We are using ArcGIS for Desktop 10.1 and we want to create a geodatabase on a SQL Server Express. We used the setup supplied with the ArcGIS 10.1 DVD. We created a SQL Server (2008 R2 Express edition) and enabled it to store geodatabases, and added this server to Database Servers in ArcCatalog. But when we want to create a new geodatabase on this server it gives an error and says "Error creating this geodatabase Operation Failed". I found the log file in the temp folder (sde_setup.log), and there is an error in creating STATE_LINEAGES table and an error code of -38. Every table before this created succesfully. I couldn't find any information about this error on the internet. Log file and screen capture of error attached to this post. Waiting for your response.