Case of the Day: Alpha Bank v. Yakovlev

The case of the day is AO Alpha Bank v. Yakovlev (Cal. Ct. App. 2018). Alpha, a Russian bank, loaned money in 2007 and 2008 to Trial Trading House, LLC, a Russian firm. Oleg Yakovlev personally guaranteed the loan on terms set out in a separate surety agreement. The surety agreement chose the Meschansky District Court, in Moscow, as the exclusive forum for disputes, and it provided that notices to Yakovlev would be sent to him at a certain address in Moscow, which was also his official registered address (Russian citizens are required by law to register their addresses with the government). Yakovlev was required to give Alpha written notice of any new address within five days.

Yakovlev fled the country in 2009 and sought asylum in the United States, unbeknownst to the bank. When the debt went bad, Alpha sued Yakovlev on his guaranty in the Moscow court. It sent notice to the prescribed address, but Yakovlev did not receive it. The case went ahead in his absence. The bank obtained a default judgment. Meanwhile, Yakovlev had come down in the world. He was working in California in a clothing store, and then as a rideshare driver.

Alpha sued Yakovlev in San Diego Superior Court seeking recognition and enforcement of the Russian judgment. Yaokvlev’s principal challenge was to service. The court took the view, which is common but not universal, that a failure of service of process entails a lack of personal jurisdiction, which is a mandatory ground for non-recognition. But the court noted that the constitutional requirement for service is not actual notice, but rather notice reasonably calculated to apprise the defendant of the action and to give him an opportunity to defend. Here, the service complied with Russian law. Yakovlev made an interesting challenge to the authenticity of the documents from the Russian court file that showed that he had received written notice at his registered address, but the court rejected the challenge. It’s unclear exactly what the documents looked like and whether they would have met the standards for self-authentication under federal law, and I can’t really judge their sufficiency under California law. While there was no direct evidence that the documents were actually sent, the court relied on a presumption of regularity, taken with the undisputed point that the duty of the clerk of the Russian court was to send the documents. Moreover, the service was reasonably calculated to give Yakovlev notice, given that it was directed to the official address that Yakovlev had given Alpha and the Russian government and that Yakovlev had not notified Alpha of a change.

2 responses to “Case of the Day: Alpha Bank v. Yakovlev”

  1. Marian Dent

    In Russia, the notice of service would have been a little cardboard form filled out and signed by the postal carrier saying that the notice had been delivered to the address, and bearing the official seal of the post office.

    However, when a Russian citizen moves permanently abroad they are supposed to (but seldom do) notify the authorities that they are no longer registered at a particular address in Russia and are no longer a resident. It would be interesting to know whether he did so. Even if he had though, I think a court in Russia would have enforced the service, because contracts here typically say that X address will be the appropriate address for notifications and service, unless and until the party changing addresses notifies the other party differently. And notification of change usually has to be formally made and signed according to whatever procedure is written in the contract. Thus, if Yakovlev didn’t notify Alfa, the problem is his.

    1. Marian, thanks, that’s interesting. The postal card you describe would not be self-authenticating under federal evidence law, though I can’t speak to California law. It’s possible there may therefore have been a technical evidentiary objection to the proof of service, though it seems the facts were not in dispute—just their consequences.

      In the circumstances of the case I agree with you that there doesn’t seem to be a strong due process argument against the sufficiency of the service.

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