Sommervold v. Wal-Mart, Inc. Case Notes

Case Overview

• The case involves Jon Sommervold, who was injured when a battery-operated toy purchased at a Wal-Mart store in Aberdeen, South Dakota, exploded in his hands.

• Sommervold filed a tort action against Wal-Mart, Inc. in South Dakota state court.

• Wal-Mart removed the case to federal court and moved to dismiss for insufficient service of process under Fed.R.Civ.P. 12(b)(5).

• The District Court granted Wal-Mart's motion, finding Sommervold failed to comply with South Dakota's service of process statute.

• Sommervold appealed the decision.

Legal Issue

The central issue is whether Sommervold properly served Wal-Mart according to South Dakota law, specifically S.D. Codified Laws § 15–6–4(d)(1).

Court's Holding

The Court of Appeals affirmed the District Court's decision, holding that Sommervold's service of process was insufficient.

Standard of Review

The Court of Appeals reviewed the District Court's determination de novo, as per Marshall v. Warwick, 155 F.3d 1027, 1030 (8th Cir.1998).

South Dakota Service of Process Statute § 15–6–4(d)(1)

• The statute governs how process may be personally served on a private corporate entity like Wal-Mart.

• Key Provision: If the action is against a business entity, service must be on the president, partner, or other head of the entity, officer, director, or registered agent.

• If those individuals cannot be conveniently found, service may be made by leaving a copy of the summons and complaint at any office of the business entity within the state, with the person in charge of such office.

Facts Regarding Service of Process

• Sommervold did not serve Wal-Mart's registered agent, CTS Corporation.

• Instead, a private process server served Assistant Manager Josh Hehn at the Aberdeen store.

• Wal-Mart submitted affidavits stating Store Manager Brian Bjordal was the “person in charge” of the Aberdeen store when Hehn was served.

• Assistant managers like Hehn report to shift managers, who in turn report to the store manager.

Arguments on Appeal

• Sommervold argued that service on Hehn complied with § 15–6–4(d)(1) because Hehn had ostensible authority to accept service.

• Sommervold also argued that serving Hehn constituted “substantial compliance” with § 15–6–4(d)(1).

Ostensible Agency Doctrine

• The court doubted that the Supreme Court of South Dakota would apply the ostensible agency doctrine to excuse non-compliance with § 15–6–4(d)(1).

• The statutory list of parties authorized to receive service under SDCL 15–6–4(d)(1) is exhaustive and compliance is not discretionary.

• Wal-Mart properly listed CTS Corporation as its registered agent for service of process.

• Ostensible agency must be traceable to the principal and cannot be established solely by the acts, declarations, or conduct of an agent (Kasselder v. Kapperman, 316 N.W.2d 628, 630 (S.D.1982)).

Substantial Compliance Argument

• Sommervold argued that service on Assistant Manager Hehn constituted “substantial compliance” with § 15–6–4(d)(1) within the meaning of Wagner v. Truesdell, 574 N.W.2d 627, 629 (S.D.1998).

• “Substantial compliance” means actual compliance in respect to the substance essential to every reasonable objective of the statute.

• The court must determine whether the statute has been followed sufficiently to carry out its intent.

Analysis of Substantial Compliance

• The court distinguished the facts from Wagner v. Truesdell, where the defendant's caretaker was served at the defendant's home because the defendant was allegedly incompetent.

• In White Eagle v. City of Fort Pierre, 606 N.W.2d 926 (S.D.2000), the court held that serving the City's finance officer instead of the mayor, alderman, or commissioner was not substantial compliance.

• R.B.O. v. Priests of the Sacred Heart, 807 N.W.2d 808 (S.D.2011), held that failing to direct service to the correct defendant was not substantial compliance.

• Spade v. Branum, 643 N.W.2d 765, 768 (S.D.2002), stated that substantial compliance is adequate where it is impossible for a plaintiff to serve process on a defendant personally.

Legislative Intent and 2005 Amendments

• The 2005 amendments to § 15–6–4(d)(1) restricted the way process may be served on a business entity.

• Prior to 2005, § 15–6–4(e) allowed substituted service on a corporate defendant if qualified representatives could not be found, by leaving a copy at the place of business with any officer or employee over fourteen years of age.

• The 2005 amendment deleted this provision, restricting service to personal service as prescribed in § 15–6–4(d)(1).

• The court reasoned that restricting the universe of agents who may be properly served reflects a legislative intent to increase the likelihood that a business entity will receive actual notice of a lawsuit.

Conclusion

The Court of Appeals agreed with the District Court's decision to dismiss Sommervold's complaint under Rule 12(b)(5) because he failed to comply with the applicable South Dakota service statute, § 15–6–4(d)(1).

• Issue:

  • Whether Sommervold properly served Wal-Mart according to South Dakota law, specifically S.D. Codified Laws § 15–6–4(d)(1).

• Rule:

  • The statute governs how process may be personally served on a private corporate entity like Wal-Mart.

  • Key Provision: If the action is against a business entity, service must be on the president, partner, or other head of the entity, officer, director, or registered agent. If those individuals cannot be conveniently found, service may be made by leaving a copy of the summons and complaint at any office of the business entity within the state, with the person in charge of such office.

• Application:

  • Sommervold did not serve Wal-Mart's registered agent, CTS Corporation.

  • Instead, a private process server served Assistant Manager Josh Hehn at the Aberdeen store.

  • Wal-Mart submitted affidavits stating Store Manager Brian Bjordal was the “person in charge” of the Aberdeen store when Hehn was served.

  • Assistant managers like Hehn report to shift managers, who in turn report to the store manager.

• Conclusion:

  • The Court of Appeals agreed with the District Court's decision to dismiss Sommervold's complaint under Rule 12(b)(5) because he failed to comply with the applicable South Dakota service statute, § 15–6–4(d)(1).

The court primarily relied on South Dakota Codified Laws § 15–6–4(d)(1), which governs how a process may be personally served on a private corporate entity. They also referenced prior case law such as Marshall v. Warwick, Kasselder v. Kapperman, Wagner v. Truesdell, White Eagle v. City of Fort Pierre, R.B.O. v. Priests of the Sacred Heart, and Spade v. Branum to interpret and apply the statute.