October 21, 2014
Is the registered statutory agent for your company accurate and up-to-date? A recent appellate decision confirms why it’s a good idea to do so. In S & S Quality Remodeling v. Phoenix Remediation, 2014-Ohio-4609, the Second District Court of Appeals affirmed a default judgment in a breach of contract claim by a subcontractor against a general contractor. The general contractor’s statutory agent of record with the Ohio Secretary of State had passed away three weeks before the suit was filed against the general. The summons was returned claimed, with an illegible signature (as is often the case). The sub-contractor moved for default judgment a month later, and the general filed an answer (out of rule) and an opposition brief to the default motion, arguing that the summons was sent to the wrong address. The trial court granted the default judgment, and the general contractor appealed.
In affirming the default judgment, the appellate court cited the duty imposed by R.C. 1705.06(D) to “appoint forthwith another agent and file with the secretary of state” upon the death of a statutory agent. The ruling suggests a very prompt time frame in which to replace a statutory agent upon death -- as short as three weeks. To avoid getting caught up in a default scenario, corporations and LLCs should regularly review their statutory agent filings with counsel, to ensure they are current.