The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court
Order Granting in Part and Denying in Part Plaintiff's Motion for Reconsideration of the Court's Order Quashing Service of Process
By order filed July 28, 2010, the Court granted the motion to quash service of process filed by Defendants Alejandro Canelos Rodriguez ("Alejandro") and Aristeo Alejandro Canelos Guillen ("Aristeo"). Plaintiff Agricola ABC, S.A. de C.V. ("Agricola") now moves for reconsideration of that order. Defendants have filed an opposition and Plaintiff has filed a reply. Because the parties' papers contained conflicting factual assertions, the Court held an evidentiary hearing on Friday, November 12, 2010. Upon review, for the reasons explained herein, the Court GRANTS IN PART AND DENIES IN PART Plaintiff's motion for reconsideration.
The factual background of this case is fully set forth in the Court's July 28, 2010 order and will not be repeated herein. The following facts are relevant to the Court's reconsideration of its prior order quashing service of process as to Alejandro and Aristeo Canelos. Plaintiff's process server initially attempted to serve Alejandro and Aristeo Canelos on April 24, 2010, and April 25, 2010 at #4 Blue Anchor Cay Rd., Coronado California. [Affidavit of Reasonable Diligence, Doc. Nos. 4 and 5, p. 2.] On April 27, 2010, Plaintiff's process server purportedly effected substitute service by leaving a copy of the summons and complaint with a woman by the name of Carmen Padilla, who identified herself as a co-occupant, at the Coronado Cays address. [Proof of Service of Summons, Doc. Nos. 4 and 5, pp. 1-2.] Plaintiff's process server thereafter mailed a copy of the documents to Alejandro and Aristeo Canelos at the same Coronado address. Plaintiff's process server again left a copy of the summons and complaint for Alejandro Canelos at the Coronado address on July 17, 2010. On that occasion, the process server left the documents with Alejandra Canelos, Alejandro's daughter. Alejandra Canelos purportedly told the process server that Alejandro was in town and sick. A copy of the complaint and summons was thereafter mailed to the Coronado address on July 19, 2010. [Proof of Service, Doc. No. 29-5, pp. 1-2.]
After the Court issued its order quashing service, Plaintiff's process server made multiple additional attempts to personally serve Alejandro Canelos at the Coronado home. [Testimony of Sandy Smith of First Legal Support Services.] On August 23, 2010, Plaintiff's process server staked out the Coronado home from 5:00 p.m. until 9:00 p.m. [Affidavit Reasonable Diligence, Doc. 29-6, p. 2.] As the process server was leaving around 9:00 p.m., she saw a maroon minivan pull up to the home and a woman went inside. The process server returned to the home and knocked at the door. The woman who answered the door purportedly said Alejandro lived there "but he is not in." When the process server attempted to deliver the papers, the woman said she did not know Alejandro Canelos. [Id.] While the process server was waiting at the home, she observed a UPS or FedEx package being delivered. When the process server went to the door, she saw the package was addressed to Alejandro Canelos. [Id.]
The Coronado home is owned by Nora Idalia Canelos, Defendants' wife and mother, respectively. [Alejandro Decl., ¶ 3;.Aristeo Decl., ¶ 3.] Alejandra Canelos has filed a declaration in opposition to Plaintiff's motion for reconsideration, denying she told the process server her father was sick. [Declaration of Alejandra Canelos, Doc. 33-2, ¶ 4.] Alejandro's other daughter, Nora Canelos, also filed a declaration in opposition to the motion for reconsideration. Nora Canelos is the woman who answered the door for the process server on August 23, 2010. She states she told the process server there was no one by the name of Alejandro Rodriguez who lived at the house. [Declaration of Nora Canelos, Doc. 33-3, ¶ 3-4.] Nora states the UPS package the process saw delivered was for an order she personally placed over the internet, using her father's credit card. [Id. ¶ 5.] Defendants presented no witnesses at the hearing.
Plaintiff has introduced, through declarations and in-court testimony, hearsay statements by its process servers regarding what Alejandra and Nora Canelos said when they were given copies of the summons and complaint on July 17 and August 23, 2010. Defendants lodged evidentiary objections to the statements made in the proofs of service and affidavits of reasonable diligence signed by Plaintiff's process servers, and further objected to testimony offered by the process servers at the hearing. Defendants object that the process servers' testimony as to what Alejandra and Nora Canelos told them is inadmissible hearsay because Plaintiff introduces it solely to prove the truth of the matter asserted -- that Alejandro Canelos was at the Coronado home.
Plaintiff did not file a written response to Defendants' evidentiary objections. At the hearing, Plaintiff argued the statements should be admitted because they are critical to determining whether Alejandro Canelos regularly stays at the Coronado address. However, Plaintiff offered and the Court aware of no exception to the hearsay rule under which the statements and testimony are admissible. Therefore, the Court sustains Defendants' objection and strikes the hearsay statements of the process servers.
Furthermore, in support of its opposition to the Defendants' original motion to dismiss, Plaintiff submitted a declaration by Aristeo Canelos Avila, the nephew and cousin of Defendants Alejandro and Aristeo Canelos. Aristeo Canelos Avila made statements about the frequency with which both individual Defendants visit the Coronado home and a variety of other matters. Mr. Canelos Avila also testified at the hearing regarding where his uncle and cousin live. Upon cross-examination at the hearing, however, it became clear that Mr. Canelos Avila has no personal knowledge of the matters contained in the declaration and about which he offered testimony. He has not seen or spoken to Alejandro Canelos since 2002, and has not seen or spoken to Aristeo Canelos for several years. Because he has no personal knowledge regarding where Defendants Alejandro and Aristeo Canelos reside, the Court will not consider Mr. Canelos Avila's declaration and testimony.
"On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons... (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b)... [or] (6) any other reason that justifies relief." Fed. R. Civ. P. 60(b). "'A motion for reconsideration should not be granted, absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law'." Kona Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (quoting 389 Orange Street Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999). Plaintiff moves for reconsideration pursuant to Fed. R. Civ. P. 60(b)(2) and (6), arguing there is newly discovered evidence and the Court committed clear error.*fn1
Where a defendant challenges the method of service, plaintiff bears the burden of establishing service was valid under Rule 4. Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004). Where factual issues are presented on a motion under Rule 12(b)(5), the court may hear evidence and determine the facts, and may hold an evidentiary hearing if necessary. Old Republic Ins. Co. v. Pacific Financial Svcs., 301 F.3d 54, 57 (2d Cir. 2002) (court should hold evidentiary hearing where material facts bearing on sufficiency of service of process are disputed).
"Service of process is the means by which a court asserts its jurisdiction over the person." SEC v. Ross, 504 F.3d 1130, 1138 (9th Cir. 2007); see also Fed. R. Civ. P. 4(k) ("[s]ervice.of a summons or filing a waiver of service is effective to establish jurisdiction over the person of a defendant"). "[I]n the absence of proper service of process, the district court has no power to render any judgment against the defendant's person or property...." Id. at 1138-39. Thus, service of process "must be 'notice reasonably calculated... to apprise interested parties of the pendency of an action and afford them an opportunity to present their objections'." Id. at 1138 (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). A plaintiff's substantial compliance with Rule 4's requirements may be sufficient to provide jurisdiction so long as the defendant receives sufficient notice of the complaint. Direct Mail Specialists, Inc. v. Eclat Computerized Technologies, Inc., 840 F.2d 685, 688 (9th Cir. 1988). However, "neither actual notice nor simply naming the defendant in the complaint will provide personal jurisdiction without substantial compliance with Rule 4." Travelers ...