Washington Ex Rel. Bond & Goodwin & Tucker, Inc. v. Superior Court of Wash. for Spokane Cty.

Background

A Delaware company had qualified to do business in Washington and named a local resident as its agent for service of legal papers. The company later withdrew from the State, dissolved in Delaware, and the agent moved away without being replaced. A creditor sued in Washington and gave the summons to the Secretary of State’s office; the papers were handed to an assistant and never forwarded to the company. The company asked a Washington court to stop the suit, arguing it was entitled to notice.

Reasoning

The central question was whether Washington’s rule allowing service on the Secretary of State after a company withdraws and fails to keep an in-state agent denied the company fair process or equal treatment. The Court said the State may condition a foreign company’s entry on reasonable protections for people who do business there. By qualifying in Washington the company accepted those conditions and could have avoided the problem by appointing a new agent. The Court also found the State could classify different kinds of corporations differently and that handing papers to an assistant of the Secretary was treated as valid service.

Real world impact

The ruling lets suits against companies proceed when they withdraw and do not replace their in-state agent, even if the company did not get direct notice. Companies that want to ensure they receive notice must appoint or maintain an in-state agent. People or businesses who dealt with the company can rely on the State’s procedure to bring claims.