If you get this error message, then, most probably, one of your mail recipient's address belongs to one of your addon domain, but mail for this domains are managed outside.

To solve the issue you need to "tell" your provider that mail for particular addon domain is managed outside by specifying correct MX records.

This is the example solution how to solve the issue for providers like HostMonster, BlueHost, FastDomain e.t.c.:

1. CPanel->Mail->Email Delivery Route

Enter email that you have problem with (you should find it as part of the PHPMAILER_RECIPIENTS_FAILED error message) and hit "Show Route".

2. If route shows "virtual_aliases via virtual_aliases router forced address failure" then continue the read. If does not - then sorry, but it is not your case.

3. CPanel->Mail->MX Entry.

4. Select domain you have problems with.

5. Delete/add/edit MX Records to point to correct mail servers. Here is the example for Google Apps servers:

Priority Destination Actions
10 aspmx.l.google.com Edit Delete
20 alt2.aspmx.l.google.com Edit Delete

6. Try to send mail now. Enjoy.