Impact To Services And Offices

Case Law Summaries

Court of Appeals Upholds Substituted Service of Process on State Agency Where Entity Fails to Comply with Resident Agent Requirement

MarylandMayor & City Council of Baltimore v. Prime Realty Associates, LLC, No. 53, decided March 12, 2020. The Maryland Court of Appeals upheld service on an LLC pursuant to Rule 3-124(o), which provides that service of process may be made on a corporation, LLC, or other entity required to maintain a resident agent by serving the State Department of Assessments and Taxation (SDAT) if the entity does not have a resident agent, or the resident agent is no longer at the statutory address maintained by the SDAT, or two good faith attempts to serve the resident agent fail. The plaintiff brought a receivership action against a Maryland LLC and attempted to serve the individual the LLC appointed as its resident agent at the address on file with the SDAT. However the resident agent had changed his address but the LLC failed to update the address with the SDAT. After its attempts to serve the resident agent failed, the plaintiff served the SDAT. The LLC failed to appear and a receiver was appointed, who sold the LLC’s property. The LLC then appealed, claiming service on the SDAT violated its due process rights.

The Maryland Court of Appeals held that serving the LLC by service on the SDAT was valid. In finding that the LLC’s due process rights were not violated, the court pointed out that the LLC failed to fulfill its statutory obligation to update the SDAT’s records when its resident agent’s address changed. The court also noted that Maryland has had a rule similar to Rule 3-124(o) for 83 years and it had never been challenged. The court also found that the fact that the plaintiff had a post office box address for the LLC did not make service on the SDAT invalid as it did not mean the plaintiff knew that the resident agent’s address on file was not an accurate address.

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