Judge: Mark A. Young, Case: 21SMCV00716, Date: 2023-12-14 Tentative Ruling
Case Number: 21SMCV00716 Hearing Date: December 14, 2023 Dept: M
CASE NAME: SMC Specialty
Finance, LLC v. Han Sanping, et al.
CASE NO.: 21SMCV00716
MOTION: Motion
for Alternative Service or Service by Publication
HEARING DATE: 12/13/2023
Legal
Standard
Alternative Service
Where
no law exists for the service of summons in a particular action, the court may direct that
summons be served in a manner which is reasonably calculated to give actual
notice to the party to be served and that proof of such service be made as
prescribed by the court.” (Code Civ. Pro., §413.30.)
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; or (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).)
“If
a defendant's address is ascertainable, a method of service superior to
publication must be employed, because constitutional principles of due process
of law, as well as the authorizing statute, require that service by publication
be utilized only as a last resort.” (Watts v.
Crawford (1995) 10 Cal.4th 743, 749, fn. 5.) The
means of service described in sections 415.10 through 415.40 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.” (Ibid.) The term “reasonable
diligence” denotes a thorough, systematic investigation and inquiry conducted
in good faith by the party or his agent or attorney. (Ibid.) Several
honest attempts to learn defendant's whereabouts or his address by inquiry of
relatives, and by investigation of appropriate city and telephone directories,
[voter registries, and assessor's office property indices situated near the
defendant's last known location], generally are sufficient. (Ibid.) These
are the likely sources of information, and consequently must be searched before
resorting to service by publication. (Ibid.) Before allowing a plaintiff
to resort to service by publication, the courts necessarily require him to show
exhaustive attempts to locate the defendant, for it is generally recognized
that service by publication rarely results in actual notice.” (Ibid.)
The plaintiff must establish reasonable diligence via the
testimony of an individual with personal knowledge of the efforts to serve the
defendant. (Olvera v. Olvera (1991) 232 Cal.App.3d 32, 42; Donel,
Inc. v. Badalian (1978) 87 Cal.App.3d 327, 333 [“the question is simply
whether [plaintiff] took those steps which a reasonable person who truly
desired to give notice would have taken under the circumstances”].)
Likewise, a plaintiff must establish that a cause of action exists against the
defendant via the testimony of an individual with personal knowledge of the
underlying facts. (Harris v. Cavasso¿(1977) 68 Cal.App.3d 723,
726.)
REQUESTS FOR
JUDICIAL NOTICE
SMC Specialty Finance requests
judicial notice of (1) Declaration of Jianu Han in support of Defendants and
Cross-Complainants Zhengfu Pictures Ltd. and Beijing Zhumeng Qiming Culture
& Art Co. Ltd.’s Ex Parte Application for Temporary Restraining Order and
Order to Show Cause re: Preliminary Injunction; and (2) Joint Status Report re:
Service of Process on Defendants and Cross-Defendants Alex Zhang aka Xi Zhang
and Golden Title Investments Ltd. and Defendant Han Sanping. A court may take judicial notice of the
contents of its own records. (Dwan v. Dixon (1963) 216 Cal.App.2d 260,
265.) Thus, the requests are granted.
Analysis
SMC asserts that a
cause of action exists against Zhang because he executed the guarantee by which
he agreed to guarantee the debt of defendant Golden Title Investments Limited
and that he forged the signature of Zhengfu’s director Han Jianu. In support,
SMC submits the declaration of Gary Gaskin, CEO and general counsel of SMC.
(Decl. Gaskin, ¶ 3.) SMC also submits the declaration of Han Jiansu. (Request
for Judicial Notice 1, Ex. 5, ¶¶ 28-34.) Thus, a cause of action exists against
Zhang.
On November 2, 2023, SMC moved for
alternative service and in the alternate, service by publication to effect
service on Alex Zhang (“Zhang”). As a preliminary matter, the Hague Convention applies
because the evidence submitted supports that Zhang resides in China, and China
is a signatory to the Hague Convention. (Code Civ. Pro., § 413.10, subd. (c); Convention
on the Service Abroad of Judicial and Extrajudicial Documents in Civil or
Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638; Decl.
Gorham, ¶ 2, Ex. 4.) The Hague Convention has its own service requirements. (Denlinger
v. Chinadotcom Corp. (2003) 110 Cal.App.4th 1396, 1399.) Thus, a law exists for the service of summons
in the instant action, and alternative service cannot be granted. SMC tried to serve Zhang by submitting the
summons and complaint to the Chinese central authority on October 24, 2022, for
it to serve Zhang. (Decl. Ingalls, ¶ 10.) Service was attempted, and it was
rejected. (Id., ¶ 15, Ex. 2.) The Court notes that the evidence
submitted supports that Zhang was the one who rejected service. As the service
document states, “The recipient refused to sign documents.” (Ibid.) Of note, Zhang did accept service of the
cross-complaint at the same address.
(RJN, Ex. 6.)
The
Convention does not apply when parties have agreed to waive formal service of
process in favor of a specified type of notification. (Rockefeller Tech. Invs. (Asia) VII v. Changzhou SinoType Tech. Co.
(2020) 9 Cal.5th 125, 145.) Here, as part of the signed Continuing Guarantee
Agreement, Zhang waived the Hague Convention service requirements and
stipulated to service by an process agent. (Decl. Raskin, ¶ 2, Ex. 3, ¶ 26.)
Thus, the Hague convention is not applicable in this situation. Paragraph 26 states, in relevant part:
Guarantor hereby irrevocably
designates Jake Seal as the designee and agent of the Guarantor (the “Process
Agent”) to receive, for and on behalf of Guarantor, service of process in any
legal action or proceeding with respect to this Guaranty Agreement, with
service to be effectuated in any manner consistent with California law. Nothing
herein shall preclude service of process upon Guarantor’s duly appointed
registered agent.
Because
no other law exists for the service of summons
in the instant action, service must be either on the agreed upon Process Agent
or by one of the methods of service authorized under California law. The Court
would require that SMC first attempt service through the agreed upon agent,
Seal. If that is unsuccessful or
impossible, service by publication would be an authorized method. (Code Civ. Proc., § 415.50).
SMC also requests authorization to serve Zhang via
email. The Hague Convention does not
prohibit service by e-mail in China.
Moreover, numerous courts in other jurisdictions have authorized service
via e-mail to parties residing in China.
(See Amazon.com, Inc. v. Pengyu Bldg. Materials, 2023 WL
4131609 at *2 (W.D. Wash. June 22, 2023)(“this Court and other courts have
concluded that email service on individuals located in China is not prohibited
by the Hague Convention or by any other international agreement”); Dolls
Kill, Inc. v. Yunye Apparel Retail Ltd., 2023 WL 6192699, at *1 (C.D. Cal.
Aug. 16, 2023)(permitting service by e-mail on Chinese defendant and holding
“The Hague Service Convention does not prohibit service by email.”)
Federal courts have interpreted
Code of Civil Procedure section 413.30 as authorizing service by e-mail where
e-mail service “is reasonably calculated to give actual notice to the party to
be served, particularly where there is evidence that the defendant is evading
service.” (Cisco Sys., Inc. v.
Shaitor, 2018 WL 3109398, at *3 (N.D. Cal. June 25, 2018). There is evidence that Zhang is evading
service. Hague Convention service was
rejected because Zhang rejected service of the documents – even though he earlier
accepted service of the cross-complaint at the same address. Moreover, the evidence demonstrates that
Zhang has responded to e-mails at the identified e-mail address. Thus, service at this address is reasonably
likely to provide notice to Zhang of the complaint.
For these reasons, the Court
orders the following. Pursuant to the
parties’ agreement, SMC may first attempt service through the Process Agent,
Jake Seal. If that is unsuccessful, the
Court authorizes service via email. The
Court will also discuss the potential for email service with the parties at the
hearing.
For these reasons, the motion is
GRANTED. SMC may serve Zhang by the
Process Agent, and if that is unsuccessful, through publication.