(This is going to be a long post, so bear with me.)
You are now resident in North Carolina. How long have you been resident in North Carolina? If you have been there long enough to establish yourself as NC residents, that is now where they must serve you if this involves consumer debt as defined in law (except real estate); it apparently is all consumer debt. (My answer is based on the assumption you are permanently resident in NC now.) The fact that litigation is being attempted by someone who is trying to serve you in California has NOTHING to do with the running of the SOL at all except to put a temporary "hold", you might say, on its running out, in this case in CA. Since they, obviously, cannot serve you personally in California (unless they do "sewer service" and lie about it on the certificate of service) they do have two choices, one which is by mail.
To serve you by mail, the plaintiff must follow California Code of Civil Procedure, ccp 415.30 and 415.40 (all emphasis mine):
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp&group=00001-01000&file=415.10-415.95415.30. (a) A summons may be served by mail as provided in this
section. A copy of the summons and of the complaint shall be mailed
(by first-class mail or airmail, postage prepaid) to the person to be
served, together with two copies of the notice and acknowledgment
provided for in subdivision (b) and a return envelope, postage
prepaid, addressed to the sender.
(b) The notice specified in subdivision (a) shall be in
substantially the following form:
(Title of court and cause, with action number, to be inserted
by the sender prior to mailing)
NOTICE
To: (Here state the name of the person to be served.)
This summons is served pursuant to Section 415.30 of the
California Code of Civil Procedure. Failure to complete this form
and return it to the sender within 20 days may subject you (or the
party on whose behalf you are being served) to liability for the
payment of any expenses incurred in serving a summons upon you in any
other manner permitted by law. If you are served on behalf of a
corporation, unincorporated association (including a partnership), or
other entity, this form must be signed in the name of such entity by
you or by a person authorized to receive service of process on
behalf of such entity. In all other cases, this form must be signed
by you personally or by a person authorized by you to acknowledge
receipt of summons. Section 415.30 provides that this summons is
deemed served on the date of execution of an acknowledgment of
receipt of summons.
_____________________
Signature of sender
ACKNOWLEDGMENT OF RECEIPT OF SUMMONS
This acknowledges receipt on (insert date) of a copy of the
summons and of the complaint at (insert address).
Date: ______________________
(Date this acknowledgement
is executed)
_________________________
Signature of person acknowledging
receipt, with title if acknowledgment
is made on behalf of another person
(c) Service of a summons pursuant to this section is deemed
complete on the date a written acknowledgement of receipt of summons
is executed, if such acknowledgement thereafter is returned to the
sender.
(d) If the person to whom a copy of the summons and of the
complaint are mailed pursuant to this section fails to complete and
return the acknowledgement form set forth in subdivision (b) within
20 days from the date of such mailing, the party to whom the summons
was mailed shall be liable for reasonable expenses thereafter
incurred in serving or attempting to serve the party by another
method permitted by this chapter, and, except for good cause shown,
the court in which the action is pending, upon motion, with or
without notice, shall award the party such expenses whether or not he
is otherwise entitled to recover his costs in the action.
(e) A notice or acknowledgment of receipt in form approved by the
Judicial Council is deemed to comply with this section.
415.40. A summons may be served on a person outside this state in
any manner provided by this article or by sending a copy of the
summons and of the complaint to the person to be served by
first-class mail, postage prepaid, requiring a return receipt.
Service of a summons by this form of mail is deemed complete on the
10th day after such mailing.
They can mail you the summons and you have to acknowledge you received it within the time allowed or you can be liable for the costs of serving you another way unless you have good reason for not doing so. Apparently one of those "good reasons" applies to you: You live out of state, so they can serve you CMRRR and the service is considered complete after 10 days from the date of mailing, apparently (according to the CA Code of Civil Procedure) regardless of whether the acknowledgment of service is returned on a timely basis or not.
Or they can use Service by Publication (CCP 415.50):
CCP 415.50
(a) A summons may be served by publication if upon
affidavit it appears to the satisfaction of the court in which the
action is pending that the party to be served cannot with reasonable
diligence be served in another manner specified in this article and
that either:
(1) A cause of action exists against the party upon whom service
is to be made or he or she is a necessary or proper party to the
action.
(2) The party to be served has or claims an interest in real or
personal property in this state that is subject to the jurisdiction
of the court or the relief demanded in the action consists wholly or
in part in excluding the party from any interest in the property.
(b) The court shall order the summons to be published in a named
newspaper, published in this state, that is most likely to give
actual notice to the party to be served. If the party to be served
resides or is located out of this state, the court may also order the
summons to be published in a named newspaper outside this state that
is most likely to give actual notice to that party. The order shall
direct that a copy of the summons, the complaint, and the order for
publication be forthwith mailed to the party if his or her address is
ascertained before expiration of the time prescribed for publication
of the summons. Except as otherwise provided by statute, the
publication shall be made as provided by Section 6064 of the
Government Code unless the court, in its discretion, orders
publication for a longer period.
(c) Service of a summons in this manner is deemed complete as
provided in Section 6064 of the Government Code.
(d) Notwithstanding an order for publication of the summons, a
summons may be served in another manner authorized by this chapter,
in which event the service shall supersede any published summons.
(e) As a condition of establishing that the party to be served
cannot with reasonable diligence be served in another manner
specified in this article, the court may not require that a search be
conducted of public databases where access by a registered process
server to residential addresses is prohibited by law or by published
policy of the agency providing the database, including, but not
limited to, voter registration rolls and records of the Department of
Motor Vehicles.
In other words, they have to try to find you using publically-available sources and fail before the court can allow them to use service by publication. They can try service by publication AND another method of service at the same time. BUT, if the other mode of service succeeds within the time limit for the service by publication to become final, that other method is considered to be the effective one and the rules pertaining to the other form of service (not the service by publication) are then the ones they must follow to make service "good".
If they do manage to serve you? No problem. You then would motion for dismissal from the California court because of improper venue (NC is now proper venue).
