Appellate Court of Illinois,

Third District.

UNITED FIRE & CASUALTY COMPANY, an Iowa Stock Insurance Company, Plaintiff–Appellant/Cross–Appellee,

v.

CIVIL CONSTRUCTORS, INC., a Foreign Corporation, Kristine M. Holloway, Individually and as Special Administrator of the Estate of Michael S. Holloway, Deceased, E.H. Stralow, Inc., an Illinois Corporation, and Northwest Illinois Construction, an Illinois Corporation, Defendants–Appellees/Cross–Appellants.

 

No. 3–13–0888.

Dec. 19, 2014.

 

Appeal from the Circuit Court of the 14th Judicial Circuit, Whiteside County, Illinois. Appeal No. 3–13–0888, Circuit No. 11–MR–40, John L. Hauptman, Judge, Presiding.

 

ORDER

Presiding Justice LYTTON delivered the judgment of the court:

*1 ¶ 1 Held: Trial court did not err in finding insurer had a duty to defend general contractor who was additional insured on subcontractor’s policy where complaint alleged that general contractor retained control over allegedly negligent subcontractor’s work. Trial court erred in finding insurer was estopped from asserting policy defenses even though it waited 14 months before instituting declaratory judgment action where case was ongoing and settlement was not imminent. Trial court properly struck insurer’s affirmative defense of collusion where facts did not support that plaintiff brought her action for an evil purpose or that insurer was substantially prejudiced by plaintiff’s amended complaint.

 

¶ 2 United Fire filed a declaratory judgment action against Civil and Northwest. Civil and Northwest filed counterclaims for declaratory judgment and then motions for summary judgment. The trial court granted the motions for summary judgment, holding that United Fire had a duty to defend Civil and that United Fire was estopped from asserting policy defenses against Civil. We affirm the trial court’s order finding that United Fire had a duty to defend Civil, but reverse its ruling on the application of estoppel.

 

¶ 3 In 2009, the Illinois Department of Transportation entered into an agreement with Civil to be the general contractor for a construction project known as the Rock Creek Bridge Project. Civil subcontracted a portion of the work to Northwest. The agreement between Civil and Northwest stated that Northwest was to act “as an independent contractor to provide all labor, materials[,] equipment and services necessary or incidental to complete the work.” The agreement further stated that Northwest “shall perform the Subcontract Work under the general direction of the Civil Constructors, Inc. of IL and in accordance with the Subcontract Documents.” The agreement required Northwest to carry Civil as an additional insured on Northwest’s commercial general liability insurance policy.

 

¶ 4 Northwest purchased an imputed liability endorsement, naming Civil as the additional insured, from United Fire. The endorsement provided that an “additional insured” is “[a]ny person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.” The policy further stated: “Such person or organization is an additional insured only with respect to your liability which may be imputed to that person or organization directly arising out of your ongoing operations performed for that person or organization.”

 

¶ 5 Michael Holloway, an employee of Northwest, was killed while working on the construction project when Erwin Strawlow, the owner of E.H. Stralow, Inc., a subcontractor on the project, struck Holloway while backing up his truck. In December 2009, Kristine Holloway, Michael’s wife, filed a complaint against Civil and Stralow for the wrongful death of her husband. The complaint alleged that Civil was the general contractor for the project, that Civil contracted with Northwest to perform work on the project, and that Northwest contracted with Stralow to provide trucking or hauling services on the project. The complaint alleged that Civil “was negligent” for failing to perform various acts.

 

*2 ¶ 6 Both Civil and Stralow then filed third party complaints against Northwest. Those complaints alleged that Northwest owed a duty to Holloway and breached that duty by various negligent acts and/or omissions.

 

¶ 7 On January 25, 2010, Civil tendered its defense to United Fire, which United Fire refused. On May 8, 2011, United Fire filed a claim for declaratory judgment, seeking a declaration that it had no duty to defend or indemnify Civil. Civil and Northwest filed counterclaims for declaratory judgment.

 

¶ 8 In June 2011, Holloway filed an amended complaint against Civil and Stralow, alleging direct negligence and vicarious liability against Civil. The complaint alleged: “That CIVIL CONSTRUCTORS, INC. is vicariously liable for any negligence of its subcontractor, NORTHWEST ILLINOIS CONSTRUCTION, LLC * * *, as it was required to oversee their activity to insure that safety policies were followed and to enforce safety laws and rules.” The complaint specifically alleged that Civil was liable because “[i]t failed to require that Northwest” perform various acts.

 

¶ 9 Civil and Northwest filed amended counterclaims in United Fire’s declaratory judgment action. Civil filed a motion for summary judgment against United Fire, which the trial court denied.

 

¶ 10 In December 2011, Holloway filed a second amended complaint against Civil and Stralow, again alleging negligence and vicarious liability against Civil. The complaint stated:

 

“That CIVIL CONSTRUCTORS, INC. retained control over the operative details of the work of its subcontractor, agent and servant, Northwest Illinois Constuction [sic] LLC and is vicariously liable for the following acts or omissions of Northwest:

 

(a) Northwest failed to require the Stralow truck to have a reverse signal alarm * * *

 

(b) Northwest failed to require observers at the rear of Stralow’s truck when Stralow backed up his truck * * *;

 

(c) Northwest failed to inspect the trucks on site each day or require the truckers to do a daily inspection of their trucks;

 

(d) Northwest failed to have an adequate safety program;

 

(e) Northwest failed to stop Stralow from backing his truck when it knew or reasonably should have known that the truck did not have a reverse signal alarm and there were no observers assisting Stralow while backing;

 

(f) Northwest failed to have an adequate number of personnel on site to monitor the work;

 

(g) Northwest failed to have enough workers on site to act as observers to assist trucks backing up.”

 

¶ 11 Again, Civil and Northwest filed amended counterclaims for declaratory judgment against United Fire, and subsequently filed summary judgment motions against United Fire, arguing that United Fire had a duty to defend Civil and should be estopped from raising policy defenses against Civil.

 

¶ 12 United Fire responded, raising the affirmative defense of collusion, alleging that Civil’s attorney drafted Holloway’s second amended complaint to ensure that United Fire would have a duty to defend Civil. Civil and Northwest moved to strike the affirmative defense, and the trial court granted the motions.

 

*3 ¶ 13 The trial court also granted Northwest’s and Civil’s motions for summary judgment, holding that (1) the allegations of Holloway’s second amended complaint triggered United Fire’s duty to defend Civil, and (2) United Fire was estopped from asserting policy defenses against Civil because of its delay in filing its declaratory judgment action. United Fire filed a motion to reconsider, which the trial court denied.

 

¶ 14 I

¶ 15 United Fire first argues that the allegations of Holloway’s second amended complaint are insufficient to establish that it had a duty to defend Civil.

 

¶ 16 In a declaratory action where the issue is whether the insurer has a contractual duty to defend pursuant to an insurance policy, a court looks first to the allegations in the underlying complaint and compares those allegations to the relevant provisions of the insurance policy. Pekin Insurance Co. v. United Contractor Midwest, Inc., 2013 IL App (3d) 120803, ¶ 21. If the underlying complaint alleges facts within or potentially within policy coverage, the insurer is obligated to defend its insured. United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill.2d 64, 73 (1991). An insurer may not justifiably refuse to defend an action against its insured unless it is clear from the face of the underlying complaint that the allegations fail to state facts that bring the case within, or potentially within, the policy’s coverage. Id. If the underlying complaint alleges several theories of recovery against the insured, the duty to defend arises even if only one such theory is within the potential coverage of the policy. Id.

 

¶ 17 The test is not whether the complaint directly alleges facts that show that the claim is within the coverage provided by the policy. Pekin Insurance Co. v. Hallmark Homes, L.L.C., 392 Ill.App.3d 589, 595 (2009). Rather, the insurer owes a duty to defend unless the insurance cannot possibly cover the liability arising from the facts alleged and the terms of the policy preclude coverage. Id. The allegations of the complaint must be construed liberally in favor of coverage. Id. Under the language of an additional insured endorsement, a defendant is an additional insured entitled to coverage so long as it is (or potentially could be) liable as a result of the original insured’s acts or omissions. Id.

 

¶ 18 Generally, a person who employs an independent contractor is not vicariously liable for the acts or omissions of the independent contractor.   United Contractor Midwest, Inc., 2013 IL App (3d) 120803, ¶ 25 (citing Restatement (Second) of Torts § 414 (1965)). However, an exception exists where the general contractor retains control over the independent contractor’s work. Id. A general contractor can be vicariously liable for the negligent acts of a subcontractor if the general contractor exercised control over the operative details of the subcontractor’s work. Id. ¶ 26; Hallmark Homes, 392 Ill.App.3d at 594. When a fair reading of the complaint shows that the plaintiff has alleged a vicarious liability theory against the general contractor and that the subcontractor’s own negligence caused the plaintiff’s injury, liability under the complaint is “potentially within” the policy, and the insurer has a duty to defend the additional insured. Hallmark Homes, 392 Ill.App.3d at 595.

 

*4 ¶ 19 Here, Holloway’s second amended complaint alleged that Civil “retained control over the operative details of the work of its subcontractor, agent and servant, Northwest Illinois Constuction [sic] LLC” and then alleged seven negligent acts and/or omissions committed by Northwest. Such allegations are sufficient to potentially bring liability within the policy. See id. Thus, the trial court properly ruled that United Fire had a duty to defend Civil under Holloway’s second amended complaint.FN1

 

FN1. Because we affirm the trial court’s holding that United Fire had a duty to defend Civil under Halloway’s second amended complaint, Civil has been granted the relief it requested. Thus, Civil’s cross appeal claiming that United Fire had a duty to defendant under earlier versions of Halloway’s complaint is rendered moot. See J.S.A. v. M.H., 384 Ill.App.3d 998, 1009 (2008); Boatmen’s National Bank of Belleville v. Benton, 219 Ill.App.3d 117, 118 (1991).

 

¶ 20 II

¶ 21 United Fire next argues that the trial court erred in finding that it was estopped from asserting policy defenses against Civil.

 

¶ 22 An insurer’s duty to defend is broader than its duty to indemnify.   Aetna Casualty & Surety Co. v. O’Rourke Bros., Inc., 333 Ill.App.3d 871, 880 (2002). An insurer can normally dispute coverage even after a court determines there is no duty to defend. Id. However, when an insurer breaches its duty to defend, the estoppel doctrine bars the insurer from raising policy defenses to coverage. Id.

 

¶ 23 When an insurer believes that its policy does not cover a claim, it may not simply refuse to defend the insured. State Automobile Mutual Insurance Co. v. Kingsport Development, LLC, 364 Ill.App.3d 946, 959 (2006). Instead, the insurer must either (1) defend the suit under a reservation of rights, or (2) seek a declaratory judgment that no coverage exists within a “reasonable time.” Id. at 959–60. An insurer that does neither and is subsequently found to have wrongfully denied coverage is estopped from raising policy defenses to coverage. Id. at 959.

 

¶ 24 In determining whether an insurer has filed a declaratory judgment action within a “reasonable time,” courts should consider the amount of time that has elapsed between the insured’s tender and the insurer’s filing of the declaratory judgment action, as well as the status of the underlying suit.   Id. at 960; O’Rourke Bros., Inc., 333 Ill.App.3d at 880. Where trial or settlement is imminent, what amounts to a “reasonable time” will likely be shorter than if no resolution is expected in the near future. See Kingsport Development, Inc., 364 Ill.App.3d at 961 (2006) (7–month delay reasonable where case was ongoing with no expectation of settlement); Central Mutual Insurance Co. v. Kammerling, 212 Ill.App.3d 744, 750 (1991) (10–month delay unreasonable where insurer has notice of possible settlement). However, a delay of over 21 months is “unreasonable as a matter of law.” West American Insurance Co. v. J.R. Construction Co., 334 Ill.App.3d 75, 87 (2002).

 

¶ 25 Here, approximately 14 months passed between Civil’s tender of the case to United Fire and United Fire’s institution of its declaratory judgment action. At that time, Holloway’s action was still ongoing with no settlement anticipated. Under these circumstances, we find that United Fire brought its declaratory judgment action within a “reasonable time,” and we reverse the trial court’s finding that estoppel applied.

 

¶ 26 III

*5 ¶ 27 Finally, United Fire argues that the trial court erred in striking its affirmative defense of collusion.

 

¶ 28 “Black’s Law Dictionary defines collusion as a deceitful agreement or compact between two or more persons, for the one party to bring an action against the other for some evil purpose, as to defraud a third party of his right.” Williams v. Williams, 108 Ill.App.3d 936, 937 (1982). The plaintiff bears the burden of pleading and proving the affirmative defense of collusion between two parties. See Ogren v. Graves, 39 Ill.App.3d 620, 623 (1976). An insurer seeking to avoid responsibility because of an insured’s allegedly collusive or improper actions or inactions must plead and prove substantial prejudice. See M.F.A. Mutual Insurance Co. v. Cheek, 66 Ill.2d 492, 499 (1977); Founders Insurance Co. v. Shaikh, 405 Ill.App.3d 367, 375 (2010). Proof of substantial prejudice requires an insurer to demonstrate that it was actually hampered in its defense by the insured’s actions. M.F.A., 66 Ill.3d at 500.

 

¶ 29 Here, United Fire cannot establish the necessary elements of collusion. United Fire alleged that Civil engaged in collusion by assisting Holloway in drafting a complaint that required United Fire to defend Civil. Such allegations are insufficient to show “an evil purpose” on the part of Holloway and Civil. There is nothing presumptively improper about opposing parties working together for the purpose of obtaining insurance coverage. Chartis Specialty Insurance Co. v. Queen Anne HS, LLC, 867 F.Supp.2d 1111, 1122 (W.D . Wash.2012).

 

¶ 30 Similarly, there can be no finding of substantial prejudice in this case. It cannot be said that but for the actions of Civil, United Fire would have no duty to defend Civil. Holloway could have amended her complaint to include allegations of vicarious liability without Civil’s assistance. It is immaterial that Civil helped Holloway draft her complaint. See Messier v. Commercial Union Insurance Co., 1987 Me.Super. LEXIS 188. The trial court properly struck United Fire’s affirmative defense of collusion.

 

¶ 31 The judgment of the circuit court of Whiteside County is affirmed in part and reversed in part.

 

¶ 32 Affirmed in part; reversed in part.

 

Justices CARTER and O’BRIEN concurred in the judgment.

 

United States District Court,

M.D. Pennsylvania.

NATIONAL SPECIALTY INSURANCE COMPANY, Plaintiff,

v.

ADVANCED CARGO TRANSPORTATION, INC., et al., Defendants.

 

Civil Action No. 3:14–CV–01417.

Signed Nov. 19, 2014.

 

Chester A. Dudzinski, Cipriani & Werner, P.C., Pittsburgh, PA, Lauren E. Dobrowalski, Cipriani & Werner, Scranton, PA, for Plaintiff.

 

Mark T. Perry, Timothy J. Holland, The Perry Law Firm, L.L.C., Jeffrey E. Havran, Fine, Wyatt & Carey, P.C., Jason J. Mattioli, Minora, Minora, Colbassani, Krowiak & Mattioli, Scranton, PA, for Defendants.

 

MEMORANDUM OPINION

KAROLINE MEHALCHICK, United States Magistrate Judge.

*1 This is a diversity action in which the Plaintiff, National Specialty Insurance Company (“National Specialty”), seeks declaratory judgment with respect to its coverage obligations under a liability policy it issued to Defendant Advanced Cargo Transportation, Inc. (“Advanced Cargo”). In essence, National Specialty seeks a declaration excusing it from any further obligation to defend or indemnify Advanced Cargo or other insureds under the policy with respect to a motor vehicle accident that occurred on October 10, 2011, on Interstate 80, westbound, at or near milepost 298, in which a truck driven by an Advanced Cargo employee or contractor, Defendant Washington Munoz–Arevalo, FN1 was involved.

 

FN1. The complaint, the instant motion, and other papers filed by National Specialty in this case routinely refer to this defendant as “Munozarevalo,” but all the underlying documentation appears to refer to him by name as “Munoz–Arevalo” or “Arevalo,” mostly the former variant.

 

National Specialty claims that the limits of liability under that policy have been exhausted by settlement payments to various individual plaintiffs—the other motorists and their passengers involved in that motor vehicle accident—in underlying tort actions. Some or all of those same tort plaintiffs have brought suit against another company, Custom Polymers, Inc. (“Custom Polymers”), which had contracted with Advanced Cargo for the transportation of certain goods, asserting tort claims arising out of the very same incident. Custom Polymers, in turn, has initiated a third-party action against Advanced Cargo and Munoz–Arevalo, seeking contribution from them as joint tort-feasors. That third-party action has precipitated the instant coverage action by National Specialty, seeking a declaration that coverage is exhausted under the policy, and thus it is free from any further duty to defend or indemnify its insureds in connection with Custom Polymers’ contribution claim.

 

All of the defendants in this coverage action, save one, have waived formal service and appeared to defend this action. The lone straggler is the driver, Washington Munoz–Arevalo. Two attempts to mail a summons and copy of the complaint to Munoz–Arevalo in New Jersey have been unsuccessful. Attempts to locate Munoz–Arevalo within New Jersey and personally serve him there have also been unsuccessful. National Specialty now moves the Court to authorize it to serve Munoz–Arevalo by publication.

 

I. BACKGROUND

The complaint in this matter was filed on July 24, 2014. (Doc. 1).

 

On July 25, 2014, Plaintiff’s counsel mailed the summons, a copy of the complaint, and a request for waiver of service to Munoz–Arevalo by certified mail, return receipt requested, at his last known address: 118 Chapel Street, Apartment 1, Newark, New Jersey 07105. (Doc. 29, at 2). That correspondence was ultimately returned to Plaintiff’s counsel, marked “unclaimed.” (Doc. 29, at 2).

 

Plaintiff’s counsel engaged the services of a private investigator, who performed a background check on Munoz–Arevalo and identified “several possible residences.” (Doc. 25–1, at 2). On August 16, 2014, the private investigator conducted early morning “cold calls” on two Newark addresses: 241 Oliver Street, Apartment 5, Newark, New Jersey; and 118 Chapel Street, Newark, New Jersey. (Doc. 25–1, at 2). The investigator rang the doorbell at the Chapel Street house several times, but there was no answer. The investigator spoke with a next-door neighbor, who advised that a man named “Luis” resided there. The investigator left a note on the door. (Doc. 25–1, at 2; see also Doc. 29–2, at 1).

 

*2 The investigator knocked several times on the door at the Oliver Street apartment, but there was no answer. The investigator canvassed the area and spoke with a woman who advised that Munoz–Arevalo had moved away “several years ago.” The woman suggested that the investigator visit 281 Adams Street, Apartment 9, recalling that relatives of Munoz–Arevalo might live there. The investigator visited the Adams Street apartment, where no one answered the door, and he or she left a note on the door. (Doc. 25–1, at 2; see also Doc. 29–2, at 1–2).

 

Significantly, the investigator’s August 19, 2014, report further noted that: “Our background address search also reveals a Florida address for Mr. Munoz–Arevalo. Please advise us as to how we should proceed.” (Doc. 25–1, at 2).

 

On September 13, 2014, the investigator “revisited” 275 Adams Street, Apartment 9.FN2 The investigator knocked on the door, but no one answered. The investigator spoke with several neighbors, none of whom were familiar with Munoz–Arevalo. The investigator left a note on the door. (Doc. 25–2, at 2; see also Doc. 29–2, at 2). On September 19, 2014, the investigator “returned to the residence” FN3 and spoke with a woman, who advised the investigator that Munoz–Arevalo “was neither a resident nor related to her.” The woman requested that the investigator stop visiting the residence and closed the door. (Doc. 25–2, at 2; see also Doc. 29–2, at 2).

 

FN2. It is unclear from the materials in the record whether one of the two reports by the private investigator contains a typo, or whether the investigator mistakenly visited two different apartment buildings located on the same block.

 

FN3. Presumably at 275 Adams Street.

 

On September 23, 2014, pursuant to information developed by Plaintiff’s counsel, the investigator visited a residence at 170 Tappan Street, Kearny, New Jersey, where he or she personally served the summons and a copy of the complaint on a man named Nuno Moniz, whom the investigator believed at the time to be Munoz–Arevalo. The investigator later determined that Moniz was not in fact the individual named as a defendant in this lawsuit. (Doc. 25–2, at 2; Doc. 29–2, at 2).

 

On October 3, 2014, Plaintiff’s counsel attempted for a second time to mail the summons and a copy of the complaint to Munoz–Arevalo by certified mail, return receipt requested, this time at the second Newark address identified by Plaintiff’s private investigator: 281 Adams Street, Newark, New Jersey, 07105. (Doc. 29, at 3). That correspondence was ultimately returned to Plaintiff’s counsel, marked “unclaimed.” (Doc. 29, at 3).

 

On October 9, 2014, the investigator once again unsuccessfully attempted personal service on Munoz–Arevalo at the Chapel Street house where he was last known to reside. (Doc. 29–2, at 1).

 

At some point, not specified in its motion papers, counsel for National Specialty contacted defense counsel who had appeared in one of the underlying tort cases on behalf of Munoz–Arevalo, as well as his erstwhile employer, Advanced Cargo. (Doc. 29, at 4–5). That attorney himself had been unable to contact Munoz–Arevalo, and he had no information to offer with respect to Munoz–Arevalo’s current location. (Doc. 29, at 5).

 

*3 On October 30, 2014, National Specialty filed the instant motion for an order permitting it to serve Munoz–Arevalo by publication of a notice in The Star Ledger, a Newark, New Jersey, newspaper. (Doc. 29). The motion is unopposed by the other parties who have appeared in this action.

 

II. ANALYSIS

Under Rule 4(e) of the Federal Rules of Civil Procedure, service of a summons and complaint upon an individual within a judicial district of the United States may be effected by:

 

(A) delivering a copy of the summons and of the complaint to the individual personally;

 

(B) leaving a copy of each at the individual dwelling or usual place of abode with someone of suitable age and discretion who resides there; or

 

(C) delivering a copy of each to an agent authorized by appointment or by law to receive service of process.

 

Fed.R.Civ.P. 4(e)(2).

 

Alternatively, service may be effected by “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)(1).

 

In this case, National Specialty has attempted and failed to effect personal or substitute service upon Munoz–Arevalo pursuant to Rule 4(e)(2). Despite efforts to locate Munoz–Arevalo and serve him at several possible locations in New Jersey where he might have resided, National Specialty has been unable to locate him. As a result, National Specialty has requested an order by this Court authorizing service by publication in a Newark-area newspaper, pursuant to New Jersey Court Rule 4:4–5.

 

Just as under the federal rules, see Fed.R.Civ.P. 4(e) (2), under New Jersey law, personal service is the primary method to serve an individual located within the state. See N.J.R. 4:4–4(a) (in personam jurisdiction); N.J.R. 4:4–5(a) (in rem or quasi in rem jurisdiction); Guardian Life Ins. Co. of Am. v. Crystal Clear Indus., No. 11–3062, 2012 WL 1884003, at *4 (D.N.J. May 22, 2012). If personal service within the state cannot be effected, substitute or constructive service is permitted under the New Jersey rules. See N.J.R. 4:4–4(b); N.J.R. 4:4–5; Guardian Life, 2012 WL 1884003, at *4. For in personam jurisdiction, the New Jersey rules authorize alternative forms of service, including personal service outside the state pursuant to the rules of the jurisdiction in which service is made, substitute service by mail, or “[i]f service cannot be made by any of the modes provided by this rule, … by court order, consistent with due process of law.” N.J.R. 4:4–4(b); Guardian Life, 2012 WL 1884003, at *4. For in rem and quasi in rem jurisdiction, the New Jersey rules authorize alternative forms of service, including personal service outside the state pursuant to the rules of the jurisdiction in which service is made, substitute service by mail, or constructive service by publication. See N.J.R. 4:4–5(a); Guardian Life, 2012 WL 1884003, at *4. Regardless of the type of action, substitute or constructive service requires the submission of an affidavit or declaration demonstrating due diligence by the plaintiff in attempting first to locate and serve the defendant personally within the state. See N.J.R. 4:4–4(b) (1); N.J.R. 4:4–5(b); Guardian Life, 2012 WL 1884003, at *4.

 

*4 National Specialty has expressly invoked the authority of New Jersey Court Rule 4:45(a)(3) in its request for this Court’s authorization to serve Washington Munoz–Arevalo by publication. But, by its terms, Rule 4:4–5(a)(3) applies only to in rem and quasi in rem actions. See N.J.R. 4:4–5(a) (concerning “actions affecting specific property, … or any res within the jurisdiction of the court, or in matrimonial actions”). This action does not appear to “seek to affect the rights of particular persons in specific property.” See Ins. Co. of N. Am. v. Allied Crude Vegetable Oil Ref. Corp., 89 N.J.Super. 518, 215 A.2d 579, 586 (N.J.Super.Ct. Ch. Div.1965). Indeed, “there is no dispute as to the ownership of the policy or any claims to the policy as a specific piece of property.” Allied, 215 A.2d at 587. Rather than seeking to resolve a dispute as to title to the policy or its proceeds, National Specialty seeks a declaration that it has fully satisfied its contractual obligations to defend and indemnify its insureds, having paid out the policy’s entire limits of liability with respect to the accident at issue in the underlying tort litigation. As such, this action is clearly brought in personam, rather than in rem or quasi in rem, and New Jersey Court Rule 4:4–5(a) (3) is inapplicable. See generally Allied, 215 A.2d at 584–87.

 

Service by publication is nevertheless permitted in in personam actions under New Jersey Court Rule 4:4–4(b)(3). See Kopic v. Magriplis Corp., No. A–0212–05T1, 2006 WL 3903975, at *2 (N.J.Super.Ct.App.Div. Dec.29, 2006). That rule provides that “[i]f service cannot be made by any of the modes provided by this rule, any defendant may be served as provided by court order, consistent with due process of law.” N.J.R. 4:4–4(b)(3). A mode of service ordered by a court is “consistent with due process of law” if it provides “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950); O’Connor v. Altus, 67 N.J. 106, 335 A.2d 545, 556 (N.J.1975) (quoting Mullane ); Kopic, 2006 WL 3903975, at *2 (quoting O’Connor ).

 

Concerning constructive service by publication in particular, this Court is mindful that “[s]ervice by publication is hardly favored and is the method of service that is least likely to give notice.” M & D Assocs. v. Mandara, 366 N.J.Super. 341, 841 A.2d 441, 448 (N.J.Super.Ct.App.Div.2004). As the Supreme Court of the United States has observed:

 

Chance alone brings to the attention of even a local resident an advertisement in small type inserted in the back pages of a newspaper, and if he makes his home outside the area of the newspaper’s normal circulation the odds that the information will never reach him are large indeed.

 

Mullane, 339 U.S. at 315.

 

Based on the record before the Court, National Specialty appears to have conducted a diligent inquiry with respect to locations within New Jersey where Munoz–Arevalo might be found. But its private investigator also identified an address for Munoz–Arevalo in Florida. There is nothing in the record to demonstrate any attempt to serve Munoz–Arevalo in Florida, to determine whether Munoz–Arevalo still resides at the Florida address identified by the private investigator, or to determine whether the Floridian identified by the private investigator is indeed the same person as the named defendant in this action. As a result, the Court cannot conclude that National Specialty has made the requisite showing under New Jersey Rule 4:44(b)(3) that service cannot be made by any of the other modes of service provided by Rule 4:4–4, inasmuch as it permits substituted service by mail or personal service in Florida under that state’s rules for service of process. See N.J.R. 4:4–4(b)(1). Moreover, knowing that Munoz–Arevalo may indeed reside in Florida rather than New Jersey, the Court cannot conclude that publication in The Star Ledger, the normal circulation of which is limited to several northern New Jersey counties, constitutes notice reasonably calculated to apprise Munoz–Arevalo of the pendency of this action. See Mullane, 339 U.S. at 314–15.

 

*5 The Court notes that National Specialty is also permitted to invoke the procedures for service of process provided by Pennsylvania law. See Fed.R.Civ.P. 4(e)(1). Pennsylvania law provides similar vehicles for personal service outside the state, substituted service by mail, and constructive service by publication. See Pa. R. Civ. P. 404(1) (permitting personal service outside Pennsylvania pursuant to Pa. R. Civ. P. 402(a)); Pa. R. Civ. P. 404(3) (permitting personal service outside Pennsylvania pursuant to the rules of the jurisdiction in which service is made); Pa. R. Civ. P. 404(2) (permitting substituted service outside Pennsylvania by mail pursuant to Pa. R. Civ. P. 403); Pa. R. Civ. P. 430 (permitting service by publication by special order if service cannot be made under other rules). Resort to Pennsylvania state procedures for service of process, however, would obtain the same result. See Countrywide Home Loans, Inc. v. Stringer, No. 3:07–CV–2072, 2008 WL 3853239, at *2–*3 (M.D.Pa. Aug.15, 2008) (“Service by special order is an extraordinary measure that is appropriate only after all other methods of service available under the rules have been exhausted.”);   Long v. Polidori, No. 03–CV–1439, 2003 WL 21278868, at *1 (E.D.Pa. May 29, 2003) (publication in newspapers serving area of defendant’s last known Pennsylvania address not reasonably calculated to provide required notice where defendant’s last known address was in Louisiana and no evidence indicated that defendant had returned to Pennsylvania); Clayman v. Jung, 173 F.R.D. 138, 142 (E.D.Pa.1997) (publication in newspaper serving area of defendant’s last known residential address was not reasonably calculated to give requisite notice of action when information of record indicatd that defendant had moved and nothing suggested that he remained in the area).

 

III. CONCLUSION

For the foregoing reasons, National Specialty’s motion authorizing service upon Washington Munoz–Arevalo by publication (Doc. 29) will be DENIED without prejudice.

 

An appropriate Order follows.