Operating Engineers Health And Welfare Trust Fund v. Mercoza

Background

The plaintiffs, which the opinion describes as benefits plans and trustees, sued Mercoza and Jason Duran Martinez for unpaid fringe-benefit contributions, liquidated damages, and interest. The claims arise under collective-bargaining and trust agreements, the Labor Management Relations Act, and the Employee Retirement Income Security Act.

The plaintiffs personally served Mercoza’s agent for service of process with the original complaint on May 30, 2024. They later amended the complaint to update the amounts owed. They had not served Martinez, and they were unable to serve the amended complaint on the defendants.

The plaintiffs asked to serve Mercoza through the California Secretary of State under California Corporations Code § 1702(a) and to serve Martinez by publication under California Code of Civil Procedure § 415.50. Their attempts included visiting Mercoza’s listed business address, where another business was operating, and visiting an address associated with Martinez, where people said he no longer lived. The opinion also notes that Mercoza’s website listed a physical business location, telephone number, and email address, and that Martinez’s LinkedIn page listed Mercoza’s website as contact information.

Legal Standard

Before a court can exercise jurisdiction over a defendant, the defendant must receive notice reasonably calculated to inform the defendant about the lawsuit and provide an opportunity to respond. Federal Rule of Civil Procedure 4 allows service on an individual through methods authorized by the law of the state where the federal court is located or where service occurs.

Under California law, service by publication is permitted when an affidavit shows that the defendant cannot be served by another authorized method despite reasonable diligence. The plaintiff must also provide sworn factual support showing that a legal claim exists against the defendant or that the defendant is a necessary or proper party. Because publication rarely provides actual notice, courts treat it as a last resort.

A corporation may be served through its designated agent or certain other authorized individuals. California law also permits service through the Secretary of State when the corporation’s service agent cannot be found at the designated address, and the plaintiff shows by affidavit that the corporation cannot be served with reasonable diligence through other methods.

Court’s Analysis and Ruling

The court was not necessarily opposed to service through the Secretary of State or by publication. But it concluded that the plaintiffs should first try other available methods because the record showed a physical business location, a business email address, and the possible availability of someone authorized to accept service for Mercoza. The court also stated that, in these circumstances, it generally would not authorize service by publication alone unless publication were the only option.

The court denied the motion for alternative service without prejudice. It stated that, in a renewed motion, the plaintiffs need not repeat facts already presented and may provide only new facts.