Opinion
NO: 2:12-CV-422-RMP Bankr. Case No. 09-06194-PCW11 Adv. Proc. No. 11-80094-PCW11
07-14-2017
In Re: LLS AMERICA, LLC, Debtor, BRUCE P. KRIEGMAN, solely in his capacity as court-appointed Chapter 11 Trustee for LLS America, LLC, Plaintiff, v. ZDENEK SLANINA AND VERA SLANINA, Defendants.
ORDER DENYING MOTION TO VACATE JUDGMENT
BEFORE THE COURT is Defendants' Motion to Vacate Judgment, ECF No. 26. The Court has reviewed the motion, the record, and is fully informed.
BACKGROUND
After Defendants failed to adequately respond to this suit, the U.S. District Court Clerk entered an Order of Default, ECF No. 14. On December 7, 2012, the Court entered a Default Judgment against the Slaninas. See ECF Nos. 21 and 22. On March 23, 2013, an Order to Register Foreign Judgment was entered against Defendants (and Plaintiff argues that it was personally served on Defendants). ECF No. 29-2.
On February 21, 2017, Defendants filed the present challenge to this Court's personal jurisdiction over them and argue that the Court should vacate the prior judgment as invalid pursuant to FED. R. CIV. P. 60(4) and (6). See ECF No. 26.
ANALYSIS
Service is governed by FED. R. CIV. P. 4, which states in relevant part:
Serving an Individual in a Foreign Country. Unless federal law provides otherwise, an individual--other than a minor, an incompetent person, or a person whose waiver has been filed--may be served at a place not within any judicial district of the United States:FED. R. CIV. P. 4.
(1) by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents;
(2) if there is no internationally agreed means, or if an international agreement allows but does not specify other means, by a method that is reasonably calculated to give notice:
(A) as prescribed by the foreign country's law for service in that country in an action in its courts of general jurisdiction;
(B) as the foreign authority directs in response to a letter rogatory or letter of request; or
(C) unless prohibited by the foreign country's law, by:
(i) delivering a copy of the summons and of the complaint to the individual personally; or
(ii) using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt; or
(3) by other means not prohibited by international agreement, as the court orders.
Pursuant to subsection (f)(1), our inquiry begins with the Hague Convention.
Article 10 of the Convention, the English text of which reads as follows: "Provided the State of destination does not object, the present Convention shall not interfere with—Water Splash, Inc. v. Menon, 137 S. Ct. 1504, 1508 (2017) (quoting 20 U.S.T., at 363. Although the Hague Convention "liberalized service of process in international civil suits," Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004), it does not, by itself, provide an affirmative answer to what specific types of service are allowed in a particular case. It must be read in conjunction with the laws of the forum where the case is pending. As the Ninth Circuit Court of Appeals stated in Brockmeyer v. May, 383 F.3d at 804:
"(a) the freedom to send judicial documents, by postal channels, directly to persons abroad,
"(b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination,
"(c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination."
[W]e must look outside the Hague Convention for affirmative authorization of the international mail service that is merely not forbidden by Article 10(a). Any affirmative authorization of service by international mail, and any requirements as to how that service is to be accomplished, must come from the law of the forum in which the suit is filed.
As stated in Article 10 of the Hague Convention and as recognized in Brockmeyer, the Hague Convention permits service of process by international mail. See id. at 808. Furthermore, Plaintiff provided the Court with a copy of Canada's Accession Document to the Hague Convention, which states that "Canada does not object to service by postal channels." See ECF No. 29-3 at 2. Considering that this case was pending in U.S. District Court, we find the requirements of this forum within FED. R. CIV. P. 4. "Service by international mail is affirmatively authorized by Rule 4(f)(2)(C)(ii), which requires that service be sent by the clerk of the court, using a form of mail requiring a signed receipt." Brockmeyer v. May, 383 F.3d at 808.
In this case, the deputy clerk for the U.S. Bankruptcy Court for the Eastern District of Washington certified "that a copy of the Summons and Complaint was mailed by international registered mail with Returned Receipt for International Mail" to both Defendants who now challenge personal jurisdiction. Plaintiff provided documents "showing receipt of the summons and complaint by the Slaninas on August 12, 2011."
Defendants urge the Court to read the language from FED. R. CIV. P. 4(f)(C): "unless prohibited by the foreign country's law" as requiring that all service provided in Canada from other countries adhere to the domestic rules for suits within Canada. This interpretation would conflict with the statements within the Hague Convention and FED. R. CIV. P. 4. "Unless prohibited by" is not to be understood as being the same as "explicitly provided for." Through the Hague Convention, Canada stated that service by mail is not "prohibited" in Canada. Accordingly, Plaintiff properly adhered to the requirements of FED. R. CIV. P. 4(f)(2)(C)(ii) by having the clerk of court serve process by international registered mail with return receipts.
Although the Court finds that it had personal jurisdiction over Defendants in this matter, the Court has considered other factors that would also require the denial of Defendants' motion. First, Defendants were personally served with an Order to Register a Foreign Judgment in March of 2013. They fail to state why they have waited nearly four years to challenge this Court's jurisdiction pursuant to FED. R. CIV. P. 60, which requires that a motion be made within a "reasonable" time. The Court finds that Defendants' unexplained delay is unreasonable.
Additionally, Defendants failed to substantively respond to Plaintiff's argument that Defendant consented to suit by filing a proof of claim in the underlying bankruptcy case before venue was transferred to this judicial district. The Court has no basis to dispute Plaintiff's assertion that Defendants consented to the Court's personal jurisdiction by filing their proof of claim.
The Court finds that Defendants were properly served, and that the Judgment entered against them was procedurally and jurisdictionally valid.
Accordingly, IT IS HEREBY ORDERED THAT:
Defendants' Motion to Vacate Judgment, ECF No. 26, is DENIED. \\ \\ \\
The District Court Clerk is directed to enter this Order, provide copies to counsel, and CLOSE this case.
DATED this 14th day of July 2017.
s/ Rosanna Malouf Peterson
ROSANNA MALOUF PETERSON
United States District Judge