Howard Bank v. Compu-Link Corporation, 472 F.Supp.3d 267

Background

In 2006 First Mariner contracted with Celink under a Reverse Mortgage Subservicing Agreement (RMSA) containing a Michigan choice-of-law clause and §9.04 ("Notices") stating notices "shall be deemed given" when personally delivered or four business days after USPS Second Day Priority Mail to the designated Notice Address (Celink HQ in Michigan).
Celink serviced reverse mortgage loans that First Mariner later assigned to Sun West; Sun West sued First Mariner (2015), settled in 2017, and First Mariner sought indemnity from Celink under §9.12 of the RMSA, which Celink refused.
Howard Bank (successor to First Mariner) sued Celink in Maryland state court on Sept. 25, 2019; requested > $75,000 and asserted state-law contract and tort claims.
Howard Bank served Celink by certified mail to Celink’s Maryland registered agent CSC on Oct. 14, 2019; CSC emailed the papers to Celink in Michigan on Oct. 16, 2019, but Celink’s employees did not open the email.
Celink filed a notice of removal to federal court on Feb. 6, 2020. Howard Bank moved to remand, arguing removal was untimely under 28 U.S.C. §1446(b); Celink argued the RMSA’s §9.04 prescribed exclusive service methods and thus formal service never occurred.
The court applied Michigan contract law to interpret §9.04, found the clause only specifies when a notice is "deemed given" (not an exclusive service rule), concluded Howard Bank’s service via the Maryland registered agent complied with Rule 4 and state law, and held Celink’s removal was untimely; remand granted and Celink’s motion to dismiss denied without prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §9.04 of the RMSA prescribes exclusive methods of service	§9.04 does not limit methods; it governs when notices are "deemed given" and does not bar other service	§9.04 mandates exclusive service to Celink's Michigan Notice Address by personal delivery or specified mail, so Maryland service was ineffective	§9.04 is not exclusive; it prescribes when a notice is "deemed given," not the only permissible methods of service
Whether Howard Bank’s service to Celink’s Maryland registered agent started §1446(b)’s 30-day removal clock	Service to registered agent on Oct. 14 (and agent’s email to Celink on Oct. 16) effected service; removal deadline ran from Celink’s actual receipt	Service was ineffective because RMSA required different methods, so removal clock never started	Service via Maryland resident agent complied with Rule 4 and state law; removal clock runs from defendant’s actual receipt via agent (Oct. 16); Celink’s removal was untimely
Whether service complied with Federal Rule of Civil Procedure 4 and state rules	Service via certified mail to the registered agent satisfied Maryland and Michigan rules and Rule 4(h)	Service failed to comply with contractually agreed method, rendering service ineffective	Service to the registered agent satisfied Rule 4 and applicable state rules; it was effective
Remedy: remand or dismissal for lack of personal jurisdiction	Move to remand due to untimely removal	Move to dismiss for lack of personal jurisdiction or failure to state a claim	Court granted remand for untimely removal and denied Celink's motion to dismiss without prejudice

Key Cases Cited

Murphy Brothers v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (removal clock begins on formal service)
Hanna v. Plumer, 380 U.S. 460 (Federal Rule 4 governs service in diversity cases)
Nat'l Equip. Rental Ltd. v. Szukhent, 375 U.S. 311 (parties may contractually agree to alternate methods of notice/service)
Choice Hotels Int'l v. SM Prop. Mgmt., LLC, 519 F.3d 200 (contract can limit notice methods when clause unambiguously requires "all" notices be sent specified ways)
Elliot v. Am. States Ins. Co., 883 F.3d 384 (when served via agent, §1446(b) runs from defendant’s actual receipt of complaint)
Northrop Grumman Tech. Servs., Inc. v. DnyCorp Int'l LLC, 865 F.3d 181 (affirming remand where removal was untimely)