Travelers Casualty and Surety Company of America v. Brenneke ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TRAVELERS CASUALTY AND SURETY 
COMPANY OF AMERICA, No. 06-36077
Plaintiff-Appellee,
v.  D.C. No.
CV 06-0303 AA
ANTHONY PAUL BRENNEKE, OPINION
Defendant-Appellant.

Appeal from the United States District Court
for the District of Oregon
Ann Aiken, District Judge, Presiding
Submitted October 24, 2008*
Portland, Oregon
Filed January 9, 2009
Before: A. Wallace Tashima and Milan D. Smith, Jr.,
Circuit Judges, and George H. Wu,** District Judge.
Opinion by Judge Wu
*This panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
**The Honorable George H. Wu, United States District Judge for the
Central District of California, sitting by designation.
161
164 TRAVELERS CASUALTY v. BRENNEKE
COUNSEL
Kim D. Stephens, Seattle, Washington, for the defendant-
appellant.
Jan D. Sokol and Tyler J. Storti, Portland, Oregon, for the
plaintiff-appellee.
OPINION
WU, District Judge:
The principal issue herein is the sufficiency of service
under Federal Rule of Civil Procedure (“Fed. R. Civ. P.”) 4(e)
by the placement of the summons and complaint within a
defendant’s physical proximity. Appellant Anthony Paul
Brenneke (“Brenneke”) appeals from a summary judgment
entered against him in favor of Appellee Travelers Casualty
and Surety Company of America (“Travelers”) in the amount
of $211,300. Brenneke contends that the district court lacked
jurisdiction over him because he was never properly served,
and that it erred in finding that he had waived his right to
challenge personal jurisdiction. He further claims that Travel-
ers presented insufficient evidence of damages for the court
to have properly made any damage award. Rejecting those
contentions, we affirm the district court’s decision.
FACTUAL AND PROCEDURAL BACKGROUND
On March 6, 2006, Travelers filed a complaint against
Brenneke, NSP Development, Inc. (“NSP”), and Sherwood
H.D., LLC (“Sherwood”) (collectively “Defendants”), seek-
ing recovery under a Commercial Surety Bond Application
(“Indemnity Agreement”) which the Defendants had executed
in favor of Travelers. The Indemnity Agreement was executed
in connection with a supersedeas bond (“Bond”) which was
TRAVELERS CASUALTY v. BRENNEKE 165
posted in conjunction with the Defendants’ appeal of certain
judgments entered in state court against them and in favor of
an entity called Polygon Northwest Company (“Polygon”).
The Bond was in the sum of $297,503. Under the Indemnity
Agreement, the Defendants agreed to indemnify Travelers:
. . . from and against any and all damages, loss,
costs, charges, and expenses of whatsoever kind or
nature, including counsel or attorney’s fees, whether
incurred under retainer or salary or otherwise, which
it shall or may, at any time, sustain or incur by rea-
son or in connection with furnishing any Bond,
including any investigation related thereto.
The Indemnity Agreement further provided that, upon receipt
of notice that a demand had been made against the Bond, the
Defendants would pay Travelers the full amount of the
demand plus any necessary fees within three business days
before payment of the demand was due. Failure to make such
payment to Travelers would cause the Defendants/
indemnitors to be additionally liable for all reasonable costs
and expenses, including attorney fees, incurred by Travelers
to enforce the Indemnity Agreement. Ultimately, a demand
was made and Travelers notified Brenneke that the sum of
$297,503 was required. Brenneke never responded to that
notice or to Traveler’s subsequent demands for indemnifica-
tion.
After the Defendants had failed to timely respond to the
complaint, Travelers filed a “Motion for Order of Default and
Judgment” against them. Brenneke filed a “Response in
Opposition to Motion for Entry of Default” and his declara-
tion, stating that he had never been served with the summons
and complaint. Brenneke had previously filed a “Notice of
Appearance” indicating his intent to appear and defend in the
action (and purporting to preserve “any objections to the juris-
diction of the court”).
166 TRAVELERS CASUALTY v. BRENNEKE
In connection with its motion to enter default, Travelers
submitted the affidavit of Phil Sheldon (“Sheldon”), a process
server for Barrister Support Service, which Travelers had
hired to effectuate service upon Brenneke. Sheldon stated that
he had experienced “significant difficulty” in serving Bren-
neke in the past, and that he was aware of other process serv-
ers’ having experienced similar difficulty. He also indicated
that he had successfully served legal documents personally on
Brenneke on prior occasions. As to the current matter, he
stated that he had made four separate visits to Brenneke’s
home between March 17, 2006 and April 2, 2006, attempting
to accomplish service. No one answered the door or intercom
even though, on more than one occasion, there were two or
three vehicles in the driveway. On both his first and third vis-
its to that residence, Sheldon left a note for Brenneke to con-
tact Barrister Support Service, but he did not do so. During
what was apparently the fifth attempt, on the evening of April
2, 2006, an adult male answering to the name of Paul Bren-
neke responded to Sheldon’s ringing on the intercom at Bren-
neke’s residence. When Sheldon identified himself as a
process server, that person responded “Oh great,” but never
opened the door. However, Sheldon observed Brenneke
standing behind the window next to the front door watching
him. Sheldon then held the summons and complaint out
towards the window, and announced in a loud voice “You are
served.” Sheldon further indicated that Brenneke watched him
place the documents on the doorstep. Sheldon thereafter com-
pleted a proof of service form.
The district court granted Travelers’ motion for entry of
default as against NSP and Sherwood, but denied it as to
Brenneke. As part of that order, Brenneke was required to file
an answer within the next ten days. Brenneke did so. The only
affirmative defense stated in that answer was a lack of per-
sonal jurisdiction based on the absence of personal service.
Travelers filed a motion for summary judgment supported
by the affidavit of Edward M. Connelly (“Connelly”), “a
TRAVELERS CASUALTY v. BRENNEKE 167
Bond Claim Manager, Salvage [for] St. Paul Travelers, which
is an entity that owns 100% of Plaintiff [Travelers].” Connelly
stated that he was “the individual at Travelers in charge of
this Brenneke file.” He described Travelers’ posting of the
$297,503 Bond and the eventual execution of the Indemnity
Agreement by Brenneke in his capacities as President of NSP,
the “Managing Member” of Sherwood, and individually. Con-
nelly further stated that:
As of the date of this Affidavit, Travelers is still
owed at least $211,300. This balance owing consists
of the balance remaining on the amount paid out to
Polygon on the Bond plus other amounts, including
attorneys fees, costs, and expenses incurred by Trav-
elers to date in enforcing its rights under the Indem-
nity Agreement, all with accrued interest at the rate
of 6.825% from the respective dates paid through
June 26, 2006. In addition, Travelers also continues
to incur expenses, costs, and attorney fees in this
action . . . .
In an “Opinion and Order” granting Travelers’ summary
judgment motion, the district court rejected Brenneke’s lack
of personal jurisdiction affirmative defense concluding that he
was “properly served with the Summons and Complaint in
this action as a matter of law.” In doing so, the court noted
that “Brenneke’s response does not address or respond to any
facts contained in the Sheldon Affidavit.” Further, the court
found undisputed evidence of damages based on statements in
and exhibits attached to the Connelly affidavit.
DISCUSSION
I. Travelers substantially complied with Fed. R. Civ. P.
4(e)(1) and (2).
A. Applicable law and standard of review
[1] “A federal court is without personal jurisdiction over a
defendant unless the defendant has been served in accordance
168 TRAVELERS CASUALTY v. BRENNEKE
with Fed. R. Civ. P. 4.” Benny v. Pipes, 799 F.2d 489, 492
(9th Cir. 1986) (citing Jackson v. Hayakawa, 682 F.2d 1344,
1347 (9th Cir. 1982)). A district court’s interpretation of the
Federal Rules of Civil Procedure is reviewed de novo. Cal.
Scents v. Surco Prods., Inc., 406 F.3d 1102, 1105 (9th Cir.
2005); Atchison, Topeka & Santa Fe Ry. v. Hercules Inc., 146
F.3d 1071, 1073 (9th Cir. 1998). The district court’s determi-
nation whether personal jurisdiction can be exercised is a
question of law reviewable de novo when the underlying facts
are undisputed. FDIC v. British-American Ins. Co., 828 F.2d
1439, 1441 (9th Cir. 1987).
[2] So long as a party receives sufficient notice of the com-
plaint, Rule 4 is to be “liberally construed” to uphold service.
Chan v. Soc’y Expeditions, Inc., 39 F.3d 1398, 1404 (9th Cir.
1994). However, “neither actual notice nor simply naming the
defendant in the complaint will provide personal jurisdiction
without substantial compliance with Rule 4.” Benny, 799 F.2d
at 492 (citation and quotes omitted).
B. Analysis
Brenneke’s only basis for challenging the district court’s
jurisdiction over him is his argument that he was not properly
served. There is sufficient undisputed evidence to conclude
that Travelers substantially complied with Fed. R. Civ. P.
4(e)(1) and (2).1
1
Fed. R. Civ. P. 4(e) provides:
(e) Serving an Individual Within a Judicial District of the
United States. Unless federal law provides otherwise, an indi-
vidual — other than a minor, an incompetent person, or a person
whose waiver has been filed — may be served in a judicial dis-
trict of the United States by:
(1) following state law for serving a summons in an action
brought in courts of general jurisdiction in the state where
the district court is located or where service is made; or
TRAVELERS CASUALTY v. BRENNEKE 169
Here, although the process server was unable to effect in-
hand service upon Brenneke, the district court reasonably
concluded that Travelers’ service of the summons and com-
plaint satisfied the requirements for personal service under
Rule 4(e)(2). As noted in 4A Wright & Miller, Federal Prac-
tice and Procedure § 1095 at 516-17 (3d ed. 2002):
If the defendant attempts to evade service or refuses
to accept delivery after being informed by the pro-
cess server of the nature of the papers, it usually is
sufficient for the process server to touch the party to
be served with the papers and leave them in defen-
dant’s presence or, if a touching is impossible, sim-
ply to leave them in the defendant’s physical
proximity. It is not crucial in these circumstances
that the defendant does not take the papers into his
or her possession. Since this procedure satisfies the
objective of giving notice to the party to be served,
it seems to be entirely sufficient to satisfy the deliv-
ery requirement of Rule 4(e)(2). [Footnote omitted.]
[3] Sufficient service may be found where there is a good
faith effort to comply with the requirements of Rule 4(e)(2)
which has resulted in placement of the summons and com-
plaint within the defendant’s immediate proximity and further
compliance with Rule 4(e)(2) is only prevented by the defen-
dant’s knowing and intentional actions to evade service. As
(2) doing any of the following:
(A) delivering a copy of the summons and of the com-
plaint to the individual personally;
(B) leaving a copy of each at the individual’s dwelling or
usual place of abode with someone of suitable age and dis-
cretion who resides there; or
(C) delivering a copy of each to an agent authorized by
appointment or by law to receive service of process.
170 TRAVELERS CASUALTY v. BRENNEKE
observed in Doe 1 v. Liu Qi, 349 F.Supp.2d 1258, 1275 n.5
(N.D. Cal. 2004), “[w]here a defendant attempts to avoid ser-
vice e.g. by refusing to take the papers, it is sufficient if the
server is in close proximity to the defendant, clearly commu-
nicates intent to serve court documents, and makes reasonable
efforts to leave the papers with the defendant.” Travelers cites
the case of Errion v. Connell, 236 F.2d 447, 457 (9th Cir.
1956), in which a sheriff’s tossing papers through a hole in a
screen door at defendant’s home after speaking to her was
found to be adequate personal service. Errion is sufficiently
apt to this case, and Brenneke has not attempted to distinguish
it.
[4] Brenneke’s contrary arguments are deficient. He ini-
tially states that “Travelers’ inability to demonstrate positive
identification of [him] is consistent with [his] affidavit in
which he states that he was never served with the summons
and complaint.” However, in his “Response to Plaintiff’s
Motion for Summary Judgment,” Brenneke offered no evi-
dence to rebut the factual statements in Sheldon’s affidavit.2
Sheldon indicated that he had personally served Brenneke
before and that Brenneke identified himself on the intercom
during the evening in question. While Brenneke noted that his
girlfriend and children were not served at his home, substi-
tuted service clearly is not a requirement for personal service
but merely an alternate means by which service may be
accomplished. Finally, Brenneke argues that his attorney, with
whom Travelers had been dealing in other lawsuits, should
have been asked if he would accept service on his behalf. This
obviously is not required either.
2
Brenneke’s declaration contained only five sentences that were either
mere legal conclusions (e.g., “I have not been served with any summons
or complaint involving Travelers.”) or factual averments which did not
conflict with the statements in Sheldon’s affidavit (e.g., “I have not
received any legal papers in the mail at home or at any corporate post
office. [Emphasis added.]”).
TRAVELERS CASUALTY v. BRENNEKE 171
Travelers also argues that by effecting service under the
State of Oregon’s procedural rules, it has satisfied Fed. R.
Civ. P. 4(e)(1). Rule 7D(1) of the Oregon Rules of Civil Pro-
cedure (“ORCP”) provides that summons shall be served:
. . . in any manner reasonably calculated, under all
the circumstances, to apprise the defendant of the
existence and pendency of the action and to afford a
reasonable opportunity to appear and defend.
Moreover, ORCP 7G provides in part that:
If service is made in any manner complying with
subsection D(1) of this rule, the court . . . shall disre-
gard any error in the service of summons that does
not violate the due process rights of the party against
whom the summons was issued.
The Oregon Supreme Court has endorsed a liberal interpreta-
tion of the service rules. See, e.g., Lake Oswego Review, Inc.
v. Steinkamp, 695 P.2d 565, 568 (Or. 1985) (“[W]hen a defen-
dant actually does get notice, defects in form of summons or
method of service of summons do not invalidate service. A
defendant who received actual notice can hardly assert that
summons was not served by a manner calculated to give
notice.”) (quoting Merrill, Jurisdiction Over Parties; Service
of Summons (Rules 4-7), reprinted in Oregon Law Institute,
Oregon Civil Procedure Rules 1980, at 237 (1979)).
[5] Although “actual notice is not enough to trigger the
application of ORCP 7G,” Levens v. Koser, 869 P.2d 344, 346
(Or. Ct. App. 1994) (citation omitted), Travelers relies not
only upon actual notice but also its reasonable steps to comply
with Oregon’s service provisions. Levens, which is Bren-
neke’s only cited case on this issue, is readily distinguishable
from the present situation. In Levens, the court held that an
attempt to serve the defendant by leaving the papers with his
mother at her house, which was not the defendant’s residence
172 TRAVELERS CASUALTY v. BRENNEKE
at that time, was not valid substituted service. Here, Travel-
ers’ service on Brenneke was at his residence, in his presence,
and executed in a manner reasonably calculated to apprise
him of the existence of the lawsuit and to afford him an
opportunity to appear and defend.
[6] There was valid service herein under both Fed. R. Civ.
P. 4(e)(1) and 4(e)(2).
II. The district court’s order requiring Brenneke to initially
file an answer was not in error.
As his second issue on appeal, Brenneke claims that he has
not waived the defense of lack of service of process. This
argument is somewhat odd because the district court clearly
addressed whether there was valid service when the issue was
raised and decided in the motion for summary judgment.
There was never any indication that the district court consid-
ered Brenneke to have waived that challenge.
[7] Perhaps what Brenneke meant is that he should have
been allowed to file a motion under Fed. R. Civ. P. 12(b)(2)
before being required to file an answer. In such a motion,
Travelers would have had the burden of establishing that ser-
vice was proper. See, e.g., Fireman’s Fund Ins. Co. v.
National Bank of Coops., 103 F.3d 888, 893 (9th Cir. 1996)
(non-moving party has burden of establishing personal juris-
diction). However, that is approximately the same burden that
applied to Travelers in its motion for summary judgment,
where it raised that issue and was required to show that there
was no material factual dispute regarding the validity of ser-
vice. It is impossible to see how Brenneke could have been
prejudiced by not having been allowed to initially file a Rule
12(b)(2) motion.
TRAVELERS CASUALTY v. BRENNEKE 173
III. The district court correctly awarded damages.
A. Standard of Review
“The district court’s grant of summary judgment is
reviewed de novo. Thus, our review is governed by the same
standard used by the trial court under Federal Rule of Civil
Procedure 56(c).” Suzuki Motor Corp. v. Consumers Union of
United States, Inc., 330 F.3d 1110, 1131 (9th Cir. 2003) (cita-
tions omitted). Fed. R. Civ. P. 56(c) provides in part: “The
judgment sought should be rendered if the pleadings, the dis-
covery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
B. Analysis
[8] Brenneke’s final contention on appeal is that there is no
competent evidence in the record that supports the amount of
damages awarded. Evidence of the amount of damages was
presented by Travelers in connection with its summary judg-
ment motion by means of the Connelly affidavit and its
accompanying exhibits. While somewhat inconclusive as to
the total amount of damages, for the purpose of an opposed
motion for summary judgment, the Connelly affidavit was
sufficient to shift the burden to Brenneke to demonstrate the
existence of a triable issue of fact with respect to those dam-
ages. See Fed. R. Civ. P. 56(e)(2); Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
As stated in the Connelly affidavit, Travelers did pay out
$297,503 to Polygon and was entitled to interest on that
amount plus attorney fees and costs in connection with
enforcing its rights under the Indemnity Agreement. Travelers
also negotiated with Polygon for the assignment of additional
outstanding judgments (“Assigned Judgments”) that had been
previously entered against Brenneke, NSP, and Sherwood in
the underlying state litigation. While Travelers did receive
174 TRAVELERS CASUALTY v. BRENNEKE
$209,025 from the Multnomah County Sheriff’s Office as a
result of a writ of execution on Brenneke’s residence in satis-
faction of one of the Assigned Judgments, Connelly stated
under oath that there remained “at least $211,300” which was
still owed and unpaid by Brenneke. Brenneke, in response,
offered no evidence to controvert Travelers’ admissible evi-
dence. Indeed, Brenneke’s arguments did not deal with the
issue of the amount of damages at all. Hence, there was no
evidentiary submission from Brenneke to rebut Connelly’s
sworn statement (and accompanying exhibits) to the effect
that Travelers is still owed “at least” $211,300, which is the
sum contained in the district court’s damage award.
CONCLUSION
For the foregoing reasons, the judgment of the district court
is AFFIRMED.