Case of the Day: Johannes Baumgartner Wirtschafts-und-Vermögensberatung GmbH v. Salzman
Posted on March 29, 2011
The case of the day rejoices in the name Johannes Baumgartner Wirtschafts-und-Vermögensberatung GmbH v. Salzman (E.D.N.Y. 2011). The plaintiffs sued Ambiente GmbH, a German firm, and Peter Schmidt, Muhsin Karakurt, and Mehmed Kocabas, all of whom resided in Germany. The claim was for violations of RICO, securities fraud, conversion–you name it. The case of the day deals with the plaintiffs’ motion for default judgment against the German defendants. It doesn’t raise any interesting points of law. I’m reporting on it simply as an example of obtaining a default judgment in Hague Service Convention cases.
The plaintiffs had effected service on the German defendants via the German central authority, and they had filed the certificates of service executed by the German authorities with the court (for instance, here is the certificate filed with respect to Karakurt). The court found that all of the ordinary prerequisites for a default judgment (a willful default, lack of a meritorious defense, and prejudice to the plaintiff). It did not, but perhaps should have, noted the provisions of Article 15 of the Convention, which provides:
Where a writ of summons or an equivalent document had to be transmitted abroad for the purpose of service, under the provisions of the present Convention, and the defendant has not appeared, judgment shall not be given until it is established that –
a) the document was served by a method prescribed by the internal law of the State addressed for the service of documents in domestic actions upon persons who are within its territory, or
b) the document was actually delivered to the defendant or to his residence by another method provided for by this Convention,
and that in either of these cases the service or the delivery was effected in sufficient time to enable the defendant to defend.
If the court had discussed the applicability of the Convention, no doubt it would have noted that the German certificates of service were prima facie evidence of service in conformity with German internal law. It also appears from the docket (Karakurt, for example, was served in February 2010), that the defendants had sufficient time to defend.
Of course, obtaining the default judgment is only half the battle–then the plaintiffs will have to obtain recognition and enforcement of the judgment in Germany!