Telephone Credit Union v. Fetela

569 A.2d 1059, 1990 R.I. LEXIS 33, 1990 WL 12876
CourtSupreme Court of Rhode Island
DecidedFebruary 19, 1990
DocketNo. 88-82-M.P.
StatusPublished
Cited by3 cases

This text of 569 A.2d 1059 (Telephone Credit Union v. Fetela) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Telephone Credit Union v. Fetela, 569 A.2d 1059, 1990 R.I. LEXIS 33, 1990 WL 12876 (R.I. 1990).

Opinion

OPINION

MURRAY, Justice,

This case is before the court on a writ of certiorari from a denial in Superior Court of the defendant’s motion to quash the plaintiff’s subpoenas. The defendant New Hampshire Insurance Company (insurance company) alleges that the trial justice erred in denying the defendant insurance company’s motion to quash witness subpoenas for nonparty, nonresident witnesses when service was made upon the insurance commissioner of Rhode Island. The facts are briefly as follows.

On June 11, 1983, plaintiff Telephone Credit Union of Rhode Island (credit union) filed a complaint in Providence County Superior Court alleging that defendant Chester K. Fetela (Fetela) had defaulted on a promissory note and that defendant insurance company failed to pay the credit union as the beneficiary of the insurance policy on the collateral. The collateral was a 1966 Pacemaker yacht that had been destroyed by fire in 1981.

The insurance company denied the credit union’s claim, alleging that the credit union had no right to sue on the contract because it was only a loss payee. The insurance company further alleges that a transfer of the policy by defendant Fetela voided the policy and that the statute of limitations had run on the action.

During discovery the credit union requested for production certain records held by the insurance company. On January 8 and 14, 1988, the credit union issued two subpoenas duces tecum requesting these records from the manager of the property-loss department and the keeper of underwriting records and files. The subpoenas were served upon the insurance commissioner of Rhode Island. Neither the manager of the property-loss department nor the keeper of underwriting records was a resident of Rhode Island. The insurance commissioner forwarded the subpoenas to the insurance company. The insurance company filed a motion to quash the subpoenas, alleging that they were improperly served on the insurance commissioner of Rhode Island.

On February 25, 1988, the trial justice heard arguments from both parties and denied the motion to quash in an order entered on March 3, 1988. The insurance company filed a petition for a writ of cer-tiorari to this court, which we granted.

The issue before us is a narrow one. The defendant insurance company alleges as error on the record the denial by the trial justice of defendant’s motion to quash subpoenas duces tecum served upon the insurance commissioner seeking documents from defendant insurance company’s employees. The credit union asserts that service of process was made on the commissioner pursuant to G.L.1956 (1989 Reenactment) § 27-2-13 since defendant insurance company is an out-of-state insurance company doing business within the State of Rhode Island.

Section 27-2-13 requires foreign insurance companies to appoint the insurance commissioner of Rhode Island as their “true and lawful attorney * * * upon whom all lawful process in any action or proceeding against the company may be served” prior to doing business within the State of Rhode Island. (Emphasis added.) “Service upon the attorney shall be deemed sufficient service upon the principal * * *.” Id.1

[1061]*1061Neither party finds fault with defendant’s appointment of the insurance commissioner as defendant’s lawful attorney as required by § 27-2-13. The controversy in this case involves the statutory interpretation of the terms “all lawful process” in § 27-2-13. The insurance company asserts that “all lawful process” refers to only the original service of process (issuance of a summons and complaint) to the insurance company upon the insurance commissioner and not service of witness subpoenas upon the insurance commissioner. Hence, the insurance company concludes that subpoenas duces tecum of nonparty, nonresident employees of the insurance company served upon the insurance commissioner are not “lawful process" within the meaning of § 27-2-13.

The plaintiff credit union served two subpoenas duces tecum on the insurance company. A subpoena duces tecum “is the process by which a court requires the production before it of documents, papers, or tangible things. The object of the writ is the production of evidence to be used, so far as admissible, before the court.” 81 Am.Jur.2d Witnesses § 14 (1976). As a general rule a corporate subpoena should issue directly to the officer or employee of the corporation who is the custodian of the records desired. American Lithographic Co. v. Werckmeister, 221 U.S. 603, 31 S.Ct. 676, 55 L.Ed. 873 (1911); 81 Am.Jur.2d Witnesses § 19 (1976). The subpoenas were issued to employees of the insurance company, namely, the keeper of underwriting records and files and the manager of the property-loss department. These subpoenas seek the production of corporate records of the insurance company and the appearance of the custodian of these records in his or her corporate or business capacity. These custodians are nonparties in their individual and personal capacities, and they are not being subpoenaed as such. The insurance company is a corporation, and as a corporate “person” it can only appear through its agents, officers, and employees as representatives of the corporation. Hence as employees of the insurance company, these custodians are agents and representatives of a party to this action and are being subpoenaed as such. Subpoenas issued to the out-of-state insurance company’s agents and employees are constructively subpoenas to the insurance company, which has appointed the insurance commissioner to receive “all lawful process” within the state.

In interpreting the Legislature’s intended meaning of the terms “lawful process” contained in § 27-2-13, we look to the plain and ordinary meaning of the statutory language. Black’s Law Dictionary 1085 (5th ed.1979) defines “legal process” as follows: “This term is sometimes used as equivalent to ‘lawful process.’ * * * [I]t means a summons, writ, warrant, mandate, or other process issuing from a court.” Further “the term ‘process’ is synonymous with ‘proceeding’ and embraces the entire proceedings in an action from beginning to end.” Lister v. Superior Court, 98 Cal.App.3d 64, 69, 159 Cal.Rptr. 280, 283 (1979); see 62 Am.Jur.2d Process § 1 (1972). Additionally the word “process” has different meanings depending on the context, spirit, and subject matter of the statute in which it occurs. United States v. Fore, 38 F.Supp. 142, 143 (S.D.Cal.1941).

[1062]*1062Section 27-2-13’s requirement that the insurance commissioner be appointed lawful attorney to receive “all lawful process” of any action against the insurance company is the Legislature’s attempt to provide potential plaintiffs an opportunity to sue out-of-state insurance companies doing business within the State of Rhode Island that otherwise would be beyond the court’s jurisdiction. It is not a bar to these potential plaintiffs to obtain valuable relevant evidence through discovery. The statute was intended to reach defendant insurance company and in the instant case to reach the insurance company’s agents, including the keeper of underwriting records and files and the manager of the property-loss department. We find that in the instant case § 27-2-13 permits service of subpoenas duces tecum through the insurance commissioner to accomplish the production of corporate records.

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Cite This Page — Counsel Stack

Bluebook (online)
569 A.2d 1059, 1990 R.I. LEXIS 33, 1990 WL 12876, Counsel Stack Legal Research, https://law.counselstack.com/opinion/telephone-credit-union-v-fetela-ri-1990.