Judge: Gregory Keosian, Case: 23STCV07136, Date: 2023-08-23 Tentative Ruling

Case Number: 23STCV07136    Hearing Date: August 23, 2023    Dept: 61

Plaintiffs Talun Hsu and Fawnia Hsu’s Motion for Order Authorizing Service by Publication I against Defendants Leal Real Estate Group, Inc., Rushmyfile, Inc., Andrew Dioli, and Bayshore Advisors, Inc. is DENIED.

I.                   SERVICE BY PUBLICATION

A summons may be served by publication if upon affidavit it appears to the 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 article and that either:

(1) A cause of action exists against the party upon whom service is to be made or he or she is a necessary or proper party to the action.

(2) The party to be served has or claims an interest in real or personal property in this state that is subject to the jurisdiction of the court or the relief demanded in the action consists wholly or in part in excluding the party from any interest in the property.

(Code Civ. Proc. § 415.50, subd. (a)(1)–(2).)

A number of honest attempts to learn the defendant's whereabouts through inquiry and investigation generally are sufficient. A plaintiff must show such efforts because it is generally recognized that service by publication rarely results in actual notice. Whether the plaintiff exercised the diligence necessary to justify resort to service by publication depends on the facts of the case. The question is whether the plaintiff took the steps a reasonable person who truly desired to give notice of the action would have taken under the circumstances.

(Rios v. Singh (2021) 65 Cal.App.5th 871, 880, internal citations omitted.)

Service by publication is “the method of last resort.” (Watts v. Crawford (1995) 10 Cal.4th 743, 750.) The other methods of service available to plaintiffs in California “make service by publication unnecessary except where a defendant's whereabouts and his dwelling house or usual place of abode, etc. cannot be ascertained with reasonable diligence,” with the phrase “reasonable diligence” being defined as “a thorough, systematic investigation and inquiry conducted in good faith by the party or his agent or attorney.” (Id. at p. 749 fn. 5.) The question of diligence is “simply whether [the plaintiff] took those steps which a reasonable person who truly desired to give notice would have taken under the circumstances.” (Donel, Inc. v. Badalian (1978) 87 Cal.App.3d 327, 333.)

Additionally, the party seeking an order of service by publication must present an affidavit showing the existence of a cause of action against the party to be served. (Code Civ. Proc. § 415.50, subd. (a)(1).) A verified complaint is “no substitute for the required affidavit, and the existence of a cause of action was a jurisdictional prerequisite to the issuance of the order for publication.” (Olvera v. Olvera (1991) 232 Cal.App.3d 32, 42 fn. 9.) Accordingly, for service by publication to be ordered, the plaintiff seeking publication must submit “an affidavit containing a statement of some fact which would be legal evidence, having some appreciable tendency to make the jurisdictional fact [of the existence of a cause of action] appear, for the Judge to act upon before he has any jurisdiction to make the order.” (Harris v. Cavasso (1977) 68 Cal.App.3d 723, 726.)

Plaintiffs Talun Hsu and Fawnia Hsu (Plaintiffs) seek an order authorizing service by publication upon Defendants Leal Real Estate Group, Inc. (Leal), Rushmyfile, Inc. (Rush), Andrew Dioli (Dioli), and Bayshore Advisors, Inc. (Bayshore), on the grounds that their attempts to serve these defendants have proven unsuccessful. Plaintiffs present the declaration of their counsel, Safora Nowrouzi, who provides the information stated on the relevant entities’ business searches with the California Secretary of State, as well as declarations of process servers employed to conduct service upon the addresses listed. The addresses and attempts at service are as follows:

·         Defendant Leal’s information page states that it is an active corporation in good standing, with its principal and mailing address both located on Third Avenue in Chula Vista, California, as well as an agent for service located at a residence address on Espuelas Court in the same city. (Nowrouzi Decl. Exh. B.) Process server Carl Herman Walker presents a sworn non-service report, attesting to five attempts to serve the agent at the Espuelas Court address at various times between the hours of 8 a.m. and 6 p.m. from April 5 through 9, 2023, to no indication that anyone was home. (Nowrouzi Decl. Exh. B.)

·         Defendant Rush’s information page states that it is an active corporation in good standing, with its principal, mailing, and agent for service of process address located on Beach Road in Burlingame, California. (Nowrouzi Decl. Exh. D.) Process server Edatil P. Carmona attests to five attempts to serve both Rush and its agent — Defendant Dioli — at various points between 9 a.m. and 5 p.m. from April 5 to April 11, 2023. (Nowrouzi Decl. Exhs. E, F.)

·         Defendant Bayshore’s information page states that It is a terminated corporation in good standing, with its inactive date listed as February 22, 2022. (Nowrouzi Decl. Exh. G.) Its agent is listed as Mark Palazo, with an address on Old Bayshore Highway in Burlingame, California. (Ibid.) It appears no service attempt was made upon Bayshore.

Plaintiffs’ motion is defective, for it makes no attempt to present evidence of any cause of action against any of the defendants to be served, and further provides no basis to conclude that reasonable diligence has been exercised in serving them. The sole basis that Plaintiffs present to show the existence of causes of action against these Defendants is their verified complaint in this matter. But verified complaints are insufficient to establish the facts necessary for the exercise of personal jurisdiction Code of Civil Procedure § 415.50. (See Olvera, supra, 232 Cal.App.at p. 42 fn. 9.) The statute states that the existence of a cause of action must be proved by affidavit, which must necessarily contain a statement of facts constituting legal evidence with a tendency to prove the existence of a cause of action against the defendants to be served. (Harris, supra,  68 Cal.App.3d at p. 726.) No such affidavit has been filed here.

Moreover, Plaintiffs’ showing of reasonable diligence in serving Defendants is lacking. Plaintiffs have only attempted to serve Leal at the Espuelas Court address indicated for its agent. (Nowrouzi Decl. Exh. C.) Plaintiffs do not suggest that any attempt was made to serve Leal at the other address listed as its principal business and mailing address on Third Avenue in the same city. (Nowrouzi Decl. Exh. B.) And while attempts at service were performed upon the only addresses listed for Defendant Rush on its information page, the evidence records no attempt to serve either Rush or Defendant Dioli at another location, perhaps personal to Defendant Dioli himself. Rather, Plaintiffs’ counsel attests, only that “[n]obody knows a current address for LEAL, RUSH, DIOLI, AND BAYSHORE, . . . and no searches reveal one.” (Nowrouzi Decl. ¶ 11.) Plaintiffs’ counsel does not describe what searches have been conducted, save for the searches that yielded the corporate Defendants’ statements of information filed with the California Secretary of State. (See Watts, supra, 10 Cal.4th at p. 749 fn. 5 [listing methods for locating defendant addresses].) This is insufficient.

Plaintiffs indeed concede no attempt has been made to serve Defendant Bayshore, based on its status as a “terminated” or dissolved corporation, therefore reasoning that “the agent of service is null.” (Motion at p. 4.) Plaintiffs do not address the statutory prescription of means for serving a dissolved corporation under Code of Civil Procedure § 416.20.

Finally, Plaintiffs present no evidence for their contention that their chosen papers, the Alpine Sun in San Diego County and the San Mateo Daily Journal, are most likely to reach the defendants in their respective areas of circulation. Plaintiffs’ counsel claims that each of these papers has been “adjudicated a paper of general circulation” in their respective counties, but no evidence of this statement follows. (Nowrouzi Decl. ¶¶ 14–15.) Nor do Plaintiffs present evidence for their assertion that the Alpine Sun is recommended for service by publication by the Superior Court in San Diego County. (Nowrouzi Decl. ¶ 14.)

The motion is therefore DENIED without prejudice.