47
Chapter 3
Court Procedures
See Separate Lecture Outline System
INTRODUCTION
This chapter continues the opportunity begun in the previous chapter to make students aware of the functioning of the
judicial branch of our government. The previous chapter outlined the theoretical framework of our court system. This chapter
covers the nuts and bolts of the process.
An important step in the judicial process is the application of procedural rules in a case. The goal of this chapter is to
give students an understanding of what happens before, during, and after a civil trial.
48 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
law and does not have to accept the adversaries’ arguments. There are rules of procedure to govern the way in which disputes
are handled in courts. These rules differ from court to court, but there are similarities.
ADDITIONAL RESOURCES—
VIDEO SUPPLEMENTS
The following video supplements relate to topics discussed in this chapter—
PowerPoint Slides
To highlight some of this chapter’s key points, you might use the Lecture Review PowerPoint slides compiled for
Chapter 3.
Business Law Digital Video Library
individual review. Clips on topics covered in this chapter include the following.
CHAPTER OUTLINE
I. Procedural Rules
Procedural requirements are introduced in the text, principally through a brief discussion of the Federal Rules of Civil
Procedure (FRCP).
A. STAGES OF LITIGATION
Most cases follow the same basic steps, from the pleadings through the appeal (if any). The text uses a
hypothetical to illustrate various stages in litigation.
B. THE FIRST STEP: CONSULTING WITH AN ATTORNEY
CHAPTER 3: COURT PROCEDURES 49
Who Pays an Attorney’s Fee?
Generally, unless statutorily or contractually authorized, attorneys’ fees are not awardable to a winning party.
Thus, the basic answer is that everyone pays his or her own attorney’s fee. There are exceptions. In some
circumstances (for example, in certain cases involving indigent criminal defendants), the government pays, win or lose.
Fees may be awarded if the losing party acted in bad faith, vexatiously, wantonly, or for oppressive reasons, or if the
attorneys handling cases for the American Civil Liberties Union pay their own fees.)
II. Pretrial Procedures
A. THE PLEADINGS
In a civil case, the pleadings inform each party of the other’s claims and specify the issues. The pleadings consist
of a complaint and an answer.
1. The Plaintiff’s Complaint
The complaint (or petition or declaration) is filed with the clerk of the trial court. It contains a statement
alleging jurisdictional facts; a statement of facts entitling the complainant to relief; and a statement asking
for a specific remedy.
CASE SYNOPSIS—
Case 3.1: Cruz v. Fagor America, Inc.
50 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
Alan Cruz was burned on the left side of his body when he tried to take the lid off a pressure cooker distributed by
Fagor America, Inc. He filed a suit in a California state court against Fagor, alleging negligence and product liability, and
mailed a summons and a copy of the complaint to Fagor by certified mail, return receipt requested. The envelope was
addressed to “Patricio Barriga, Chairman of the Board, FAGOR AMERICA, INC.,” etc. The receipt was returned with the
aside the judgment. Cruz appealed.
proper when the summons and a copy of the complaint are delivered to “a person authorized by the corporation to
the action is imputed to Fagor and its officers.”
…………………………………………………………..………………………………………………………….………..
Notes and Questions
Did Fagor establish a satisfactory excuse for failing to defend against Cruz’s suit? The appellate court
answered no. “Although Fagor submitted a declaration of Patricio Barriga, notably absent from that declaration is any
statement that he does not know Hayes, that Hayes is not employed by Fagor, that Hayes is not authorized to accept
mail for Barriga or other Fagor officers, or that neither Hayes or anyone else at Fagor received the summons and
complaint at issue. Barriga also does not state that he was unaware of the action pending against Fagor.”
If a mailed summons actually reached the individual to be served, would that be sufficient to establish
valid service, even if the summons was not addressed correctly or was signed for by someone who did not
have the authority to do so? Probably. If a plaintiff can provide evidence that a corporate officer or an agent for
service of process actually received a summons, this would likely be sufficient to establish that the plaintiff
substantially effected service.
service by e-mail in certain circumstances, but generally, a party will have to obtain a court’s permission.
cost savings resulting from service by e-mail. The legal profession, the court systems, and other plaintiffs will also
ANSWERS TO QUESTIONS AT THE END OF CASE 3.1
1. Suppose that Cruz had misaddressed the envelope, but the summons had still reached Hayes and Cruz
could prove it. Would this have been sufficient to establish valid service? Explain. Evidence that a mailed
CHAPTER 3: COURT PROCEDURES 51
summons actually reached the individual to be served should be sufficient to establish valid service, even if the
envelope was misaddressed or some other circumstance indicated that the summons might have gone astray. Thus, if
Cruz were able to provide evidence that a corporate officer or an agent for service of process actually received a
summons, this should have been sufficient to establish compliance with the requirements for service of process, re-
gardless of the address on the envelope.
was mailed to an officer of the corporation should not be held responsible for any failure on the part of the corporate
2. The Defendant’s Response
The defendant’s answer admits or denies the allegations in the complaint and sets out any defenses and
counterclaims (the plaintiff can file a reply to any counterclaim).
B. DISMISSALS AND JUDGMENTS BEFORE TRIAL
1. Motion to Dismiss
2. Motion for Judgment on the Pleadings
After the pleadings are filed, if no facts are in dispute and only questions of law are at issue, either party can
file a motion for judgment on the pleadings. A trial might be avoided if no facts are in dispute and only
questions of law are at issue.
ADDITIONAL BACKGROUND—
Motions to Dismiss and Other Pre-Answer Motions
Besides a plaintiff’s failure to state a claim on which relief can be granted, a defendant’s pre–answer motion to
dismiss may be based on the court’s lack of subject matter or personal jurisdiction, improper venue, insufficiency of
process or service of process, and the plaintiff’s failure to join a party needed for a just adjudication of the controversy.
Or the defendant may raise these defenses in his or her answer. In fact, some of these must be raised at this stage, or
asserts that there is no genuine issue of material fact, and he or she is entitled to judgment as a matter of law).
3. Motion for Summary Judgment
Like a motion for judgment on the pleadings, after the pleadings are filed, if no facts are in dispute and only
questions of law are at issue, either party can file a motion for summary judgment. A trial might be avoided
if no facts are in dispute and only questions of law are at issue. In ruling on a motion for summary judgment,
a court can consider evidence outside the pleadings.
ADDITIONAL BACKGROUND—
Motions for Judgment on the Pleadings and
CHAPTER 3: COURT PROCEDURES 53
Other Motions That May Be Made after the Pleadings Are Closed
A motion for judgment on the pleadings is more akin to a motion for summary judgment than it is to a motion to
dismiss for failure to state a claim on which relief can be granted. The grounds on which motions to dismiss can be
made can be divided into four categories, including challenges to the complaint itself. These challenges point to
defects on the face of a complaint—that is, a plaintiff may actually have a claim, but has not properly phrased it. A
motion for judgment on the pleadings “attack[s] the substantive sufficiency of the allegations.” In other words, a
appropriate if the facts as shown in the pleadings reveal that the applicable statute of limitations has run.) Also, before
motion to dismiss for failure to state a claim on which relief can be granted, which is a pre-answer motion).
C. DISCOVERY
To prepare for trial, parties obtain information from each other and from witnesses through the process of dis-
covery. These devices save time by preserving evidence, narrowing the issues, preventing surprises at trial, and
avoiding a trial altogether in some cases.
CASE SYNOPSIS—
Case 3.2: Blankenship v. Collier
Horace Collier was admitted to Caritas Medical Center in Louisville, Kentucky, with abdominal pain. The next day,
after tests, Dr. Robert Blankenship diagnosed appendicitis, and Collier had an appendectomy. Later, Collier filed a suit
in a Kentucky state court against Blankenship and Caritas, alleging negligence in their evaluation and treatment. More
than a year later, after Collier had missed two court-imposed deadlines to disclose the identity of an expert witness to
testify on his behalf, the court issued a summary judgment in the defendants’ favor. Collier appealed. A state
intermediate appellate court reversed. The defendants appealed.
of an expert to offer evidence of the applicable standard of care, sufficient time had been allowed for its production.
was enough time for Collier to identify an expert to support his claim, and this he had failed to do.
…………………………………………………………..……………………………………………………………………
54 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
Notes and Questions
Suppose that a defendant is unable to find an expert to support his or her claim but does not reveal this to
the court and instead attempts to delay the proceedings to gain more time in the hope that an expert will
appear. What does the result in this case suggest to parties in litigation who might be reluctant to be truthful to
the court? The result in this case indicates to those involved in litigation who might be hesitant to respond to court
the court deceived.
ANSWER TO “THE ETHICAL DIMENSION” QUESTION IN CASE 3.2
Collier contended that there was a “serious question” as to whether he would even need experts to prove
his medical malpractice claim. Is it fair to Collier not to let the trial proceed, even though the lack of expert
testimony might have made it difficult—if not impossible—for him to win the case? Explain. According to a
lose the case, he should have been given that chance.
1. Discovery Rules
2. Depositions
3. Interrogatories
4. Requests for Admissions
5. Requests for Documents, Objects, and Entry upon Land
A request for documents, objects, and entry on land is a request to inspect these items.
6. Requests for Examinations
7. Electronic Discovery
Computer-generated or electronically recorded information, such as e-mail, voice mail, spreadsheets, word
processing documents, and other data, is discoverable. An expert must usually be hired to retrieve
information from e-evidence. Its review can be time-consuming and expensive, particularly when its source
is a large corporation with many offices and employees.
D. PRETRIAL CONFERENCE
After discovery, a pretrial hearing is held to clarify the issues, consider a settlement, and set rules for trial.
E. THE RIGHT TO A JURY TRIAL
III. The Trial
A. OPENING STATEMENTS
The trial begins with the attorneys’ opening statements. These statements concern facts that they expect to
prove during the trial.
B. RULES OF EVIDENCE
These rules ensure that evidence presented during a trial is fair and reliable.
CASE SYNOPSIS—
Case 3.3: Novak v. Tucows, Inc.
56 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
therein is under oath or even subject to independent verification absent underlying documentation,” and “any
reversed the judgment, the name was returned to Novak. Novak filed a suit in a federal district court against Tucows
and Nitin, arguing that the transfer of the name out of his control destroyed his business. Tucows responded in part
with a motion to strike some of Novak’s exhibits.
litigation of all related disputes in Ontario, Canada, according to Canadian law. The court determined that the clause
was valid and reasonable, and dismissed the suit.
…………….………………………………………………………………………………………………………………….
Notes and Questions
If the printouts of Web site postings offered in evidence qualified under an exception to the hearsay rule,
but the party offering them could not show that they were authentic, would they be admissible? Possibly, but
they would be inadmissible if their source or the method or circumstances of their preparation indicated a lack of
trustworthiness.
If all of Novak’s exhibits had been admissible, would the outcome of this case have been different? No. In
or conclusions on the substantive issues in the instant case.”
ANSWER TO “THE ETHICAL DIMENSION” QUESTION IN CASE 3.3
Hearsay is literally what a witness says he or she heard another person say. What makes the
admissibility of such evidence potentially unethical? Hearsay is inadmissible as evidence in a suit when it is offered
is no opportunity to verify the accuracy of the statements because the declarant is not present in court to be
questioned. These features make the use of hearsay potentially unethical.
ANSWER TO “THE E-COMMERCE DIMENSION” QUESTION IN CASE 3.3
In this case, the plaintiff offered as evidence the printouts of Web pages that he claimed once appeared
on others’ Web sites. What makes such evidence questionable until proven accurate? As stated by courts in
CHAPTER 3: COURT PROCEDURES 57
evidence procured off the Internet is adequate for almost nothing, even under the most liberal interpretation of the
hearsay exception rules.”
ADDITIONAL CASES ADDRESSING THIS ISSUE —
Recent cases considering the admissibility of technology-based evidence include the following.
• State v. Damper, 223 Ariz. 572, 225 P.3d 1148 (Ariz.App. Div. 1 2010) (text message was admissible when a third
party testified that she and the victim often communicated by text, that when the message at issue arrived her phone
displayed the victim’s nickname as the sender, and the victim’s cell phone was found beside her body).
• Commonwealth v. Purdy, 76 Mass.App.Ct. 1119, 923 N.E.2d 122 (2010) (e-mail was admissible when a police
detective, an expert in the field of computer forensics, testified that the computer was seized from the defendant’s
business, the defendant provided the passwords from memory, and the e-mail originated from, or were addressed to,
the defendant’s e-mail address).
defendant and his accomplice, in which they discussed plans to commit burglaries, was admissible when the
accomplice testified as to its authenticity and the substance of the conversation).
that they had engaged in instant messaging with the defendant on the site, a police investigator related that he had
retrieved the conversations from the victims’ computer).
C. EXAMINATION OF WITNESSES
Because the plaintiff has the burden of proving his or her case, the plaintiff’s attorney calls and examines the first
witness. This is direct examination. The defendant’s attorney cross–examines the plaintiff’s witness, after which
there is an opportunity for redirect and recross-examinations.
1. Expert Witnesses
2. Potential Motion and Judgment
In a jury trial, after the plaintiff’s case is presented, the defendant can move for a directed verdict, which
the judge grants if he or she believes that the jury could not find for the plaintiff. If this motion is denied,
the defendant’s attorney presents the defendant’s case.
ADDITIONAL BACKGROUND—
58 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
Motions for a Directed Verdict and Motions for Summary Judgment
Under the Federal Rules of Civil Procedure, a party may move for a directed verdict: (a) after his or her
opponent’s opening statement, (b) at the conclusion of the opponent’s case, or (c) at the close of all the evidence.
Basically, a directed verdict is proper if the party with the burden of proof has presented no or insufficient evidence on
a critical issue. A party with the burden of persuasion on an issue is rarely entitled to a directed verdict, since the
party bears the risk of nonpersuasion, and usually, reasonable jurors may differ on what evidence to believe. Thus,
even if a party with the burden of persuasion produces substantial evidence of, for example, the other party’s
negligence, so that the jury could reasonably conclude that the other party was negligent, the motion will be denied,
since the jury may also disbelieve the evidence.
trial is by jury. Either side may move for a directed verdict whenever the other side rests—for example, after the
plaintiff presents his or her evidence, the defendant may move for a directed verdict; after the defendant rests, the
evidence is such that reasonable jurors could not disagree and, thus, the moving party is entitled to a favorable verdict
moves for summary judgment. On determining that there is no genuine issue of material fact and the moving party is
entitled to prevail on the issue or issues as a matter of law, the judge grants the motion. If there is any doubt as to any
of the facts necessary to determine the outcome of the issue or issues, the court will deny the motion.
3. Defendant’s Evidence
The defendant’s attorney presents the evidence and witnesses for the defendant, after which there is an
opportunity for redirect and recross-examinations. At the end of the defendant’s case, either party can
move for a directed verdict. If this motion is denied, the plaintiff’s attorney can refute the defendant’s case
in a rebuttal, and the defendant’s attorney can meet that evidence in a rejoinder.
D. CLOSING ARGUMENTS, JURY INSTRUCTIONS, AND VERDICT
IV. Posttrial Motions
After the jury has rendered its verdict, either party may make a posttrial motion. The prevailing party usually files a
motion for a judgment in accordance with the verdict.
A. MOTION FOR A NEW TRIAL
CHAPTER 3: COURT PROCEDURES 59
V. The Appeal
A. FILING THE APPEAL
To appeal, the appellant files the record on appeal, which contains the pleadings, a trial transcript, copies of the
exhibits, the judge’s rulings, arguments of counsel, jury instructions, the verdict, posttrial motions, and the
judgment order from the case below. The appellant files a brief, which contains statements of facts, issues,
applicable law, and grounds for reversal. The appellee files an answering brief.
B. APPELLATE REVIEW
The court reviews these records, the attorneys present oral arguments, and the court affirms the lower court’s
judgment or reverses it and remands the case for a new trial.
CASE SYNOPSIS—
Case 3.4: Evans v. Eaton Corp. Long Term Disability Plan
Eaton Corp. funds and administers a long-term disability benefits plan for its employees. In 1998, Eaton employee
Brenda Evans quit her job due to severe rheumatoid arthritis and filed for benefits. Four years later, Evans injured her
spine in a car accident and added that injury to her disability claims. By 2004, however, Evans’s arthritis had improved
and her back injury seemed to be less severe—she could cook, shop, do laundry, wash dishes, and drive. Eaton decided
The U.S. Court of Appeals for the Fourth Circuit reversed and remanded for a judgment in Eaton’s favor. A
merely because it would have come to a different result. . . . Where an ERISA administrator rejects a claim to benefits
…………………………………………………………..…………………….……………………………………………..
Notes and Questions
Is it possible that a court would “show . . . deference to a primary decision–maker’s judgment” and affirm
60 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
a result that is clearly an abuse of discretion? Yes, and it may sometimes happen, but such a compounded abuse of
discretion is one of the reasons for the provision of appellate review. At times, upholding the process may be viewed as
more important than arriving at a “correct” result; at other times, the “substance” of an outcome may seem to take
precedence over judicial “form”; in still other circumstances, as in the Eaton case, the two can be intertwined.
was not an abuse of discretion, and Evans had appealed. In that situation, would Evans have had any
ANSWER TO “THE ETHICAL DIMENSION” QUESTION IN CASE 3.4
The appellate court noted in this case that the district court’s decision—which granted benefits to Evans—
may arguably have been a better decision under these facts. If the court believes the district court’s
conclusion was right, then why did it reverse the decision? What does this tell you about the standards for
review that judges use? This ruling indicates, among other things, that standards of review, although they “cannot be
limits to their application.
ANSWER TO “WHAT IF THE FACTS WERE DIFFERENT?” IN CASE 3.4
Suppose that it was clear from the evidence on record that the ERISA administrator had not been careful
and consistent and had rejected Evans’s claim merely because of a personal dislike for Evans. How might
this fact have changed the result in this case? In this circumstance, Evans’s grounds for appeal might have included
the administrator’s lack of care and consistency and personal dislike for Evans.
C. HIGHER APPELLATE COURTS
If this court is an intermediate appellate court, the losing party can file a petition for leave to appeal to a higher
court. If the petition is granted, the appeal process is repeated.
CHAPTER 3: COURT PROCEDURES 61
VI. Enforcing the Judgment
TEACHING SUGGESTIONS
1. To impress on students one of the reasons for the legal system’s observance of procedural technicalities,
2. Emphasize the factors—economic and non-economic—in deciding whether or not to pursue legal action. Are they
prepared to pay for going to court? Engaging in legal action can be expensive. A good attorney may charge as much
as $300 an hour, or more, plus expenses, and more for trial work. Do they have the patience to pursue a case
through the judicial system? Court calendars are crowded. In some cases, it may be years before the matter comes
to trial—and then there is the appeal. Is there an alternative to legal action? A settlement might be preferable to a
resolution. Students should also be reminded that a decision should only be made with the advice of a competent legal
professional.
3. What do your students think that jurors discuss when they retire to consider a verdict? What should they
discuss? Research indicates that discussion in the jury room focuses primarily on what procedures the jury should
that the judges would have made. Studies reveal that 80 percent of the time, the court agrees with the jury’s verdict. In
civil cases, judges and juries almost always agree; in criminal cases, a jury is more likely to acquit a defendant than a
judge is.
4. All students have different requirements in regards to the amount of study time that they need to prepare for a
class or an exam. Everyone faces the same temptation: putting off until tomorrow what should be done today. Your
students might be reminded that the best remedy for this temptation is not to give into it but to remain disciplined.
They might simply set up a schedule and make every effort to stick to it to achieve their best results.
Cyberlaw Link
Many jurisdictions have implemented online filing systems, and some have set up cyber courts in which part, or all,
of a case may be presented online. What issues are likely to occur in these circumstances?
62 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
DISCUSSION QUESTIONS
1. What are the first steps in bringing a legal action? A complaint (or petition or declaration) is filed with the clerk of
2. What are the defendant’s possible responses? The defendant files a motion to dismiss the complaint, files an
3. What are the contexts in which pretrial motions may be filed, and what are those motions? If the pleadings (the
4. What is discovery? Discovery is the process through which parties prepare for trial by obtaining information from
each other and from witnesses. What devices are used to obtain this information? Discovery can involve the use of
5. What are the advantages of discovery? Discovery saves time by preserving evidence, narrowing the issues,
6. How might a large corporation defend against allegations that it intentionally failed to preserve electronic data
that a party is attempting to review as part of a discovery request? A corporation might defend against charges of
7. What takes place at a pretrial conference? A pretrial conference is an informal discussion to plan the course of a
8. Briefly, what are the steps in the course of a trial? If the right to a jury trial has been requested, the jury is se–
9. Who can appeal from a trial court’s decision? Either party—the party against whom the judgment of the trial court
runs, or the party who was granted relief that was less than, or different from, the relief he or she sought.
ACTIVITY AND RESEARCH ASSIGNMENT
64 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
ANSWERS TO ESSAY QUESTIONS IN
STUDY GUIDE TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION
BY HOLLOWELL & MILLER
1. What is the primary consideration in deciding whether to settle a dispute or take the dispute to court? A
client’s decision as to how much money he or she can afford to invest in the resolution of a particular legal problem is the most
2. What evidence is, and what evidence is not, admissible in a trial? Evidence is admissible if it is relevant to the
matter in question. Relevant evidence is evidence that tends to prove or disprove a fact in question or to establish that a fact or
action is more probable or less probable than it would be without the evidence. Relevant evidence may not be admitted if its
probative value is substantially outweighed by other important considerations. Relevant evidence may be excluded if its
admission would cause undue delay (because the fact at issue has already been proved or disproved) or if it would tend to
REVIEWING—
COURT PROCEDURES
Ronald Metzgar placed his fifteen-month-old son, Matthew, awake and healthy, in his playpen. Ronald left the
room for five minutes and on his return found Matthew lifeless. A toy block had lodged in the boy’s throat, causing him
to choke to death. Ronald called 911, but efforts to revive Matthew were to no avail. There was no warning of a
choking hazard on the box containing the block. Matthew’s parents hired an attorney and sued Playskool, Inc., the
manufacturer of the block, alleging that the manufacturer had been negligent in failing to warn of the block’s hazard.
Playskool filed a motion for summary judgment, arguing that the danger of a young child choking on a small block was
obvious. Using the information presented in the chapter, answer the following questions.
1. Suppose that the attorney the Metzgars hired agreed to represent them on a contingency-fee basis.
What does that mean? If the Metzgars lose, the lawyer does not receive pay for work provided. If they win a verdict
facts of the accident are not in dispute, the question of liability is one to be determined at trial. The basic facts may not
4. Suppose that the judge denied Playskool’s motion and the case proceeded to trial. After hearing all the
evidence, the jury found in favor of the defendants. What options do the plaintiffs have at this point if they are
unsatisfied with the verdict? The plaintiffs may make a motion for a judgment n.o.v. and, if that is unsuccessful, may
appeal the decision reached at trial to the court of appeals.
DEBATE THIS:
Some consumer advocates argue that high attorney contingency fees—sometimes reaching 40
percent—unfairly deprive winning plaintiffs of too much of their awards. Should the government put a cap on
contingency fees at, say 20 percent? Why or why not? In theory and in practice, poorer plaintiffs opt for
contingency fee contracts with their attorneys because they cannot afford to pay straight hourly legal fees plus all of
the related expenses that occur during discovery, before trial, during trial, and after trial. Therefore, empirically,
poorer plaintiffs often end up paying the most in contingency fees. If the government capped such fees at a maximum
percents, say 20 percent, then winning plaintiffs would keep the lion’s share of their awards. This would be fairer.
are used in part to compensate for the contingency-fee cases that plaintiff attorneys lose. In the latter, they receive
take on the ones that they were more certain they could win. Fewer would-be plaintiffs would be able to find legal
ANSWERS TO QUESTIONS—
SPECIAL CASE ANALYSIS
Case No. 3.1
Cruz v. Fagor America, Inc.
California Court of Appeal,
Fourth District, Division 1, 2007.
146 Cal.App.4th 488,
52 Cal.Rptr.3d 862.
(a) Issue: On what preliminary step to litigation does the issue in this case focus? Service of process was the
preliminary step to litigation at the heart of the dispute in this case.
(b) Rule of Law: What are the chief requirements for fulfilling the pretrial procedure at the center of the
66 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW: TWELFTH EDITION
dispute in this case? The chief requirements for satisfactory service of process are that a summons and a copy of a
complaint be delivered to the proper party. Here, the defendant was a corporation and the service was addressed to
the corporation’s president. In compliance with state law, the documents were sent via first-class mail, return receipt
requested. Under an applicable state statute, service is proper if the documents are delivered to “a person authorized
by the corporation to receive service.”
(c) Applying the Rule of Law: In applying the rule of law in this case, what did the court infer and what did that
inference imply for the defendant? “The only reasonable inference from the evidence”—a U.S. Postal Service
employee’s testimony that a certain individual “regularly received mail on [the defendant’s] behalf”—was that this
individual “was authorized to accept mail on behalf of [the defendant] at the time she signed the return receipt for the
defendant “and its officers.”
lack of a valid service of process. The appellate court concluded that Cruz met all of the requirements for serving an