April 2013 Volume XII No. 5 Taking Care of Business
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The misidentification of company's registered agent results in default liability to the company.

Kim Peil
Kim Peil

On February 27, 2013, the Indiana Court of Appeals upheld a default judgment against a corporation, holding that it was liable for compensatory damages, treble damages, prejudgment interest, costs, and attorney fees in an action where it had listed the incorrect registered agent with the Indiana Secretary of State.

In, Storm Damage Specialists of Am. v. Johnson, 2013 Ind. App. LEXIS 98 (Ind. Ct. App. Feb. 27, 2013), the Johnsons signed a contract with Storm Damage Specialists to repair hail damage to their roof, they also assigned the right to negotiate for damages with their insurance company to Storm Damage Specialists. Storm Damage Specialists received a check for $4,224.78 from the Johnsons’ insurance company, but never performed any work on the Johnsons’ roof. The Johnsons sued Storm Damage Specialists and addressed the summons to the registered agent of Storm Damage Specialists listed on the Indiana Secretary of State’s Website. Service of the summons and complaint to Storm Damage Specialists was made by certified mail. Storm Damage Specialists did not enter an appearance and failed to respond to the complaint. The Johnsons filed a motion for default judgment, which the trial court granted, ruling that the Johnsons were entitled to compensatory damages, treble damages, prejudgment interests, costs, attorney fees, and post judgment statutory interest.

In attempt to set aside the judgment, and on appeal, Storm Damage Specialists argued that the incorrect registered agent’s address it had listed on the Indiana Secretary of State’s website was a scrivener’s error committed by its corporate accountant at the time of the company’s organization. The Indiana Court of Appeals refused to set aside the default judgment holding that service to the listed registered agent was proper under the Indiana Trial Rules, and “the fact that the registering of that particular address is claimed to be a scrivener’s error on the part of Storm Damage Specialists’ accountant is a burden that should be borne by the company.” The Indiana Court of Appeals upheld the trial court’s determination that Storm Damage Specialists was liable to the Johnsons for compensatory damages ($4,224.78), treble damages under the Crime Victim’s Relief Act ($8,449.56), the Johnsons’ reasonable attorney fees (which may include appellate attorney fees), costs, and interest.

To avoid default liability, it is imperative that companies designate the correct registered agent with the Indiana Secretary of State. It is also important for companies to ensure that the agent is aware of the obligations so summonses and complaints are forwarded to the correct individuals within the company in a timely manner.

¹ The Court of Appeals reduced the amount of treble damages by $4,224.78 finding that the trial court incorrectly quadrupled the amount of compensatory damages instead of trebling it as required by the statute.

If you have any questions, please contact your HWE relationship attorney or visit us at http://www.hwelaw.com.

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