General Star Indemnity Company v. First American Title Insurance Company of Napa ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GENERAL STAR INDEMNITY Case No. 20-cv-03210-TSH COMPANY, 8 Plaintiff, ORDER GRANTING MOTION FOR 9 LEAVE TO SERVE COUNTER- v. DEFENDANT MICHAEL VENUTA BY 10 ALTERNATIVE MEANS FIRST AMERICAN TITLE INSURANCE 11 COMPANY OF NAPA, et al., Re: Dkt. No. 38 12 Defendants. 13 14 I. INTRODUCTION 15 Defendant and Counterclaimant First American Title Insurance Company seeks an order 16 pursuant to Federal Rule of Civil Procedure 4(f)(3) authorizing substituted service of process on 17 Counter-Defendant Michael Venuta both through his counsel in a pending California Superior 18 Court action, Michael Healy, and what it claims to be Venuta’s personal email address, 19 mvenuta59@yahoo.com. ECF No. 17. Venuta, appearing specially through Healy, opposes the 20 motion. ECF No. 47. The Court finds this matter suitable for disposition without oral argument 21 and VACATES the October 8, 2020 hearing. See Civ. L.R. 7-1(b). Having considered the 22 parties’ arguments and the relevant legal authority, the Court GRANTS First American’s motion 23 for the following reasons. 24 II. BACKGROUND 25 Plaintiff General Star Indemnity Company brought this case against First American and 26 Venuta, as well as First American Title Company of Napa (“First Napa”), In The Vines LLC, and 27 Lisa Mini to determine the parties’ rights and obligations under an insurance policy issued by 1 case is related to a case pending in Napa Superior Court brought by Venuta against First Napa, In 2 The Vines, and Mini. See Req. for Judicial Notice, Exs. A & B, ECF No. 40 (Venuta’s January 3 22, 2018 Complaint and May 7, 2018 First Amended Complaint in Case No. 18CV000095, 4 Venuta v. First Am. Title Co. of Napa).1 Michael Healy represents Venuta in the Napa case. See 5 id., Exs. A & B; Mircheff Decl. ¶¶ 4, 9, Exs. 1, 4, ECF No. 39. 6 On March 6, 2020, Healy, on behalf of Venuta, sent a letter to the Napa Superior Court 7 asking the judge to order First American and General Star to participate in an April 2, 2020 8 settlement conference. Mircheff Decl. ¶ 4, Ex. 1. Healy’s correspondence also advised the Court 9 that “Mr. Venuta resides primarily in Cabo San Lucas Mexico and does not plan to be in Napa in 10 April. He can fully and effectively participate by telephone.” Id. First American responded that it 11 would agree to be available to participate in the settlement conference by remote means. Id. ¶ 4. 12 That April 2020 mandatory settlement conference was cancelled because of the COVID-19 13 pandemic. Id. 14 First American filed its Answer and Counterclaim in this case on July 20, 2020, asserting 15 counterclaims against Venuta, Mini, In The Vines, and First Napa. ECF No. 21. On July 24 16 counsel for First American sent correspondence to Healy, asking if Venuta would waive service. 17 Mircheff Decl. ¶ 6 & Ex. 2. Healy responded by email on July 27 stating, “I am not authorized to 18 accept service of your client’s counterclaim. Mr. Venuta is now retired and resides primarily in 19 Mexico, where he lives with his wife, who is a Mexican citizen. Mr. Venuta has not visited the 20 United States since the early fall of 2019.” Id. ¶ 7 & Ex. 3. 21 Between July 29 and July 30, 2020, counsel for First American received a series of emails 22 from Healy, General Star’s counsel, and from the email address “mvenuta59@yahoo.com” 23 concerning a rescheduled mandatory settlement conference in the Napa Superior Court action. Id. 24 ¶ 8. Counsel has also received emails regarding the settlement conference with the following 25 sender information: “Michael Venuta. .” Id. ¶ 9 & Exs. 5, 7, 8. Based 26 1 As court documents already in the public record and documents filed in other courts are proper 27 subjects of judicial notice, the Court GRANTS First American’s request to take judicial notice of 1 on this information, First American believes Venuta is the person sending emails from the email 2 address mvenuta59@yahoo.com. Id. ¶ 8. 3 First American filed the present motion on August 28, 2020, seeking leave to serve Venuta 4 with its answer and counterclaim through service on Healy and by service on the 5 mvenuta59@yahoo.com email address. First American maintains it is left with two options for 6 service: “the costly, time-consuming process of personal service through the Hague Convention 7 (assuming First American could obtain a good address for Venuta in Mexico)” or alternative 8 service under Rule 4(f)(3). Mot. at 1. It argues “[t]he facts here are exactly the type of situation 9 for which FRCP 4(f)(3) was created. Healy’s long-standing representation of Venuta in the 10 related superior court actions pending in Napa County, Venuta’s use of Healy for offensive steps 11 against First American, and evidence of Healy’s lines of communications with Venuta all establish 12 that service on Healy is reasonably calculated to apprise Venuta of First American’s Counterclaim, 13 and to afford Venuta an opportunity to respond and present his position.” Id. 14 Venuta argues First American “know[s] perfectly well how to serve Venuta consistent with 15 applicable Treaty requirements, and also that . . . Venuta resides in the city of Cabo San Lucas, 16 Mexico,” but it “has made no effort whatsoever to serve Venuta in Cabo San Lucas.” Opp’n at 2. 17 He maintains First American could serve him pursuant to Rule 4(f)(1) or (2), but it “prefers to 18 force this Court to slog through its incredible 88 page filing.” Id. at 2-3. 19 III. LEGAL STANDARD 20 Federal Rule of Civil Procedure 4(f) provides several means by which a plaintiff may serve 21 an individual “at a place not within any judicial district of the United States.” Pursuant to Rule 22 4(f)(1), an individual may be served in a foreign country “by an internationally agreed means of 23 service that is reasonably calculated to give notice, such as those authorized by the Hague 24 Convention on the Service Abroad of Judicial and Extrajudicial Documents.” Rule 4(f)(3) further 25 provides for service “by any other means not prohibited by international agreement, as the court 26 orders.” Under Rule 4(f)(3), courts can order service through a variety of methods, “including 27 publication, ordinary mail, mail to the defendant’s last known address, delivery to the defendant’s 1 the contrary. Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1016 (9th Cir. 2002). 2 Rule 4(f)(3) is “neither a ‘last resort’ nor ‘extraordinary relief.’ It is merely one means 3 among several which enables service of process on an international defendant.” Id. at 1014-15 4 (citation omitted). A plaintiff “need not have attempted every permissible means of service of 5 process before petitioning the court for alternative relief,” but must only “demonstrate that the 6 facts and circumstances of the present case necessitated the district court’s intervention.” Id. at 7 1016. Still, to comport with due process, “the method of service crafted by the district court must 8 be ‘reasonably calculated, under all the circumstances, to apprise interested parties of the 9 pendency of the action and afford them an opportunity to present their objections.’” Id. at 1016-17 10 (quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)). 11 The decision to provide an order under Rule 4(f)(3) is within the sound discretion of the 12 district court, which must determine whether the “particularities and necessities of a given case 13 require alternative service of process.” Id. 14 IV. DISCUSSION 15 A. Alternative Service is Not Prohibited by International Agreement 16 Mexico and the United States are signatories of the Hague Convention referenced in Rule 17 4(f)(1). See Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil 18 or Commercial Matters (“Hague Convention”), Nov. 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638; 19 HCCH, Status Table (Apr. 11, 2018), available at 20 https://www.hcch.net/en/instruments/conventions/status-table/?cid=17. As such, the Convention 21 provides the exclusive means by which First American can serve Venuta. See Volkswagenwerk 22 Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705 (1988) (“[C]ompliance with the Convention is 23 mandatory in all cases to which it applies.”); Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 24 2004) ( “Because service of process was attempted abroad, the validity of that service is controlled 25 by the Hague Convention, to the extent that the Convention applies”). 26 The primary means by which service is accomplished under the Convention is through a 27 receiving country’s “Central Authority,” which the Convention requires each signatory nation to 1 See Brockmeyer, 383 F.3d at 801. To effectuate service through a country’s Central Authority, a 2 party must forward the summons and complaint to the Central Authority along with a request for 3 service that complies with the Hague Convention, and then the Central Authority must itself serve 4 the documents or arrange to have them served by an appropriate authority. See Hague 5 Convention, Arts. 2, 3, 5; see also OGM, Inc. v. Televisa, S.A. de C.V., 2009 WL 1025971, at *2 6 (C.D. Cal. Apr. 15, 2009). “Although the Hague Convention outlines alternative methods of 7 service, Mexico has objected to them and thus service through Mexico’s Central Authority is the 8 exclusive method by which” a party can effectuate service. Wright v. Old Gringo Inc., 2018 WL 9 3584483, at *2 (S.D. Cal. July 26, 2018), on reconsideration in part, 2018 WL 3707260 (S.D. Cal. 10 Aug. 3, 2018) (listing cases finding that service of a defendant in Mexico must be completed 11 through Mexico’s Central Authority) (internal quotations omitted). 12 Despite this, “numerous courts have authorized alternative service under Rule 4(f)(3) even 13 where the Hague Convention applies.” Richmond Techs., Inc. v. Aumtech Bus. Sols., 2011 WL 14 2607158, at *12 (N.D. Cal. July 1, 2011) (listing cases). Courts have held that “alternative service 15 may be ordered pursuant to Rule 4(f)(3) as long as the alternative method of service is not 16 expressly prohibited by the Convention or objected to by the receiving state.” Id. at *13 (listing 17 cases). Relevant here, service on U.S.-based counsel is not barred by the Hague Convention. See, 18 e.g., Juicero, Inc. v. Itaste Co., 2017 WL 3996196, at *2 (N.D. Cal. June 5, 2017) (“service on 19 Defendants’ U.S.-based attorney is permissible because the Hague Convention does not bar this 20 type of service.”); Richmond Techs., 2011 WL 2607158, at *13 (“Service upon a foreign 21 defendant’s United States-based counsel is a common form of service ordered under Rule 22 4(f)(3).”). Nor is service by email. See, e.g. Facebook, Inc. v. Banana Ads, LLC, 2012 WL 23 1038752, at *2 (N.D. Cal. Mar. 27, 2012); Williams-Sonoma Inc. v. Friendfinder Inc., 2007 WL 24 1140639, at *2, *3 (N.D. Cal. Apr. 17, 2007). Accordingly, the Court finds that First American’s 25 request to serve Venuta through his U.S.-based counsel and by email is not prohibited. 26 B. Alternative Service Comports with Due Process Requirements 27 Due process requires that “the method of service crafted by the district court must be 1 the action and afford them an opportunity to present their objections.’” Rio Props., 284 F.3d at 2 1016 (quoting Mullane, 339 U.S. at 314). 3 “Courts in the Ninth Circuit have ordered service through United States-based counsel 4 even when counsel has refused to accept service on the ground that they do not represent the 5 international defendants.” Prods. & Ventures Int’l v. Axus Stationary (Shanghai) Ltd., 2017 WL 6 1378532, at *4 (N.D. Cal. Apr. 11, 2017) (citing Brown v. China Integrated Energy, Inc., 285 7 F.R.D. 560, 566 (C.D. Cal. 2012)); see also Microsoft Corp. v. Buy More, Inc., 703 Fed. App’x 8 476, 480 (9th Cir. 2017) (approving service on attorney where evidence indicated defendant was 9 in recent contact with attorney). As explained above, Healy initiated a lawsuit on Venuta’s behalf 10 in the Napa Superior Court substantially arising out of transactions and events also at issue in the 11 instant case. See Healy Decl. ¶ 1, ECF No. 47 (“I am the attorney representing Michael Venuta in 12 a pending action in Napa County Superior Court captioned Venuta v. First American Title 13 Company of Napa, et al., Case No. 18CV000095.”); Req. for Judicial Notice, Exs. A and B 14 [Venuta’s Complaint and First Amended Complaint]; Dkt. No. 21 [First American 15 Counterclaim]). Healy has been actively litigating and advocating on behalf of Venuta in the 16 Napa case and has taken steps to require parties in this action (First American and General Star) to 17 participate in a settlement conference. Mircheff Decl. ¶¶ 4, 8-11; RJN. Exs. A, B, E. On July 30, 18 2020, Healy appeared on Venuta’s behalf at a Case Management Conference in the case and 19 sought and obtained an order for First American and General Star to participate in the settlement 20 conference. Mircheff Decl., ¶¶ 9-11, Exs. 4, 6; Req. for Judicial Notice, Ex. E (Notice to Attend 21 Settlement Conference). Given this attorney-client relationship, the Court is confident that service 22 upon Healy is reasonably calculated to apprise Venuta of the pendency of the action. See Rio 23 Props., 284 F.3d at 1017 (finding service upon U.S.-based attorney was appropriate “because he 24 had been specifically consulted by [Defendant] regarding this lawsuit,” “[h]e knew of 25 [Defendant’s] legal positions and it seems clear that he was in contact with [Defendant] in Costa 26 Rica.”); Prods. & Ventures Int’l, 2017 WL 1378532, at *4 (“Hogan Lovells’ close connection to 27 the Foreign Defendants would render substituted service on the Foreign Defendants through 1 and an opportunity to object.”). 2 Further, service on an individual in a foreign country via email is properly within the 3 Court’s discretion. Rio Props., 284 F.3d at 1018 (“we leave it to the discretion of the district court 4 to balance the limitations of email service against its benefits in any particular case”). Here, the 5 record shows that Venuta has used mvenuta59@yahoo.com to communicate with Healy regarding 6 the superior court action. As such, the Court finds service of process on Venuta by the 7 mvenuta59@yahoo.com email address, coupled with service on Venuta’s counsel, is reasonably 8 calculated to apprise him of the pendency of the action and afford him an opportunity to respond. 9 See Hillbroom v. Lujan, 2010 WL 11515374, at *2 (C.D. Cal. May 3, 2010) (permitting service of 10 foreign individual by email where individual used the subject email address to communicate with 11 counsel regarding the issues in the case). 12 Contrary to Venuta’s argument, First American is not required to show that it attempted 13 service through the Hague Convention and did not succeed, or that Venuta has evaded or is likely 14 to evade personal service, to obtain an order under Rule 4(f)(3). In Rio Properties, the Ninth 15 Circuit considered and rejected that very argument made by the foreign corporation defendant: 16 [Defendant] RII argues that Rule 4(f) should be read to create a hierarchy of preferred methods of service of process. RII’s 17 interpretation would require that a party attempt service of process by those methods enumerated in Rule 4(f)(2), including by diplomatic 18 channels and letters rogatory, before petitioning the court for alternative relief under Rule 4(f)(3). We find no support for RII’s 19 position. No such requirement is found in the Rule’s text, implied by its structure, or even hinted at in the advisory committee notes. 20 21 284 F.3d at 1014-15. The Ninth Circuit further explained that the text and construction of Rule 22 4(f) established that the other methods of service on a foreign defendant under Rule 4(f) were not 23 preferred over the method stated in Rule 4(f)(3), and there was no requirement to first attempt 24 service by those other methods: “By all indications, court-directed service under Rule 4(f)(3) is as 25 favored as service available under Rule 4(f)(1)4 or Rule 4(f)(2).” Id. at 1015. The Ninth Circuit 26 concluded: 27 Thus, examining the language and structure of Rule 4(f) and the neither a “last resort” nor “extraordinary relief.” [Citation] It is merely 1 one means among several which enables service of process on an international defendant. 2 3 Id. Thus, First American need not show Venuta has evaded service attempts by other means. Id. 4 at 1014-16. 5 Further, Venuta does not dispute that the only method for service on him in Mexico 6 through the Hague Convention is personal service by Mexican authorities following a formal 7 request to Mexico’s Central Authority. Nor does he address First American’s argument that the 8 process for personal service by request to Mexico’s Central Authority can take up to six months 9 even under normal (non-pandemic) conditions. See Mot. at 3; Mircheff Decl. ¶ 15. Given that 10 Venuta is actively directing the prosecution of claims in the related Napa case through Healy, and 11 using Healy to compel First American and General Star (who are parties in this case but not the 12 Napa case) to participate in a settlement conference in the Napa case, the Court finds no reason to 13 delay the progress of this action at the expense of all parties by forcing personal service through 14 the Hague Convention. First American has presented ample evidence that service on Healy and by 15 email is reasonably calculated to apprise Venuta of First American’s counterclaim and afford him 16 an opportunity to respond.2 17 Finally, in his opposition, Venuta attempts to raise substantive defenses to First 18 American’s claims, arguing he received none of the insurance funds at issue and “[a]lso 19 troublesome is First American’s wish to pursue its counter-claim in this action when its claims are 20 largely duplicative of the parties’ claims in the Napa Superior Court litigation, which has been 21 ongoing since late 2017.” Opp’n at 2. Those defenses are not properly before the Court on this 22 motion because Venuta is not yet before the Court. However, the fact that Healy has knowledge 23 of at least some of Venuta’s asserted substantive defenses in this action and already is asserting 24 Venuta’s defenses does provide further support that service on Healy is reasonably calculated to 25 apprise Venuta of First American’s counterclaim and to afford Venuta an opportunity to present 26 27 2 Indeed, Healy specially appeared for Venuta to oppose First American’s motion, which is further 1 his defenses. See Rio Props., 284 F.3d at 1017 (service upon U.S.-based counsel “was also 2 appropriate because he had been specifically consulted by RII regarding this lawsuit. He knew of 3 || RII’s legal positions, and it seems clear that he was in contact with RII in Costa Rica. 4 || Accordingly, service to [counsel] was also reasonably calculated in these circumstances to apprise 5 RII of the pendency of the present action.”). 6 V. CONCLUSION 7 In sum, the Court finds the facts weigh in favor of allowing First American Title Insurance 8 Company to serve Counter-Defendant Michael Venuta through his U.S.-based attorney and 9 through his email address. Accordingly, the Court in its discretion GRANTS First American’s 10 || motion for substitute service. First American is authorized to utilize substituted service of process 11 on Counter-Defendant Michael Venuta through his U.S.-based counsel, Michael Healy. First 12 || American is further authorized to utilize substituted service of process on Venuta through the 5 13 email address mvenuta59@ yahoo.com, return receipt requested. Any return of service must 14 || include proof that First American has attempted, at a minimum, to verify actual receipt of the 15 email message. 16 The Case Management Conference is CONTINUED to November 19, 2020 at 10:00 a.m. 3 17 All related deadlines are adjusted accordingly. IT IS SO ORDERED. 19 20 Dated: September 25, 2020 21 7 LU \ - Lj THOMAS S. HIXSON 22 United States Magistrate Judge 23 24 25 26 27 28