The process-serving industry in California is largely unregulated, which can leave consumers vulnerable to unscrupulous servers who often are paid per transaction. There is no systematic way to gauge how widespread improper service is, industry experts said.
San Jose attorney Fred W. Schwinn, who filed the suits against ABC Legal – one of the country’s largest process-serving businesses – estimates that there are “hundreds, if not thousands,” of these kinds of cases in California. His review of three months of ABC Legal records found multiple instances in which process servers claimed to be in two places at the same time.
In Walker’s case, B.H. Financial Services, a Los Angeles company that buys portfolios of consumer debt and then tries to collect on them, contacted the teacher about two years ago. Walker explained that his only debts were a car payment and student loans.
Walker also told B.H. Financial representatives that he had been a victim of identity theft, and he said he sent the collections company a copy of the police report. Nevertheless, the company filed a debt collection lawsuit against Walker in January 2011. ABC Legal was hired to serve the papers, and the case was assigned to Lowry.
“It’s a disturbing feeling that you’re being sued over something, and if you’re going to be sued, you want to be sued over something you know about and you did,” Walker said.
The Case is still making its way through the courts.
Afterward, Staudaher said he was "happy with the verdict," but disappointed Cadish did not order Carroll jailed immediately.Carroll refused comment as he left the courtroom, and his lead defense lawyer, Craig Mueller, said he would appeal.
"He was convicted on a couple of very unsettled points of law," Mueller said. "They convicted him of perjury without establishing that there was an oath of any sort. " Prosecutors alleged Carroll submitted false affidavits of service on May 13 and June 13 in civil cases involving one of his clients, debt collector Richland Holdings.
In February 2011, a process server working for ABC Legal Services filed a document with the Alameda County Superior Court saying he had personally served Fremont physical education teacher Matthew Walker with a lawsuit over an unpaid $2,340.76 personal loan.
In his proof of service, process server Richard Lowry stated that he had handed the papers to Walker at the Fremont Unified School District offices at 3:37 p.m. Feb. 15. But Walker says that he never took out a personal loan, and he was six miles away, coaching a basketball game at Thornton Junior High School, when he supposedly was served. A crowd of students and parents could attest to his whereabouts, he said.
Walker is one of 16 residents from Alameda, Santa Clara and San Mateo counties who recently sued ABC Legal Services. The residents filed 14 separate lawsuits in San Francisco federal court between June 2011 and April 2012, claiming that the firm’s process servers lied about serving court papers in debt collection cases. The lawsuits accuse ABC Legal of the “ignominious and shoddy practice of ‘sewer service,’ ” a colloquialism that stems from reports that some process servers throw court documents into sewers instead of delivering them. Individual process servers are also named in these lawsuits.
A default judgment is entered against a debtor who fails to respond to a collection lawsuit. In the most extreme cases, consumers have had wages garnished and bank accounts levied – even if they had not been properly served and were not aware that a debt collection case had been filed against them.
Process server convicted of 35 felonies for filing False Proof of Services
Bay Area residents sue process servers for failing to deliver lawsuits
A jury on Monday convicted the owner of an unlicensed process serving company on all 35 felony charges stemming from his filing of false court affidavits earlier this year. Maurice Carroll, who owns On Scene Mediations, faced 17 counts of perjury, 17 counts of offering false instruments for filing or record and one count of obtaining money under false pretenses. The 12 members of the jury, who did not look at Carroll as they entered the courtroom, took about three hours to deliberate his fate.
District Judge Elissa Cadish allowed Carroll, a 42-year-old former Las Vegas police officer, to remain free on $35,000 bail while he awaits his Feb. 16 sentencing. Chief Deputy District Attorney Mike Staudaher had asked Cadish to order Carroll into custody, saying he now is a flight risk headed for "potentially significant time" behind bars.
Carroll faces a maximum of four years in prison and a $5,000 fine on each of the 17 perjury charges and a maximum of five years in custody and $10,000 fine on each of the 17 false instruments charges. He also can receive up to six years in prison and a $10,000 fine on the charge of obtaining money under false pretenses.