State National Insurance Company, Inc. v. The Badelle Group, Inc.

Background

State National Insurance Company, Inc. asked the court for permission to serve Brett Badelle and The Badelle Group, Inc. by publication. It also asked to extend the time for completing service and complying with other court-imposed deadlines. The lawsuit seeks a declaration that State National owes the Badelle Defendants no duty to defend or indemnify them in an underlying personal-injury action.

The court previously allowed State National to file additional briefing about why publication was needed, because State National had not initially contacted the Badelle Defendants’ current counsel in the underlying action. State National later submitted additional material describing unsuccessful attempts to serve the defendants’ counsel. Its counsel and a licensed investigator also submitted declarations describing repeated attempts to serve the defendants at multiple locations.

Legal standard

Federal Rule of Civil Procedure 4(e)(1) allows an individual defendant to be served under the law of the state where the federal court is located or where service occurs. Under California law, a court may allow service by publication if the plaintiff shows both that the defendant cannot be served through another specified method despite reasonable diligence and that a cause of action exists against the defendant.

Reasonable diligence requires a thorough, systematic, good-faith effort to locate and notify the defendant. California law also requires an affidavit or declaration stating facts from which the court can conclude that the plaintiff has a cause of action against the defendant.

Court’s analysis

The court found that State National’s documented attempts to serve the Badelle Defendants were “exhaustive” and therefore satisfied the reasonable-diligence requirement.

The court nevertheless found that State National had not satisfied the separate requirement concerning its cause of action. The declarations from State National’s counsel did not contain independent evidentiary support in the form of sworn facts based on personal knowledge showing that the lawsuit presented a viable claim against each Badelle Defendant. The court therefore found that State National had not submitted the affidavit or declaration required under California law.

Disposition

The court deferred ruling on State National’s motion. It gave State National until April 28, 2023, to supplement its submission with an affidavit or declaration containing facts showing the claim against the insured in the underlying action, as described in the underlying complaint, and—if State National relied on policy exclusions—an explanation of how those exclusions applied to the facts of the underlying claim. The order did not grant or deny the request for service by publication.