Recent Legislative Changes to Service of Process: A New Ball Game?

Recent Legislative Changes to Service of Process: A New Ball Game?

By Giacomo Bossa, Coral Gables
Florida Bar Journal June 2023 • volume 97, no. 3

Congress

In 2022, the Florida Legislature passed S.B. 1062, which reshaped the procedures for, and methods governing, service of process for actions pending in Florida courts. The legislation, which became effective in substantial part on January 2, 2023, simplifies, clarifies, and modernizes the manner of service of process on business entities. For instance, S.B. 1062 permits service of process by “other means” when traditional methods of service have been unsuccessful, including by email or other electronic means, and provide a more robust method for service of process on persons and businesses in foreign countries. The legislation also allows constructive service of process for absent mothers in paternity actions and for unknown parties-in-possession in eviction actions and revises the procedures for pre-suit notices in medical malpractice actions. All practitioners who litigate in Florida should become familiar with these legislative changes, so that they may benefit from or respond effectively to the new requirements and procedures.

S.B. 1062 stems from an initiative by the Business Law Section of The Florida Bar. In 2018 and 2019, a task force of the section was studying possible amendments to the Florida Business Corporations Act, F.S. Ch. 607. At that time, Ch. 607 and other chapters of the Florida statutes addressing the formation, governance, and operation of different types of business entities each contained comprehensive provisions detailing methods and procedures for service of process on those types of business entities. But these laws duplicated, and sometimes conflicted with, provisions in F.S. Ch. 48, the general statutory regime addressing service of process in Florida courts. These conflicts led to difficulties by practitioners and the courts in interpreting and reconciling these parallel sets of requirements.[1] The Business Law Section decided to create a separate task force to study and propose possible legislative changes to the statutes regarding service of process to address this situation.

Finding no justification for duplicative statutory regimes, the task force proposed to do away with the provisions regarding service of process on limited liability companies, for-profit and not-for-profit corporations, partnerships, limited partnerships, and limited liability partnerships under F.S. Chs. 605, 607, 617, and 620, and to consolidate these provisions within Ch. 48. The substantive provisions relating to service of process in the “entity statutes” would then be replaced by cross-references to the applicable provisions of Ch. 48. In some cases, notably relating to service of process on corporations, the task force concluded that the provisions in Ch. 607 were preferable to those in Ch. 48, so these provisions were moved to Ch. 48 and largely substituted in place of the existing statutory provisions.[2]

Additionally, through its research and deliberations, the task force concluded that in many respects the provisions of Ch. 48 were unduly complex, vague, incomplete, and antiquated. The Bar’s International Law Section also approached the task force with a proposal to revise the provisions for service of process in foreign countries to follow the provisions of Fed. R. Civ. P. 4(f). Later, during the legislative process, the Real Property, Probate, and Trust Law Section, the Family Law Section, and the Florida Justice Association also proposed separate statutory provisions addressing service in paternity actions, evictions, and pre-suit proceedings involving medical malpractice that were included in the legislation.

Service of Process on Specific Types of Business Entities

The task force undertook to revise service of process on general partnerships, limited partnerships, limited liability partnerships, corporations, and limited liability companies. The main goal of the task force here was to make the procedures for service of process more, regardless of the type of business entity, and thereby simplify the procedures for benefit of all constituencies.

The members of the task force agreed that service of process on business entities should generally follow a waterfall-based approach with three layers, summarized as follows: 1) Service on the registered agent is preferred and should occur first; 2) Service on the entities’ representatives should be next; and 3) As a last resort, service on the secretary of state or alternative service including through electronic means could be obtained.

The First Level — The Registered Agent

The task force wanted to foster a good culture of responsible companies and registered agents while simplifying the process and ensuring that bad players would not benefit from roadblocks and procedural traps lurking in the statutory regime. As a result, the task force settled on a basic requirement that only one good-faith attempt to serve the registered agent must be made before the party attempting service can move to the next level of the waterfall. A single good-faith attempt avoids the requirement that the party seeking to secure service of process show “due diligence” in its attempts to serve a representative higher positioned in the waterfall before moving to the next level in the hierarchy, since regardless of his or her position in the hierarchy, personal service on a responsible representative of the entity would still provide actual notice of the lawsuit consistent with due process. At the same time, the task force felt that a party seeking service of process should first attempt to serve the registered agent, where the entity has an active one, since the main responsibility of the registered agent of any entity is to accept process on its behalf and to ensure that the entity is timely and properly notified of a lawsuit.

The only exception to this new requirement that service must first be attempted on the registered agent deals with general partnerships. Under Ch. 620, a general partnership was not required to register with the Florida Department of State or to designate a “registered agent” to accept process but, under former F.S. §48.8105, a general partnership needed to only register with the Department of State and designate an “agent.” This designated agent did not, however, have authority to accept service of process. Instead, the designated agent only had to maintain a list of the names and mailing addresses of all the partners of the partnership and, on request and good cause shown, make the list available at the partnership’s office.[3] In practice, however, if a general partnership elected to have a designated agent, the secretary of state would record the designated agent as a “registered agent” on sunbiz.org. Yet because of the lack of express authority of these designated agents to accept service of process, the validity of service on them by unwary practitioners relying on this information was uncertain at best. The task force’s solution to this dilemma was to propose a statutory amendment, now enacted as F.S. §48.061(1)(b), to provide that, if a general partnership has registered and designated an agent, any process served on that agent is as effective as if served on a general partner. In recognition, however, of the historic nature of a general partnership as a collection of individuals, which traditionally has been served with process by serving one or more general partners, the task force decided not to require service to be first attempted on the designated agent of a general partnership. Any general partnership, whether registered or not, thus can be still served first by serving any of its general partners.[4] Moreover, consistent with the law for service of process on individual partners of the general partnership, the amended statute explicitly provides that, if a party seeking to serve a general partnership chooses to effect service by serving the designated agent, only the assets of the general partnership are available for execution — and not the assets of the general partners — without separate individual service on them.[5]

To clarify the statutory regime, the task force further proposed to amend F.S. §48.091 to expressly apply the requirements for designation of a registered agent and registered office, which had referred only to corporations, to all business entities, except general partnerships, to clarify when employees of registered agents may be served in their places, and to further specifically require registered agents to promptly forward copies of the process and any other papers received in connection with the service to responsible persons in charge of the business entity.[6]

The Second Level — The Representatives

Although the party seeking to serve process need only try to serve the registered agent once, if the party cannot obtain service through that one good-faith attempt on the registered agent, that party can proceed to serve the individuals below who may generally be described as the “representatives” for each type of business entity:

1) General Partnership — partners.

2) Limited partnership — general partners

3) Limited liability partnership — general partners

4) Limited liability companies

a) Managers if manager managed or person listed on latest annual report.

b) Member if member managed or person listed on latest annual report.

5) Corporations

a) Board chair, president, any vice president, secretary, treasurer, or person listed on corporation’s latest annual report.[7]

The statutes then generally allow the party seeking service to personally serve other representatives of the entities if these persons cannot be served with one good-faith attempt.[8] The careful practitioner may have noticed a novelty in the procedures for service on representatives of limited liability companies and corporations under the amended statutes that are sure to make their lives a little easier — the introduction of “person listed on latest annual report” as a person who can be served with process. The task force here attempted to recognize the practicalities often involved in the formation of business entities, where less sophisticated individuals may have registered the entity without listing or properly describing all of the representatives involved in the operation or governance of the entity, and the fact that the secretary of state on sunbiz.org has no power to police what indication or designation third parties use when registering a business entity in Florida.[9] Accordingly, rather than list all the possible categories of representatives of business entities within the hierarchy, the task force decided to include the general descriptive phrase “any person listed publicly…on its latest annual report.”[10]

The Third Level — Substituted Service on the Florida Secretary of State

The Florida statutes historically provided for the alternative of substitute service of process on the Florida secretary of state under F.S. §§48.061 and 48.081 if a party could not through reasonable diligence secure personal service of process on a business entity, if a foreign entity doing business in this state failed to have an active registered agent in this state, or if an individual concealed himself or herself. But the task force believed F.S. §§48.161 and 48.181 were confusing and incomplete. The task force, therefore, undertook a deep rewrite of these statutes to 1) provide specific guidance on when they apply and 2) modernize their application.

First, the task force sought to clarify the relationship between the other statutory provisions relating to personal service of process on business entities and F.S. §§48.161 and 48.181 as well as the interrelationship between the two statutes themselves. Cross references to these sections were first expressly added to the statutory provisions for personal service of process on specific business entities. Then, a subsection was added to the jurisdictional statute, F.S. §48.181, that references F.S. §48.161 as setting forth the procedures and methods of that type of service.

Many revisions to F.S. §48.161 were also included in the legislation. First, in consultation with the Florida secretary of state, subsection (1) of the statute was amended to provide the ability to serve process on the secretary of state through electronic filing as well as personal service, or through certified mail or courier service.

Next, subsection (2) of the statute was amended to specify that it is the responsibility of the party seeking service, rather than the secretary of state, to serve notice on the party to be served that the secretary of state has been served on their behalf and required the notice to be sent by email or other electronic means if those means have been used by the parties recently and regularly to communicate between or among themselves.[11] Amended subsection (2) further clarifies when proof of the service of the notice must be filed with the court; specifically exempting such a requirement if the party to be served refuses to accept delivery of the notice or is concealing itself. Finally, the amended subsection adds specific requirements about the affidavit of due diligence that must be filed with the court, while eliminating any need for the complaint be amended to reflect those facts, a requirement some courts had imposed that the task force felt was duplicative and unnecessary and simply caused delay in the litigation.

Alternative Methods of Service of Process on Business Entities

The legislation also creates an alternative to constructive service of process on the Florida secretary of state when the party seeking to effect personal service of process on a business entity has been unable to do so after due diligence. Over the past 20 years, many legal commentators and scholars have proposed to allow service of process by email or social media.[12] Several other states, including New York, Utah, and Texas, allow service of process by email or other electronic means if ordered by a court,[13] and by order the federal courts have allowed service of process by alternative means on parties located in foreign countries, including by email or other electronic methods.[14]

F.S. §48.102, included in the legislation, closely follows the Texas rule. It allows a party who has been unable through due diligence to secure personal service on a defendant that is a business entity through traditional means to file a motion with the court to allow service “in any other manner that the party seeking to effectuate service shows will be reasonably effective to give the entity on which service is sought to be effectuated actual notice of the suit,” including “electronically by e-mail or other technology.” The task force limited the applicability of the statute to service of process on business entities based on an assumption that business entities were more likely to maintain regular email systems for official or business purposes rather than for casual or social communications. Moreover, the requirement that the court approve service of process in this way only upon a showing that the email or other electronic communication is likely to be received by the opposing party should ensure compliance with due process considerations. A party seeking to secure service likely could satisfy this burden by showing that it had communicated with the opposing party through this method, at least if the communications occurred recently and on more than an isolated occasion. Although the statute does not specially mention service of process through social media, if a party seeking to carry out service in that way can establish reliability, a court could also authorize service in that way. The statute further requires that the service be made by a sheriff, certified process server, or other officer appointed by the court or by an attorney. A separate provision of the statute added at the request of one of the bill’s sponsors during the legislative process also allows a court to authorize service in any way specified by contract in a lawsuit for breach of contract and is not limited to service of process on a business entity. The task force prepared flow charts listing specific steps for practitioners to follow in serving process on the various types of business entities.[15]

Service of Process in Foreign Countries

Before the enactment of the new legislation, service on parties in foreign countries in actions before Florida courts was governed by F.S. §48.194, which addressed any process served outside the state of Florida and required that the service “be made in the same manner as service within this state by any person authorized to serve process in the state where the person is served.” With respect specifically to service of process in foreign countries, the statute merely stated that “service of process on persons outside the United States may be required to conform to the provisions of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters.”

The International Law Section proposed the task force include in its legislative proposal a new statutory section modeled on Fed. R. Civ. P. 4(f), that would provide additional options for service of process outside the U.S. The resulting new statute, F.S. §48.197, tracks the language of the federal rule. It provides three ways to serve individuals and companies located in a foreign country. Under §1(a), a defendant located outside the U.S. may be served with process by any internationally agreed means of service that is reasonably calculated to give notice.[16] Under §1(b), if there is no internationally agreed means, or if an international agreement allows but does not specify other means, service may be made by a method that is reasonably calculated to give notice as prescribed by the law of the foreign country for service in that country in an action in its courts of general jurisdiction or as the foreign authority directs in response to a letter rogatory or letter of request. Alternatively, under this subsection, in serving an individual, service may be made by delivering a copy of the summons and complaint to the individual personally or by using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt, unless either of these methods is prohibited by the foreign country’s law. Finally, under §1(c), service may be made by any other means directed by the court, “including electronically by e-mail or other technology, which the party seeking service shows is reasonably calculated to give actual notice of the proceedings and is not prohibited by international agreement.” The specific inclusion to electronic methods of service in the new Florida statute — which is not explicitly mentioned in federal Rule 4(f)(3), although it has been increasingly authorized by federal courts under the general language of the rule — was intended to confirm the specific authority of the court to order this method of service.[17] Moreover, given the otherwise virtually identical language between the federal rule and F.S. §48.197, the extensive body of existing federal caselaw should be available to serve as precedent in interpreting the new statute.[18]

Practitioners should remember that F.S. §48.197 does not apply to service of process in the state of Florida on a foreign person or business entity doing business in this state. Individuals or business that are sued in connection with their business activities in Florida may continue to be served personally if they or their agents are present in this state or, if not, through constructive service on the Florida secretary of state under F.S. §§48.161 and 48.181.[19]

As noted, several provisions were added to the bill through the legislative process to address specific issues.

Constructive Service of Process On Unknown Parties In Possession

New F.S. §48.184 provides for constructive service of process on unknown parties in possession. This new statute was the brain child of the Real Property, Probate, and Trust Law Section of The Florida Bar. It provides a procedure for service of process upon unknown tenants or other parties in possession in eviction and unlawful detainer actions. Previously, some clerks of court throughout the state had refused to issue summons to “John Doe” or unnamed defendants. Some courts had held that a complaint filed against a party whose identity is unknown could not commence an action against that party. This made it difficult for landlords to remove these individuals from possession of rental property.

New F.S. §48.184 resolves these issues by specifically authorizing summonses upon unknown parties in possession. The statute now provides a mechanism for obtaining constructive service of process on unknown parties in possession. A plaintiff must make three attempts to personally serve the parties in possession and, if able, the process server must ask for the name of the unknown occupant. If the individual still cannot be identified, service will be deemed made upon posting a copy of the process at the property and mailing a copy to the unknown party.

Service by Publication on Absent Mothers in Paternity Actions

The amendments to F.S. §49.0111 now allow service of process by publication on both absent fathers and absent mothers. This fix was proposed by the Bar’s Family Law Section. Former F.S. §49.0111 permitted constructive service by publication on an absent legal father in a paternity action. Yet, the statute did not allow for such service in instances where putative fathers were seeking to establish their custodial rights to children as against absent mothers.

Service of Pre-Suit Notices in Medical Malpractice Actions

Finally, the Florida Justice Association proposed an amendment to F.S. §766.106, dealing with the pre-suit notice requirements for a medical malpractice action. The new law expands the ways to serve the pre-suit notice by permitting service by more methods than the certified mailing allowed under the prior statute. And the new law establishes a rebuttable presumption of effective service of the notice when delivery is made to an address on file with the government. Lastly, the amendments clarify that the statute of limitations is tolled as of the date of mailing or the date of the first attempt at service by the certified process server, tolling applies to all defendants, and the 90-day investigation period does not start until delivery of the notice, as oppose to mailing.[20]

Conclusion

The new legislation regarding service of process, although begun as an initiative of the Business Law Section, received significant substantive contributions and support from many sections and constituencies of The Florida Bar during the legislative process. Its intent is to clarify, simplify, and make more effective and efficient the methods of service of original process in this state. If the legislation does not make for a completely “new ball game” in the initiation of civil lawsuits, it should at least make the game less frustrating, time consuming, and expensive for the players and the courts.

[1] See, e.g., Green Emerald Homes, LLC vs. Nationstar Mortg., LLC, 210 So. 3d 263, 264-65 (Fla. 2d DCA 2017) (holding Fla. Stat. §605.0117(3), which permits a plaintiff to serve a limited liability company though substituted service on the secretary of state, did not create a new, independent method of effecting substituted service, and plaintiff must still comply with the notice requirements in Ch. 48); Jupiter House LLC v. Deustche Bank Nat’l Tr. Co., 198 So. 3d 1122 (Fla. 4th DCA 2016) (same). But see Magnolia Court, LLC v. Moon, LLC, 299 So. 3d 423 (Fla. 3d DCA 2019) (party serving Florida secretary of state as agent for unregistered foreign LLC under Fla. Stat. §605.904(6) was not required to comply with notice requirements of Ch. 48).

[2] Compare Fla. Stat. §607.0504(2) (2021) with Fla. Stat. §48.081 (2021). Former §48.081 created a hierarchy of corporate officers who could be served with process. Courts had held that, before a party seeking to serve process could properly serve an inferior officer in the hierarchy, the party must demonstrate that all superior officers were outside of the county at the time of the service, an often extremely difficult burden. See, e.g., Southeastern Mail Transp., Inc. v. Amoco Oil Co., 402 So. 2d 522 (Fla. 1st DCA 1981), and cases cited therein.

[3] Fla. Stat. §620.8105(1)(c)(2).

[4] Fla. Stat. §48.061(1)(a).

[5] Fla. Stat. §48.061(1)(b).

[6] See Fla. Stat. §48.091(5). The amended statute further expressly states, however, that failure of the registered agent to comply with this requirement does not invalidate the service of process.

[7] See Fla. Stat. §§48.061(1)(a), 48.061(3)(a)2, 48.061(2)(a), 48.062(3)(a), & 48.081(3).

[8] Id.

[9] For example, it is possible for an individual to register a corporation and solely indicate someone as “director” or to open an LLC an indicated someone as “AMBR.” Neither definition was previously included in the list of representatives who could be served with process on behalf of a corporation or an LLC. However, given the at least implicit recognition by the entity of the authority of those individuals through these official filings, the task force felt that it was proper to include them in the hierarchy of representatives of the business entity who could be served with process.

[10] Fla. Stat. §§48.062(3)(c) & 48.081(3)(b).

[11] Prior to the amendment of Fla. Stat. §48.061, at least one Florida court had indicated that a party using substitute service through the Florida secretary of state would under some circumstances be required to email the notice and a copy of the process to the opposing party. See Crystal Springs Partners, Ltd. v. Michael R. Band, P.A., 132 So. 3d 1230, 1231 (Fla. 3d DCA 2014) (appellee was obligated to make an “honest and conscientious effort,” using knowledge at its command, to provide the defendant with actual notice of the lawsuit, and failure to mail a copy of the notice of process to defendant at an address for which it had contact information or to email the papers to the defendant at an email used to communicate with its director in the past invalidated the service).

[12] See, e.g., Andriana L. Shultz, Superpoked and Served: Service of Process via Social Networking Sites, 43 U. Rich. L. Rev. 1497 (2009); John W. Murphy III, From Snail Mail to Email: The Steady Evolution of Service of Process, 17 St. John’s L. Rev. Legal Comment. 73 (2004); Jeremy A. Colby, You’ve Got Mail: The Modern Trend towards Universal Electronic Service of Process, 51 Buff. L. Rev. 337 (2003).

[13] See N.Y.C.P.L.R. Law §308, which generally allows service of process “in such manner as the court, upon motion without notice, directs, if service is impractical under [other provisions of the statute]; Utah R. Civ. P. 4(d)(5), which allows a court to file a motion to allow service “by some other means” if traditional service is impractical; Tex. R. Civ. P. 106(b) (allowing court to approve service of process “in any other manner, including electronically by social media, email, or other technology, that the statement or other evidence shows will be reasonably effective to give the defendant notice of the suit.”

[14] See Foreign Defendants, You’ve Got Mail! Substitute Service by Email Increasingly Permitted, 11 Nat’l L. Rev. 149 (May 29, 2021).

[15] The Florida Bar Business Law Section, Legislative Update, Changes to Service of Process (Nov. 18, 2022), https://flabizlaw.org/member-articles/legislative-update-changes-to-service-of-process/.

[16] The U.S. is a party to two multilateral treaties governing service of process: the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 5, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638 (entered into force Feb. 10, 1969), reprinted in 28 U.S.C.A. (Appendix following Fed. R. Civ. P. 4), and the Inter-American Convention on Letters Rogatory, O.A.S. T.S. No. 43, Jan. 30, 1975, reprinted in 14 I.L.M. 339 (1975) (entered into force Aug. 27, 1988). Alternatively, the U.S. and the destination state may have entered into a bilateral agreement governing cross-border service.

[17] See Foreign Defendants, You’ve Got Mail!.

[18] Cf., Grangehoff v. Lokey Motors, Inc., 270 So. 2d 58 (Fla. 2d DCA 1972) (holding a rule never construed in Florida, which is identical to a federal rule, may be construed according to the caselaw enunciated in the federal decisions); Dinter v. Brewer, 420 So. 2d 932, 936, n.2 (Fla. 3d DCA 1982) (decisions and commentaries under federal rules are persuasive as to meaning of similar Florida rules.) Federal courts have generally held that Rule 4(f) governing service of process on individuals in a foreign country, unlike the “waterfall” provisions of §§48.061, 48.062, and 48.081 regarding service of process on representatives of business entities, does not create a hierarchy of preferred methods of service of process and does not require that a party first attempt to obtain process by those methods enumerated in the rule, including by diplomatic channels and letters rogatory, before petitioning the court for alternative relief. See, e.g., Rio Prop., Inc. v. Rio Int’l Interlink, 284 F. 3d 1007 (9th Cir. 2002); 4B Fed. Prac. & Proc. Civ. §1134 (4th ed.). Some district courts have held, however, that, in order to invoke Fed. R. Civ. P. 4(f)(3) allowing a court to order an alternative method of service, plaintiffs must show that they have made other reasonable efforts to effect service and that the circumstances require the court’s intervention, while other courts have not imposed those requirements. Id.

[19] See Volkswagenswerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 707-08 (1988) (Hague Convention did not prevent a foreign company from being served process by serving its domestic subsidiary in the state, when the domestic subsidiary was, according to state law, the foreign company’s involuntary agent for service of process).

[20] Unlike the remainder of the legislation which became effective on January 2, 2023, the amendments to F.S. §766.106 became effective upon signing of the bill by the governor.

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