RESOLUTION DIGEST
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1 RESOLUTION DIGEST Consumer Sales: Service of Process on Designated Agent Amends Business and Professions Code section to provide that personal service of process may be effected via delivery to a commercial mail receiving agency. RESOLUTIONS COMMITTEE RECOMMENDATION APPROVE IN PRINCIPLE History: No similar resolutions found. Reasons: This resolution amends Business and Professions Code section to provide that personal service of process may be effected via delivery to a commercial mail receiving agency. This resolution should be approved in principle because it would improve the ability of consumers to effect personal service upon persons and entities that conduct business through an alternative address. Personal service is usually the best means of service because it is immediately effective (Code Civ. Proc., ) and usually leaves no doubt as to whether service was actually made. However, more and more businesses are using rented mailboxes, post office boxes, or other alternative addresses instead of traditional "bricks and mortar" premises. It has thus become increasingly difficult for plaintiffs to determine where personal service can be made and easier for unscrupulous individuals or entities to evade service. The use of such facilities also places consumers at a disadvantage by requiring them to use substituted service, which delays the prosecution of the action by adding ten days to the effective date of service. (Code Civ. Proc., , ) Businesses that use rented mailboxes or other such addresses should not be able to insulate themselves from personal service. Personal service upon a commercial mail receiving agent should be deemed effective as to the principal. TEXT OF RESOLUTION RESOLVED that the Conference of Delegates of California Bar Associations recommends that legislation be sponsored to amend Business and Professions Code section to read as follows: (a) It is unlawful in the sale or offering for sale of consumer goods or services for 3 any person conducting, any business in this state which utilizes a post office box address, a 4 private mailbox receiving service, or a street address representing a site used for the
2 5 receipt or delivery of mail or as a telephone answering service, to fail to disclose the legal 6 name under which business is done and, except as provided in paragraph (2) of subdivision 7 (b), the complete street address from which business is actually conducted in all 8 advertising and promotional materials, including order blanks and forms. Any violation of 9 the provisions of this section is a misdemeanor punishable by imprisonment in the county 10 jail not exceeding six months, or by a fine not exceeding two thousand five hundred 11 dollars ($2,500), or by both. 12 (b)(1) This section shall not apply to a person who sells the preponderance of 13 goods and services at retail from trade premises which are open to the public regularly 14 during normal business hours where the post office box or telephone answering service is 15 supportive of and ancillary to the sales made or to any person who provides services 16 pursuant to a license issued pursuant to this code or any other provision of law by a state 17 board or agency or, except for a person conducting a mail order or catalog business, by a 18 city or county or city and county in this state, which has the person's current business street 19 address or home address on record and which is authorized to reveal that address to 20 inquiring persons. 21 (2) If a person conducts a business described in subdivision (a) from that person's 22 residence, the person is not required to disclose the residence address if both of the 23 following conditions are satisfied: 24 (A) The person's current business street address or home address is contained in a 25 United States Postal Service (USPS) Form 1583 that is filed with the USPS. 26 (B) The person has signed an acknowledgment form substantially in accordance 27 with the provisions set forth in subdivision (f) which, among other things, authorizes the 28 commercial mail receiving agency to act as that person's agent for service of process. 29 (c) A commercial mail receiving agency (CMRA) shall not provide private 30 mailbox receiving service to any customer until it obtains from that customer at least two 31 pieces of identification regarding that customer and provides to that customer an 32 acknowledgment, as set forth in subdivision (f), which (1) acknowledges the obligation to 33 advise the CMRA of any change in address, (2) authorizes the CMRA to act as an agent 34 for service of process, and (3) acknowledges the requirements of Sections and , which prohibit unfair competition and false advertising. The commercial mail 36 receiving agency shall thereafter maintain a copy of any United States Postal Service 37 USPS Form 1583 for each mailbox service customer, along with a copy of each of the two 38 pieces of identification used by the customer, for a period of two years after the 39 termination of service to that customer. Upon the request of the Department of Consumer 40 Affairs or any law enforcement agency conducting an investigation, the commercial mail 41 receiving agency shall make available to the Department of Consumer Affairs or that law 42 enforcement agency, for purposes of that investigation and copying, its copy of the United 43 States Postal Service USPS Form 1583 and the two pieces of identification used by the 44 customer. 45 (d)(1) Every person receiving private mailbox receiving service from a CMRA in 46 this state shall be required to sign an agreement, along with a USPS Form 1583, which 47 authorizes the CMRA owner or operator to act as agent for service of process for the mail 48 receiving service customer. Every CMRA owner or operator shall be required to accept
3 49 service of process for and on behalf of any of their mail receiving service customers, and 50 for two years after termination of any mail receiving service customer agreement. 51 Personal service on the owner, operator or person in charge of the CMRA at the time of 52 service shall constitute personal service on the mail receiving service customer under 53 Sections and of the Code of Civil Procedure. Upon receipt of any process 54 for any mailbox service customer, the CMRA owner or operator shall (A) within 48 hours 55 after receipt of any process, place a copy of the documents or a notice that the documents 56 were received into the customer's mailbox or other place where the customer usually 57 receives his or her mail, unless the mail receiving service for the customer was previously 58 terminated, and (B) within five days after receipt, send all documents by first-class mail, to 59 the last known home or personal address of the mail receiving service customer. The 60 CMRA shall obtain a certificate of mailing by completing USPS Form 3817 in connection 61 with the mailing of the documents. Service of process upon the mail receiving service 62 customer shall then be deemed perfected 10 days after the date of mailing. 63 If the CMRA owner or operator has complied with the foregoing requirements and 64 provides to any party participating in a lawsuit involving a mail receiving service customer 65 a declaration of service by mail, given under penalty of perjury along with a certificate of 66 mailing, the CMRA owner or operator shall have no further liability in connection with 67 acting as agent for service of process for its mail receiving service customer. 68 (2) Upon complaint or inquiry concerning any CMRA mail receiving service 69 customer, the CMRA owner or operator shall inform the person making the complaint or 70 inquiry that the CMRA is an authorized agent for service of process on the mail receiving 71 service customer. 72 (3) Upon presentation of a certified copy of a judgment, the CMRA shall disclose 73 to the judgment creditor the last known address of any of its mail receiving service 74 customers against whom the judgment was obtained. 75 (e) An owner or operator of a CMRA who, acting in good faith, contacts a 76 governmental agency concerning suspected illegal or fraudulent activities carried out by a 77 mail receiving service customer shall have no liability for claims filed by the customer 78 arising out of that contact. No owner or operator of a commercial mail receiving agency 79 that maintains on file a copy of the United States Postal Service USPS Form 1583 for its 80 private mailbox receiving service customers and complies with subdivision (c) shall be 81 liable for any illegal acts of any mail receiving service customer based only on the fact that 82 the owner or operator of the CMRA provided mail receiving services to the customer. 83 (f) The following acknowledgment and notice, substantially in the form set forth 84 below, shall be delivered to each person obtaining private mailbox receiving service at a 85 CMRA: 86 "ACKNOWLEDGMENT BY PRIVATE MAILBOX SERVICE CUSTOMERS 87 This acknowledgment is required by Section of the Business and 88 Professions Code. 89 Any person obtaining private mailbox receiving service in the State of California 90 must read and acknowledge receipt of the following statement, which is to be kept on file 91 at this CMRA and will be made available, upon demand, to the Department of Consumer 92 Affairs or any law enforcement agency conducting an investigation
4 93 By requesting and obtaining use of a private mailbox receiving service in the State 94 of California, I acknowledge that: I am obligated to disclose my actual home address or place of residence on a 96 USPS Form 1583 or other form as may later be developed and I further agree that I will 97 provide prompt written notice to this CMRA of any subsequent change in my home 98 address or place of residence By signing below, I irrevocably authorize this CMRA to act as my agent for 100 service of process to receive any legal documents that may be served upon me. This 101 authorization shall continue from the date of this agreement until two years after my mail 102 receiving service has been terminated. I understand that this CMRA will (A) place a copy 103 of the documents or a notice that the documents were received into my mailbox or other 104 place where I usually receive my mail, unless my mail receiving service has been 105 terminated, and (B) send all documents by first-class mail to the home or other address last 106 known to the CMRA I further acknowledge that I understand that use of a private mailbox receiving 108 service for commercial purposes in the State of California requires the user to comply with 109 all applicable laws, including Section of the Business and Professions Code and 110 laws prohibiting unfair competition and false advertising as set forth in Sections and of the Business and Professions Code. Violation of these laws may result in 112 criminal or civil penalties or both. I understand that the United States Postal Service USPS 113 Form 1583 that must be prepared for each private mailbox receiving service customer shall 114 be delivered to the local United States Post Office and a copy of the form must be retained 115 by this CMRA and made available upon demand to the Department of Consumer Affairs 116 or any law enforcement agency conducting an investigation. I hereby agree to accept and 117 abide by the foregoing requirements Date Signature Name Printed Street Address City State Zip (Proposed new language underlined: language to be deleted stricken.) PROPONENT: San Diego County Bar Association STATEMENT OF REASONS: Existing Law: Business and Professions Code section provides important protections to California consumers against the growing number of businesses and individuals conducting business from home or other non-traditional locations. Among these is a requirement to disclose the legal name and complete address under and from which the business or individual conducts
5 business in various communications. The section also requires individuals who utilize the services of a commercial mail receiving agency ( CMRA ) to provide the CMRA with their forwarding address and to appoint the owner or operator of the CMRA as their agent for service of process. This Resolution: Would expressly provide that personal service of process on the owner, operator or person in charge of a CMRA is personal service, as contemplated by Code of Civil Procedure sections and The proposed language is intended to clarify and protect the rights of consumers against evasive defendants, both resident and foreign, who might otherwise escape lawful service of process. The resolution also clarifies what is meant by certificate of mailing as is found within this statute and throughout scattered sections of the California Code; and inserts abbreviations where appropriate. The Problem: Code of Civil Procedure section et seq. prescribes a number of acceptable means by which service of process may be effected upon a party. In particular, section states that personal service shall consist of service upon the person(s) to be served. Following these manner of service provisions in section et seq. are subsequent provisions as to the persons and entities who may be served. Section specifically authorizes that [a] summons may be served on a person not otherwise specified in this article by delivering a copy of the summons and of the complaint to such person or to a person authorized by him to receive service of process. Many court clerks are unaware that an individual, as well as a corporation, may appoint an agent for service of process; and section of the Business and Professions Code is not sufficiently clear as to exactly who at a CMRA must be served, or the effect of such service. Service on the owner, operator or person in charge of a CMRA should be considered service on the customer who appointed that entity as his, her or its agent for service of process. IMPACT STATEMENT This resolution does not affect any other law, statute or rule. AUTHOR AND/OR PERMANENT CONTACT: Martin A. Ramey, Ramey Law Group, A Professional Corporation, 835 Fifth Avenue, Suite 307, San Diego, CA 92101, voice , ramey@rameylawgroup.com RESPONSIBLE FLOOR DELEGATE: COUNTERARGUMENT SANTA CLARA COUNTY BAR ASSOCIATION Santa Clara County Bar Association approves the intent of this resolution. However we feel there should be some delayed effectiveness for service under the proposed changes. We therefore suggest that the deletions in lines 61 and 62 be removed but the ten day delayed effectiveness in line 62 be changed to five days. For these reasons, Santa Clara County Bar Association opposes Resolution as written
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