Spring 2014

In the process of negotiations for settlement of a dispute, you may have to file a lawsuit. This may be because there is no meeting of the minds with respect to a settlement or the timing within which to file a lawsuit has come (so that you do not lose your rights). Once the lawsuit is filed with the court, the very first thing that must be done is the Summons and Complaint, along with other court forms, must be served on all of the defendants (the Summons notifies the party(ies) that they are being sued). For those in an office, this is a very mundane aspect of the lawsuit even though it is a very important aspect. As a contractor, subcontractor, or material supplier, you should be aware of this process in order to protect your own rights because if a party is not served properly then they are not a part of the legal action.

There are various ways for a Summons and Complaint to be served properly in a general lawsuit. The obvious is that the Summons and Complaint are served by personal delivery. Another effective way to serve a party is by substitution (meaning that the Summons and Complaint is left at the business with a person in charge or at home with someone 18 or older) and then a copy of the Summons and Complaint is then mailed to the same address. There is also the possibility that the Summons and Complaint can be served by mail alone utilizing a Notice and Acknowledgment of Receipt, which means that the recipient actually signs the Notice accepting service of the Summons and Complaint and returns it. If the party resides out-of-state, then it is also acceptable to serve them via first-class mail with a return receipt requested. Lastly, if the party cannot be served using the above means, it is possible to obtain permission from the court to serve by publication (published in a named newspaper that is most likely to give notice to the party). An unlawful detainer matter has additional rules regarding service that we will not get into here.

Keeping the above in mind, service also depends on the type of entity (an individual, a corporation, a public entity, etc.). Corporations can be served by serving the president, CEO, etc., or a person authorized by the corporation to accept service. They will also have a designated agent for service of process, often times an officer, their attorney or a company that is hired for just the purpose of receiving service, that service can be made to.

There is a recent case Ariel Ramos v. Homeward Residential wherein Ramos served the corporate defendant with the Summons and Complaint by delivering the paperwork to a manager at a branch office of the defendant. Even though the manager told Ramos that they were not authorized to accept service and the documents should be served on the agent for service of process, Ramos did not do so. When defendant did not appear in the case, Ramos obtained a default judgment in her favor for over $250,000. Once defendant was notified of the judgment, it moved to have the judgment set aside because they were not served properly. The court agreed and overturned the default judgment. In a nutshell, this means that Ramos thought she was victorious in her suit, but in reality, spent more time and money than necessary because the defendant was never served properly.

As you can see from the above scenario, it is important to make sure that you have an understanding as to what is going on in this beginning stage of your lawsuit in order to make sure that you are not surprised at a later date because the Summons and Complaint was not served properly.

ADVERTISEMENTS BY UNLICENSED CONTRACTORS

Many of us see advertisements, especially online, for contracting work which is to be performed by an unlicensed operator. These advertisements are fine as long as the unlicensed contractor advertises that they are unlicensed and only offer services that will not exceed $500. However, many of these advertisements do not meet those guidelines.

The CSLB is supporting a proposal that would amend Business and Professions Code section 7027.2. This would revise the requirements for advertisements posted by these unlicensed operators. If this proposal is sponsored by a legislator and then passed into law, the CSLB would then be able to pursue administrative sanctions against operators who advertise services in excess of the $500 legal limit and also target those individuals in undercover sting operations.

This is one way that the CSLB is fighting the underground economy in California.