Castro v. Charter Club, Inc.

Pedro and Maria Castro (plaintiffs) owned a condominium in a building owned and operated by Charter Club, Inc. (Charter) (defendant). Charter’s records listed the Castro’s daughter’s address as the Castro’s alternate address and billing address. Because the Castros fell behind on maintenance payments, Charter filed a foreclosure action against the Castros’ condominium. Charter’s process-server unsuccessfully attempted to serve the Castros at the condominium; after the failed first attempt, no further attempts were made to serve the Castros at their condominium. In May 2010, Charter’s process-server attempted to serve the Castros at their daughter’s home. The Castros were not at their daughter’s home at the time of service, but their daughter provided the process-server with the Castros’ current address. The process-server did not tell the daughter about the foreclosure action and did not write down the Castros’ current address. The process-server then attempted to serve the Castros at an incorrect address; the process-server made no attempt afterward to verify the correct address with the daughter. In June 2010, Charter served the Castros by publication, a type of constructive-service. Charter’s affidavit-of-service stated that constructive-service was appropriate because Charter was unable to locate the Castros despite a diligent records search. Around the same time, Charter and the Castros’ daughter negotiated a deal under which the Castros would rent out their condominium and the tenant would pay rent directly to Charter to pay down the Castros’ outstanding maintenance-fee balance. Charter asked the tenant for help locating the Castros. In January 2012, on Charter’s motion, the trial court entered a default-judgment against the Castros for failing to timely file a responsive pleading. After learning about the default-judgment, the Castros moved to vacate it, arguing that the court did not have jurisdiction over the Castros because the constructive-service-by-publication was invalid. The trial court denied the Castros’ motion-to-vacate. The Castros appealed.