Davis v. Urquiza

NO. COA13-1089

NORTH CAROLINA COURT OF APPEALS

Filed: 15 April 2014

DEAVEN GREY DAVIS, DANETTE DAVIS
and DICKIE G. DAVIS,

Plaintiffs,

v. Surry County
No. 12 CVS 817
HERMILO SALAZAR URQUIZA,

Defendant.

Appeal by plaintiffs from order entered 11 March 2013 by

Judge James M. Webb in Surry County Superior Court. Heard in

the Court of Appeals 18 February 2014.

Daggett, Shuler, Koontz, Nauman & Bell, P.L.L.C., by
Michael W. Clark, for plaintiff-appellants.

Willardson & Lipscomb, LLP, by John S. Willardson, for
unnamed defendant-appellee, North Carolina Farm Bureau
Mutual Insurance Company.

STEELMAN, Judge.

Where valid service of process was not made upon an

uninsured motorist carrier within the applicable statute of

limitations period, the trial court did not err in granting the

motion of the uninsured motorist carrier to dismiss for

insufficient process or insufficient service of process.
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I. Factual and Procedural Background

On 15 July 2009, Deaven Grey Davis, then a minor, was a

passenger in a vehicle struck by another vehicle operated by

Hermilo Salazar Urquiza (“defendant”). On 31 May 2012, Deaven

Davis, along with her parents, Danette and Dickie G. Davis

(collectively, “plaintiffs”) filed suit against defendant,

seeking monetary damages for personal injuries resulting from

the collision.

Defendant was an uninsured motorist. Plaintiffs contended

that North Carolina Farm Bureau Mutual Insurance Company (“Farm

Bureau”) provided uninsured motorists’ coverage for the

collision in accordance with N.C. Gen. Stat. § 20-279.21(b)(3).

Defendant was served with a copy of the summons and complaint on

29 July 2012. Plaintiffs also contended that National Grange

Insurance Company (“National Grange”) provided applicable

uninsured motorists’ coverage.

On 5 June 2012, counsel for plaintiffs mailed a copy of the

summons and complaint to Steve Wagoner, a claims adjuster for

Farm Bureau, by certified mail, at Wagoner’s office in

Wilkesboro. These documents were received on 7 June 2012. On 6

July 2012, Farm Bureau filed an answer to plaintiffs’ complaint,

as an unnamed party, specifically asserting the defenses of
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insufficiency of process and insufficiency of service of

process, as well as the statute of limitations. On 27 December

2012, Farm Bureau gave notice to plaintiffs of a hearing on 7

January 2013 concerning its motion to dismiss based upon

insufficiency of process and insufficiency of service of

process. On 31 December 2012, Farm Bureau served the affidavit

of H. Julian Philpott, Jr. This affidavit stated that Steve

Wagoner “was not now, nor has he ever been an officer, director

or managing agent of North Carolina Farm Bureau Mutual Insurance

Company, nor has he ever been a designated process agent for

that company...”

Plaintiffs caused alias and pluries summonses to be issued

by the Clerk of Superior Court of Surry County, directed to

defendant, on 20 July 2012, 25 September 2012, and 10 December

2012. On 2 January 2013, plaintiffs mailed a copy of the

summons and complaint to Wayne Goodwin, Commissioner of

Insurance, by certified mail, in order to serve Farm Bureau in

accordance with the provisions of N.C. Gen. Stat. § 58-16-30.

This was received by the Commissioner of Insurance on 7 January

2013.

On 7 January 2013, Farm Bureau’s motion to dismiss was

heard before the trial court. By order filed 11 March 2013, the
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trial court granted defendant’s motion, and dismissed

plaintiffs’ complaint against Farm Bureau as an unnamed

defendant, with prejudice.

Plaintiffs appeal.

II. Standard of Review

“We review de novo the grant of a motion to dismiss.” Lea

v. Grier, 156 N.C. App. 503, 507, 577 S.E.2d 411, 414 (2003).

Where there is no valid service of process, the court lacks

jurisdiction over a defendant, and a motion to dismiss pursuant

to Rule 12(b) should be granted. Sink v. Easter, 284 N.C. 555,

561, 202 S.E.2d 138, 143 (1974).

III. Service of Process

In their sole argument on appeal, plaintiffs contend that

the trial court erred in dismissing the complaint against Farm

Bureau for insufficient process and/or insufficient service of

process. We disagree.

N.C. Gen. Stat. § 20-279.21(b)(3), concerning uninsured

motorist coverage, provides that:

[T]he insurer shall be bound by a final
judgment taken by the insured against an
uninsured motorist if the insurer has been
served with copy of summons, complaint or
other process in the action against the
uninsured motorist by registered or
certified mail, return receipt requested, or
in any manner provided by law . . . The
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insurer, upon being served as herein
provided, shall be a party to the action
between the insured and the uninsured
motorist though not named in the caption of
the pleadings and may defend the suit in the
name of the uninsured motorist or in its own
name. The insurer, upon being served with
copy of summons, complaint or other
pleading, shall have the time allowed by
statute in which to answer, demur or
otherwise plead (whether the pleading is
verified or not) to the summons, complaint
or other process served upon it. . . . The
failure to post notice to the insurer 60
days in advance of the initiation of suit
shall not be grounds for dismissal of the
action, but shall automatically extend the
time for the filing of an answer or other
pleadings to 60 days after the time of
service of the summons, complaint, or other
process on the insurer.

N.C. Gen. Stat. § 20-279.21(b)(3)(a) (2013). This statute

provides that, in order for an uninsured motorist carrier to be

bound by a proceeding, mere notice is insufficient; the carrier

must be formally served with process. See Liberty Mut. Ins. Co.

v. Pennington, 356 N.C. 571, 576, 573 S.E.2d 118, 122 (2002)

(holding that the statute “unequivocally requires that the UM

carrier be served with a copy of the summons and complaint in

order to be bound by a judgment against the uninsured

motorist.”).
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Under Rule 4(j)(6) of the North Carolina Rules of Civil

Procedure, service of process can be effected upon a

corporation:

a. By delivering a copy of the summons and
of the complaint to an officer, director, or
managing agent of the corporation or by
leaving copies thereof in the office of such
officer, director, or managing agent with
the person who is apparently in charge of
the office.

b. By delivering a copy of the summons and
of the complaint to an agent authorized by
appointment or by law to be served or to
accept service of process or by serving
process upon such agent or the party in a
manner specified by any statute.

c. By mailing a copy of the summons and of
the complaint, registered or certified mail,
return receipt requested, addressed to the
officer, director or agent to be served as
specified in paragraphs a and b.

d. By depositing with a designated
delivery service authorized pursuant to 26
U.S.C. § 7502(f)(2) a copy of the summons
and complaint, addressed to the officer,
director, or agent to be served as specified
in paragraphs a. and b., delivering to the
addressee, and obtaining a delivery receipt.
As used in this sub-subdivision, “delivery
receipt” includes an electronic or facsimile
receipt.

N.C. R. Civ. P. 4(j)(6) (2013). In addition, N.C. Gen. Stat. §

58-16-30 provides that an insurance company can be served by
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serving the North Carolina Commissioner of Insurance. N.C. Gen.

Stat. § 58-16-30 (2013).

We have previously held that statutes concerning service of

process must be strictly complied with, and that even actual

notice, if it does not comply with statutory requirements, does

not give the court jurisdiction over a party. Fulton v. Mickle,

134 N.C. App. 620, 623-24, 518 S.E.2d 518, 520-21 (1999). In

Fulton, we held that service upon a party was defective for two

reasons: first, because it was delivered by regular mail instead

of certified mail; second, because the recipient was not one of

those listed in Rule 4(j)(6) as authorized to receive service.

We hold that this latter basis, the lack of an authorized

recipient, is controlling in the instant case.

“[A] defendant who seeks to rebut the presumption of

regular service generally must present evidence that service of

process failed to accomplish its goal of providing defendant

with notice of the suit. However, once the defendant has pled

the statute of limitations, the burden is on the plaintiff to

show that his cause of action accrued within the limitations

period.” Lawrence v. Sullivan, 192 N.C. App. 608, 621-22, 666

S.E.2d 175, 182-83 (2008) (citations and quotations omitted).

In Lawrence, the plaintiff, seeking to bring an action against
 -8-
Sullivan, served process within the applicable limitations

period by certified mail. The letter was signed for by one

James Holt. The plaintiff voluntarily dismissed the case, and

then refiled it within one year. The defendant, in her

affidavit, stated that she did not reside at the residence where

the certified letter was delivered or receive a copy of the

summons and complaint. The trial court held that the defendant

had rebutted the presumption of valid service within the

limitations period, placing the burden upon the plaintiff to

prove that the action accrued within the limitations period.

The trial court held that the plaintiff failed to do so, and

that defendant was entitled to a dismissal due to insufficient

process or service of process within the applicable limitations

period. We affirmed. Id. at 623, 666 S.E.2d at 183.

In the instant case, plaintiffs mailed a copy of the

summons and complaint to Steve Wagoner, a claims adjuster for

Farm Bureau, by certified mail on 5 June 2012. Plaintiffs’

complaint alleged that the accident took place on 15 July 2009.

The applicable statute of limitations for personal injury in

tort, and for service on a UM carrier, arising out of an

automobile accident is three years. N.C. Gen. Stat. § 1-52(16)

(2013); Thomas v. Washington, 136 N.C. App. 750, 754, 525 S.E.2d
 -9-
839, 842 (2000) (holding that “the three-year tort statute of

limitations, which begins running on the date of an accident,

also applies to the uninsured motorist carrier.”).

The affidavit of H. Julian Philpott, Jr., states that

Wagoner was neither an officer nor director, nor a designated

agent for service of process, for Farm Bureau. This affidavit

rebutted the presumption that service upon Wagoner was

effective. Plaintiff failed to present evidence to demonstrate

effective service within the limitations period. We therefore

hold that plaintiffs’ purported service of process upon Steve

Wagoner was defective.

Plaintiffs contend that this case presents us with “a new

set of facts with no case law directly on point.” This is

simply not correct. Our opinion in Thomas v. Washington is

controlling. In Thomas, the plaintiff had uninsured motorist

coverage, and was in an accident on 31 March 1995; “the three-

year statute of limitations applicable to automobile negligence

actions ran on 31 March 1998.” Thomas, 136 N.C. App. at 751-53,

525 S.E.2d at 841.1 The plaintiff instituted an action within

1
We are puzzled as to why appellee does not directly cite to
Thomas v. Washington in its brief. Rather, its argument is
based upon a recommended decision of a federal magistrate in
Neth. Ins. Co. v. Cockman, 342 F. Supp. 2d 396 (M.D.N.C. 2004),
which references Thomas v. Washington. Appellee cites this
 -10-
the limitations period, and properly served the individual

defendants; however, the uninsured motorist carrier was not

served within the applicable three-year period. Plaintiff

contended that service upon the insurance company was

nonetheless effective, despite being served upon the company’s

registered agent after the expiration of the limitations period.

Plaintiff’s contention was that the limitations period was based

on contract, not on tort, and that the action was kept alive

through alias or pluries summonses. Id. at 753-54, 525 S.E.2d

at 842. We disagreed, holding that the three-year tort statute

of limitations applied, and that alias or pluries summonses only

extend the action upon defendants who are not served, until such

time as service can be made. Id. at 753-55, 525 S.E.2d 842-43.

We further held that:

Our appellate courts have required strict
compliance with the statutes which provide
for service of process on insurance
companies in similar situations. For

decision as if it was authoritative. It is not. With regard to
matters of North Carolina state law, “neither this Court nor our
Supreme Court is ‘bound by the decisions of federal courts,
including the Supreme Court of the United States, although in
our discretion we may conclude that the reasoning of such
decisions is persuasive.’” Libertarian Party of N.C. v. State,
200 N.C. App. 323, 331, 688 S.E.2d 700, 706 (2009) aff'd as
modified, 365 N.C. 41, 707 S.E.2d 199 (2011) (quoting State ex
rel. Martin v. Preston, 325 N.C. 438, 449–50, 385 S.E.2d 473,
479 (1989)). Briefs should cite directly to controlling North
Carolina precedent.
 -11-
example, in Fulton v. Mickle this Court held
that mailing a copy of the summons and
complaint by regular mail to a claims
examiner for the insurer did not comply with
the requirement of Rule 4(j)(6)(c) of the
Rules of Civil Procedure that a copy of the
summons and complaint be mailed by
“registered or certified mail, return
receipt requested, addressed to the officer,
director or agent to be served....”

Id. at 755, 525 S.E.2d at 843.

Where a plaintiff seeks to bind an uninsured motorist

carrier to the result in a case, the carrier must be served by

the traditional means of service, within the limitations period.

In the instant case, plaintiffs’ service upon a claims adjuster

was insufficient. As we held in Thomas, plaintiffs’ alias and

pluries summonses issued after defendant was served have no

legal effect. Id. at 755, 525 S.E.2d at 843. Plaintiffs’

service upon the Commissioner of Insurance outside of the

limitations period mandated dismissal.

The trial court did not err in granting Farm Bureau’s

motion to dismiss for insufficiency of process or insufficiency

of service of process.

This argument is without merit.

AFFIRMED.

Judges McGEE and ERVIN concur.