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Case of the Day: St. Philip Catholic Church v. Kubicek

The case of the day is St. Philip Catholic Church v. Kubicek (Cal. Ct. App. 2014). Josef Kubicek borrowed 19 million Czech crowns from three parishioners of St. Philip’s church in 1992, promising to repay them by 1995. When he defaulted, the Church, which had guaranteed the loans, repaid the parishioners and then sued Kubicek in the Czech Republic. The Church was not able to effect service of process on Kubicek. Under Czech law, a legal guardian was therefore appointed to represent Kubicek’s interests, but for some reason she failed to appear in court, and the court proceeded to hear the case in her absence. The court entered a judgment in favor of the Church.

Kubicek died in 2009. A probate proceeding regarding his estate was filed in Los Angeles. The Church filed a claim against the estate to recover the judgment debt, but the estate rejected the claim as untimely. The Church then sued in the Los Angeles Superior Court.

The court granted summary judgment for the estate, and on appeal the court affirmed. It held that under California’s judgment recognition statute, the judgment could not be recognized if the Czech court had lacked personal jurisdiction, if Kubicek had had no notice of the action, or if there had been a lack of due process. All three of these tests were met. The notice point was obvious. The due process point rested on the fact that the legal guardian appointed by the court to represent Kubicek’s interests was herself a court employee, contrary to Czech law, and that the guardian failed even to show up in court. The court lacked personal jurisdiction because the only effort made at service was a letter addressed to an address in the Czech Republic where Kubicek did not reside.

Case of the Day: Plata v. Darbun Enterprises

The case of the day is Plata v. Darbun Enterprises, Inc. (Cal. Ct. App. 2014). Plata was an employee of Soluciones Tecnologicas de Mexico, S.A. de C.V., a Mexican firm. He brought a claim before the Number One Special Local Labor Relations and Conciliation and Arbitrage Local Authority of the City of Tijuana, claiming that his wages had not been paid. Darbun Enterprises, a California firm, was a defendant, because it was “part of a production unit responsible for paying wages to Soluciones employees.” Darbun had notice of the action and appeared and defended. The Board entered a judgment in Plata’s favor, and it awarded damages, including 20 days salary for each year worked, three months’ salary, vacation pay for past years, a vacation pay bonus, a seniority bonus, payment equal to 30 days of Plata’s last salary, and payment of all unpaid salaries from the date of the action until the judgment was satisfied. This last item seems unusual: according to Plata, under Mexican law “an employee is not deemed to have been effectively terminated until the employee has been paid all back wages, sick pay and vacation pay.”
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Case of the Day: Landstar Global Logistics v. Robinson & Robinson

The case of the day is Landstar Global Logistics, Inc. v. Robinson & Robinson, Inc. (Cal. Ct. App. 2013). Landstar had won a judgment against Robinson in the Florida state courts. Landstar brought an action to recognize and enforce the Florida judgment in the San Diego County Superior Court. The court recognized the Forida judgment and issued a writ of execution.

Later, Wells Fargo Bank, N.A., sued Robinson and others in the San Diego Superior Court for payment of a defaulted loan. The court, at Wells Fargo’s request, appointed a receiver for Robinson. Wells Fargo also brought an action against Robinson in Mexico, and the Mexican court imposed a lien in Wells Fargo’s favor on real property held in trust for the benefit of Robinson.

Landstar, evidently aware that Wells Fargo had put itself at the head of the line by chasing Robinson’s assets in Mexico, asked the San Diego court to issue a letter rogatory under the Inter-American Convention requesting that the Mexican court recognize the California judgment liens and assign the right to receive the proceeds of the sale of the property in trust to Landstar, and also sought a restraining order enjoining Robinson from transferring its rights to the Mexican property. The lower court granted all of the relief sought, and Robinson appealed. The issuance of the letter rogatory (but not the restraining order) was stayed pending the appeal. It turned out that the restraining order was improper as a matter of California law (though leaving aside any California-specific issues, it seems proper to me to issue an order in personam restraining a judgment debtor from transferring its property anywhere in the world). So I don’t consider the restraining order further here. Instead, let’s focus on the question whether it was proper to issue a letter rogatory in the first place.

The court correctly concluded that the Inter-American Convention did not authorize the letter rogatory. Article 2 of the Convention provides:

This Convention shall apply to letters rogatory, issued in conjunction with proceedings in civil and commercial matters held before the appropriate judicial or other adjudicatory authority of one of the States Parties to this Convention, that have as their purpose:
a. The performance of procedural acts of a merely formal nature, such as service of process, summonses or subpoenas abroad;
b. The taking of evidence and the obtaining of information abroad, unless a reservation is made in this respect.

The court construed the phrase “procedural acts of a merely formal nature.” a “Procedural act” is a step “taken according to rules that prescribe the manner of conducting litigation or other judicial business, as opposed to rules that define parties’ substantive rights and obligations.” “Formal,” according to the court, here means “adhering to accepted forms, conventions, or regulations,” such as the “special or stipulated solemnities or formalities required for an act to become effective.” Thus the Convention extends to “customary or conventional steps that are taken to provide a person with a legally sufficient notice of a proceeding or of a document filed or issued in a proceeding, but that do not alter the person’s substantive rights or obligations.” The obvious conclusion: the Convention does not authorize a letter rogatory aimed at obtaining a substantive remedy such as an attachment or recognition of a California judgment liens.

Does this mean that the California court was forbidden to send a letter rogatory seeking such relief? I don’t know of any reason why the California court couldn’t send such a request, even if it is not authorized by the Convention. How a Mexican court would treat such a request is really a question of Mexican law, to which I don’t know the answer. If Mexico grants substantive relief on a foreign judgment without first recognizing the judgment, then it seems to me that Mexico is an outlier.