Judge: Christopher K. Lui, Case: 23STCV03278, Date: 2024-12-03 Tentative Ruling
Case Number: 23STCV03278 Hearing Date: December 3, 2024 Dept: 76
Plaintiff alleges that Defendants have breached a contract regarding the supply of content, support and financing necessary to launch Defendants’ non-fungible tokens (“NFT”) business.
Specially Appearing Defendant Perpetual Altruism, Ltd. moves to quash service of summons.
TENTATIVE RULING
Specially Appearing Defendant Perpetual
Altruism, Ltd.’s motion to quash service of summons is DENIED. Defendant Perpetual
Altruism is to respond to the Complaint within 30 days.
ANALYSIS
Motion To Quash
Request For Judicial Notice
Plaintiff requests that the Court take judicial notice of the following: (1) Second Notice of Motion and Motion to Quash Service of Summons by Specially Appearing Defendants Hugo McDonaugh and Perpetual Altruism Ltd; Memorandum of Points and Authorities in Support Thereof, filed on August 30, 2023; (2) Declaration of Max D. Fabricant in Support of Proof of Service of Summons and Complaint on Defendant Perpetual Altruism Ltd., filed on July 24, 2024.
Requests Nos. 1 and 2 are GRANTED per Evid. Code, § 452(d)(court records).
Discussion
Specially Appearing Defendant Perpetual Altruism, Ltd. moves to quash Plaintiff’s third attempted service of summons.
“A party cannot be properly joined unless served with the summons and complaint; notice does not substitute for proper service. Until statutory requirements are satisfied, the court lacks jurisdiction over a defendant.” (Ruttenberg v. Ruttenberg (1997) 53 Cal.App.4th 801, 808.) Earlier case law even held that there is “no duty to act upon a defectively served summons. The requirement of notice ‘is not satisfied by actual knowledge without notification conforming to the statutory requirements’ [citation]; it is long-settled that methods of service are to be strictly construed and that a court does not acquire jurisdiction [*1467] where personal service is relied upon but has not in fact taken place. [Citations.]’” (Kappel v. Bartlett (1988) 200 Cal.App.3d 1457, 1466-67.)
On a motion
to quash for lack of personal jurisdiction, the plaintiff has the initial burden of proof:
“When a defendant moves to quash service
of process” for lack of specific jurisdiction, “the plaintiff has the initial burden
of demonstrating facts justifying the exercise of jurisdiction.” ( Vons, supra,
14 Cal.4th at p. 449.) “If the plaintiff meets this initial burden, then the defendant
has the burden of demonstrating ‘that the exercise of jurisdiction would be unreasonable.’
“ ( Pavlovich, supra, 29 Cal.4th at p. 273, quoting Vons, at p. 449.)
(Snowney v. Harrah’s Entertainment, Inc.
(2005) 35 Cal.4th 1054, 1062 [bold emphasis added].)
Specially appearing Defendant argues as follows:
First, Plaintiff’s latest proof of service is not supported by an affidavit as required by California Civil Procedure Code § 417.10. Rather, it is based on an unverified “Certificate of Attestation” that is unsigned by anyone with the UK Central Authority. Moreover, the declaration Plaintiff’s former counsel, Max D. Fabricant, which purports to testify that Perpetual Altruism was purportedly “served . . . under Article 5 of the Hague Convention,” is not admissible. This at least because: (1) Mr. Fabricant’s attempt to introduce attorney argument as factual testimony is improper; (2) Mr. Fabricant did not effectuate service himself and has no personal knowledge regarding whether or not service was effectuated by someone with the UK Central Authority on Perpetual Altruism; and (3) Mr. Fabricant’s statement is pure hearsay based on out of court statements purportedly had with the UK Central Authority which are being offered to prove the truth of the matter asserted.
Second, even assuming arguendo Perpetual Altruism is amenable to service at the Brock House, 19 Langham Street, London W1W 6BP, United Kingdom (“Brock House”) – which it disputes, as Perpetual Altruism no longer maintains operations there, and that location is a shared WeWork style facility that houses numerous transitory tenants – Plaintiff has presented no admissible evidence purporting to satisfy its burden of demonstrating that the alleged “RECEPTIONIST” named “Mr TOM” [sic] who was purportedly served was an authorized agent of Perpetual Altruism. Moreover, Perpetual Altruism expressly denies that any such individual is employed by it, was authorized to accept service on its behalf or has delivered any documents to it. Indeed, California courts have held that service on an unauthorized recipient at a shared work facility, like Brock House, does not constitute valid substitute service under California law.
Third, there is no evidence that the person served was “informed of the contents” of what he was purportedly delivered or understood the obligation to ensure delivery to Perpetual Altruism, as required by statute. Cal. Civ. Proc. Code § 415.20(a).
Finally, there is also no evidence that Plaintiff complied with the requirements of California Civil Procedure Code Section 415.20(a) by mailing a certified copy of the Summons and Complaint to a designated person of Perpetual Altruism as defined by California Civil Procedure Code § 416.10 after substitute service was purportedly effectuated on a “RECEPTIONIST” named “Mr TOM.”
Specially Appearing Defendant was allegedly served in London. As such, the Hague Convention applies. Service effectuated through the Central Authority is sufficient.
Because Hiller was in England
at the time of service of process, Balcom was required to serve her pursuant to
the specifications of the Hague Service Convention (Convention). (Citations omitted).)
Failure to comply with the Convention renders the service void, even if the defendant
has actual notice of the lawsuit. (Citations omitted.)
Article 1 of the
Convention states that it “shall apply in all cases, in civil or commercial matters,
where there is occasion to transmit a judicial or extrajudicial document for service
abroad.” (See Appen. to Fed. Rules Civ. Proc., rule 4, 28 U.S.C.)
Articles 2 through
6 of the Convention establish a system whereby each participating country will
organize and designate a “Central Authority” to receive, and to reject or to execute,
and to certify requests for service of process from parties in other participating
states. Both the United States of America and the United Kingdom are participating
countries. Balcom concedes that he did not have Hiller served through the designated
Central Authority in the United Kingdom. That, however, is not the end of the inquiry
because the Convention recognizes other methods of service.
(Balcom v. Hiller (1996) 46 Cal.App.4th 1758, 1763-64 [bold emphasis added].)
The Hague Service Convention has preemptive effect as to service on foreign nationals:
California is a jurisdiction where the original service of process,
which confers jurisdiction, must conform to statutory requirements or all that follows
is void. (Citations omitted) Specifically plaintiffs
must comply with statutes prescribing the method of service on foreign corporations.
(Citation omitted.)
Plaintiff argues that the Hague Convention is not controlling over
California statutes which authorize service by mail. (Citing Code Civ. Proc., §
415.40.) However, this argument is entirely without support; the preemptive
effect of the Hague Convention as to service on foreign nationals is beyond dispute.
(Citations omitted.) Even the Shoei Kako case essentially
concedes this point, by analyzing and construing the treaty rather than simply considering
the matter under California law.
(Honda Motor Co. v. Superior Court (1992) 10
Cal. App. 4th 1043, 1048-49 [bold emphasis and underlining added].)
Under California law, service upon a person outside the United States reasonably calculated to give actual notice, as prescribed by the law of the place where the person is served, and in accordance with the Hague Service Convention, is sufficient:
Section 413.10,
subdivision (c), provides that when the person is to be served outside the United
States, a summons must be served as provided by the Code of Civil Procedure,
as directed by the trial court, “or, if the court before or after
service finds that the service is reasonably calculated to give actual notice,
as prescribed by the law of the place where the person is served or as
directed by the foreign authority in response to a letter rogatory. These rules are subject to the provisions of the Convention on the
‘Service Abroad of Judicial and Extrajudicial Documents’ in Civil or Commercial
Matters (Hague Service Convention).” “Failure to comply with
the Hague Service Convention procedures voids the service even though it was made
in compliance with California law. [Citation.] This is true even in cases where
the defendant had actual notice of the lawsuit. [Citations.]” (Citations omitted.)
. . .
Article 1 of the Hague Service Convention addresses the scope of its
applicability: “‘The present Convention shall apply in all cases, in civil or commercial
matters, where there is occasion to transmit a judicial or extrajudicial document
for service abroad.’ [Citation.]” (Volkswagenwerk, supra, 486 U.S. at p.
699.) In interpreting the phrase “‘occasion to transmit,’” the United [*1065] States Supreme Court stated: “If the internal
law of the forum state defines the applicable method of serving process as requiring
the transmittal of documents abroad, then the Hague Service Convention applies.”
(Id. at p. 700.) Thus, service of process is governed by the Hague Service
Convention and, to the extent not inconsistent with the Convention, by the
Code of Civil Procedure. (§ 413.10, subd. (c); Volkswagenwerk, supra,
at pp. 699–700; see also Brockmeyer v. May (9th Cir. 2004) 383 F.3d 798,
803–804 (Brockmeyer).)
“The primary
means by which service is accomplished under the [Hague Service] Convention is through
a receiving country’s ‘Central Authority.’ The Convention affirmatively requires
each member country to designate a Central Authority to receive documents from another
member country. [Citation.] The receiving country can impose
certain requirements with respect to those documents (for example, that they be
translated into the language of that country). [Citation.] If the documents comply
with applicable requirements, the [Hague Service] Convention affirmatively requires
the Central Authority to effect service in its country.” (Brockmeyer, supra,
383 F.3d at p. 801.) . . .
(Inversiones Papaluchi S.A.S. v. Superior Court
(2018) 20 Cal.App.5th 1055, 1064-65 [bold emphasis and underlining added].)
The Hague Convention permits service
“directly”:
Article 10
Provided the State of destination does
not object, the present Convention shall not interfere with –
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.
(Hague Convention, Article 10(c)[bold emphasis and underlining added].)
Plaintiff submits evidence of the following:
3. On January 18, 2024, Plaintiff’s counsel submitted the necessary documents, including the summons, complaint, and supporting documentation, to the UK Central Authority (HM Courts & Tribunals Service) for service under the Hague Service Convention. This submission was made to comply strictly with the Convention, which governs international service of process. (RJN Exhibit C, Declaration of Max Fabricant at 2.)
4. On May 1, 2024, the UK Central Authority
served Perpetual Altruism at its registered business address, Brock House,
19 Langham Street, London W1W 6BP, United Kingdom, by delivering the documents to
“Mr. Tom,” a receptionist at the location, who was informed of the nature of the
documents. (RJN Exhibit C, Fabricant Decl. at 2.)
5. On July 1, 2024, the UK Central Authority issued a Certificate of Attestation under Article 6 of the Hague Service Convention, confirming that service had been completed in accordance with the Convention. This certification explicitly stated that the documents were delivered to the address listed and received by “Mr. Tom” on behalf of Perpetual Altruism. (RJN Exhibit C, Fabricant Decl. at 4 et seq.)
Although neither party cites the UK Public General Act, Companies Act of 2006, § 1139, it appears the UK permits service of a document registered under the Act by leaving it at the company’s registered office:
1139
Service of documents on company
(1)A document may be served on a company
registered under this Act by leaving it at, or sending it by post to, the company’s
registered office.
. . .
(3)For the purposes of this section a person’s
“registered address” means any address for the time being shown as a current
address in relation to that person in the part of the register available for public
inspection.
. . .
(UK Public General Act, Companies Act of 2006, § 1139(1) & (3)[1] [bold emphasis added].)
Where service is proper under UK law and was reasonably calculated under all the circumstances to impart actual notice, this will constitute proper service of summons:
We first consider whether the evidence establishes
proper service under Russian law. (Citation omitted.) If it does, we then
consider whether such service was reasonably calculated, under all the circumstances,
to impart actual notice. (Citations omitted.)
[*204]
. . .
. . . [*205]
. . .
Yakovlev stipulated to the authenticity of the
Russian court documents but objected to their admission on hearsay grounds. The
trial court did not rule on his objections, and Yakovlev renews them on appeal.
Yakovlev claims there was no admissible evidence of any attempt to serve him in
Russia. To the contrary, however, we find that the above referenced documents are
admissible and conclusive as to proper service under Russian law.
Alfa-Bank argues that documents in the court
file are admissible under the public records exception to the hearsay rule. (Evid.
Code, § 1280.) “Evidence of a writing made as a record of an act, condition, or
event” is admissible as an exception to the hearsay rule when it is (a) “made by
and within the scope of duty of a public employee”; (b) “made at or near the time
of the act, condition, or event”; and (c) trustworthy based on the sources of information
used and the method and time of preparation. (Ibid.) We agree that those
foundational elements are present.
. . . [*206]
. . .
Yakovlev questions whether the public records
exception applies to foreign public records, but the law is clear. Evidence Code
section 1280, subdivision (a) refers to writings by a “public employee.” A “public
employee” is defined as “an officer, agent, or employee of a public entity,” and
a “public entity” in turn includes every form of public authority, “whether foreign
or domestic.” (Evid. Code, §§ 195, 200.)
Next, Yakovlev argues that even if the summons
letters were admissible as public records, there was no evidence they were ever
sent to Yakovlev’s residence. Although he concedes that the telegrams were
sent, he claims they lack the information required by due process. The trial court
agreed on both points. In particular, it found “no indication in the court’s file
[that the summons] letters were actually delivered to Yakovlev’s residence.” Alfa-Bank
challenges that finding with the evidentiary presumption under Evidence Code
section 664 that “official duty has been regularly performed.” It argues we
must presume that the Russian court performed its duty to send Yakovlev the summons
letters and enclosed statement of claim. We agree.
Russian law requires the court to effect service
through documented means. The summons letters found in the Russian court file are
signed by a judge and state that they enclose a copy of the statement of claim.
Yakovlev protests that an expert can testify only about Russian procedural law as
a general matter, not that the law was followed on a particular occasion. But that
is all we take from Alfa-Bank’s expert testimony. Evidence Code section 664 furnishes
the next step, a presumption that the court performed its official duty by sending
the summons letters and statement of claim to Yakovlev’s residence. The existence
of the summons letters within the Russian court file and the reference to attempted
service in the judgment further suggest that the court actually performed its duty.18
Yakovlev questions whether Evidence Code section
664 applies to acts by foreign government officials. We have found California Supreme
Court authority applying the predecessor statutory presumption to such acts. (Citations
omitted.)
Yakovlev next argues that even if the presumption
applies, it applies only to the truthfulness of statements in the summons
letters. Evidence Code section 664 is not
so limited. The presumption has been applied not only to statements made pursuant
to an official duty but also to conduct by court employees. (Citations
omitted.)
Yakovlev did not present contrary authority to
rebut the presumption that the court performed its official duty by sending Yakovlev
the summons and statement of claim. He suggests that different notations between
the summons letters and telegrams regarding delivery establishes clear irregularity
in the Russian court’s service of the summons letters. Whereas the telegrams contain
notations from the telegram operator confirming Yakovlev was not present, the summons
letters in the court file contain no such notation. We fail to see how different
content in different types of documents impugns their trustworthiness. Yakovlev
did not contradict Professor Asoskov’s expert opinion that the court file reflected
compliance with the court’s usual procedures as to both the telegrams and
the summons letters.
In short, we disagree with Yakovlev’s view that
Alfa-Bank has attempted “to manufacture evidence of attempted service and personal
jurisdiction over Yakovlev through hearsay, inapplicable hearsay exceptions and
evidentiary presumptions, and the conclusory and foundationally-challenged testimony
of its expert witness … .” Alfa-Bank properly presented expert testimony on Russian
procedural law; the court records were admissible as official records; and the unrebutted
Evidence Code section 664 presumption establishes that the Russian court fulfilled
its official duty to mail Yakovlev the summons letter and statement of claim. Once
the court received notice from the telegram operator that Yakovlev no longer resided
at his last known place of residence, it satisfied its service obligations under
Russian law.
2. The Russian court’s service attempts comported with due process
“A determination that there was valid service
of process under [Russian] law does not end the analysis. The court must also determine
whether service of process under a foreign country’s laws comports with traditional
American notions of due process.” (de la Mata, supra, 771 F.Supp. at p. 1386.)
“Due process of law does not require actual notice, but only a method reasonably
certain to accomplish that end. The means employed must be such as one desirous
of actually informing the absentee might reasonably adopt to accomplish it.”
(Baughman v. Medical Board (1995) 40 Cal.App.4th 398, 402 [46 Cal. Rptr.
2d 498] (Baughman).)
The Russian court mailed a summons letter enclosing
a copy of Alfa-Bank’s statement of claim to the address for service Yakovlev provided
in the surety agreement, which matched his registered address under Russian law.
Yakovlev was obligated under the surety agreement to notify Alfa-Bank of any change
of address but did not do so. Russian courts may authorize a search for a defendant
only when dealing with certain types of cases, and this was not such a case.
Under these circumstances, we conclude
the procedure used was reasonably calculated to apprise Yakovlev of the pendency
of the action and afford him an opportunity to respond. (Citations omitted.)
Ma is instructive. At issue was whether
a foreign judgment could be collaterally attacked on the ground the Hong Kong court
lacked personal jurisdiction. (Ma, supra, 905 F.2d at pp. 1075–1076.) The
Seventh Circuit applied traditional comity principles, rather than the uniform act,
but its analysis applies with equal force. (See § 1722.) The question was whether
process mailed to the defendant at his Hong Kong residence after he no longer
lived there was “reasonably calculated to produce actual notice.” (Ma,
at p. 1076.) The court concluded it was, particularly when the defendant had
not told anyone he had moved permanently and, if so, where. (Ibid.)
. . .
Critical to our conclusion is the fact that
under the surety agreement, Yakovlev was required to keep his official registered
address up to date. Section 6.3 of the surety agreement provides, “All letters,
notifications, advice and other communications shall be provided by the Parties
to each other in writing in accordance with the details specified in Clause 7 of
this Agreement or supplementary agreements hereto. [¶] … [¶] If the Surety changes
his mailing address or contact details, he must notify the Lender of such change
in writing within 5 days of the effective date of such change.” The next section
in the agreement lists Yakov lev’s address in Moscow, which matched his official
registered address under Russian law. The Russian court’s service of summons letters
by registered mail to that address was without question reasonably calculated to
impart actual notice. Although not required for due process (citation omitted),
this was in fact the method of service most likely to reach Yakovlev
under the circumstances. (Citation omitted.) Yakovlev does not suggest any
other manner of service that would have been more likely to reach him. (See Greene
v. Lindsey, supra, at p. 454 [“Of course, the reasonableness of the notice provided
must be tested with reference to the existence of ‘feasible and customary’ alternatives
and supplements to the form of notice chosen.”].)
Our conclusion comports with cases outside the
foreign judgment recognition context. In Baughman, a doctor appealed the
denial of a writ of administrative mandamus to set aside the state medical board’s
revocation of his medical license. (Baughman, supra, 40 Cal.App.4th at pp.
399–400.) He failed to answer an accusation of misconduct that had been filed and
served by certified mail to the mailing address on file with the medical board,
and the board rendered a default decision. (Ibid.) The trial court denied
writ relief, finding the accusation had been served in conformance with the applicable
statute. (Ibid.) On appeal, he argued he was not properly served and thereby
deprived of due process notice and an opportunity to defend. The court rejected
that claim, concluding that where a licensee has a statutory obligation to keep
a licensing agency informed of his or her current address, service by mail to that
address “is reasonably calculated to give the licensee notice of the accusation.”
(Baughman, supra, 40 Cal.App.4th at p. 402.) The fact the licensee
does not personally receive notice does not establish a lack of due process.
(Ibid.)
(AO Alfa-Bank v. Yakovlev (2018),
21 Cal.App.5th 189, 205-11 [bold emphasis
and underlining added].)
Here, because Plaintiff utilized the UK Central Authority, which served Perpetual Altruism at its registered business address, as reflected in the Certificate of Attestation, the Court finds that this method of service is consistent with the Hague Convention, complies with UK service of process laws, and was reasonable calculated to give actual notice to Perpetual Altruism, which had an obligation to maintained its current registered address and does not explain what other method of service would be most likely to give actual notice to Perpetual Altruism. Given the foregoing, the Court need not analyze substituted service under California law.
Pursuant to Evidence Code § 664, it is presumed that the official duty of the HM Courts & Tribunals Service (Fabricant Decl., Exh. 1) has been regularly performed, as reflected in the Certificate of Attestation, certified by the Senior Courts of England and Wales, Foreign Process Section, dated July 1, 2024. (Evid. Code, § 664; AO Alfa-Bank, supra, 21 Cal.App.5th at 206-07.) Moreover, pursuant to Evid. Code, § 1280, evidence of an act or event is not inadmissible hearsay where offered to prove the act or event if, the writing was made by and within the scope of duty of a public employee, the writing was made at or near the time of the act, condition, or event, and the sources of information and method and time of preparation were such as to indicate its trustworthiness. (Evid. Code, § 1280(a) – (c); AO Alfa-Bank, supra, 21 Cal.App.5th at 205.) The Court finds the Certificate of Attestation to be admissible under these evidentiary rules.
As such, the
motion to quash service of summons is DENIED. Defendant Perpetual Altruism is to
respond to the Complaint within 30 days.