#2219 signed 4-25-96
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF KANSAS
FUND ADMINISTRATORS ASS'N,
ROBERT L. BAER, Trustee,
MONTANA HIGH SCHOOL ASS'N,
ADV. NO. 95-7118
ROBERT L. BAER, Trustee,
TENNESSEE SECONDARY SCHOOL ATHLETIC ASS'N,
ADV. NO. 95-7119
ORDER DENYING DEFAULT JUDGMENTS AND QUASHING SERVICE
These proceedings are before the Court on the plaintiff-trustee's motions for default judgment.
The trustee appears by counsel John T. Houston. The defendants have not appeared. The Court
has reviewed the relevant pleadings and is now ready to rule.
The trustee commenced these proceedings in November 1995, seeking to recover from both defendants postpetition transfers under 11 U.S.C.A. §549 and preferences under §547, and also to recover an account receivable from the Montana High School Association. Neither complaint alleges the capacity of the defendant, and their names indicate they could be private associations or governmental agencies. Thus, the Court cannot tell whether the trustee should have attempted mail service under Federal Rule of Bankruptcy Procedure 7004(b)(3) or (6). The summonses the trustee used contain the case caption but otherwise identify the party being summoned only as "You." In Adversary Number 95-7118, the trustee mailed the summons to:
1 S Dakota Ave
Helena, MT 59601
In Number 95-7119, he mailed the summons to:
3333 Lebanon Rd
Hermitage, TN 37076
The summonses and complaints do not indicate why the trustee chose to serve these individuals.
Neither defendant responded to the summons, and in February 1996, the trustee moved for
default judgment. These motions do not indicate that they were served on anyone. At the Court's
direction, the Clerk's Office informed the trustee's counsel of the need to show the relationship
between the person served and the defendant. Counsel has now filed affidavits, swearing that Dan
Frands is the Executive Director for the Montana High School Association and that Ronnie Carter
is the registered agent of the Tennessee Secondary School Athletic Association.
DISCUSSION AND CONCLUSIONS
The Court is unwilling to enter a default judgment against either defendant under the circumstances presented. Federal Rule of Bankruptcy Procedure 7004(b) provides that service may be made by first class mail:
(3) Upon a domestic or foreign corporation or upon a partnership or other unincorporated association, by mailing a copy of the summons and complaint to the attention of an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process. . . .
. . . .
(6) Upon a state or municipal corporation or other governmental organization thereof subject to
suit, by mailing a copy of the summons and complaint to the person or office upon whom process
is prescribed to be served by the law of the state in which service is made when an action is
brought against such a defendant in the courts of general jurisdiction of that state, or in the
absence of the designation of any such person or office by state law, then to the chief executive
Two things particularly concern the Court here. First, it appears nothing printed on the envelopes the trustee mailed would have informed the individuals served that the contents concerned the associations named as defendants rather than the individuals personally. If the individuals chose to discard the envelopes without opening them, they would never have known they were endangering the associations' interests rather than their own. Second, given the addresses used and the wording of the summonses, even if the individuals opened the letters, they could easily have interpreted the materials to be summoning them personally, not the associations.
The Court has not found any cases addressing a problem similar to the one presented here. However, the suggested form for a summons in an ordinary civil case, Form 1 of the Federal Rules of Civil Procedure, indicates the summons is to contain the case caption and then state: "To the above-named Defendant:" or something similar. In addition, the suggested form to give notice of a lawsuit and request waiver of service of a summons, Form 1A of the Civil Rules, indicates mailed service should be addressed:
[as (B) of (C)]"
where (A) is the name of an individual defendant or the name of the officer or agent of a defendant entity, (B) is the title or other relationship of the individual to the defendant entity, and (C) is the name of the defendant entity. The first sentence of the body of that form reads: "A lawsuit has been commenced against you (or the entity on whose behalf you are addressed)." If these facets of these forms had been incorporated into the trustee's attempted service, the Court would be much less concerned that the defendants' defaults may not be the result of deliberate decisions to ignore these lawsuits.
For these reasons, the Court concludes the trustee's motions for default judgments must be denied. Service of the summonses is hereby quashed. The proceedings will not be dismissed at this time, though, and the trustee is free to attempt service again.
IT IS SO ORDERED.
Dated at Topeka, Kansas, this _____ day of April, 1996.
JAMES A. PUSATERI
CHIEF BANKRUPTCY JUDGE