Harrison

Plaintiff Engebretson & Company, Inc. (Engebretson) brought this independent action in equity to set aside a default and default judgment taken against it by defendant Doris R. Harrison (Harrison). Granting part of the requested relief, the trial court vacated the default judgment but left the default intact. Both parties have appealed.

The appeal raises an important and novel question concerning the proper manner for service of an amended complaint on a party who, though validly served with summons and the original complaint, has not appeared in the action.

Engebretson is a corporation engaged in the business of stock brokerage and investment counseling. In 1972, Harrison entrusted $50,000 to Engebretson to invest and manage for her. In 1975, Harrison sued Engebretson for breach of fiduciary duty, negligence, and fraud. The action was commenced in the Superior Court for the City and County of San Francisco. The complaint alleged damages “in excess of $5,000.”

In April 1976, summons and complaint were personally served on the president of Engebretson. In November 1976, a “statement of damages being sought” was mailed to Engebretson. On July 22, 1977, an “amended…