Navigators Specialty Insurance Company v. SVO Building One, LLC

Background

Navigators Specialty Insurance Company sued SVO Building One, LLC, seeking reimbursement for costs associated with defending an underlying lawsuit against SVO Building One and a declaration about the parties’ contractual relationship. Navigators moved to serve SVO Building One through the California Secretary of State under Federal Rule of Civil Procedure 4 and California law.

Navigators first attempted to serve SVO Building One’s registered agent, Jennifer Przygrodzka, at an address in McClellan, California. The process server reported that the subject and company were not known at that address. Navigators then attempted service at the company’s listed principal office in McClellan. The process server reported that the building was under reconstruction and non-operational. Finally, a process server went to a San Francisco residential address associated with Nicholas Laag, SVO Building One’s chief executive officer, on three occasions. Laag’s name appeared on the building’s call box, but he did not answer, and the process server did not see anyone enter or leave.

Applicable Rules

Federal Rule of Civil Procedure 4 permits service under the law of the state where the federal court is located or where service is made. For a company, service may be made on an authorized agent or certain officers, including a chief executive officer. California Corporations Code section 1702(a) allows service through the Secretary of State when the company’s agent cannot be found with reasonable diligence and the statutory requirements are met. California law also requires a showing that the company cannot be served through another legally available method with due diligence.

Court’s Analysis

The court found that Navigators had acted with reasonable diligence regarding the registered agent’s address and the company’s principal office. Because both McClellan addresses appeared defunct, the court found it reasonable not to attempt service by mail at those addresses.

The court concluded, however, that Navigators had not shown the required diligence regarding Laag’s address. The address was a valid address associated with SVO Building One’s chief executive officer, who could be served under California law. Navigators had not attempted to serve that address by mail under California Code of Civil Procedure section 415.30(a). Because that required effort had not been made, the court could not find that the requirements for service through the Secretary of State were satisfied.

Disposition

Judge Jeycqueline Scott Corkey denied the motion without prejudice. The court also vacated the March 9, 2023 hearing and extended Navigators’ deadline to serve SVO Building One to May 12, 2023. The order disposed of Docket Number 12.