In The Matter Of The Estate Of Clemens Graf Droste Zu Vischering, J. Dixon Tews ( 2010 )

IN THE SUPREME COURT OF IOWA
No. 08–1888
Filed May 7, 2010
IN THE MATTER OF THE ESTATE
OF CLEMENS GRAF DROSTE ZU
VISCHERING, Deceased,
J. DIXON TEWS,
Appellant,
Appeal from the Iowa District Court for Mitchell County, Bryan H.
McKinley, Judge.
In proceedings to reopen an estate, the executor appeals from an
interlocutory order in which the district court determined it was
unnecessary for petitioners to comply with the Hague Service Convention
in serving process on the estate beneficiary, who resides in Germany.
DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED
FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.
Eric G. Hoch and Jerry P. Alt of Finley, Alt, Smith, Scharnberg,
Craig, Hilmes & Gaffney, P.C., Des Moines, for appellant.
Michael M. Sellers of Sellers, Heraldson and Binford, Des Moines,
for appellee.
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BAKER, Justice.
In proceedings to reopen an estate, the executor appeals from an
interlocutory order in which the district court agreed with petitioners
that it was unnecessary for them to comply with international treaty
requirements for service abroad in serving process on the estate
beneficiary, who resides in Germany. We find the district court erred in
ruling that service of process on the estate beneficiary did not require
compliance with the Hague Service Convention.
I. Background Facts and Proceedings.
In April 2008, the petitioners filed an application in district court
to reopen the estate of Clemens Graf Droste Zu Vischering. All of the
petitioners were, at one time, tenants of a commercial building in West
Des Moines, Iowa. Clemens was the sole owner of this office building
from approximately 1982 until at least November 1997. Petitioners
allege Clemens breached their rental agreements and defrauded them by
using a secret formula to increase the rent charged for the office spaces
the petitioners occupied. They claim the lease language guaranteed
them a specific number of square feet of office space for the price being
charged pursuant to the terms of the written contracts. They have
petitioned to reopen the estate to procure the information necessary to
properly pursue their claims.
In November 1997, Clemens transferred his interest in the building
to a limited liability company, Vischering, L.L.C. Vischering, L.L.C.’s
principal place of business activity is located at the building in West Des
Moines. Clemens then sold his interest in the L.L.C. to his son Benedikt
Graf Droste zu Vischering. Clemens died on June 3, 1998.
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A petition for the probate of Clemens’s will was filed in February
1999. Benedikt was the sole beneficiary of Clemens’s estate. Due to
Clemens’s status as a nonresident alien, there was a dispute with the
German taxing authority concerning the estate’s federal and state tax
liabilities. Clemens’s estate finally closed on October 5, 2006. At that
time, the court declared there were no claims filed against the estate.
The petitioners’ application to reopen the estate was filed on April
18, 2008. The district court issued an order scheduling a hearing on the
application and directing that a copy of the order and a copy of the
petitioners’ application be served upon Benedikt at his residence in
Germany. The executor of Clemens’s estate filed a resistance to the
petitioners’ application to reopen the estate.
The petitioners attempted to serve Benedikt at his residence in
Germany by mail on July 9, 2008, and through personal service on July
30, 2008. The executor moved to quash the service, claiming it was
defective as petitioners failed to comply with the Hague Convention on
the Service Abroad of Judicial and Extrajudicial Documents in Civil or
Commercial Matters [hereinafter “Hague Service Convention”]. The
estate alleged that the district court’s ruling demanded that Benedikt be
personally served in Germany, triggering the application of the Hague
Service Convention which required the petitioners serve him through the
German Central Authority and provide German translations of the
petition. Because the executor claimed the petitioners failed to comply
with these requirements, he asked the court to dismiss their claims
without prejudice as they failed to serve Benedikt with original notice
within ninety days of the filing of the petition.
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Petitioners’ original claims were dismissed. A new case, involving
the same parties and claims, was filed against Clemens’s estate. In
connection with this case, the petitioners filed a supplemental
application to reopen the estate. The application also requested that the
court order direct personal service of Benedikt at his residence in
Germany in accordance with the court’s order concerning petitioners’
original claim. The court subsequently entered an order declaring the
executor’s motion to quash the service moot.
The executor filed a resistance to the petitioners’ supplemental
application. The district court ruled that service of process on Benedikt
did not require compliance with the Hague Service Convention. The
court reasoned that since neither Iowa Rule of Civil Procedure 1.305 or
Iowa Rule of Civil Procedure 1.306 define the applicable method of
serving process as requiring the transmittal of documents abroad, the
Hague Service Convention did not apply and petitioners were not
required to comply with its provisions. The court once again ordered
that a copy of the petitioners’ application, the amended application, and
the court’s order requiring notice be served on Benedikt at his residence
in Germany.
Soon after this order, the Clemens’s estate filed an application for
interlocutory appeal, claiming the district court erred in determining the
Hague Service Convention did not apply, and therefore the petitioners
were not required to comply with its provisions in serving Benedikt with
original notice. The estate also asked that the proceedings below be
stayed during the pendency of the appeal. The petitioners filed a
resistance to Benedikt’s appeal. We granted the executor’s application.
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II. Scope of Review.
In federal court, the trial court’s interpretation of a treaty is subject
to de novo review. State v. Lopez, 633 N.W.2d 774, 781 (Iowa 2001)
(citing Blake v. Am. Airlines, Inc., 245 F.3d 1213, 1215 (11th Cir. 2001)).
Our review is, likewise, de novo. State v. Buenaventura, 660 N.W.2d 38,
44 (Iowa 2003). The meaning of the language used in a treaty, however,
is a question of law. Lopez, 633 N.W.2d at 781.
III. Discussion and Analysis.
The executor claims that the Hague Service Convention applies to
this case, and its requirements demand service of German-translated
original notice documents upon and through Germany’s Central
Authority. The Hague Service Convention is a multilateral treaty that
was formed in 1964 at the Hague Conference of Private International
Law. Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698,
108 S. Ct. 2104, 2107, 100 L. Ed. 2d 722, 730 (1988). We have never
had occasion to consider the Hague Service Convention and its interplay
with the Iowa Rules of Civil Procedure concerning the service of process
when the party to be served is living abroad in one of the signatory
countries to the Convention.
The Hague Service Convention was intended to revise parts of the
Hague Convention Treaties on Civil Procedure from 1905 and 1954. Id.;
Hague Convention on the Service Abroad of Judicial and Extrajudicial
Documents in Civil or Commercial Matters, Nov. 15, 1965 [1969], 20
U.S.T. 361, T.I.A.S. No. 6638. The revisions were intended to
simplify the service of process abroad so as to insure that
judicial and extrajudicial documents to be served abroad are
brought to the notice of the addressee in sufficient time, and
to make available one method of service that will avoid the
difficulties and controversy attendant to the use of other
methods.
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Marjorie A. Shields, Annotation, When Is Compliance with Hague
Convention on Service Abroad of Judicial and Extrajudicial Documents in
Civil and Commercial Matters, Art. 1 et seq., Required, 18 A.L.R. Fed. 2d
185, 197 (2007). Both the United States and Germany have ratified or
acceded to the Convention. Volkswagenwerk, 486 U.S. at 698, 108 S.
Ct. at 2107, 100 L. Ed. 2d at 730.
The scope of the Convention is defined by Article 1. Id. at 699, 108
S. Ct. at 2108, 100 L. Ed. 2d at 730. It states: “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.” Hague Service Convention art.1, 20 U.S.T. at 362. The United
States Supreme Court has declared that this language is mandatory.
Volkswagenwerk, 486 U.S. at 699, 108 S. Ct. at 2108, 100 L. Ed. 2d at730 (citing Société Nationale Industrielle Aérospatiale v. U.S. Dist. Ct., 482
U.S. 522, 534 n.15, 107 S. Ct. 2542, 2550 n.15, 96 L. Ed. 2d 461, 478
n.15 (1987)). “By virtue of the Supremacy Clause, U.S. Const. Art. VI,
the Convention pre-empts inconsistent methods of service prescribed by
state law in all cases to which it applies.” Id.Our task is to determine whether this is a case to which the
Convention applies. The district court held that because the Iowa Rules
of Civil Procedure do not define the applicable method of serving process
in this case as requiring the transmittal of documents abroad, the Hague
Service Convention did not apply. The court came to this conclusion by
analyzing the requirements of Iowa Rules of Civil Procedure 1.305 and
1.306.
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Iowa Rule of Civil Procedure 1.305 outlines acceptable forms of
personal service of original notice under Iowa law. Iowa R. Civ. P. 1.305.
The Rule provides in pertinent part:
Original notices are “served” by delivering a copy to the
proper person. Personal service may be made as follows:
1.305(1) Upon any individual who has attained
majority and who has not been adjudged incompetent . . . by
serving the individual personally; or by serving, at the
individual’s dwelling house or usual place of abode, any
person residing therein who is at least 18 years old . . . .
....
1.305(14) If service cannot be made by any of the
methods provided by this rule, any defendant may be served
as provided by court order, consistent with due process of
law.
Id. The district court determined that 1.305(14) was applicable in this
case because the court’s earlier order directed the petitioners to serve a
copy of the application to reopen the estate on Benedikt at his residence
in Germany.
Iowa Rule of Civil Procedure 1.306 states:
Service may be made on any . . . individual . . . as
provided in rule 1.305 within or without the state or, if such
service cannot be so made, in any manner consistent with
due process of law prescribed by order of the court in which
the action is brought.
Nothing herein shall limit or affect the right to serve an
original notice upon any . . . individual . . . within or without
this state in any manner now or hereafter permitted by
statute or rule.
The court reasoned that the Hague Service Convention did not apply to
the case because the district court had ordered service in a manner
authorized by rule 1.305, and under rule 1.306 nothing could limit the
right to serve individuals outside Iowa utilizing the methods approved in
rule 1.305. The court indicated that following the requirements of the
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Hague Service Convention would have limited or affected the ability to
serve those outside the state with personal service.
We find the district court erred in both its interpretation of the
controlling case law and its application of Iowa Rule of Civil Procedure
1.306. The Supreme Court decision in Volkswagenwerk holds that
American plaintiffs need not serve foreign defendants at locations abroad
if the law of the forum state allows for plaintiffs to serve the defendant’s
domestic agent within the United States. Volkswagenwerk, 486 U.S. at
707, 108 S. Ct. at 2112, 100 L. Ed. 2d at 735–36. Volkswagenwerk
concerned a wrongful death action brought against Volkswagen of
America, Inc. Id. at 696, 108 S. Ct. at 2106, 100 L. Ed. 2d at 728–29. In
Volkswagenwerk, the plaintiff successfully served Volkswagen of
America, but Volkswagen of America denied it had designed or
assembled the automobile at issue. Id. The plaintiff amended the
complaint to include Volkswagen Aktiengesellschaft, Volkswagen of
America’s German parent company. Id. The plaintiff then served
Volkswagen Aktiengesellschaft by serving Volkswagen of America as its
agent. Id. at 697, 108 S. Ct. at 2106, 100 L. Ed. 2d at 729. Illinois, the
state where Volkswagen of America was registered to do business, has a
long-arm statute that authorizes plaintiffs to serve foreign defendants by
substituted service on their domestic agents. Id. at 706, 108 S. Ct. at2111–12, 100 L. Ed. 2d at 735. The Court determined that the Illinois
long-arm statute provided “ ‘notice reasonably calculated, under all the
circumstances, to appraise interested parties of the pendency of the
action and afford them an opportunity to present their objections.’ ” Id.
at 707, 108 S. Ct. at 2112, 100 L. Ed. 2d at 735 (quoting Mullane v.
Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652,
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657, 94 L. Ed. 865, 873 (1950)). The Court also determined that
Volkswagen of America was the domestic agent of Volkswagen
Aktiengesellschaft. Id. Because the Court determined that service on a
domestic agent is valid and service abroad was not required, the Court
held that the Hague Service Convention did not apply. Id.In the case at issue, the district court ordered the petitioners to
serve Benedikt at his residence in Germany and, in fact, documents have
been served abroad, first by mail and then by personal service. “If 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 700, 108 S. Ct. at 2108, 100 L. Ed. 2d at
731. While the internal law of the forum state may determine whether
serving notice on a defendant must be accomplished through personal
service abroad, once the court orders documents to be transmitted
abroad, the provisions of the Convention apply. Id.Iowa Rule of Civil Procedure 1.306 allows for defendants outside of
Iowa to be served in the manners set forth in rule 1.305. Iowa R. Civ. P.
1.306. It also states that “[n]othing herein shall limit or affect the right
to serve an original notice upon any . . . individual . . . within or without
this state in any manner now or hereafter permitted by statute or rule.”
Id. The district court appears to have interpreted this provision as
declaring that anything that conflicts with the methods of service allowed
by the law of Iowa is void or need not be followed.
The Supremacy Clause establishes the United States Constitution,
federal statutes, and U.S. treaties as “the supreme Law of the Land.”
U.S. Const., Art. VI, § 2. The United States has ratified the Hague
Service Convention. Volkswagenwerk, 486 U.S. at 698, 108 S. Ct. at
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2107, 100 L. Ed. 2d at 730. It is the supreme law of the land and pre-
empts any inconsistent service methods allowed by state law. Id. at 699,
108 S. Ct. at 2108, 100 L. Ed. 2d at 730. Iowa Rules of Civil Procedure
do not trump the Hague Service Convention and allow Benedikt be
personally served in Germany when the Convention requires that he be
served through the German Central Authority. See Eto v. Muranaka, 57
P.3d 413, 420 (Haw. 2002) (“It is evident, then, that Hawai‘i law cannot
override the Hague Convention, when the Convention applies.”). The
district court erred in determining the Hague Service Convention did not
apply in this case.
Having determined that the Hague Service Convention applies, we
must determine if the manner of service complies with the Convention.
Three liberal methods of service employed by the petitioners are
permitted under the Hague Service Convention. Dahya v. Second
Judicial Dist. Court ex rel. County of Washoe, 19 P.3d 239, 242 (Nev.
2001). First, service may go through the central authority of the
receiving country. Id. (citing Hague Service Convention art. 5, 20 U.S.T.
at 362). Second, service may go through diplomatic or consular agents
that the receiving country considers “non-objectionable.” Id. (citing
Hague Service Convention art. 8–11, 20 U.S.T. at 363–64). Third, service
may be done by any method permitted by the internal law of the
receiving country. Id. (citing Hague Service Convention art. 19, 20 U.S.T.
at 365). In Germany, service is only permitted through the Central
Authority although personal service may be affected by court personnel if
specifically requested through the Central Authority. Hague Convention
Conference on Private International Law, Germany—Central Authority &
practical information, Replies to the 2003 and/or 2008 Service
Convention Questionnaire, http://www.hcch.net/index_en.php?act=auth
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orities.details&aid=257 (detailing Germany’s objection to Article 10 of the
Convention which allowed for direct personal service); see also Hague
Service Convention art. 10, 20 U.S.T. at 363 (providing authority for the
country of destination to object to the methods of service allowed by
Article 10 of the Convention).
The petitioners attempted to serve Benedikt at his residence in
Germany by mail and through personal service. The record contains a
return receipt which confirms that they attempted to serve Benedikt
personally in compliance with German law through the Coesfeld District
Court in Germany; however we are unable to discern if this attempted
service was properly commenced through the Central Authority. We are
also unable to determine whether the documents were translated into
German before being served. As these are two central requirements of
the Hague Service Convention, on this record we are unable to determine
whether the petitioners complied with the requirements of the
Convention.
IV. Disposition.
We hold the district court erred in ruling that service of process on
Benedikt did not require compliance with the Hague Service Convention
and that the petitioners need not comply with the Convention’s
requirements of German-translated documents sent through the German
Central Authority. The case is remanded to determine if service as
accomplished complied with the requirements of the Hague Service
Convention.
DISTRICT COURT JUDGMENT REVERSED AND CASE
REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS
OPINION.