HR leaders need to make sure their company doesn't end up in a similar situation
A court recently said that a company acting as an agent for service of process was negligent in an incident where its employee improperly read a notice of levy, which led to delay in freezing certain bank account funds.
In Bergstrom v. Zions Bancorporation, N.A., a Nevada state court issued a judgment against Northamerican Sureties, Ltd. and Robert Michaels in 2007. In 2019, the plaintiff, who was the judgment creditor, learned that Michaels’ wife held two Los Angeles-based bank accounts.
On Apr. 2, 2019, the plaintiff tried to seize the bank accounts’ funds through serving a notice of levy on Corporation Service Company (CSC), the bank’s agent for service of process for California-based matters.
CSC’s employee glanced at the underlined words – “Northamerican Sureties, Ltd.” – in the form. The employee wrongly believed that these words referred to the party to be served with the levy, in line with a certain common practice of process servers. Because CSC’s principal was the bank, not Northamerican Sureties, the employee therefore rejected the notice of levy.
On Apr. 3, CSC mailed the plaintiff a rejection letter. That same day, Michaels’ wife withdrew $15,000 from the first bank account. On Apr. 9, the plaintiff received the letter and called CSC to notify it about the mistake.
The bank, in line with its internal policy, froze the money in the bank accounts at 4 p.m. the following day, Apr....
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