Judge Helen Zukin, Case 21SMCV01430 2022-08-18 Tentative Ruling

Judge: Helen Zukin, Case: 21SMCV01430, Date: 2022-08-18 Tentative Ruling

Case Number: 21SMCV01430 Hearing Date: August 18, 2022 Dept: 207

Background

Plaintiffs Gregory Mancuso and Rainier AG (collectively “Plaintiffs”) bring this action against several Defendants, including Defendant Consul Group re Dos Mil Vientiuno S.R.L. (“Consul” or “Defendant”). Plaintiff Rainier AG is a brokerage company and Gregory Mancuso is a corporate compliance office for Rainier AG. The dispute between the parties stems from a Brokerage Agreement entered into between Rainier AG and Consul in October 2018. Plaintiffs allege Consul began a pattern of unusual and suspicious trading behavior shortly after entering in the Brokerage Agreement. Plaintiff alleges it conducted an investigation which revealed stock manipulation and conversion by Defendants. Consul previously brought an action in federal court alleging causes of action stemming from the relationship between Consul and Rainier AG. Plaintiffs allege this federal action was frivolous.

On December 15, 2021, Consul filed a First Amended Cross-Complaint (“FACC”) for conspiracy to defraud, fraud, breach of contract, imposition of trust, breach of fiduciary duty, negligence, accounting, and declaratory relief against several Cross-Defendants, including EZBanc Corp. (“Cross-Defendant”). Consul previously attempted to serve Cross-Defendant with the FACC, and Cross-Defendant brought a motion to quash this attempted service. On July 7, 2022, the Court granted Cross-Defendant’s motion. Consul now brings this motion to serve Cross-Defendant with process through the California Secretary of State, or, alternatively, for an order enlarging Consul’s time to effectuate service. Consul’s motion is unopposed.

Legal Standard

Corporations Code section 1702 provides: “If an agent for the purpose of service of process has resigned and has not been replaced or if the agent designated cannot with reasonable diligence be found at the address designated for personally delivering the process, or if no agent has been designated, and it is shown by affidavit to the satisfaction of the court that process against a domestic corporation cannot be served with reasonable diligence upon the designated agent by hand in the manner provided in Section 415.10, subdivision (a) of Section 415.20 or subdivision (a) of Section 415.30 of the Code of Civil Procedure or upon the corporation in the manner provided in subdivision (a), (b) or (c) of Section 416.10 or subdivision (a) of Section 416.20 of the Code of Civil Procedure, the court may make an order that the service be made upon the corporation by delivering by hand to the Secretary of State, or to any person employed in the Secretary of State's office in the capacity of assistant or deputy, one copy of the process for each defendant to be served, together with a copy of the order authorizing such service. Service in this manner is deemed complete on the 10th day after delivery of the process to the Secretary of State.” (Corp. Code, § 1702(a).)

Similarly, Corporations Code section 2111 provides: “If the agent designated for the service of process is a natural person and cannot be found with due diligence at the address stated in the designation or if the agent is a corporation and no person can be found with due diligence to whom the delivery authorized by Section 2110 may be made for the purpose of delivery to the corporate agent, or if the agent designated is no longer authorized to act, or if no agent has been designated and if no one of the officers or agents of the corporation specified in Section 2110 can be found after diligent search and it is so shown by affidavit to the satisfaction of the court, then the court may make an order that service be made by personal delivery to the Secretary of State or to an assistant or deputy secretary of state of two copies of the process together with two copies of the order, except that if the corporation to be served has not filed the statement required to be filed by Section 2105 then only one copy of the process and order need be delivered but the order shall include and set forth an address to which the process shall be sent by the Secretary of State. Service in this manner is deemed complete on the 10th day after delivery of the process to the Secretary of State.” (Corp. Code, § 2111(a).)

“Diligence is a relative term and must be determined by the circumstances of each case. The question is one for the trial court in the first instance.” (Vorburg v. Vorburg (1941) 18 Cal.2d 794, 797.) “If the facts set forth in the affidavit have a legal tendency to show the exercise of diligence on behalf of the plaintiff in seeking to find the defendant within the state, and that after the exercise of such diligence [she or] he cannot be found, the decision of the judge that the affidavit shows the same to his satisfaction is to be regarded with the same effect as is [her or] his decision upon any other matter of fact submitted to [her or] his judicial determination.” (Id.)

Analysis

The Court has reviewed Consul’s moving papers, which describe the efforts Consul has undertaken in seeking to serve the agent for service of process for Cross-Defendant.

Cross-Defendant is a Florida corporation with its status forfeited in California. Its registered agent for service of process in California resigned in 2012 and has not been replaced. Consul has attempted to serve Cross-Defendant through Corey Wilson, the individual identified as Cross-Defendant’s current registered agent for service of process at the address stated on its filing with the Florida Secretary of State. That address is 200 S. Indian River Drive in Fort Pierce, Florida. As detailed in the Court’s prior order on Cross-Defendant’s motion to quash, the 200 S. Indian River Drive address is a three-story commercial building with several tenants. Consul has attempted service on Cross-Defendant at this address on multiple occasions, but each time Consul has been unsuccessful as the process server has been unable to locate Cross-Defendant at the address. Consul has provided evidence showing the process server walked every floor of the property and did not see any signage indicating Cross-Defendant’s presence in the building. Consul’s process server also spoke to other tenants of the property, each of whom denied any knowledge of or connection to Cross-Defendant. Consul attempted service by mail on Cross-Defendant at this address, which was returned as undeliverable due to the lack of a suite or office number.

Counsel for Consul also called the owner of the property who denied there was a tenant in the building with the name of Cross-Defendant or Cross-Defendant’s current or prior registered agents for service of process. Consul has been unable to locate any other address for Cross-Defendant or its registered agent, Corey Wilson.

Based on the papers and supporting declaration submitted, the Court finds that the agent for purposes of service of process for Cross-Defendant cannot with reasonable diligence be served, or the agent has resigned and has not been replaced. (See Corp. Code §§ 1702(a), 2111(a).) Accordingly, Consul’s motion to serve Cross-Defendant through the Secretary of State is GRANTED.

Conclusion

Defendant and Cross-Complainant Consul Group re Dos Mil Vientiuno, S.R.L.’s motion to serve Cross-Defendant EZBanc Corp. through the Secretary of State is GRANTED.