American First Finance LLC v. Mendoza Garcia

[5] 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA [8] 9 AMERICAN FIRST FINANCE, LLC, Case No. 1:23-cv-00117-EPG 10 Plaintiff, ORDER VACATING MAY 26, 2023 HEARING 11 v. (ECF No. 10) 12 FERNANDO MENDOZA GARCIA, ORDER PERMITTING SUPPLEMENT IN 13 Defendant. SUPPORT OF EX PARTE APPLICATION FOR AN ORDER PERMITTING SERVICE 14 BY PUBLICATION 15 (ECF No. 9) [17] I. INTRODUCTION [18] In this civil action filed on January 26, 2023, Plaintiff American First Finance, LLC, [19] alleges that Defendant Fernando Mendoza Garcia committed fraud, breached a contract, and [20] engaged in unfair business practices related to an agreement between the parties for Defendant to [21] sell products to customers on credit and thereafter assign the credit sales to Plaintiff. (ECF No. 1, [22] p. 3). Asserting that it cannot serve Defendant by conventional means, Defendant has filed an ex 23 parte application for an order permitting service by publication. (ECF No. 9). Upon review of the 24 application, the Court will (1) vacate the hearing set for May 26, 2023, and (2) permit Plaintiff to 25 file a supplement in support of the application. 26 II. LEGAL STANDARDS 27 Federal Rule of Civil Procedure 4(e)(1) permits service on an individual defendant by 28 “following state law for serving a summons in an action brought in courts of general jurisdiction 1 in the state where the district court is located or where service is made.” Here, Plaintiff requests 2 permission to serve Defendant under a California Code of Civil Procedure § 415.50(a)(1), which 3 provides as follows: A summons may be served by publication if upon affidavit it appears to the 4 satisfaction of the court in which the action is pending that the party to be served cannot with reasonable diligence be served in another manner specified in this [5] article and . . . [a] cause of action exists against the party upon whom service is to 6 be made . . . . Cal. Civ. Proc. Code § 415.50 (a)(1). Generally, service by publication is carried out by publishing [7] the summons in a newspaper. § 415.50(b). [8] However, personal service is the preferred method of service in California, and [9] “[c]onsistent with the notions of fair play and due process, substituted service by publication is ‘a [10] last resort’ when ‘reasonable diligence to locate a person in order to give him notice before [11] resorting to the fictional notice afforded by publication’ has been exercised.” Calvert v. Al Binali, [12] 29 Cal. App. 5th 954, 963 (2018) (quoting Donel, Inc. v. Badalian, 87 Cal. App. 3d 327 , 332 [13] (1978)). Accordingly, service by publication comes with some stringent requirements to establish [14] both “reasonable diligence” and “a cause of action.” [15] Beginning with “reasonable diligence,” a court must be satisfied that a plaintiff has 16 expended reasonable effort in trying to locate a defendant. 17 “The term ‘reasonable diligence’ takes its meaning from the former law: it denotes a thorough, systematic investigation and inquiry conducted in good faith by the [18] party or his agent or attorney (See Vorburg v. Vorburg [ (1941) 18 Cal.2d 794 ] at 19 p. 797 [ 117 P.2d 875 ]; Stern v. Judson (1912) 163 Cal. 726, 736 [ 127 P. 38 ]; Rue v. Quinn [ (1902) 137 Cal. 651 ,] at p. 657 [ 70 P. 732 ]). A number of honest 20 attempts to learn defendant’s whereabouts or his address by inquiry of relatives, friends, and acquaintances, or of his employer, and by investigation of appropriate 21 city and telephone directories, the voters’ register, and the real and personal property index in the assessor’s office, near the defendant’s last known location, [22] are generally sufficient. These are likely sources of information, and consequently 23 must be searched before resorting to service by publication.” (See Cal. Judicial Council Comment, West Ann.Code Civ.Proc. (1973 ed.) § 415.50, pp. 561–563.) 24 However, the showing of diligence in a given case must rest on its own facts and “[n]o single formula nor mode of search can be said to constitute due diligence in 25 every case.” (Donel, Inc. v. Badalian (1978) 87 Cal.App.3d 327, 333 , 150 Cal.Rptr. 855 .) [26] Kott v. Superior Ct., 45 Cal. App. 4th 1126, 1137-38 (1996). [27] As for establishing “a cause of action,” a court must be satisfied that a cause of [28] 1 action exists in the case for purposes of establishing jurisdiction. 2 For the purpose of service by publication, the existence of a cause of action is a jurisdictional fact. (Columbia Screw Co. v. Warner Lock Co. (1903) 138 Cal. 445 , 3 448, 71 P. 498 ; Forbes v. Hyde, supra, 31 Cal. at p. 353.) ‘An affidavit in proper form . . . is a jurisdictional basis of the order for publication: '(T)here must be an 4 affidavit containing a statement of some fact which would be legal evidence, having some appreciable tendency to make the jurisdictional fact appear, for the [5] Judge to act upon before he has any jurisdiction to make the order. Unless the 6 affidavit contains some such evidence tending to establish every material jurisdictional fact, the Judge has no legal authority to be satisfied, and, if he makes 7 the order, he acts without jurisdiction, and all proceedings based upon it are void. (Citations.)“ (2 Witkin, Cal. Procedure (2d ed. 1970) Actions, s 639, pp. 1431— [8] 1432.) 9 Harris v. Cavasso, 68 Cal. App. 3d 723, 726-27 (1977). 10 III. PLAINTIFF’S APPLICATION 11 With these standards in mind, the Court turns to Plaintiff’s application. Beginning with 12 “reasonable diligence,” Plaintiff’s counsel has provided the declaration of its counsel broadly 13 outlining the service attempts on Defendant. (ECF No. 9, pp. 7-9). For example, Plaintiff states 14 that it “attempted to personally serve Defendant at his last known business and possible known residential addresses.” (Id. at 7). However, the declaration generally fails to explain why Plaintiff [15] believes the addresses at issue were Defendant’s business and residential addresses. See Colonize [16] Media, Inc. v. Palmer, No. 1:20-CV-01053-DAD-SAB, 2021 WL 1839697 , at *5 (E.D. Cal. May [17] 7, 2021) (internal citation and quotation marks omitted) (“Although the efforts that Plaintiff set [18] forth to serve Defendant Palmer are somewhat indicative of reasonableness, Plaintiff’s efforts as [19] described in the application do not alone rise to the requisite level of both thorough and [20] systematic. Due to the lack of detail as to actual efforts made to obtain a current address for [21] service, the Court is precluded from finding that Plaintiff has met the reasonable diligence [22] standard to order service by publication.). [23] As for establishing a “cause of action,” the application itself summarily contends to have [24] established one. (ECF No. 9). However, Plaintiff has provided no affidavit containing [25] “independent evidentiary support, in the form of a sworn statement of facts, for the existence of a 26 cause of action.” Rose v. Seamless Fin. Corp. Inc., No. 11CV240 AJB KSC, 2013 WL 1285515 , 27 at *3 (S.D. Cal. Mar. 26, 2013). Notably, the declaration of counsel contains no such facts. [28] 1 | Moreover, while the Court does not decide the issue, caselaw generally indicates that it should be 2 | the Plaintiff to provide such facts since they must be based on personal knowledge of the cause of 3 || action. See Colonize Media, Inc., 2021 WL 1839697 , at *3 (“Generally, it is the plaintiff who 4 | makes the affidavit as to the cause of action.”); Indian Hills Holdings, LLC v. Frye, 337 F.R.D. 5 | 293, 304 (S.D. Cal. 2020) (“Affidavits by a plaintiff’s attorney have been held insufficient to 6 | meet the jurisdictional requirement for a court to issue an order for publication.”). 7 Based on the above, the Court will grant Plaintiff leave to file a supplemental brief and/or 8 evidence before ruling on the application. 9 IV. CONCLUSION Accordingly, IT IS ORDERED as follows: 1. The May 26, 2023 hearing (ECF No. 10) on the ex parte application for an order permitting service by publication is vacated. If the Court later determines that it is 2 necessary to reset the hearing, it will issue an order doing so. 13 2. By no later than June 8, 2023, Plaintiff is permitted to file a supplemental brief and/or evidence in support of its application. 15 3. If Plaintiff chooses not to do so, the Court will rule on the application based on the current 16 briefing and attachments. [17] 1g | IIS SO ORDERED. 19 | Dated: _May 17, 2023 [sf hey 20 UNITED STATES MAGISTRATE JUDGE