In Bowling v. Grange Mut. Cas. Co., No. 05AP-51, 2005 WL 2981247 (Oh. App. Nov. 8, 2005), an Ohio appeals court ruled that an insurance company failed to show that its neglect in failing to timely answer a complaint should be excused.

 

Russell and Marsha Bowling filed a lawsuit against Kemper Insurance Company for breach of contract in denying an uninsured/underinsured motorist claim. The Bowling's complaint was served on Kemper on December 10, 2002, via certified mail. Kemper claimed it was not properly served.

 

At trial, an employee of Arrow Messenger Service, which picked up Kemper's mail from the post office and delivered it to their offices, testified that he and another employee had completed the normal pickup procedure the day the certified mail was signed for. Their manifest sheets showed that they delivered to Kemper on December 10, 2002.

 

Both Kemper's operations manager for the branch and operations supervisor, who supervised the mailroom employees and the receptionist, stated that Kemper became aware of the lawsuit when a default judgment entry was received.

 

According to the manager and the supervisor, mail was delivered directly by post office employees to the receptionist. If certified mail was delivered to a specific person, the receptionist was to call that individual to sign for it; however, if it was simply addressed to Kemper, the receptionist was to sign for it and call the manager.

 

Neither the manager nor the supervisor were aware that Kemper used a messenger service to pick up and deliver their mail. The receptionist said that she received all of Kemper's mail, except larger packages, and that she signed for certified mail. She also stated that she sent certified mail addressed to just Kemper to the mailroom.

 

The receptionist further said that she received no training regarding legal service of process. Kemper had no written procedure in place for handling certified mail or legal service of process.

 

A mailroom employee stated that men in yellow shirts dropped the mail off. He said there was no procedure in place for certified mail and that he would use his best efforts to get the mail to the right person. Another employee corroborated with the mailroom employee that if certified mail was already signed for at the post office, it went to the mail room.

 

Kemper claimed that it never received valid service or process from the Bowlings. The court, however, said that “plaintiffs sent the complaint and summons by certified mail to one of Kemper's usual places of business, and, due to the authorization Kemper gave Arrow to sign for and retrieve its certified mail, an authorized agent signed for and returned the certified mail receipt.” Thus, the court said that Kemper did not produce sufficient evidence of non-service and that service was accomplished.

 

The court also held that the evidence did not support grounds for neglect based on mistakes made by Arrow or post office employees. The court stated the two-prong test for finding excusable neglect: “it is sufficient to show (1) that there is a set procedure to be followed in the corporate hierarchy for dealing with legal process, and (2) that such procedure was, inadvertently, not followed until such time as a default judgment had already been entered against the corporate defendant.”

 

Based on the testimony of the various Kemper employees, the court said that the evidence did not support that Kemper had an adequate procedure to ensure that certified mail was properly forwarded. Thus, the court ruled that the trial court abused its discretion in setting aside the default judgment and remanded to the court of common pleas to reinstate the default judgment.