Maryland High Court Rejects Virginia Service of Process Rule On Maryland Residents

The Maryland Court of Appeals recently decided a case that will have far reaching effect on out-of-state lawsuits involving Maryland residents. In Miserandino v. Resort Properties, Inc., 345 Md. 43, 691 A.2d 208 (1997), cert. filed, - U.S. - (July 1, 1997), Maryland's highest court struck down as unconstitutional Virginia's procedure for service of process on a Maryland resident. In Miserandino, Resort Properties, Inc. filed suit against Gerald and Karen Miserandino in Virginia state court for breach of contract. Because the Miserandinos were residents of Maryland, Resort served the complaint pursuant to Virginia's process rule for out-of-state defendants by sending the complaint to the Virginia Secretary of the Commonwealth, who, in turn, sent the complaint to the Miserandinos by first-class mail. The Miserandinos did not file an answer, and a default judgment was entered against them. The Miserandinos later claimed that they never received the complaint and did not have notice of the Virginia lawsuit.

Resort recorded the Virginia judgment against the Miserandinos in Maryland under a uniform statute that permits the judgment of a sister state to be entered in Maryland as a Maryland judgment. The Miserandinos moved to strike the judgment, taking the position that the Virginia service of process rule violated due process because it did not give them notice of the original Virginia action against them. The Maryland trial court granted the motion to strike but, upon reconsideration, reversed its decision.

On appeal, the Maryland Court of Appeals, in a 4-3 opinion, reversed and granted the Miserandinos' motion to strike. The court observed that, even though service of process complied with Virginia's method for service, service was not sufficient if that method violated federal due process. The Court of Appeals identified the issue as whether "original service of process by first class mail is constitutionally sufficient to confer in personam jurisdiction over a nonresident individual in a long-arm jurisdiction case." In analyzing that issue, the court balanced the interests of the state against the right of the individuals to due process of law under the Fourteenth Amendment. The court found that there was no Virginia interest present that outweighed or justified resort to what the court regarded as the significantly less certain procedure of first-class mail as a means for notifying a defendant of an action against him -especially in light of the availability of more reliable methods of service, such as hand-delivery or certified mail, as required by Maryland law. Accordingly, the Court of Appeals denied full faith and credit to the Virginia judgment and found the Virginia process rule as it relates to Maryland residents unconstitutional. On July 1, 1997, Resort, joined by the Commonwealth of Virginia, filed a petition for a writ of certiorari with the Supreme Court.

Miserandino will have a significant impact on all who attempt to sue Maryland residents in non-Maryland courts. Existing out-of-state judgments obtained against Maryland residents without personal service will be subject to attack if they are recorded in Maryland. Moreover, on a prospective basis, it will be risky for anyone to sue a Maryland resident in another state's courts under a forum procedure that allows service by first-class mail. Accordingly, out-of-state plaintiffs would be well advised to serve a Maryland defendant personally, even if less stringent service methods are permitted where the suit is filed.

For more information on service of process issues, contact Scott P. Burns at 410/752-9743.