Tag Archives | UK

The case of the day is St. Ventures, LLC v. KBA Assets & Acquisitions, LLC (E.D. Cal. 2013). St. Ventures sued KBA, Ben Fenfield, Asset Placement Ltd., Susan Gillis, Paul Windwood, and Bank of America, claiming that “the defendants obtained a bond owned by St. Ventures through fraudulent means.” Asset Placement Ltd. was a UK company, and St. Ventures served the summons and complaint using a private process server, who delivered the papers to APL’s registered agent. APL moved to dismiss for insufficient service of process.

The judge denied the motion. Service in the UK is permissible under Article 10(c) of the Convention, which provides that the Convention does not interfere with “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.”

The judge’s discussion could have been more fulsome. Ordinarily, in my experience anyway, service under Article 10(c) in England is generally handled by a solicitor. The UK’s declarations concerning the Convention make it clear that service by solicitor is permissible. It is not clear from the return of service or from the judge’s decision whether the process server was a solicitor or not. The judge simply says that he was a “competent person of the State of destination” because he was over 21 years of age and was hired by a process-serving firm. It’s not clear to me that this is correct: under what provision of the applicable UK or English law is a private process server permitted to serve case-initiating documents? I welcome the comments of UK readers on this question.

The case of the day is Absolute Activist Master Value Fund, Ltd. v. Ficeto (S.D.N.Y. 2013). The Absolute Activist Master Value Fund and several other Cayman Islands hedge funds sued several principals and employees of the company they hired to manage their assets, Absolute Capital Management, including Florian Homm. The claim was that Homm, a German national who also held a Liberian passport, masterminded a scheme to manipulate the defendants’ fees and commissions and the share price of penny stocks. After Homm resigned in 2007, he “went into hiding and has been heard from or seen only sporadically since, although he maintains an address in the UK.” He was arrested in Italy in March 2013 and is now in custody while the United States seeks his extradition.

Homm was in default because he had not answered the First Amended Complaint, but when the plaintiffs filed a Second Amended Complaint, Homm moved to dismiss on grounds of insufficient service of process, arguing that he had not properly been served with the Second Amended Complaint. (The plaintiffs had served the Second Amended Complaint, and apparently the First Amended Complaint, on Homm via the UK central authority at the UK address Homm owned and which he had used to receive correspondence and given as his residential address when he was questioned by Swiss prosecutors in 2010). The judge rejected Homm’s argument on two grounds. First, because he had been served properly with the First Amended Complaint, and because the Second Amended Complaint was similar enough to the First Amended Complaint, there was no requirement that the plaintiffs serve the document on him: a party in default is not entitled to service of documents as a general matter. Second, in any case the service under the Hague Service Convention was proper. Homm’s contention that his address was unknown is baffling and that the Convention does not apply is baffling. It’s true that the Convention does not apply if the defendant’s address is unknown, and let’s assume (contrary, apparently, to fact) that the Convention did not apply. But Article 5 of the Convention generally requires a central authority to serve documents “by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its territory.” Thus the methods that a central authority would use to serve a document under the Convention, if the Convention applied, are almost certainly going to be the methods “prescribed by the foreign country’s law for service in that country in an action in its courts of general jurisdiction,” and such methods are permissible under FRCP 4(f)(2)(A) in cases where the Convention does not apply.