Court Opinion

ID: 4249564
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:19:33.22703+00
Date Added: 2024-06-11T13:56:37.974280
License: Public Domain

IN THE SUPREME COURT OF IOWA
                               No. 10–1677

                           Filed June 29, 2012

L.F. NOLL INC.,

      Appellee,

vs.

DOPE EVIGLO,

      Appellant.

      Appeal from the Iowa District Court for Woodbury County,

Mary Jane Sokolovske, Judge.

      Appellant alleges the district court erred in denying his motion to

quash garnishment. REVERSED AND CASE REMANDED.

      Andrea Hiatt Buckley of Iowa Legal Aid, Sioux City, for appellant.

      Jessica R. Noll, Sioux City, for appellee.
                                     2

APPEL, Justice.

      In this case, the plaintiff L.F. Noll filed an action against defendant

Dope Eviglo, a resident of Nebraska, for damages related to the

termination of an apartment lease in Sioux City, Iowa where Eviglo

formerly resided. L.F. Noll attempted to serve notice under Iowa’s long-

arm statute, Iowa Code section 617.3 (2007), by certified mail at a

forwarding address provided by Eviglo upon the termination of his

tenancy in the apartment. The notice, however, was returned by postal

authorities with the annotation “Attempted—Not Known” and “Unable to

Forward.”   L.F. Noll took no further action to achieve service, and the

district court entered a default judgment against Eviglo. Based on the

default judgment, L.F. Noll sought to garnish Eviglo’s wages at his

Nebraska employer.     Eviglo sought to quash the garnishment on the

ground that L.F. Noll failed to comply with the requirements of Iowa Code

section 617.3 in connection with the underlying action that produced the

default judgment.    In the alternative, Eviglo argued that Iowa Code

section 617.3 is unconstitutional as applied in this case on due process

and equal protection grounds. An associate district court judge denied

Eviglo relief, and the district court affirmed. Eviglo appealed. For the

reasons expressed below, we reverse the judgment of the district court.

      I. Factual and Procedural History.

      In March 2006, Dope Eviglo and Bisse Ndim entered into a six-

month lease with Candlewick Apartments.         Eviglo and Ndim renewed

their lease for an additional six months, but moved out three months

early. At the time of termination of the lease, Eviglo and Ndim signed a

document entitled “NOTICE TO VACATE APARTMENT.”                  The notice

generally provided information about a move-out inspection and

procedure related to return of a security deposit.     The notice declared
                                     3

that the signatories understood that if they did not supply management

“with a mailing address or instructions” within one year of the

termination of the tenancy, the security deposit would revert to the

landlord.   The forwarding address provided on the notice was 2242

Florence Boulevard, Omaha, Nebraska, 68110.

      On October 2, 2007, L.F. Noll, an assignee of Candlewick

Apartments, filed an action in small claims court for $1662.65, plus

interest, against Eviglo and Ndim. L.F. Noll sent original notice to the

Iowa Secretary of State and attempted to serve notice of the filing by

certified mail to Eviglo and Ndim. The notice addressed to Eviglo was

sent to the Florence Boulevard address in Omaha.             The notice was

returned by postal authorities as “Attempted—Not Known” and “Unable

to Forward.”

      Judgment     was   entered   against   both   Eviglo   and   Ndim   on

January 28, 2008. After entry of judgment, L.F. Noll garnished Eviglo’s

wages from Tyson Fresh Meats, Inc. in Dakota City, Nebraska.              On

January 27, 2010, Eviglo filed a motion to quash garnishment. Eviglo

argued the judgment entered against him was void because L.F. Noll

failed to comply with Iowa Code section 617.3 when it attempted to serve

process on him. Eviglo also raised facial and as-applied challenges to the

constitutionality of Iowa Code section 617.3 under the Due Process and

Equal Protection Clauses of the Iowa and United States Constitutions.

The small claims court overruled the motion to quash, and Eviglo

appealed to the district court.

      The district court affirmed. The district court reasoned that L.F.

Noll satisfied the requirements of Iowa Code section 617.3 because it

mailed service by certified mail to the forwarding address Eviglo provided

to Candlewick Apartments in the notice to vacate. Additionally, the court
                                     4

held that section 617.3 does not require notification to be delivered or

rejected by the addressee.     Instead, according to the district court,

section 617.3 is satisfied so long as the address used was reasonably

calculated to give notice.   The district court also rejected Eviglo’s due

process claim, reasoning that the statute is reasonably calculated to

apprise the defendant of notice.    Further, the district court concluded

Eviglo’s equal protection claim failed because the statute did not infringe

on a fundamental interest and had a rational basis for imposing different

notice requirements on residents and nonresidents.      Eviglo applied for

discretionary review, which we granted.

      II. Standard of Review.

      The district court’s interpretation of a statute is reviewed for

correction of errors at law. State v. Madison, 785 N.W.2d 706, 707–08

(Iowa 2010).

      III. Discussion of Statutory Claim.

      A. Introduction. The statutory claim in this case focuses on the

language of the Iowa long-arm statute, which provides, in relevant part:
             Service of such process or original notice shall be
      made (1) by filing duplicate copies of said process or original
      notice with said secretary of state . . . and (2) by mailing to
      the defendant . . . by registered or certified mail, a
      notification of said filing with the secretary of state . . . .
      Such notification shall be mailed . . . to each such
      nonresident person at an address in the state of residence.

Iowa Code § 617.3 (emphasis added).

      Eviglo contends that under the statute, the term “an address”

must mean a “valid address.” In this case, Eviglo argues, the certified

letter was returned because the address was an invalid address, at least

for the purpose of attempting to serve Eviglo with the notice.          Eviglo

claims that our case of Barrett v. Bryant, 290 N.W.2d 917 (Iowa 1980)

and a decision of the court of appeals, Calinger v. Konz, No. 05-0041,
                                      5

2006 WL 2418910 (Iowa Ct. App. Aug. 23, 2006), support his argument.

In Barrett, we concluded, as to one defendant, that service was invalid

under the long-arm statute where notice was sent to an address where

the defendant did not live. Barrett, 290 N.W.2d at 922. A similar result

occurred in Calinger, where notice was sent to a location where a

putative defendant had no demonstrable connection. Calinger, 2006 WL
2418910, at *3 n.3.

      In the alternative, Eviglo argues that in order for service to be

perfected, the return receipt must either be signed or refused. In support

of this argument, Eviglo cites our decision in Emery Transportation Co. v.

Baker, 254 Iowa 744, 119 N.W.2d 272 (1963) and Calinger. In Emery, we

held under our nonresident motorist statute that service must be

achieved either through actual delivery or offered delivery of the

notification. Emery, 254 Iowa at 750, 119 N.W.2d at 276–77.

      L.F. Noll recognizes that under Barrett, “clear and complete

compliance” with the statutory requirements of Iowa Code section 617.3

is required. Barrett, 290 N.W.2d at 922. L.F. Noll asserts that nothing in

the language of Iowa Code section 617.3 requires actual notice. L.F. Noll

emphasizes that service was attempted at an address which was

provided by the defendant to which the defendant had a connection. As

a result, L.F. Noll distinguishes Bryant and Calinger. Further, L.F. Noll

distinguishes    Emery,   noting   that   the   statutory   language   in   the

nonresident motorist statute varies significantly from that in Iowa Code

section 617.3.

      B.   Overview of Iowa Law.            We begin our discussion by

recognizing a strongly held and frequently repeated principle that we

strictly construe statutes providing extraordinary methods of securing

jurisdiction over nonresidents. See Buena Vista Manor v. Century Mfg.
                                      6

Co., 221 N.W.2d 286, 288 (Iowa 1974) (citing Matney v. Currier, 203
N.W.2d 589, 593 (Iowa 1973)). It is thus not surprising that our cases

regarding service under Iowa Code section 617.3 reflect the view that

extraordinary service of process must be carefully circumscribed by the

courts.

      We have had only a few occasions to interpret the notice

requirement in Iowa’s long-arm statute, Iowa Code section 617.3. The

first case of significance is Bentley v. Allen-Sherman-Hoff Pump Co., 203
N.W.2d 312 (Iowa 1972). In this case, the plaintiff attempted to serve

notice at the home office of a corporation at an address informally

provided by an employee in the secretary of state’s office in a foreign

state. Bentley, 203 N.W.2d at 312. Although the corporation had moved

to another location and had filed an appropriate change of address

document with the foreign secretary of state, the employee providing the

address to the plaintiff overlooked the change. Id. at 313. Nonetheless,

the notice sent to the wrong address was accepted by an employee of a

stranger corporation located at the address and was forwarded by the

employee to the defendant corporation.          Id.   Thus, actual notice was

achieved, albeit not by service “at the address of [the defendant

corporation’s] principal office.” Id. at 312.

      We held in Bentley that the service was invalid. Id. at 314. Citing

Esterdahl v. Wilson, 252 Iowa 1199, 1206, 110 N.W.2d 241, 244 (1961),

we reasoned that if we took a contrary approach, we “would approve

service of notice by ordinary mail, by telegram, word of mouth or by

reading of the suit in a newspaper.”            Bentley, 203 N.W.2d at 314.

Instead, we insisted that jurisdiction must be achieved as provided by

law. Id.
                                      7

       Our next notice case under the long-arm statute is Buena Vista. In

this case, the first attempt at notice on a nonresident company was

returned “unclaimed.” Buena Vista, 221 N.W.2d at 288. The plaintiff did

additional research, found a better address, and served another notice.

Id. On this second attempt, the notice was served on the defendant and

the plaintiff received a return receipt. Id. The defendant claimed that his

notice was not received within ten days of filing with the secretary of

state under the statute. Id.

       We held that while the statute appeared to contemplate actual

receipt, the ten-day period should be measured from the date of mailing

of the first letter. Id. We stressed, however, that under the statute “it is

apparent the legislature intended defendant would receive the certified

letter.”   Id.   We emphasized that the defendant was in fact notified of

when, where, and what to defend. Id. As a result, service was proper

under the statute.

       Our next long-arm case is Barrett. In this case, three defendants

(Al Bryant, B.J. Cherry and Preston Webb) challenged the manner in

which notice was served under the long-arm statute.               Barrett, 290

N.W.2d at 921. Bryant argued that service was sent to a wrong address

for him, and that while the spouse of a codefendant lived at the address

and signed for him, he did not authorize her to accept service.           Id. at

922. Cherry challenged service that was sent to a wrong post office box

in a one post office town with a total population of 668.           Id.   Webb

claimed service was ineffectual where it was addressed to Box 357

instead of Box 357-B and was returned unclaimed. Id. Webb, however,

did not deny receipt of the notice of the delivery attempt. Id.

       We held that service as to Bryant was invalid. Id. We noted that

when notice is sent to a wrong address where the defendant does not
                                        8

live, the notice is invalid.   Id.    We upheld the notices, however, as to

Cherry and Webb. Id. In the case of Cherry, we noted that service to a

wrong post office box in a small town would not likely affect delivery. Id.

With respect to Webb, we held that sending a notice to Box 357 instead

of 357-B was still service “at his address in his state of residence” and

when he refused to claim the mail, notice could be charged to him. Id.

      Language in Barrett, however, seemed to qualify the observations

in Buena Vista. According to the Barrett court, there was no requirement

that the notification of filing be actually received for jurisdiction to be

acquired. Id.

      In addition to cases involving our long-arm statute, we have

decided several other notice cases under other statutes. In Emery, we

considered a case in which notice sent by restricted registered mail

under our nonresident motorist statute was served but “unclaimed.”

Emery, 254 Iowa at 747, 119 N.W.2d at 274. Under Iowa Code section

321.501 (1954), notice was required to be served “by restricted registered

mail addressed to the defendant at his last known address.” Id. (internal

quotation marks omitted).      Further, Iowa Code section 321.505 stated

that the proof of the mailing, “including the return registry receipt,” must

be filed in the district court.      Id. at 748, 119 N.W.2d at 275 (internal

quotation marks omitted).

      We held in Emery that under the applicable statutes, there must

be a showing of actual or offered delivery. Id. at 751, 119 N.W.2d at 277.

We noted a distinction between an “unclaimed” notice and a refusal to

accept the notice. Id. at 750–51, 119 N.W.2d at 277. We emphasized

that the act of timely mailing a notification, properly addressed by

restricted registered mail, does not end the obligation under the statute.

Id.   The Barrett court, however, distinguished Emery, indicating that
                                     9

language in the nonresident motorist statute required receipt. Barrett,

290 N.W.2d at 922.

      We also considered statutory requirements under our farm tenancy

statute in Escher v. Morrison, 278 N.W.2d 9 (Iowa 1979). The applicable

statute, Iowa Code section 562.7(3), provided that service be sent to a

party “at his last known address . . . by restricted certified mail.” Iowa

Code § 562.7(3) (1977); Escher, 278 N.W.2d at 10. In Escher, the notice

was sent to P.O. Box 74 instead of P.O. Box 113. Id. The notice was

returned “unclaimed.” Id.

      We held in Escher that service was ineffective. We noted that the

statute required notice by “restricted certified mail.” Id. at 11. While we

reasoned that refusal to accept the notice will not defeat a landlord’s

effort to terminate a farm lease, service is incomplete where the notice is

returned “unclaimed.” Id. Justice McCormick dissented, arguing that

notice is complete upon mailing and that the statute does not require

actual receipt. Id. at 11–12 (McCormick, J., dissenting).

      C. Discussion. As we see it, the principal question of statutory

interpretation is what constitutes “an address in the state of residence”

under our long-arm statute, Iowa Code section 617.3 (2007). The phrase

“an address” is not self-defining.       No one would contend that “an”

address under the statute means “any” address in the state of residence.

An address to which the defendant has no connection clearly would not

satisfy the statute.   On the other hand, no one would argue that a

location where the defendant is currently residing fails to qualify as “an

address” under the statute. In this case, however, we are called upon to

determine whether a location listed as a “forwarding address” for

purposes of refunding a security deposit provided ten months prior to

service amounts to “an address” under the statute when a notice served
                                    10

by certified mail is returned “Attempted—Not Known” and “Unable to

Forward.”

      This statutory question is distinct from and should not be

confused with the constitutional question of whether service under the

statute comports with due process.       Service may be invalid under the

statute even though it comports with due process. Conversely, service

valid under the statute may run afoul of due process if it offends notions

of fundamental fairness.

      We begin our analysis by noting that the meaning of the term “an

address” depends on the context in which it is used. In re Marriage of

Johnson, 781 N.W.2d 553, 556 (Iowa 2010). For example, “an address”

for purposes of a nominations petition means residence, not a post office

box or business address or address of an agent. Pierce v. Peters, 599
S.W.2d 849, 850–51 (Tex. Civ. App. 1980), superseded by statute on other

grounds as stated in In re Bell, 91 S.W.3d 784, 786 (Tex. 2002). Yet, for

purposes of contacting a claimant, an address might include a mail

address and does not necessarily mean a residence. Stewart v. City of

Rio Vista, 164 P.2d 274, 275 (Cal. Ct. App. 1945).        In still another

context, “addresses” in a statute related to disclosure of membership

rosters for nonprofit entities might be broad enough to include e-mail

addresses. Worldmark v. Wyndham Resort Dev. Corp., 114 Cal. Rptr. 3d
546, 557–58 (Ct. App. 2010). In short, we believe the meaning of the

somewhat ambiguous term “address” in Iowa Code section 617.3 turns

on the function that is to be accomplished.

      Here, the function to be accomplished is service of notice by

registered or certified mail.   Iowa Code § 617.3.    In order to achieve

effective service by registered or certified mail, the person being served

must be present either at the time of delivery or in sufficient time to
                                    11

respond to a notice of attempted delivery.      Therefore, “an address” for

purposes of Iowa Code section 617.3 must mean a place where a person

is physically present and thus can be effectively served with registered or

certified mail.

      At the time of the certified mailing in this case, the address was

not a place where Eviglo could be found for purposes of receipt of the

notice. The mail at the address was returned “Attempted—Not Known”

and “Unable to Forward.” According to the United States Postal Service

(USPS), the phrase “Attempted—Not Known” means “[d]elivery attempted,

addressee not known at place of address.” United States Postal Service,

Domestic Mail Manual §        507.1.4.1,   at   801   (2007), available at

pe.usps.com/archive/pdf/dmmarchive20070717/mailingstandards.pdf

[hereinafter Domestic Mail Manual]; see also 39 C.F.R. § 111.1 (West,

Westlaw through June 14, 2012) (incorporating by reference the USPS

Domestic Mail Manual); Emery, 254 Iowa at 748, 119 N.W.2d at 275

(taking judicial notice of explanation of postal department procedure for

purposes of discussion). The USPS further states that the designation

“Unable to Forward” means that the “[m]ail [is] undeliverable at address

given; no change-of-address order on file; forwarding order expired.”

Domestic Mail Manual § 507.1.4.1, at 801.

      The    designations   “Attempted—Not      Known”   and   “Unable   to

Forward” differ from “Unclaimed” or “Refused.”            An “Unclaimed”

designation means that the addressee “abandoned or failed to call for

mail.” Id. If mail is listed as “Refused,” it means the addressee “refused

to accept mail or pay postage charges on it.” Id.

      Keeping in mind our longstanding view that the long-arm statute is

to be strictly construed, and consistent with its underlying purposes, we

believe the best interpretation of Iowa Code section 617.3 is that “an
                                    12

address” for purposes of the statute means a place where the person

being served with registered or certified mail can be found. In this case,

Eviglo at the time of service could not be found at the address.

Therefore, it was not a valid address under the statute. When mail is

returned “Attempted—Not Known” and “Unable to Forward,” Iowa Code

section 617.3 requires the party to take additional steps to achieve

service, namely, resend the notice to a valid address where the defendant

may effectively be served by registered or certified mail or achieve

personal service pursuant to the Iowa Rules of Civil Procedure. See Iowa

R. Civ. P. 1.305.

      We would come to a different view if the defendant refused service

or left it unclaimed. Under our caselaw, we have held that actual receipt

is not required and that refusal to accept or to claim registered or

certified mail at a valid address will not defeat service.    Barrett, 290

N.W.2d at 922. But we do not believe the statute contemplates effective

service at “an address” where the defendant is not present to receive it.

Our interpretation of the term “an address” is also reinforced by the

doctrine of constitutional avoidance. In Jones v. Flowers, 547 U.S. 220,

126 S. Ct. 1708, 164 L. Ed. 2d 415 (2006), the Supreme Court

considered a tax forfeiture case where notice of a tax sale was attempted

by certified mail but the notice was returned “unclaimed.” In an opinion

by Chief Justice Roberts, the Supreme Court compared the return of a

certified letter as “unclaimed” to watching a postal employee accidentally

drop the letter down a storm drain. Jones, 547 U.S. at 229, 126 S. Ct. at

1716, 164 L. Ed. 2d at 427–28.      The majority reasoned that a party

“desirous of actually informing the owners” would not simply give up at

this point and say “I tried,” but would take further steps to achieve

effective service. Id. (citation and internal quotation marks omitted); see
                                      13

Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 315, 70 S. Ct.
652, 657, 94 L. Ed. 865, 874 (1950). The majority rejected the view that

due process should be viewed solely at the point of the mailing of the

certified letter, noting that at the time of mailing, the sender was aware

of the possibility that notification of a failure to deliver could be received.

Jones, 547 U.S. at 230–31, 126 S. Ct. at 1716–17, 164 L. Ed. 2d at 429.

Although the majority did not specifically prescribe what additional step

would be required, due process required some kind of additional effort,

such as an attempt to achieve service by regular mail. Id. at 234–36,

126 S. Ct. at 1718–19, 164 L. Ed. 2d at 430–32.

      There is a question whether the principle in Jones extends to a

case involving an effort by a private party to obtain a money judgment

against another private party. Some lower federal caselaw seems to limit

the application of Jones in cases involving government initiated

forfeitures. See, e.g., Williams v. Cheyenne Crossing Residential Ass’n,

Inc., No. 4:10cv34, 2010 WL 5287509, at *3 (E.D. Tex. Dec. 17, 2010).

Other lower federal courts have at least reviewed Jones principles in

cases involving private interests. Yi Tu v. Nat’l Transp. Safety Bd., 470
F.3d 941, 945–46 (9th Cir. 2006) (failed notice by registered mail

insufficient in connection with suspension of pilot’s license); Orix Fin.

Servs. v. Phipps, No. 91 Cv. 2523(RPP), 2009 WL 30263, at *10 (S.D.N.Y.

Jan. 6, 2009) (default judgment entered against spouse in connection

with loan guarantee).    State appellate courts have also reached mixed

results on the application of Jones in cases involving private disputes.

Compare Harris v. Northbrook Condo. II, 44 A.3d 293, 298–99 (D.C. 2012)

(stating foreclosure sale of owner’s condo involved only private parties

and therefore due process not implicated), and NYCTL 1999-1 Trust v.

114 Tenth Ave. Assoc., Inc., 845 N.Y.S.2d 235, 237 (App. Div. 2007)
                                     14

(same); with Griffin v. Bierman, 941 A.2d 475, 482–85 (Md. 2008)

(applying Jones in context of private foreclosure).

      Some state court cases have applied Jones in the context of actions

for money judgments.     In particular, in Bloodgood v. Leatherwood, 25
So. 3d 1047, 1050–51 (Miss. 2010), the Mississippi Supreme Court,

relying on Jones principles, found service via certified mail upon a

nonresident     defendant     inadequate     when        it         was   returned

“unclaimed/refused.” See also Genoff Farms, Inc. v. Seven Oaks S., LLC,

249 P.3d 526, 531–32 (Okla. Civ. App. 2010) (applying Jones in contract

action to find inadequate service under long-arm statute).

      We relied upon Jones in War Eagle Village Apartments v. Plummer,

775 N.W.2d 714, 721 & n.2 (Iowa 2009), a case involving private parties.

In War Eagle, we determined that use of certified mail where there was a

very short time frame between notice and the hearing violated due

process under the Iowa Constitution.       War Eagle, 775 N.W.2d at 721.

We noted in a footnote citing Jones that “[w]e also look at whether there

are other reasonable steps the landlord could have taken” to achieve

actual notice. Id. at 721 n.2. Rather     than   reach        the    constitutional

issue, however, the doctrine of constitutional avoidance suggests that the

proper course in the construction of a statute is to steer clear of potential

constitutional shoals if possible.   See Simmons v. State Pub. Defender,

791 N.W.2d 69, 74 (Iowa 2010); State v. Nail, 743 N.W.2d 535, 539 (Iowa

2007); State v. Bower, 725 N.W.2d 435, 441 (Iowa 2006).                        Our

interpretation of Iowa Code section 617.3 is consistent with our general

desire to avoid constitutional adjudication where possible.

      IV. Conclusion.

      For the above reasons, we hold that the underlying default

judgment that gave rise to the garnishment in this case is void for lack of
                                   15

personal jurisdiction over the defendant as provided in Iowa Code section

617.3. As a result, the motion to quash the garnishment in this case

should have been granted. We therefore vacate the order of the district

court and remand with instructions to grant the motion to quash.

      REVERSED AND CASE REMANDED.