions of 109, and list a commercial registered office along with a County of venue. 15 Pa. C.S. 109(a). Defendant chose the latter, listing United States Corporation Agents, Inc. as its registered office address. Whether that decision was made due to mere oversight, or a failure to change boilerplate terms of the filing is of no concern to this Court. (See Defendant s Motion Pg. 2 Par. 3). What is important is that USCA was, and is currently, the registered office of CBL. When USCA accepted service of the original complaint, they did so under the authority of CBL s certificate of incorporation. Defendant s motion is a request to let the game of hide-andseek continue. A request to continue avoiding the reality of this action, and increase the financial cost to both parties. Such a request is not supported by the facts, nor the law. Quality Roofing s service through USCA as an agent of CBL was in full compliance with Pa. R. Civ. Pro. 424 (3). As such the Defendant has failed to demonstrate a meritorious defense warranting the opening of 9 Pa. C.S

9 Default Judgment. Defendant s motion is therefore overruled, and the Default Judgment rendered in favor of the Plaintiff is hereby affirmed. Issues of Standing Presented by Plaintiff s Response: In Plaintiff s response to Defendant s Motion, Quality Roofing notes that the filing on behalf of CBL was done so through the pro-se appearance of CBL s President and Owner, Mary Carotenuto. Plaintiff argues that under Pennsylvania law, a corporate entity may appear in court only through an attorney-at-law admitted to practice before the court. Walacavage v. Excell 200, Inc., 480 A.2d 281, 285 (Pa. Super. 1984). Plaintiff further presents that Mary Carotenuto is not a licensed Pennsylvania Attorney, and therefore, not permitted to represent the legal interests of CBL. 10 The Court recognizes Plaintiff s argument is valid, and that Defendant s filing could properly be dismissed without consideration of the merits. See Selig v. Zoning Hearing Bd. of N. Whitehall Twp., No. 180 C.D. 2014, 2014 WL , at *1 (Pa. Commw. Ct. 2014), reconsideration denied (Sept. 3, 2014). Even still, given the circumstances of the litigation, the Court felt it prudent to address the merit, and illuminate the legal reasoning supporting its decision. That does not dissuade this Court however from informing the Defendant of the longstanding rule in this Commonwealth that only those admitted-at-law may represent a corporate entity in legal proceedings before the court. This rule holds true even where the corporation has only one individual shareholder. Walacavage v. Excell at 285, (citing Shamey v. Hickey, 433 A.2d 1111, 1113 (D.C. App.1981))

10 The justification for this rule is a sound one, a corporation has been described historically as a creature of legal fiction. 11 While this creature is in essence its own separate entity, all actions performed by it are done through the work of its individual agents. Id. It is therefore incumbent upon the judiciary to ensure that any agent representing the legal interests of a corporation be one who is an officer of the court, subject to the control and authority of the court. Selig v. Zoning Hearing Bd. of N. Whitehall Twp., No. 180 C.D. 2014, 2014 WL Accordingly, the Defendant is instructed that any future filings made on behalf of Carotenuto Brown LLC. are to be drafted and submitted by an Attorney admitted to practice law in the Commonwealth of Pennsylvania. With that and for all the reasons stated above, Defendant s Motion in Objection citing improper service is OVERRULED, and the Default Judgment entered in favor of Plaintiff on August 13, 2014 is hereby AFFIRMED. ORDER 11 Petrina v. Allied Glove Corp., 46 A.3d 795, 799 (Pa. Super2012). 10

11 AND NOW, this 8th Day of January 2015, the Defendant s Motion in Objection of Judgment is OVERRULED. Default Judgment entered in favor of Plaintiff is hereby AFFIRMED. Defendant is further ordered that any future motions on behalf of Carotenuto Brown LLC be filed by Counsel admitted-at-law to the Bar of the Commonwealth of Pennsylvania. BY THE COURT: JOSEPH C. MADENSPACHER, PRESIDENT JUDGE ATTEST: CC: Craig A. Hirneisen, Esquire Carotenuto Brown, LLC 11