United States District Court, D. Colorado
ORDER ON PLAINTIFF'S MOTION FOR SUBSTITUTED
SERVICE UPON DEFENDANTS DAVID E. WEBB, NICHOLAS T. WEBB,
TRUSTEE OF THE SPIRIT MTN. TRUST DATED APRIL 5, 2007, AND
NICHOLAS T. WEBB, INDIVIDUALLY (DKT. #36)
N.
Reid Neureiter United States Magistrate Judge.
Before
the Court is Plaintiff State Farm Fire & Casualty
Company's (“State Farm”) Motion for
Substituted Service Upon Defendants David E. Webb, Nicholas
T. Webb, Trustee of the Spirit Mtn. Trust Dated April 5,
2007, and Nicholas T Webb Individually (Dkt. #36) (together,
the “Webb Defendants”), referred to me by Judge
Wiley Y. Daniel. (Dkt. #37.) Defendants Park Estates
Homeowners Association, Inc. (the HOA”) and Robin
Gregory do not oppose the motion. After carefully considering
the motion, taking judicial notice of the Court's file,
and considering the applicable Federal Rules of Civil
Procedure and case law, the Court GRANTS in part and DENIES
in part State Farm's motion.
I.
Background
On
September 7, 2016, Defendant David Webb brought suit in state
court against Defendants the HOA and Robin Gregory, among
others, for personal injuries he allegedly sustained after
being thrown from his ATV while driving on property owned by
the HOA (the “State Case”). Mr. Gregory filed
various counterclaims and third-party complaints against each
of the Webb Defendants and the HOA, mostly relating to an
easement dispute between the parties. (Id.
¶¶ 26-27, and Exhibit 4.) One of Mr. Gregory's
counterclaims against David Webb asserted he had breached his
fiduciary duty as an HOA board member.
State
Farm agreed to defend the HOA in the State Case as a named
insured under a Condominium and Homeowner Association
Liability Policy Including Employment Practice Liability
Coverage (“the Policy”) issued to the HOA. (Dkt.
#1 ¶ 40.) State Farm also agreed, under a reservation of
rights, to defend Defendant David Webb's “interests
under the Policy” in relation to Mr. Gregory's
breach of fiduciary duty counterclaim. (Id. ¶
44.) After that counterclaim was dismissed, State Farm
notified David Webb in writing he did not have coverage and
it was denying coverage for claims asserted against him
individually. (Id. ¶¶ 47-49, and Exhibits
6 and 7.) David Webb's counsel, retained by State Farm on
his behalf, then withdrew.
According
to State Farm, Defendant David Webb “has disputed State
Farm's position that there is no coverage [for him
individually] under the Policy” in the State Case
(Id. ¶51), and has also alleged, in briefing
filed in the State Case, that Defendant Nicholas Webb is
entitled to coverage under the Policy. (Id. ¶
82.) State Farm thus filed this lawsuit on October 24, 2018
seeking a declaratory judgment concerning “its rights,
duties and obligations in relation to” the Webb
Defendants under the Policy. (Id. ¶ 1.)
State
Farm, however, has been unable to serve either David Webb or
Nicholas Webb. State Farm initially filed a “Motion for
Service of [the Webb Defendants] by Publication” (Dkt.
#22) pursuant to Fed.R.Civ.P. 4(e)(1), and also purportedly
Colorado Rule of Civil Procedure 4(f). But at the hearing
held to address that motion (Dkt. #29), counsel for State
Farm agreed that service by publication is governed by
Colorado Rule of Civil Procedure 4(g), and that such service
is only permissible “in actions affecting specific
property or status or other proceedings in rem”-which
this action is not. Colo. R. Civ. P. 4(g). See also
ReMine ex rel. Liley v. District Court for City and County of
Denver, 709 P.2d 1379 (Colo. 1985) (even where defendant
willfully hides to avoid service, court may not create
exception to rule that service by publication is only allowed
in cases affecting specific property or other in rem
proceedings). The Court denied the motion without prejudice,
and gave State Farm the option of submitting “a new
motion with additional authority to justify alternative
service on or before March 9, 2019.” (Dkt. #29). That
motion is now before me.
II.
Analysis
Under
Federal Rule of Civil Procedure 4(e), “an individual .
. . may be served in a judicial district of the United States
by: (1) following state law for serving a summons in an
action brought in courts of general jurisdiction in the state
where the district court is located or where service is
made.” Fed.R.Civ.P. 4(e). Pursuant to Colorado Rule of
Civil Procedure 4(f), “Substituted Service, ”
where a party is unable to effectuate personal service under
Colorado Rule of Civil Procedure 4(e), and where service by
mail or publication is not permitted under Colorado Rule of
Civil Procedure 4(g), “the party may file a motion,
supported by an affidavit of the person attempting service,
for an order for substituted service.” Colo. R. Civ. P.
4(e). The motion must include “the identity of the
person to [whom] the party wishes to deliver the process,
” and prior to authorizing substituted service the
court must be satisfied that “delivery of the
process” to such person “is appropriate under the
circumstances and reasonably calculated to give actual notice
to the party upon whom service is to be effective.”
Id.
A.
Substituted Service on David Webb
State
Farm asks the Court to allow it “to effect service on
David Webb by serving his counsel, J. Keith Killian, ”
who represented him in the State Case, and who currently
represents him in appealing certain orders entered in the
State Case. (Dkt. #36 ¶¶ 14-15.)
State
Farm acknowledges that “generally service of process on
an attorney of record is improper unless the attorney has
been specifically authorized by his client to accept service,
” which has not occurred here. (Id. ¶ 16)
(citing Bardahl Mfg. Corp. v. District Court In and For
Jefferson County, 372 P.2d 447 (Colo. 1962)). State Farm
argues, however, that a party's counsel in one case
“is impliedly authorized to accept service of process
in a closely related proceeding.” (Id.)
(citing Southerlin v. Automotive Elec. Corp., 773
P.2d 599 (Colo.App. 1988), overruled on other grounds).
According to State Farm, because this case “is an
insurance coverage action arising out of the underlying
action [i.e. the State Case] in which Mr. Killian represents
Mr. [David] Webb . . . substituted service is a reliable
option here because Mr. Killian still represents Mr. Webb in
matters related to” the State Case. (Id.
¶ 17.) (See also Dkt. #36-6, March 8, 2019
Notice of Appeal filed by Mr. Killian and his firm on behalf
of David E. Webb in relation to, among other things, summary
judgment rulings in the State Case.)
Because
Mr. Killian continues to represent David Webb in an appeal
relating to the State Case, State Farm asserts he “is
in the best position to apprise Mr. [David] Webb of this
action and provide him with the summons and complaint.”
(Id. ¶ 18) (citing Peck v. Chiddix
Excavating, Inc., No. 14-cv-01344-RM-MJW, 2014 WL
4820986 (D. Colo. Sept. 29, 2014) and Contrada, Inc. v.
Parsley, No. 1:10-CV-00646-WYD-CBS, 2010 WL 2943428 (D.
Colo. July 21, 2010)).
The
plaintiffs in both Peck and Contrada were
unable to serve certain defendants in those cases despite
repeated attempts at service, as described in affidavits or
testimony by the process servers who attempted service. In
Peck, the court allowed substituted service on one
of the defendant's attorneys who represented the
defendant in other matters, but who had communicated via
email with plaintiff's counsel, and who had advised
plaintiff's counsel that he had forwarded the complaint
in the subject case to his client. In Contrada, the
court similarly authorized substituted service on the
defendants' attorney in a separate case in which the
attorney was actively representing the defendants. In both
cases, the courts concluded that based on the circumstances,
service on the defendants' counsel who represented them
in another case was “reasonably calculated to give
actual notice to Defendants.” Contrada, 2010
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