July 17, 2017 – A company that appointed a registered agent for service of process in Wisconsin did not trigger personal jurisdiction to be sued in Wisconsin, the state supreme court has ruled, reversing an appeals court decision on the issue.
Countrywide Home Loans Inc. is a New York corporation with a principal place of business in California, but it appointed a Wisconsin corporation to be its registered agent for service of process. Countrywide had no offices or employees in the state.
A Wisconsin corporation, Ambac Assurance Corp., sued Countrywide in 2014, alleging that it incurred substantial insurance claim liabilities because Countrywide fraudulently misrepresented the quality of mortgages in mortgage-backed securities.
Countrywide moved to dismiss for a lack of personal jurisdiction. The Dane County Circuit Court dismissed the case, concluding Wisconsin courts did not have jurisdiction. However, an appeals court reversed, noting Countrywide elected to be served in Wisconsin and therefore consented to personal jurisdiction in Wisconsin.
But in the Segregated Account of Ambac Assurance Corp. v. Countrywide Home Loans Inc., 2017 WI 71 (June 30, 2017), the Wisconsin Supreme Court ruled (4-2) that maintaining a Wisconsin-based registered agent did not trigger personal jurisdiction.
Wis. Stat. section 180.1507 requires foreign corporations to maintain a registered office and a registered agent in Wisconsin if authorized to transact business in Wisconsin.
Countrywide was not transacting business in Wisconsin, but Ambac argued that it consented to general personal jurisdiction by maintaining a registered agent here.
General jurisdiction is triggered if a corporation has substantial and continuous operations in the state, the supreme court majority explained, but complying with section 180.1507, without more, is not automatic consent to general jurisdiction.
“The language is straightforward, and none of the words – independently or taken together – suggest consent to jurisdiction,” wrote Justice Rebecca Bradley.
“A registered agent’s role is to receive service of process, notice, or demand on behalf of a foreign corporation, and the agent’s mere receipt of process does not empower Wisconsin courts to exercise either specific or general personal jurisdiction without compromising the due process rights of the foreign corporation,” Justice Bradley wrote.
Justice Ann Walsh Bradley dissented, joined by Justice Shirley Abrahamson, noting that Countrywide is authorized to do business in Wisconsin and has filed more than 100 foreclosure lawsuits against Wisconsin homeowners in Wisconsin state courts.
“But now that the shoe is on the other foot, it contends that Wisconsin courts no longer have jurisdiction under that same chapter when lawsuits are filed against it,” she wrote.
“I conclude that the circuit court has general personal jurisdiction over Countrywide in this action. Countrywide consented to personal jurisdiction in Wisconsin when it appointed a registered agent in order to accept service of process,” A.W. Bradley wrote.
The dissenters said complying with section 180.1507 is a clear indication that a corporation has consented to be sued in Wisconsin, since one of the functions of a registered agent is to accept the summons and complaint when lawsuits are filed.
“What reason exists for the appointment of a registered agent to receive service of a summons and complaint other than the purpose of being subject to a lawsuit? The majority offers none,” Justice A.W. Bradley wrote.