James Henderson, Trustee for Service Equipment Company v. Cherry, Bekaert & Holland, a Partnership

932 F.2d 1410, 19 Fed. R. Serv. 3d 1493, 1991 U.S. App. LEXIS 11422, 1991 WL 82908
CourtCourt of Appeals for the Eleventh Circuit
DecidedJune 7, 1991
Docket90-8794
StatusPublished
Cited by7 cases

This text of 932 F.2d 1410 (James Henderson, Trustee for Service Equipment Company v. Cherry, Bekaert & Holland, a Partnership) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James Henderson, Trustee for Service Equipment Company v. Cherry, Bekaert & Holland, a Partnership, 932 F.2d 1410, 19 Fed. R. Serv. 3d 1493, 1991 U.S. App. LEXIS 11422, 1991 WL 82908 (11th Cir. 1991).

Opinion

PER CURIAM:

I. Background

On April 13, 1988, James Henderson, as bankruptcy trustee for Service Equipment Company, and John Smithgall filed suit against the accounting firm of Cherry, Bekaert & Holland (CBH), a North Carolina partnership, for its role in the purchase and sale of the stock of Service Equipment Company. The complaint included federal securities law and pendent state law claims.

CBH filed a Fed.R.Civ.P. 12(b) motion to dismiss the complaint. The motion sought dismissal on the ground that the district court lacked subject matter jurisdiction over the claims asserted against it by Smithgall. The motion also sought dismis *1407 sal of the complaint on the ground of insufficient service of process. See Fed.R.Civ.P. 12(b)(5). 1 In support of its motion to dismiss, CBH submitted the affidavits of Tomi Simpkins, a receptionist who spoke with the process server, and Jerry Killinger, the CBH employee with whom the summons and complaint were left. Henderson submitted the affidavit of Robert Heath, the process server, in opposition to the motion.

According to the affidavits, on August 11, 1988, Heath went to the Atlanta office of CBH to attempt to serve the complaint. After speaking with Simpkins, Heath left the process with Killinger, a certified public accountant employed there by CBH. Killinger was not a partner at CBH, but his business card, which he gave to Heath, indicated that he was a C.P.A. and carried the title of “Manager.” CBH received timely actual notice of the suit. These facts are undisputed. The parties disagree about whether Simpkins told Heath that no one of authority was present, about whether Heath refused to come back another time, and about whether Killinger accepted the process under protest of lack of authority.

The district court found it lacked subject matter jurisdiction over all Smithgall’s claims, and dismissed Smithgall as a party to the action. (Smithgall is no longer a party to this appeal.) The district court also agreed with CBH’s second argument and, without holding an evidentiary hearing, found that service upon CBH by service upon Killinger was insufficient. Noting that no other effort had been made to timely serve CBH, the court dismissed the action. Henderson appeals the district court’s dismissal. 2

II. Discussion

CBH prevailed in the district court on the claim that service on it was improper because Killinger was not a proper person to receive service for CBH. According to the Federal Rules of Civil Procedure, process could be served on CBH, a partnership, either “pursuant to the law of the State in which the district court is held for the service of summons or other like process upon such defendant in an action brought in the courts of general jurisdiction of that state,” Fed.R.Civ.P. 4(c)(2)(C)(i), or “by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or law to receive service of process,” Fed.R.Civ.P. 4(d)(3).

Although the district court cited the applicable rules of civil procedure in its order, it did not undertake an analysis of whether Killinger was a proper person to receive service for CBH. Instead, it appears that the court found that service was improper because Henderson did not serve a partner in CBH. In its order, the court said “[t]he record indicates that at the time plaintiffs commenced the instant action, plaintiffs were aware of the proper method to effect service on defendant partnership. Plaintiffs specifically stated that [Cherry, Bek-aert & Holland] may be served by serving any one of its partners.... ” The court also found “that plaintiffs were aware on April 13, 1988, when the complaint was filed that defendant should be served by serving any one of its partners” (emphasis added). If the court understood that process could properly be served on persons other than partners in CBH, its analysis does not reflect that understanding. Finally, discussing the plaintiffs’ dilatoriness, the court said “to date, there is no indication in the record that plaintiffs have made any effort to properly effect service on a partner of defendant’s firm.” Noting that more than a year had passed since the plaintiffs had filed their complaint, the court dismissed the action. See Fed.R. Civ.P. 4(j). 3

*1408 On appeal, Henderson argues that the district court erred in finding that Killinger was not a proper person to receive service on behalf of CBH. Henderson also argues that should we decide that the district court was correct in that determination, the district court erred by dismissing the complaint without providing plaintiffs an opportunity for reservice. We conclude that even though Killinger was not a partner, he was under Georgia law a proper person to receive service for CBH. 4

Under Georgia law, process can be served on a nonresident partnership “doing business and having a managing or other agent, cashier, or secretary within this state, [by delivering the process] to such agent, cashier, or secretary or to an agent designated for service of process.” O.C. G.A. § 9-ll-4(d)(2) (1990). In discussing who is an “agent” who can properly receive service, the Supreme Court of Georgia has said that “[s]ince the object of service of process is to transmit notice of suit to the corporation, it must be made on an agent whose position is such as to afford reasonable assurance that he will inform his corporate principal that such process has been served upon him.” Scott v. Atlanta Dairies Coop., 239 Ga. 721, 724, 238 S.E.2d 340, 343 (1977). According to Killinger’s affidavit, “[t]he structure of Cherry, Bekaert & Holland for its professional staff is as follows: equity partner, income partner, principal, manager, supervisor, staff, administrative.” Since both parties and the district court agree that service upon a partner in the firm would be clearly proper, our dispute concerns which non-partner employees can properly receive service.

Killinger is a certified public accountant, a position distinguished by advanced education and state licensing, and his firm designates his level of authority with the title “manager.” Assuming that clerical and other support employees rank below the hierarchy of professional employees set out in Killinger’s affidavit, he has reached the second-highest level it is possible to reach in Cherry, Bekaert & Holland without becoming a partner.

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932 F.2d 1410, 19 Fed. R. Serv. 3d 1493, 1991 U.S. App. LEXIS 11422, 1991 WL 82908, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-henderson-trustee-for-service-equipment-company-v-cherry-bekaert-ca11-1991.