Ao Alpha-Bank v. Yakovlev

Filed 4/3/18 (unmodified opn. attached)
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
AO ALFA-BANK, D071872
Plaintiff and Appellant, (Super. Ct. No.
37-2014-00033649-CU-MC-CTL)
v.
ORDER MODIFYING OPINION
OLEG NIKOLAEVICH YAKOVLEV, AND DENYING REHEARING
Defendant and Respondent. NO CHANGE IN JUDGMENT
THE COURT:
It is ordered that the opinion filed on March 12, 2018 be modified as follows:
1. On page 22, first sentence of the first paragraph, after "court to effect service,"
add "through documented means" so the sentence reads:
Russian law requires the court to effect service through documented
means.
2. On page 22, fifth sentence of the first paragraph, delete "to send" and insert "by
sending" so the sentence reads:
Evidence Code section 664 furnishes the next step, a presumption
that the court performed its official duty by sending the summons
letters and statement of claim to Yakovlev's residence.
3. On page 24, the first sentence of the first paragraph, delete "to send" and insert
"by sending" so the sentence reads:
Yakovlev did not present contrary authority to rebut the presumption
that the court performed its official duty by sending Yakovlev the
summons and statement of claim.
4. On page 24, the fifth sentence of the first paragraph, after "court's usual
procedures" insert "as to both the telegrams and the summons letters" so the sentence
reads:
Yakovlev did not contradict Professor Asoskov's expert opinion that
the court file reflected compliance with the court's usual procedures
as to both the telegrams and the summons letters.
Respondent's petition for rehearing is denied.
There is no change in judgment.
BENKE, Acting P. J.
Copies to: All parties
2
Filed 3/12/18 (unmodified version)
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
AO ALPHA-BANK, D071872
Plaintiff and Appellant,
v. (Super. Ct. No.
37-2014-00033649-CU-MC-CTL)
OLEG NIKOLAEVICH YAKOVLEV,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of San Diego County,
Eddie C. Sturgeon, Judge. Reversed.
Norton Rose Fulbright, Robin Dale Ball and Susan St. Denis for Plaintiff and
Appellant.
Lawstache Law Firm, Anton Vialtsin; Knight Johnson and James Michael Johnson
for Defendant and Respondent.
Plaintiff AO Alpha Bank (Alpha Bank) initiated this lawsuit pursuant to the
Uniform Foreign-Country Money Judgments Act (Recognition Act; Code Civ. Proc.,
§§ 1713–1725)1 to recognize a Russian judgment against defendant Oleg Nikolaevich
Yakovlev. Yakovlev moved for summary judgment, arguing the judgment could not be
recognized because (1) the Russian court lacked personal jurisdiction; (2) he did not
receive notice of the Russian proceeding in sufficient time to enable a defense; and (3)
the Russian court proceeding was incompatible with due process. (§ 1716, subd (b)(2),
former subd. (c)(1), now subd. (c)(1)(A) & former subd. (c)(8), now subd. (c)(1)(G).)2
His central premise was that service of process in the Russian proceedings was
ineffective. The trial court agreed and denied recognition of the Russian judgment on
personal jurisdiction grounds. It granted Yakovlev's motion for summary judgment and
denied Alpha Bank's cross-motion for summary judgment.
We reverse. As we explain, due process does not require actual notice; it requires
only a method of service "reasonably calculated" to impart actual notice under the
circumstances of the case. (Mullane v. Cent. Hanover Bank & Trust Co. (1950) 339 U.S.
306, 314 (Mullane).) Service by registered mail to the address Yakovlev designated in
the surety agreement met that standard. Yakovlev did not meet his burden to establish a
basis for nonrecognition on grounds of lack of personal jurisdiction, lack of notice, or
1 Further statutory references are to the Code of Civil Procedure unless otherwise
indicated.
2 As will be discussed, the Recognition Act was amended in 2017. (Stats. 2017,
ch. 168, § 3.) We refer to the versions of sections 1713 to 1725 of the Code of Civil
Procedure that were in effect prior to the 2017 amendments throughout this opinion.
2
incompatibility with due process. Accordingly, the presumption in favor of recognition
applies, and the Russian judgment is entitled to recognition. (§ 1716, subds. (a), (d).)
FACTUAL AND PROCEDURAL BACKGROUND
Yakovlev is a Russian businessman who owned several entities, including a
children's retail chain. Alpha Bank is a Russian bank that loaned millions of dollars in
2007 and 2008 through a series of cash advances to a Russian company named Trial
Trading House, LLC. These loans were secured by Yakovlev's personal guarantee,
subject to terms set forth in a separate surety agreement. With each cash advance to Trial
Trading House, Yakovlev executed a supplemental agreement to the surety agreement
guaranteeing the amount of that advance.
The surety agreement selected the Meschansky District Court in Moscow as the
exclusive forum for resolving disputes.3 The parties agreed that notices would be sent to
Yakovlev at his residence in Moscow: 27 Bratislavskaya Street, building 3, apartment
113. If he moved, Yakovlev was contractually obligated to give written notice to Alpha
Bank within five days of his new address. Under Russian law, Russian citizens must
register their residence address with the government. Yakovlev's registered address
matched the address he provided in the surety agreement.
Trial Trading House defaulted, and Alpha Bank turned to the sureties for
repayment.4 In May 2009, Alpha Bank filed a statement of claim against Yakovlev in
3 The record indicates that the Meschansky District Court is a specialized court for
business litigation in Moscow.
4 Trial Trading House was later liquidated in Russian bankruptcy proceedings.
3
the Meschansky District Court. Unbeknownst to Alpha Bank, Yakovlev had fled Russia
a month earlier and sought political asylum in the United States. Yakovlev did not notify
Alpha Bank of any change in address before leaving the country. Nor did he deregister
his Moscow address with the Russian government.
The Meschansky District Court attempted to serve Yakovlev with process at his
Moscow residence; thereafter, the case proceeded to trial in his absence.5 On September
15, 2009, the Russian court entered judgment in Alpha Bank's favor but reduced the
amount of default interest Alpha Bank claimed. In total, the court ordered Yakovlev to
pay Alpha Bank 11,643,136.82 United States dollars and 569,177,514.05 Russian rubles
to cover outstanding principal debt and interest and 20,000 Russian rubles to cover court
costs.6 The judgment became enforceable in Russia on September 28, 2009. It was not
appealed within the 10-day window and enforcement of the judgment has not been
stayed.
Yakovlev revealed in a 2011 interview that he was no longer living in Russia. He
settled in San Diego, California in 2012 and worked for a brief period at a clothing store
5 These highly contested service attempts form the crux of Yakovlev's asserted
grounds for nonrecognition of the Russian judgment. To avoid repetition, we discuss
relevant details concerning the attempts to effect service in the Discussion section, post.
6 According to a declaration filed by Alpha Bank's counsel in support of its
summary judgment motion, the judgment totals $30,530,136.66 based on the official
exchange rate on September 28, 2009.
4
before becoming a rideshare driver. Alpha Bank learned he was living in the United
States in 2013 and hired an investigator to locate him.
In 2014, Alpha Bank filed this action in San Diego Superior Court to recognize the
Russian judgment under the Recognition Act. Yakovlev opposed recognition on three
main grounds—lack of personal jurisdiction, insufficient notice, and incompatibility with
due process.7 Following cross motions for summary judgment and summary
adjudication, the trial court granted Yakovlev's motion and denied Alpha Bank's cross-
motion. It concluded the Russian court lacked personal jurisdiction over Yakovlev
because service of process was ineffective.
DISCUSSION
Yakovlev asserted three grounds for nonrecognition based on his contention that
the Russian court's attempts at service of process were inadequate. The trial court agreed
with that premise and declined to recognize the Russian judgment on personal
jurisdiction grounds. Because we conclude mail service of the summons letter and
attached statement of claim to Yakovlev's residence was "reasonably calculated, under all
the circumstances" to impart actual notice (Mullane, supra, 339 U.S. at p. 314), Yakovlev
7 Yakovlev's answer also asserted affirmative defenses that we need not consider,
such as lack of standing, unclean hands, estoppel, and various statutory grounds for
nonrecognition under the Recognition Act. Alpha Bank moved for summary adjudication
as to these affirmative defenses. Yakovlev conceded the relevant facts as to nearly all of
these defenses and based his own summary judgment motion on only the three referenced
grounds for nonrecognition. Yakovlev did maintain one additional defense, as to the
finality of the Russian judgment. But the trial court found the judgment was "final,
conclusive, and enforceable under Russian law," and Yakovlev does not challenge that
determination on appeal.
5
did not meet his burden to defeat the presumption in favor of recognition on any of the
asserted grounds. (§ 1716, subds. (a), (d).)
1. Legal Principles Governing the Recognition of Foreign Country Judgments
a. Historical overview
In Hilton v. Guyot (1895) 159 U.S. 113 (Hilton), the United States Supreme Court
declared the enforceability of foreign country money judgments to be a matter of the
" 'comity of nations.' " (Id. at p. 163.) The court rejected arguments that a French
judgment could not be enforced because of procedural differences, the lack of cross
examination, or looser evidentiary rules. (Id. at pp. 204−205.) As it explained,
"[w]hen an action is brought in a court of this country, by a citizen
of a foreign country against one of our own citizens, to recover a
sum of money adjudged by a court of that country to be due from the
defendant to the plaintiff, and the foreign judgment appears to have
been rendered by a competent court, having jurisdiction of the cause
and of the parties, and upon due allegations and proofs, and
opportunity to defend against them, and its proceedings are
according to the course of a civilized jurisprudence, and are stated in
a clear and formal record, the judgment is prima facie evidence, at
least, of the truth of the matter adjudged; and it should be held
conclusive upon the merits tried in the foreign court, unless some
special ground is shown for impeaching the judgment, as by showing
that it was affected by fraud or prejudice, or that by the principles of
international law, and by the comity of our own country, it should
not be given full credit and effect." (Id. at pp. 205−206.)8
Comity remained the basis for recognizing foreign judgments until 1962 when the
National Conference of Commissioners on Uniform State Laws (Uniform Law
8 Hilton ultimately declined to recognize the French judgment on the basis of
reciprocity, which is not a ground for nonrecognition under California's Recognition Act.
(Hilton, supra, 159 U.S. at pp. 227–228; §§ 1716, subds. (b)–(c) [listing exclusive bases
for nonrecognition].)
6
Commission) promulgated the Uniform Foreign Money-Judgments Recognition Act
(1962 Uniform Act). The 1962 Uniform Act sought to codify rules as to foreign money
judgments that had "long been applied by the majority of courts" in order to encourage
the reciprocal recognition of United States judgments abroad. (West's U. Laws Ann.
(1962) U. Foreign Money Judgments Recognition Act, Prefatory Note.)9 It defined
threshold requirements for recognition and delineated mandatory and discretionary
grounds for nonrecognition. (Id., §§ 3–4.)
In 1986, the American Law Institute adopted the Restatement (Third) of Foreign
Relations Law of the United States (hereafter Restatement). (See generally, Brand, The
Continuing Evolution of U.S. Judgments Recognition Law (2017) 55 Columbia J.
Transnational L.J. 277, 288 (hereafter Brand).) Sections 481 and 482 of the Restatement
cover the recognition of foreign judgments and closely track the provisions in the 1962
Uniform Act.10 (Rest.3d Foreign Relations Law of the U.S., § Scope.)
The Uniform Law Commission updated the 1962 Uniform Act in 2005 and
renamed it the Uniform Foreign Country Money Judgments Recognition Act (2005
9 Since Erie R.R. v. Tomkins (1938) 304 U.S. 64, recognition and enforcement of
foreign country judgments has been a matter of state law. (Rest.3d Foreign Relations
Law of the U.S., § 481, com. a.) Federal courts sitting in diversity jurisdiction apply the
law of the state in which recognition or enforcement is sought. (See, e.g., Ohno v.
Yasuma (9th Cir. 2013) 723 F.3d 984, 990 (Ohno).)
10 Whereas the 1962 Uniform Act lists lack of subject matter jurisdiction as a
mandatory ground for nonrecognition, the Restatement allows discretionary
nonrecognition on this basis. The 1962 Uniform Act also contains one additional
permissive ground for nonrecognition, where the court believes the original action should
have been dismissed by the foreign court on grounds of forum non conveniens.
7
Uniform Act). The 2005 Uniform Act clarified the procedure for seeking recognition of
a foreign judgment, added a statute of limitations, and set forth applicable burdens of
proof. (See Brand, supra, 55 Columbia J. Transnational L.J. at pp. 290–291.) It also
created two new discretionary bases for nonrecognition. (West's U. Laws Ann. (2005)
U. Foreign-Country Money Judgments Recognition Act, § 4, subd. (c)(8).)
As of January 2018, twenty-three states and the District of Columbia have adopted
the 2005 Uniform Act.11 Another eleven states and the United States Virgin Islands
apply the 1962 Uniform Act.12 "In the remaining sixteen states, judgments recognition
remains primarily a matter of common law, heavily influenced by the Restatement."
(Brand, supra, 55 Columbia J. Transnational L.J. at p. 295.)
b. Recognition of Foreign Country Money Judgments in California
California adopted the 1962 Uniform Act in 1967 and the 2005 Uniform Act in
2007. (Manco Contracting Co. v. Bezdikian (2008) 45 Cal.4th 192, 195, fn. 1 & 198
(Manco).) In its present form, the Recognition Act is codified at sections 1713 to 1725.
Last year, the Legislature amended sections 1714, 1716, and 1717. (Stats. 2017,
ch. 168, § 3.) It did not alter section 1724, subdivision (a), arguably creating ambiguity
11 See Legislative Fact Sheet—Foreign-Country Money Judgments Recognition Act,
[as of Mar. 8, 2018].
12 Legislative Fact Sheet—Foreign Money Judgments Recognition Act,
[as of Mar. 8, 2018].
8
as to the retroactivity of the recent amendments.13 "[S]tatutes ordinarily are interpreted
as operating prospectively in the absence of a clear indication of a contrary legislative
intent." (Quarry v. Doe I (2012) 53 Cal.4th 945, 955; see Stats. 2017, ch. 168, § 3 ["No
part of [this code] is retroactive, unless expressly so declared."].) The presumption
against retroactivity is displaced only where express language or other sources
unavoidably indicate legislative intent for retroactive application. (Quarry v. Doe I,
supra, at p. 955.) Ambiguous statutory language will not suffice. (Ibid.) Finding no
clear indication of a contrary legislative intent, we conclude the 2017 amendments apply
only prospectively.
Under the Recognition Act, the party seeking recognition of a foreign country
judgment bears the initial burden to establish that the judgment falls within the scope of
the statute. (§ 1715, subd. (c).)14 The parties do not dispute that the Russian judgment
conforms to the threshold requirements for recognition: it grants recovery of a sum of
money; is final, conclusive, and enforceable in Russia; and is not a judgment for taxes, a
fine, or other penalty, or a domestic relations judgment. (§ 1715, subd. (a)–(b).)
Once the initial showing is made, there is a presumption in favor of enforcement,
and the party resisting recognition bears the burden of establishing a basis for
13 Section 1724, subdivision (a) took effect on January 1, 2008 and provides: "This
chapter applies to all actions commenced on or after the effective date of this chapter in
which the issue of recognition of a foreign-country judgment is raised."
14 "Comity remains the basis for recognizing foreign judgments not covered by the
[Recognition Act], such as domestic relations judgments." (Manco, supra, 45 Cal.4th
at p. 198.)
9
nonrecognition. (§ 1716, subd. (d).) There are both mandatory and discretionary
grounds for nonrecognition. Unless one of these grounds applies, the court must
recognize the foreign judgment. (§ 1716, subd. (a).) Among the mandatory grounds, a
judgment cannot be recognized if the foreign court lacked personal jurisdiction over the
defendant. (§ 1716, subd. (b)(2).) The court also has discretion not to recognize a
judgment if: (1) if the defendant did not receive notice of the foreign proceeding in
sufficient time to enable him to defend (§ 1716, subd. former (c)(1), now subd.
(c)(1)(A)); or (2) the specific proceeding in the foreign court was incompatible with due
process of law (§ 1716, former subd. (c)(8), now subd. (c)(1)(G)). Other bases for
nonrecognition are not relevant to this action.
There are additional limitations to nonrecognition for lack of personal jurisdiction.
The court may not refuse to recognize a foreign jurisdiction on this basis if "[t]he
defendant, before the commencement of the proceeding had agreed to submit to the
jurisdiction of the foreign court with respect to the subject matter involved." (§ 1717,
former subd. (a)(3), now subd. (b)(3).) Nor may it do so if "[t]he defendant had a
business office in the foreign country and the proceeding in the foreign court involved a
cause of action or claim for relief arising out of business done by the defendant through
that office in the foreign country." (§ 1717, former subd. (a)(5), now (b)(5).)
If the court finds that the foreign country money judgment is entitled to
recognition in California, it is "[c]onclusive between the parties to the same extent as the
judgment of a sister state entitled to full faith and credit in this state would be
conclusive," and "[e]nforceable in the same manner and to the same extent as a judgment
10
rendered in this state." (§ 1719, subds. (a)–(b).) Although not binding, non-California
authorities interpreting the 1962 or 2005 uniform acts or applying comity principles have
persuasive value. (§ 1722 ["[i]n applying and construing this uniform act, consideration
shall be given to the need to promote uniformity of the law with respect to its subject
matter ... ."]; see Cal. Law Revision Com. com., 20 West's Ann. Code Civ. Proc. (2018
supp.) foll. § 1716, pp. 82–83 [discussing Hilton, supra, 159 U.S. at p. 202].)
11
2. Standard of Review
The trial court granted Yakovlev's motion for summary judgment on Alpha Bank's
single-count complaint seeking recognition of the Russian judgment. We review that
ruling de novo, "considering all of the evidence the parties offered in connection with the
motion (except that which the trial court properly excluded) and the uncontradicted
inferences the evidence reasonably supports." (Merrill v. Navegar, Inc. (2001) 26 Cal.4th
465, 476.)15 Summary judgment is proper if the record demonstrates there is no triable
issue as to any material fact and that the moving party is entitled to judgment as a matter
of law. (§ 437c, subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)
Because we review the trial court's ruling and not its rationale, we affirm an order
granting summary judgment "if it is correct on any ground that the parties had an
adequate opportunity to address in the trial court, regardless of the trial court's stated
reasons." (Securitas Security Services, USA, Inc. v. Superior Court (2011) 197
Cal.App.4th 115, 120 (Securitas Security Services).)
3. Yakovlev Did Not Meet His Burden on Summary Judgment to Defeat Recognition
15 Although neither party makes the argument, a more deferential standard of review
arguably applies to nonrecognition on permissive (as opposed to mandatory) grounds.
(Compare Hyundai Securities Co., Ltd. v. Lee (2015) 232 Cal.App.4th 1379, 1385
[applying abuse of discretion standard] with Ohno, supra, 723 F.3d at p. 1002 [applying
de novo standard].) Under the circumstances presented, we see no practical distinction
between the two standards of review. Even if the abuse of discretion standard applies, it
is always an abuse of discretion for the trial court to misinterpret the law. (Upland Police
Officers Assn. v. City of Upland (2003) 111 Cal.App.4th 1294, 1301; Knapp v. AT&T
Wireless Services, Inc. (2011) 195 Cal.App.4th 932, 939; see generally, DeJoria v.
Maghreb Petroleum Exploration, S.A. (5th Cir. 2015) 804 F.3d 373, 379 fn. 4 [no
practical difference between abuse of discretion and de novo standards to review a
recognition decision under Texas's version of the 2005 Uniform Act] (DeJoria).)
12
The trial court found that Alpha Bank met its preliminary burden to show that the
Russian judgment "grants a sum of money, is final, conclusive, and enforceable under
Russian law, and is not for taxes, a fine, or other penalty." The parties do not challenge
that ruling, and the burden therefore shifted to Yakovlev to demonstrate a statutory basis
for nonrecognition. (§ 1716, subd. (d).) He asserted three grounds for nonrecognition:
(1) lack of personal jurisdiction (§ 1716, subd. (b)(2)); (2) lack of notice (§ 1716, former
subd. (c)(1), now subd. (c)(1)(A)); and (3) incompatibility with due process (§ 1716,
former subd. (c)(8), now subd. (c)(1)(G)). All three centered on Yakovlev's claim that
service of process was ineffective.
The trial court concluded that service was ineffective and declined to enforce the
Russian judgment on personal jurisdiction grounds. It found no evidence Yakovlev had
actual or constructive knowledge of the Russian lawsuit. It rejected Alpha Bank's
rebuttal to the personal jurisdiction defense based on Yakovlev's business office in Russia
(§ 1717, former subd. (a)(5), now (b)(5)) and did not reach Alpha Bank's separate rebuttal
that Yakovlev had agreed to the Russian court's jurisdiction through the surety
agreement's forum selection clause (§ 1717, former subd. (a)(3), now subd. (b)(3)).
As we explain, Yakovlev did not meet his burden to defeat recognition of the
Russian judgment on grounds of lack of personal jurisdiction or notice. Notice must be
"reasonably calculated, under all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present their objections."
(Mullane, supra, 339 U.S. at p. 314.) Service of the summons letters and statement of
claim at the address Yakovlev provided in the surety agreement satisfies that standard.
13
Neither actual nor constructive notice of the lawsuit is required for due process. The final
asserted ground, incompatibility with due process, is either inapplicable to the technical
service argument that Yakovlev makes, or it overlaps with and fails for the same reasons
as the personal jurisdiction and notice arguments. Consequently, Yakovlev did not meet
his burden to rebut the presumption in favor of recognition, and the trial court erred in
awarding summary judgment in his favor.
a. Personal jurisdiction
Lack of personal jurisdiction is a mandatory ground for nonrecognition. (§ 1716,
subd. (b)(2).) As Alpha Bank's counsel explained to the trial court, "[t]his is a Moscow
businessman entering into an agreement with a Moscow bank to provide a surety to a
business in Moscow for a debt that's being performed in Moscow." Each of the ancillary
agreements extending the loan and reiterating the surety obligations were likewise
entered in Moscow. Personal jurisdiction is not challenged based on the sufficiency of
Yakovlev's contacts with Russia or the reasonableness of personal jurisdiction there.
Instead, Yakovlev's challenge rests on his challenge to service of process.
Amenability to jurisdiction is a separate question from service of process.
"Service of process, under longstanding tradition in our system of justice, is fundamental
to any procedural imposition on a named defendant." (Murphy Bros. v. Michetti Pipe
Stringing (1999) 526 U.S. 344, 350.) "In the absence of service of process (or waiver of
service by the defendant), a court ordinarily may not exercise power over a party the
complaint names as defendant." (Ibid.; see Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co.
14
(1987) 484 U.S. 97, 104; Mississippi Publishing Corp. v. Murphree (1946) 326 U.S. 438,
444–445; Renoir v. Redstar Corp. (2004) 123 Cal.App.4th 1145, 1154.)
There is some debate whether the personal jurisdiction defense under the
Recognition Act encompasses ineffective service. (See generally Monestier, Whose Law
of Personal Jurisdiction? The Choice of Law Problem in the Recognition of Foreign
Judgments (2016) 96 Boston U.L.Rev. 1729, 1775 ["Much of the confusion in the
recognition case law stems from the Uniform Act's failure to adequately account for how
'notice' fits into the jurisdictional inquiry."].) The Third Circuit recently concluded it did
not. (Louis Dreyfus Commodities Suisse, SA v. Fin. Software Sys. (3d Cir. 2017) 703
F.App'x. 79, 83 [personal jurisdiction defense "refers only to the substantive dimensions
of personal jurisdiction, such as sufficient minimum contacts, and not the technical
requirements for service of process"] (Louis Dreyfus Commodities).) But other courts,
including those applying California law, consider both amenability to jurisdiction and
service in evaluating the lack of personal jurisdiction defense. (Julen v. Larson (1972) 25
Cal.App.3d 325, 328 [California Recognition Act] (Julen); Bank of Montreal v. Kough
(N.D. Cal. 1977) 430 F. Supp. 1243, 1247–1248 [California Recognition Act] (Bank of
Montreal); DeJoria, supra, 804 F.3d at p. 386 [Texas Recognition Act].) We follow the
latter approach and consider whether service of process was effective to confer personal
jurisdiction over Yakovlev in the Meschansky District Court.
To be constitutionally adequate, notice must be "reasonably calculated, under all
the circumstances, to apprise interested parties of the pendency of the action and afford
them an opportunity to present their objections." (Mullane, supra, 339 U.S. at p. 314;
15
see Julen, supra, 25 Cal.App.3d at p. 328 [applying Mullane].) "The notice must be of
such nature as reasonably to convey the required information [citation], and it must afford
a reasonable time for those interested to make their appearance [citation]. But if with due
regard for the practicalities of the case these conditions are reasonably met the
constitutional requirements are satisfied." (Mullane, at pp. 314–315.) Thus, in Mullane,
service by publication was sufficient for persons whose "whereabouts could not with due
diligence be ascertained," but insufficient as to persons "of known place of residence."
(Id. at p. 318.) As the Supreme Court has explained,
"when notice is a person's due, process which a mere gesture is not
due process. The means employed must be such as one desirous of
actually informing the absentee might reasonably adopt to
accomplish it. The reasonableness and hence the constitutional
validity of any chosen method may be defended on the ground that it
is in itself reasonably certain to inform those affected or, where
conditions do not reasonably permit such notice, that the form
chosen is not substantially less likely to bring home notice than other
of the feasible and customary substitutes." (Id. at p. 315.)
We first consider whether the evidence establishes proper service under Russian
law. (DeJoria, supra, 804 F.3d at p. 386; de la Mata v. American Life Ins. Co. (D.Del.
1991) 771 F.Supp. 1375, 1385 (de la Mata).) If it does, we then consider whether such
service was reasonably calculated, under all the circumstances, to impart actual notice.
(DeJoria, at p. 386; de la Mata, at p. 1386; Ma v. Continental Bank N.A. (7th Cir. 1990)
905 F.2d 1073, 1076 (Ma); Julen, supra, 25 Cal.App.3d at p. 328.)
1. Service was proper under Russian law
Alpha Bank's Russian law expert Anton Asoskov provided declaration testimony
about the general procedure used for personal service under Russian law. Yakovlev did
16
not challenge his expertise or submit expert testimony of his own. A Russian court (not
the plaintiff) typically effects service at the address provided in the plaintiff's statement of
claim. The court sends the summons by registered mail (return receipt requested),
telegram, or other documented means. If service is not possible at the address provided,
the court looks up the defendant's official registered residence address and re-serves the
documents at that address. Service is deemed effective "when the court sent the
summons to the last known place of residence of the defendant and a person delivering or
serving those [documents] informed the court that the defendant was absent at this place
and the defendant's place of temporary stay was unknown." Additionally, Russian courts
enforce contractual notice provisions and find service effective if sent to that
contractually specified address.
In support of its summary judgment motion, Alpha Bank proffered several
documents from the Russian court file. There are two summons letters, dated June 2009
and July 2009, that are signed by Judge O.N. Vereschak of the Meschansky District
Court. The letters are identical in substance, except for the word "REPEATED!!!!" in the
caption of the second letter. Both have captions containing the address provided by
Yakovlev in the surety agreement (which matches his government-registered address).
The letters notified Yakovlev that Alpha Bank had sued him for recovery on a debt,
directed him to appear, and warned him that the court would consider the case
irrespective of whether he submitted evidence. There is language in both letters
suggesting they enclosed Alpha Bank's statement of claim. A sentence near the top of
both letters reads, "we hereby send you a copy of the above-mentioned claim and
17
accompanying documents"; near the signature line, there is the following notation:
"Attachment: statement of claim and accompanying documents."
There are also two telegrams sent from the court to Yakovlev's Moscow residence,
in August and September 2009. Both bear a judge's name in print and asked Yakovlev to
appear before the Meschansky District Court on a specific date for a hearing in a case by
Alpha Bank against Yakovlev.16 After the first telegram was not retrieved, a telegram
operator sent a note to the court that the apartment was locked and Yakovlev failed to
collect the telegram after a notice was left for him. The second telegram was also not
retrieved; the operator reported back to the court, "Telegram submitted by you ... to
Yakovlev has not been delivered, the addressee does not reside at the given address."
Yakovlev stipulated to the authenticity of the Russian court documents but
objected to their admission on hearsay grounds. The trial court did not rule on his
objections, and Yakovlev renews them on appeal. Yakovlev claims there was no
admissible evidence of any attempt to serve him in Russia. To the contrary, however, we
find that the above-referenced documents are admissible and conclusive as to proper
service under Russian law.
Alpha Bank argues that documents in the court file are admissible under the public
records exception to the hearsay rule. (Evid. Code, § 1280.) "Evidence of a writing
16 During oral arguments on the cross-motions for summary judgment, Alpha Bank
explained the usual process for sending telegrams in Russia. A person leaves a notice at
the specified address asking the addressee to come pick up a telegram. The telegram is
retained at a post office or telegram office for some defined period of time. If no one
collects it, the telegram with any notation is returned to the sender (here, the court).
18
made as a record of an act, condition, or event" is admissible as an exception to the
hearsay rule when it is (a) "made by and within the scope of duty of a public employee";
(b) "made at or near the time of the act, condition, or event"; and (c) trustworthy based on
the sources of information used and the method and time of preparation. (Ibid.) We
agree that those foundational elements are present.
First, the summons letters are signed by a judge and located within the foreign
court file. Although not signed, the telegrams are also in the Russian court file and bear
the issuing judge's name in print. All of the documents were prepared within the scope of
the Russian court's official duty to effect service. They are presumed to be accurately
dated under Evidence Code section 640, and Yakovlev does not challenge the court's
finding that the summons letters "probably were made near the same time they were
dated." Finally, the summons letters and telegrams relayed information that would be
known to the judge who tried to effect service, and Yakovlev offered no evidence
suggesting they were anything but trustworthy. (See People v. Martinez (2000) 22
Cal.4th 106, 129−130 [trustworthiness requirement is met if public employees "had a
duty to observe, report, record, and disseminate the information" and " '[n]one of the
information reflects the opinions or conclusions of the reporting employees' "].)
By way of contrast Lakah v. UBS AG (S.D.N.Y. 2014) 996 F.Supp.2d 250(Lakah), analyzing the parallel federal rule, suggests what Yakovlev could have done to
challenge the trustworthiness of documents in the Russian court file. (See Rojas v.
Superior Court (2004) 33 Cal.4th 407, 417, fn. 5 [considering construction of parallel
federal rule in interpreting Evidence Code provision].) Ramy and Michel Lakah,
19
husband and wife, challenged the admissibility of documents from an Egyptian criminal
investigation file under the federal hearsay exception for public records. (Fed. Rules
Evid., rule 803(8), 28 U.S.C.) They submitted evidence that Ramy Lakah was a human
rights activist and political opponent of the existing Egyptian government, as well as a
State Department Country Report attesting to Egypt's extreme measures against political
opponents. (Lakah, supra, at p. 256.) Although such evidence was "indirect and
circumstantial," the court deemed it sufficient to cast serious doubt on the motivations
underlying the Egyptian criminal investigations and render the documents inadmissible.
(Ibid.) Here, although Yakovlev claimed in his asylum application to have faced
persecution at the hands of high-ranking Russian officials, he did not argue that as a basis
for nonrecognition of the Russian judgment, much less cite such evidence to impugn the
trustworthiness of documents found in the Russian court file.
The trial court emphasized that when California courts send a document to a
recipient, the document is accompanied by a declaration of service under penalty of
perjury. But as Alpha Bank's expert explained,
"Russian rules governing procedure in the Meschansky District
Court do not provide that court clerks make any written declarations
under penalty of perjury in respect to their service of process or take
any other procedural actions to document the service of process.
"Russian court clerks check that all procedural documents are properly sent to the
respective litigants and that all documents filed to the court are attached to the proper
case files, but they do not compile and/or sign any formal declarations in this respect. If
some document is attached to the case file, it is presumed that a judge himself/herself or a
20
court clerk has properly sent or received the respective document in compliance with
rules specified in the Russian procedural law." The absence of a formal declaration of
service, not required under Russian law, does not impugn the trustworthiness of
documents in the Russian court file.
Yakovlev questions whether the public records exception applies to foreign public
records, but the law is clear. Evidence Code section 1280, subdivision (a) refers to
writings by a "public employee." A "public employee" is defined as "an officer, agent, or
employee of a public entity," and a "public entity" in turn includes every form of public
authority, "whether foreign or domestic." (Evid. Code, §§ 195, 200.)
Next, Yakovlev argues that even if the summons letters were admissible as public
records, there was no evidence they were ever sent to Yakovlev's residence. Although he
concedes that the telegrams were sent, he claims they lack the information required by
due process. The trial court agreed on both points. In particular, it found "no indication
in the court's file [that the summons] letters were actually delivered to Yakovlev's
residence." Alpha Bank challenges that finding with the evidentiary presumption under
Evidence Code section 664 that "official duty has been regularly performed."17 It argues
we must presume that the Russian court performed its duty to send Yakovlev the
summons letters and enclosed statement of claim. We agree.
17 This presumption furthers a policy similar to the one underlying the public records
exception to the hearsay rule. (Jazayeri v. Mao (2009) 174 Cal.App.4th 301, 317 [public
records exception "is based on the presumption that public officers properly perform their
official duties"]; Fisk v. Department of Motor Vehicles (1981) 127 Cal.App.3d 72, 78
["Commentators have recognized the interrelationship between the official records
hearsay exception and the presumption of proper performance of official duty."].)
21
Russian law requires the court to effect service. The summons letters found in the
Russian court file are signed by a judge and state that they enclose a copy of the
statement of claim. Yakovlev protests that an expert can testify only about Russian
procedural law as a general matter, not that the law was followed on a particular
occasion. But that is all we take from Alpha Bank's expert testimony. Evidence Code
section 664 furnishes the next step, a presumption that the court performed its official
duty to send the summons letters and statement of claim to Yakovlev's residence. The
existence of the summons letters within the Russian court file and the reference to
attempted service in the judgment further suggest that the court actually performed its
duty.18
Yakovlev questions whether Evidence Code section 664 applies to acts by foreign
government officials. We have found California Supreme Court authority applying the
predecessor statutory presumption to such acts. (De Castro v. Fellom (1901) 135 Cal.
225, 231 [presuming the Mexican governor and departmental assembly had the power to
make land grants absent evidence of irregularity].) There is also ample support for
applying the presumption to foreign officials at common law. (See Jover y Costas v.
Insular Government of Philippine Islands (1911) 221 U.S. 623, 633 ["it must be
presumed, there being no showing to the contrary, that he reported the grant to his
18 The judgment states, "[Yakovlev], who was duly notified of the place and time of
the court hearing by a notice sent at his place of permanent residence indicated in the
statement of claim, the Surety Agreement and a copy of his passport, failed to appear in
court and did not provide either any valid reason for such failure to appear or any written
objections to the claim."
22
superiors at Madrid, as was required by the royal order ... ."]; Hayes v. U.S. (1898) 170
U.S. 637, 646 ["In the absence of proof, the presumption of omnia rita creates the
inference that the duty [required under the Mexican constitution] was performed."];
United States v. Davenport's Heirs (1853) 56 U.S. 1, 8 ["Having been executed by
officers of the Crown of Spain, within its dominions, and in the exercise of an apparently
legitimate authority, the presumption is in favor of the rightfulness of the act."]; United
States v. King (1845) 44 U.S. 773, 786 ["the acts of the [foreign government] officer, in
the line of his duty, will prima facie be considered as performed honestly, and in good
faith"]; see generally, Riggs Nat'l. Corp. v. Comm'r (D.C. Cir. 2002) 295 F.3d 16, 20
["Common law has long recognized a presumption of regularity for actions and records
of public officials. ... Most pertinently, it applies to the actions and records of foreign
public officials."].)
Yakovlev next argues that even if the presumption applies, it applies only to the
truthfulness of statements in the summons letters. Evidence Code section 664 is not so
limited. The presumption has been applied not only to statements made pursuant to an
official duty but also to conduct by court employees. (See People v. American
Contractors Indemnity Co. (2004) 33 Cal.4th 653, 659, fn. 5 [presuming court clerk
complied with duty to timely serve notice of entry of judgment]; Fergus v. Songer (2007)
150 Cal.App.4th 552, 564–566 [presuming deputy clerk timely fulfilled his or her duty to
enter the trial court's order into the permanent minutes].)
Yakovlev did not present contrary authority to rebut the presumption that the court
performed its official duty to send Yakovlev the summons and statement of claim. He
23
suggests that different notation between the summons letters and telegrams regarding
delivery establishes clear irregularity in the Russian court's service of the summons
letters. Whereas the telegrams contain notations from the telegram operator confirming
Yakovlev was not present, the summons letters in the court file contain no such notation.
We fail to see how different content in different types of documents impugns their
trustworthiness. Yakovlev did not contradict Professor Asoskov's expert opinion that the
court file reflected compliance with the court's usual procedures.
In short, we disagree with Yakovlev's view that Alpha Bank has attempted "to
manufacture evidence of attempted service and personal jurisdiction over Yakovlev
through hearsay, inapplicable hearsay exceptions and evidentiary presumptions, and the
conclusory and foundationally-challenged testimony of its expert witness ... ." Alpha
Bank properly presented expert testimony on Russian procedural law; the court records
were admissible as official records; and the unrebutted Evidence Code section 664
presumption establishes that the Russian court fulfilled its official duty to mail Yakovlev
the summons letter and statement of claim. Once the court received notice from the
telegram operator that Yakovlev no longer resided at his last known place of residence, it
satisfied its service obligations under Russian law.
2. The Russian court's service attempts comported with due process
"A determination that there was valid service of process under [Russian] law does
not end the analysis. The court must also determine whether service of process under a
foreign country's laws comports with traditional American notions of due process."
(de la Mata, supra, 771 F.Supp. at p. 1386.) "Due process of law does not require actual
24
notice, but only a method reasonably certain to accomplish that end. The means
employed must be such as one desirous of actually informing the absentee might
reasonably adopt to accomplish it." (Baughman v. Medical Board (1995) 40 Cal.App.4th
398, 402 (Baughman).)
The Russian court mailed a summons letter enclosing a copy of Alpha Bank's
statement of claim to the address for service Yakovlev provided in the surety agreement,
which matched his registered address under Russian law. Yakovlev was obligated under
the surety agreement to notify Alpha Bank of any change of address but did not do so.
Russian courts may authorize a search for a defendant only when dealing with certain
types of cases, and this was not such a case.
Under these circumstances, we conclude the procedure used was reasonably
calculated to apprise Yakovlev of the pendency of the action and afford him an
opportunity to respond. (Mullane, supra, 339 U.S. at p. 314; see Tulsa Professional
Collection Services, Inc. v. Pope (1988) 485 U.S. 478, 490 ["We have repeatedly
recognized that mail service is an inexpensive and efficient mechanism that is reasonably
calculated to provide actual notice. [Citations.] In addition, Mullane disavowed any
intent to require 'impracticable and extended searches ... in the name of due process.' "];
Dusenbery v. United States (2002) 534 U.S. 161, 170 [due process does not require
"heroic efforts," only efforts " 'reasonably calculated' to apprise a party of the pendency
of the action"]; Milliken v. Meyer (1940) 311 U.S. 457, 463 [if the method of service is
reasonably calculated to give defendant actual notice of the proceedings and an
25
opportunity to be heard, "the traditional notions of fair play and substantial justice
[citation] implicit in due process are satisfied"].)
Ma is instructive. At issue was whether a foreign judgment could be collaterally
attacked on the ground the Hong Kong court lacked personal jurisdiction. (Ma, supra,905 F.2d at pp. 1075–1076.) The Seventh Circuit applied traditional comity principles,
rather than the uniform act, but its analysis applies with equal force. (See § 1722.) The
question was whether process mailed to the defendant at his Hong Kong residence after
he no longer lived there was "reasonably calculated to produce actual notice." (Ma, at
p. 1076.) The court concluded it was, particularly when the defendant had not told
anyone he had moved permanently and, if so, where. (Ibid.)
Another comity-based decision is also helpful. In re B-E Holdings, Inc.
(Bankr.E.D.Wis. 1999) 228 B.R. 414 considered the enforceability of a Peruvian
judgment in a bankruptcy proceeding. A creditor filed a proof of claim based on a
Peruvian default judgment. (Id. at p. 417.) The debtor contested the enforceability of the
judgment on the ground he had never been served with the Peruvian complaint. (Ibid.)
The court discussed the creditor's multiple attempts to comply with Peruvian service
requirements and concluded the debtor received sufficient notice of the litigation to
comport with due process under Mullane. (Id. at pp. 418–419.) That the debtor chose
26
"[f]or whatever reason" not to defend itself in the Peruvian litigation was of no
significance where notice was constitutionally adequate. (Ibid.)19
Critical to our conclusion is the fact that under the surety agreement, Yakovlev
was required to keep his official registered address up to date. Section 6.3 of the surety
agreement provides,
"All letters, notifications, advice and other communications shall be
provided by the Parties to each other in writing in accordance with
the details specified in Clause 7 of this Agreement or supplementary
agreements hereto. [¶] ... [¶] [¶] ... [¶] If the Surety changes his
mailing address or contact details, he must notify the Lender of such
change in writing within 5 days of the effective date of such
change."
The next section in the agreement lists Yakovlev's address in Moscow, which matched
his official registered address under Russian law. The Russian court's service of
summons letters by registered mail to that address was without question reasonably
calculated to impart actual notice. Although not required for due process (Greene v.
Lindsey (1982) 456 U.S. 444, 455), this was in fact the method of service most likely to
reach Yakovlev under the circumstances. (See Broadfoot v. Diaz (In re International
Telemedia Assocs.) (Bankr.N.D.Ga. 2000) 245 B.R. 713, 721 ["If any methods of
communication can be reasonably calculated to provide a defendant with real notice,
surely those communication channels utilized and preferred by the defendant himself
19 The court further noted that the debtor had a procedural avenue to object to the
judgment in Peru on grounds of improper service but had not done so. (In re B-E
Holdings, Inc., supra, 228 B.R. at pp. 417–418.) The same can be said of Yakovlev; he
did not dispute Alpha Bank's evidence that "he could have sought reinstatement of the
procedural time limit for filing an appeal" by arguing ineffective service of the summons
under Russian procedural law.
27
must be included among them."].) Yakovlev does not suggest any other manner of
service that would have been more likely to reach him. (See Greene v. Lindsey, supra,
at p. 454 ["Of course, the reasonableness of the notice provided must be tested with
reference to the existence of 'feasible and customary' alternatives and supplements to the
form of notice chosen."].)20
Our conclusion comports with cases outside the foreign judgment recognition
context. In Baughman, a doctor appealed the denial of a writ of administrative
mandamus to set aside the state medical board's revocation of his medical license.
(Baughman, supra, 40 Cal.App.4th at pp. 399−400.) He failed to answer an accusation
of misconduct that had been filed and served by certified mail to the mailing address on
file with the medical board, and the board rendered a default decision. (Ibid.) The trial
court denied writ relief, finding the accusation had been served in conformance with the
applicable statute. (Ibid.) On appeal, he argued he was not properly served and thereby
deprived of due process notice and an opportunity to defend. The court rejected that
claim, concluding that where a licensee has a statutory obligation to keep a licensing
agency informed of his or her current address, service by mail to that address "is
reasonably calculated to give the licensee notice of the accusation." (Baughman, supra,
20 Were we to side with Yakovlev, a defendant contractually obligated to maintain an
updated address for service could avoid recognition of a foreign judgment by evading
service. This would conflict with settled California law. " 'When it satisfactorily appears
that a defendant by his own design successfully has secreted himself from the process
server and thus thwarted personal service, it would be anomalous to heed an assertion
that he had been denied notice and an opportunity to be heard.' " (Cradduck v. Financial
Indem. Co. (1966) 242 Cal.App.2d 850, 858 (Cradduck).)
28
40 Cal.App.4th at p. 402.) The fact the licensee does not personally receive notice does
not establish a lack of due process. (Ibid.)
The trial court relied on Julen v. Larson, supra, 25 Cal.App.3d 325 to conclude
that the summons letters and telegrams sent by the Russian court lacked the necessary
information to provide adequate notice of the bank's lawsuit. It distinguished Ma and
Alpha Bank's other cases on the basis that the defendants in those cases received at least
constructive notice of the foreign lawsuit.
In Julen, notice of a Swiss complaint written in German served on a California
resident was found to be inadequate. The defendant received two letters via certified
mail from the Consulate General of Switzerland enclosing legal documents written in
German, a language the defendant did not understand. The court found inadequate notice
because the defendant "did not understand the language in which the legal documents
were written, and the accompanying correspondence did not identify the documents as
materials of legal significance." (Julen, supra, 25 Cal.App.3d at p. 328.) The court
explained that constitutionally adequate notice normally sets forth "the location of the
pending action, the amount involved, the date defendant is required to respond, and the
possible consequences of his failure to respond." (Ibid.) But as Julen also made clear,
"no great amount of formality is required for the effective notice." (Ibid.) The court
noted that it would have been sufficient if the Swiss Consulate's letter had informed the
defendant "that an action by Julen for SF30,000 was pending against him in the Swiss
cantonal court of Wallis and that unless he responded by a particular date judgment in
that amount might be entered against him ... ." (Ibid.)
29
The trial court misconstrued Julen's language as defining constitutional
"requirements" for adequate notice. On this basis, it deemed the summons letters and
telegraphs infirm. Even if the information listed in Julen were constitutionally required
in any given case, all of the information the trial court believed missing was contained in
the summons letters and enclosed statement of claim.21 And although the Seventh
Circuit in Ma noted that the defendant had actual notice of the foreign proceeding from
his daughter, who still lived at his Hong Kong residence, that observation followed the
court's conclusion that service was constitutionally adequate under Mullane. (Ma, supra,905 F.2d at p. 1076.)
The trial court found that even if the summons letter had been mailed, there was
no evidence it had been received. But due process "does not require actual receipt or
actual knowledge; notice by mail or other means reasonably calculated to provide actual
notice is sufficient." (In re Emily R. (2000) 80 Cal.App.4th 1344, 1353; see Cradduck,
supra, 242 Cal.App.2d at p. 860 ["Due process requires no more than 'fair notice.' "].)22
Moreover, even if receipt were relevant, proof that a letter was properly mailed "creates a
presumption that it reached its destination in usual time and was actually received by the
21 Alpha Bank argues that reading Julen to require disclosure of the amount sought
would violate California law, as service by publication of the summons would not meet
this standard. (See § 415.50.) Because we conclude the court sent the summons letters
and enclosed a statement of claim that disclosed the amount sought, we do not reach this
argument.
22 For example, in California, mail service "is complete at the time the document is
deposited in the mail," and "the sender does not have the burden of showing the notice
was actually received by the addressee." (Sharp v. Union Pacific R.R. Co. (1992) 8
Cal.App.4th 357, 360, citing § 1013, subd. (a).)
30
person to whom it was addressed." (Hagner v. United States (1932) 285 U.S. 427, 430;
see Evid. Code, § 641 ["A letter correctly addressed and properly mailed is presumed to
have been received in the ordinary course of mail."].) Yakovlev did not rebut that
presumption.
Yakovlev's counsel conceded that if the Russian court had effected adequate
service to his Moscow address, his client "would have a very hard time arguing lack of
personal jurisdiction" and would instead have to rely on discretionary bases for
nonrecognition of the foreign judgment. Having found that the Russian court served
Yakovlev by mailing the summons letter and enclosed statement of claim to the address
provided in the surety agreement, we conclude service met the prerequisites for personal
jurisdiction. Accordingly, we need not reach Alpha Bank's secondary arguments that
Yakovlev's personal jurisdiction defense is barred under section 1717, former subdivision
(a)(3), now subdivision (b)(3), and section 1717, former subdivision (a)(5), now
subdivision (b)(5).23
b. Notice
23 We briefly note that the scope of section 1717, former subdivision (a)(3), now
subdivision (b)(3) appears unsettled. In some cases, courts reject personal jurisdiction
challenges under an analogous version of this statute where the defendant agreed to a
forum selection clause designating the foreign jurisdiction as the venue for legal disputes.
(Marolax Handels-Und Verwaltungsgesellschaft MBH v. 898 5th Ave. South Corp.
(M.D.Fla. 2007) 2007 U.S.Dist. Lexis 96860, *3; John Galliano, S.A. v. Stallion, Inc.
(2010) 15 N.Y.3d 75 [930 N.E.2d 756]; Louis Dreyfus Commodities, supra,703 F.App'x.
79, 83.) But at least one court has reached the opposite conclusion. (Bank of Montreal,
supra, 430 F.Supp. 1243, 1246–1247.) And as Yakovlev notes, outside the Uniform Act
context an agreement to litigate disputes in a particular location is not the same as
consent to jurisdiction in that location. (Global Packaging, Inc. v. Superior Court (2011)
196 Cal.App.4th 1623, 1633.)
31
A court is not required to recognize a foreign-country judgment if "[t]he defendant
in the proceeding in the foreign court did not receive notice of the proceeding in
sufficient time to enable the defendant to defend." (§ 1716, former subd. (c)(1), now
subd. (c)(1)(A).) In moving for summary judgment, Yakovlev claimed he did not receive
timely notice of the Russian proceeding. The trial court did not reach this ground, and
Yakovlev urges us to remand for the trial court to exercise its discretion on this
permissive ground for nonrecognition. Alpha Bank responds that no purpose would be
served by remand and urges us to address whether nonrecognition was proper on notice
grounds.
Yakovlev's notice arguments are indistinguishable with his other asserted grounds
for nonrecognition on summary judgment; the central premise of all three defenses was
that the Russian court's service of process was ineffective. Because "the parties had an
adequate opportunity to address [the notice argument] in the trial court," we will consider
whether nonrecognition was proper on this ground. (Securitas Security Services, supra,
197 Cal.App.4th at p. 120.)
The notice ground may have broader application than the service of process
prerequisite for personal jurisdiction. (See Isack v. Isack (2007) 274 Mich.App. 259,
265–266 [733 N.W.2d 85] [lack of notice defense may apply where the defendant lacked
notice of a specific motion].) Here, however, the inquiries overlap. Nonrecognition is
proper on notice grounds only if Yakovlev was not served in a manner reasonably
calculated to give him actual notice of the pendency of the Russian proceeding.
(See Najas Cortes v. Orion Secs., Inc. (2005) 362 Ill.App.3d 1043, 1048–1049 [842
32
N.E.2d 162] [evaluating notice prong of Illinois Recognition Act under due process
standard set forth in Mullane, supra, 339 U.S. at p. 315]; John Galliano, S.A. v. Stallion,
Inc., supra, 930 N.E.2d at p. 758 [analyzing personal jurisdiction and notice defenses
together]; but see Chabert v. Bacquie (Fla.Dist.Ct.App. 1997) 694 So.2d 805, 815 [notice
defense considers defendant's "failure to receive actual notice" of the foreign proceeding,
but the defense is negated where any lack of actual notice is attributable to defendant's
own failure to keep a foreign court apprised of his current residence address].)
As the Restatement explains, "[i]f it were established that the defendant did not
have notice of the pendency of the action that resulted in the judgment in question, and
that no attempt had been made to give notice by means reasonably calculated to do so,
the judgment would not ordinarily qualify for recognition." (Rest.3d Foreign Relations
Law of the U.S., § 481, com. a [interpreting identical notice provision], italics added.)
For the reasons discussed, the means of service employed by the Russian court
comported with due process requirements. Nonrecognition is not warranted on lack of
notice grounds. (§ 1716, former subd. (c)(1), now subd. (c)(1)(A).)
c. Due process
A court is not required to recognize a foreign-country judgment if "[t]he specific
proceeding in the foreign court leading to the judgment was not compatible with the
requirements of due process of law." (§ 1716, former subd. (c)(8), now subd. (c)(1)(G).)
Yakovlev urges this court to affirm the trial court's ruling on this discretionary ground.
This exception is either inapplicable to the technical service of process argument
33
Yakovlev makes, or it overlaps with his personal jurisdiction and notice arguments and
fails for the same reasons.
The legislative history makes this apparent. Both the 1962 and 2005 uniform acts
contain a mandatory ground for nonrecognition where the foreign judgment was
"rendered under a judicial system that does not provide impartial tribunals or procedures
compatible with the requirements of due process of law." (West's U. Laws Ann. (1962)
U. Foreign Money Judgments Recognition Act, § 4, subd. (a)(1); West's U. Laws Ann.
(2005) U. Foreign-Country Money Judgments Recognition Act, § 4, subd. (b)(1).) This
ground tracks the Supreme Court's decision in Hilton and applies only where there are
system-wide concerns with the impartial administration of justice in the foreign country.
"The focus of the inquiry is not whether the procedure in the rendering country is similar
to [United States] procedure, but rather on the basic fairness of the foreign-country
procedure." (Cal. Law Revision Com. com., 20 West's Ann. Code Civ. Proc. (2018
supp.) foll. § 1716, p. 82.) A court must deny recognition if it finds "that the entire
judicial system in the foreign country where the foreign-country judgment was rendered
does not provide procedures compatible with the requirements of fundamental fairness."
(Id. at p. 84.)24
The 2005 Uniform Act added a discretionary ground for nonrecognition where the
"specific proceeding" was not compatible with due process requirements. (West's
24 "The California Law Revision Commission's official comments are entitled to
substantial weight when interpreting a statute." (Estate of O'Connor (2017) 16
Cal.App.5th 159, 165 & fn. 7.)
34
U. Laws Ann. (2005) U. Foreign-Country Money Judgments Recognition Act, § 4,
subd. (c)(8).) Whereas the mandatory ground focuses "on the foreign country's judicial
system as a whole," the discretionary ground focuses "on the particular proceeding that
resulted in the specific foreign-country judgment under consideration." (Cal. Law
Revision Com. com., 20 West's Ann. Code Civ. Proc. (2018 supp.) foll. § 1716, p. 84.)
"Thus, the difference is that between showing, for example, that there has been such a
breakdown of law and order in the particular foreign country that judgments are rendered
on the basis of political decisions rather than the rule of law throughout the judicial
system versus showing that for political reasons the particular party against whom the
foreign-country judgment was entered was denied fundamental fairness in the particular
proceedings leading up to the foreign country judgment." (Ibid.)
The discretionary due process exception is reserved for challenges as to the
"integrity or fundamental fairness with regard to the particular proceeding leading to the
foreign country judgment." (Cal. Law Revision Com. com., 20 West's Ann. Code Civ.
Proc. (2018 supp.) foll. § 1716, p. 84.) For example, in Bank Melli Iran v. Pahlavi
(9th Cir. 1995) 58 F.3d 1406 (Bank Melli Iran), the evidence established that the
defendant "could not expect fair treatment from the courts of Iran, could not personally
appear before those courts, could not obtain proper legal representation in Iran, and could
not even obtain local witnesses on her behalf." (Id. at p. 1413.) These were not "mere
35
niceties of American jurisprudence" but rather "ingredients of basic due process."
(Ibid.)25
"[F]oreign courts are not required to adopt 'every jot and tittle of American due
process.' " (DeJoria, supra, 804 F.3d at p. 387.) Russia "is not bound by our notions of
due process," and we do not "insist on the additional niceties of domestic jurisprudence"
in deciding whether to enforce a Russian judgment. (Ma, supra, 905 F.2d at p. 1076.)
In determining whether the specific proceeding that resulted in the judgment conformed
to due process requirements, the question is whether the foreign proceeding conformed to
what the Seventh Circuit has termed the "international concept of due process." (Society
of Lloyd's v. Ashenden (7th Cir. 2000) 233 F.3d 473, 478.) Our task is to decide whether
the foreign procedures are " 'fundamentally fair' " and do not offend " 'basic fairness.' "
(Id. at p. 477.)26 Nevertheless, "[n]otice is an element of our notion of due process and
the United States will not enforce a judgment obtained without the bare minimum
25 Because the case was decided before the 2005 Uniform Act was promulgated, it
focused on the mandatory ground for nonrecognition, considering the administration of
justice in Iran as a whole. (Bank Melli Iran, supra, 58 F.3d at p. 1410.) However, in
reaching its conclusion, the court also considered whether the specific proceeding against
the defendant could be deemed fundamentally fair, and we consider the case for that
purpose. (Id. at p. 1412.)
26 As the court explained, "[j]ust as no judgments of a foreign legal system would be
enforceable in Illinois if the system had to conform to the specifics of the American
doctrine of due process, so very few foreign judgments would be enforceable in Illinois if
the proceeding in which such a judgment was rendered had to conform to those specifics.
In a case decided by a foreign court system that has not adopted every jot and tittle of
American due process (and no foreign court system has, to our knowledge, done that), it
will be sheer accident that a particular proceeding happened to conform in every
particular to our complex understanding of due process." (Society of Lloyds v. Ashenden,
supra, 233 F.3d at p. 478.)
36
requirements of notice." (International Transactions, Ltd. v. Embotelladora Agral
Regiomontana, SA de CV (5th Cir. 2003) 347 F.3d 589, 594; see Ma, supra, at p. 1076[courts require "the bare minimum requirements of notice" in the foreign proceeding];
In re B-E Holdings, Inc. (Bankr.E.D.Wis. 1999) 228 B.R. 414, 417 [concluding debtor
"received at least the bare minimum requirements of notice" required under due
process].)
Although the record contains evidence (submitted by Alpha Bank) regarding
Yakovlev's reasons for seeking political asylum, Yakovlev never argued for
nonrecognition on the ground he could not expect fair treatment from Russian courts.
The due process ground for nonrecognition appears inapplicable to the technical service
of process argument Yakovlev makes. Had there been no attempt at service in Russia,
Yakovlev might have been able to seek nonrecognition on due process grounds under
section 1716, former subdivision (c)(8), now subdivision (c)(1)(G). Where, however,
service was "reasonably calculated, under all the circumstances, to apprise [Yakovlev] of
the pendency of the action and afford [him] an opportunity to present [his] objections"
(Mullane, supra, 339 U.S. at p. 314), he is not entitled to avoid recognition of the Russian
judgment on due process grounds.
4. Proceedings on Remand
The parties agree that if the Russian judgment is recognized, the final amount must
be adjusted for sums since paid by other sureties toward Trial Trading House's loan
balance. We leave it to the trial court to fashion further proceedings as necessary to
calculate such offsets.
37
DISPOSITION
The judgment is reversed. The trial court is directed to vacate its orders on the
cross-motions for summary judgment, enter a new order denying Respondent Oleg
Yakovlev's motion and granting Appellant Alpha Bank's motion, and conduct further
proceedings consistent with this opinion. Appellant is entitled to its costs on appeal.
DATO, J.
WE CONCUR:
BENKE, Acting P. J.
O'ROURKE, J.
38