American General Life Insurance Company v. Bushman

District Court, E.D. California·Decided January 26, 2023·No. 1:22-cv-01167·Unknown

Opinion

8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10

11 AMERICAN GENERAL LIFE INSURANCE Case No. 1:22-cv-01167-ADA-SAB COMPANY, 12 ORDER GRANTING PLAINTIFF’S Plaintiff, MOTION TO SERVE BY PUBLICATION 13 AND EXTENDING TIME TO COMPLETE v. SERVICE 14 SHARON BUSHMAN, et al., (ECF No. 15) 15 Defendants. 16 17 I. 19 Currently before the Court is Plaintiff’s motion to allow service by publication on 20 Defendant Sharon Bushman, filed on December 28, 2022. (Pl.’s Mot. Serve Publication 21 (“Mot.”), ECF No. 15.) Plaintiff seeks to serve by publication pursuant to Federal Rule of Civil 22 Procedure 4(e)(1), and California Code of Civil Procedure Section 415.50. The opposition 23 period has now expired and no opposition to the motion has been filed.1 Based on the moving 24 papers, the supplemental declaration, and the Court’s records, Plaintiff’s motion shall be granted. 25

1 While Plaintiff filed the motion as an administrative motion under Local Rule 233, it is not clear whether a motion 26 to serve by publication is properly brought under that Rule. See L.R. 233 (“Examples of matters that such motions may address include motions to exceed applicable page limitations; requests to shorten time on a motion; requests to 27 extend a response deadline; requests to alter a briefing schedule; or requests to alter a discovery schedule that does not affect dispositive motion filing dates, trial dates, or the final pre-trial conference.”). The opposition period has 1 II. 3 On September 13, 2022, American General Life Insurance Company (“Plaintiff” or 4 “American General”) filed this interpleader action against Sharon Bushman (“Bushman”), 5 Heather K. Litz, and Micklos Lemons. (Compl., ECF No. 1.) The matter involves competing 6 claims to payments due under a structured settlement annuity. (Compl. ¶ 27.) Bushman is the 7 current payee to certain of the annuity payments. (Id. at ¶ 16.) Micklos Lemons, through his 8 court appointed guardian, has contested payment of the annuity payments to Bushman and 9 Heather K. Litz. (Id. at ¶ 27.) 10 Summonses were issued on September 14, 2022. (ECF No. 4.) Waivers of service were 11 returned executed on October 17, 2022, for Defendants Heather K. Litz, and Micklos Lemons. 12 (ECF Nos. 6, 7.) 13 On November 16, 2022, the Court granted Plaintiff’s motion to continue the scheduling 14 conference to allow for continued attempts to serve Bushman. (ECF No. 12.) On December 14, 15 2022, the Court granted Plaintiff’s motion to enlarge the time to complete service under Federal 16 Rule of Civil Procedure 4(m), extending the deadline to complete service on Bushman until 17 February 1, 2023. (ECF No. 14.) 18 On December 28, 2022, Plaintiff filed the motion to serve by publication that is currently 19 before the Court, as well as a declaration of counsel. (Mot., ECF No. 15; Decl. John T. Burnite 20 Supp. Mot. (“Burnite Decl.”), ECF No. 15-1.) On January 20, 2023, the Court ordered Plaintiff 21 to file a supplemental declaration or briefing in support of the motion, within ten days. (ECF No. 22 17.) On January 24, 2023, Plaintiff filed a supplemental declaration. (Suppl. Decl. Jeff Reinbold 23 Supp. Mot. (“Reinbold Decl.”), ECF No. 19.) 26 Under the Federal Rules of Civil Procedure, an individual can be served by any of the 27 following: “(A) delivering a copy of the summons and of the complaint to the individual 1 someone of suitable age and discretion who resides there; or (C) delivering a copy of each to an 2 agent authorized by appointment or by law to receive service of process.” Fed. R. Civ. P. 3 4(e)(2). Rule 4 also provides that proper service can be made by “following state law for serving 4 a summons in an action brought in courts of general jurisdiction in the state where the district 5 court is located or where service is made.” Fed. R. Civ. P. 4(e)(1). 6 The California Code of Civil Procedure provides that: “[a] summons may be served by 7 publication if upon affidavit it appears to the satisfaction of the court in which the action is 8 pending that the party to be served cannot with reasonable diligence be served in another manner 9 specified in this article and that either: (1) A cause of action exists against the party upon whom 10 service is to be made or he or she is a necessary or proper party to the action.” Cal. Civ. Proc. 11 Code § 415.50(a)(1). 12 “Under California law, ‘[c]onsistent with the notions of fair play and due process, 13 substituted service by publication is a last resort when reasonable diligence to locate a person in 14 order to give him notice before resorting to the fictional notice afforded by publication has been 15 exercised.’ ” Indian Hills Holdings, LLC v. Frye, 337 F.R.D. 293, 299 (S.D. Cal. 2020) (quoting 16 Calvert v. Al Binali, 29 Cal.App.5th 954, 963 (2018) (alteration in quoting source)). “ ‘Personal 17 service remains the method of choice under the statutes and the constitution,’ and ‘[w]hen 18 substituted or constructive service is attempted, strict compliance with the letter and spirit of the 19 statutes is required.’ ” Id. 20 Service by publication can be effectuated under California law as follows: 21 (b) The court shall order the summons to be published in a named newspaper, published in this state, that is most likely to give actual 22 notice to the party to be served. If the party to be served resides or is located out of this state, the court may also order the summons to 23 be published in a named newspaper outside this state that is most likely to give actual notice to that party. The order shall direct that 24 a copy of the summons, the complaint, and the order for publication be forthwith mailed to the party if his or her address is 25 ascertained before expiration of the time prescribed for publication of the summons. Except as otherwise provided by statute, the 26 publication shall be made as provided by Section 6064 of the Government Code unless the court, in its discretion, orders 27 publication for a longer period. 1 Cal. Civ. Proc. Code § 415.50(b); see also Cal. Gov’t Code § 6064 (“Publication of notice 2 pursuant to this section shall be once a week for four successive weeks. Four publications in a 3 newspaper regularly published once a week or oftener, with at least five days intervening 4 between the respective publication dates not counting such publication dates, are sufficient.”). 5 IV. 7 Plaintiff proffers it has made diligent efforts to effectuate service on Bushman but has 8 been unsuccessful. Plaintiff moves the Court for authorization to serve Defendant Bushman by 9 publication. The Court first considers whether a “cause of action exists against” the Unserved 10 Defendant. Cal. Civ. Proc. Code § 415.50(a)(1). 11 A. The Court Finds a Cause of Action Exists against Bushman 12 Under California law, “[f]or the purpose of service by publication, the existence of a 13 cause of action is a jurisdictional fact.” Harris v. Cavasso, 68 Cal.App.3d 723, 726 (1977). The 14 requesting party must submit an affidavit containing a statement of some fact that would be legal 15 evidence that the cause of action exists for the court to have jurisdiction to order service by 16 publication. Harris, 68 Cal.App.3d at 726. “When jurisdiction is sought to be established by 17 constructive service, the statutory conditions for such service must be strictly complied with or 18 the judgment is subject to collateral attack.” Donel, Inc. v.

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