Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-03171/USCOURTS-casd-3_13-cv-03171-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

STEPHEN H. ARNOLD,

Plaintiff,

CASE NO. 13-cv-3171-H (RBB)

ORDER VACATING

CLERK’S ENTRY OF

DEFAULT

vs.

ROYAL BANK OF CANADA

TRUST COMPANY (CAYMAN)

LIMITED; and DOES ONE through

FORTY, inclusive,

Defendant.

On December 27, 2013, Plaintiff Stephen Arnold (“Plaintiff”) filed a complaint

against Defendant Royal Bank of Canada Trust Company (Cayman) Limited

(“Defendant” or “RBC Cayman”). (Doc. No. 1.) On February 25, 2014, Plaintiff filed

a request for entry of Clerk’s default against Defendant. (Doc. No. 5.) On March 4,

2014, the Clerk entered default against Defendant. (Doc. No. 6.) On March 14, 2014,

the Court issued an order to show cause why the Clerk’s entry of default should not be

vacated due to inadequate proof of proper service of process. (Doc. No. 7.)

On March 27, 2014, Plaintiff filed a first amended complaint. (Doc. No. 11.) On

April 10, 2014, Plaintiff filed a response to the Court’s order to show cause, stating that

Plaintiffintended to re-serve DefendantRBCCayman, but also contending thatservice

on RBC Cayman in Ontario, Canada was proper. (Doc. No. 13.)

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Discussion

I. Federal Rules of Civil Procedure for Serving a Corporation Outside Any

Judicial District of the United States

FederalRules ofCivil Procedure 4(h)(2) and 4(f) set forth the process for serving

a foreign corporation outside the judicial districts of the United States. A plaintiff may

serve a litigant who is not present within any judicial district of the United States “by

any internationally agreed means ofservice that isreasonably calculated to give notice,

such as those authorized by the Hague Convention on the Service Abroad of Judicial

and Extrajudicial Documents.” Fed. R. Civ. P. 4(f)(1); see generally Convention on

Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial

Matters, Nov. 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638 (“Hague Convention”).

Plaintiff asserts that service “is being made on [RBC Cayman] according to the

Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents

pursuant to FRCP Rule 4(h)(2).” (Doc. No. 13 at 1-2.) Plaintiff asserts that he initiated

the process of serving RBC Cayman according to the Hague Convention on March 25,

2014. (See Doc. No. 13 at 4.)

II. The Hague Convention on the Service Abroad of Judicial and Extrajudicial

Documents

“[C]ompliance with the [Hague] Convention is mandatory in all cases to which

it applies.” Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705 (1988).

“[T]he Cayman Islands is a territory of the United Kingdom, and as such, it is

considered to be a signatory to the Hague Convention.” Mapping Your Future, Inc. v.

Mapping Your Future Servs., Ltd., 266 F.R.D. 305, 307 (D.S.D. 2009) (citing

Universal Trading & Inv. Co. v. Kiritchenko, No. C-99-3073 MMC, 2007 WL 295548,

at *2 (N.D. Cal. Jan. 30, 2007)).

As the district court in Universal Trading summarized:

Service pursuant to the Hague Convention may be effected by

forwarding the summons and complaint to the ‘Central Authority’ for

the country in which service is to be made, along with a form Request

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For Service containing, inter alia, a form Summary of the Documents to

be Served. See Hague Convention arts. 2-5. Once the Central Authority

has served a document, it is required to ‘complete a certificate’ stating

that ‘the document has been served and . . . the method, the place and

the date ofservice and the person to whomthe document was delivered.’

See id art. 6. The Hague Convention expressly provides that ‘[w]here a

. . . summons . . . had to be transmitted abroad for the purpose ofservice,

under the provisions of the [Hague] Convention, and the defendant has

not appeared, judgment shall not be given unless it is established that .

. . the service or delivery was effected in sufficient time to enable the

defendant to defend.’ See Hague Convention art. 15.

Universal Trading, 2007 WL 295548, at *2 (N.D. Cal. Jan. 30, 2007) (refusing to enter

default judgment because the plaintiff had not provided adequate certification fromthe

Central Authority of the Cayman Islands that service of process was accomplished).

The Central Authority for the Cayman Islands is the “Clerk of the Courts, Grand

Cayman, Cayman Islands.” United Kingdom - Other Authorities (Art. 18), Hague

Conference on Private International Law (HCCH) (Jan. 12, 2012),

http://www.hcch.net/index_en.php?act=authorities.details&aid=681;see alsoUniversal

Trading, 2007 WL 299548, at *2 n.2 (discussing a certificate issued by “the Bailiff of

the Grand Court of the Cayman Islands on behalf of the Clerk of the Courts of the

Cayman Islands . . . .”)

Plaintiff has not submitted any documentation to show that he has received a

certificate of service from the Clerk of the Courts in the Cayman Islands. Because

Plaintiff cannot demonstrate adequate proof that service has been accomplished on

RBC Cayman, the Court must vacate without prejudice the Clerk’s entry of default.

Volkswagenwerk, 486 U.S. at 705; Universal Trading, 2007 WL 299548, at *4.

In the alternative, Plaintiff asserts that RBC Cayman is “a wholly owned

subsidiary of ROYAL BANK OF CANADA,” (FAC at 1), and therefore that service

on RBC Cayman at “200 Bay Street, South Tower, Toronto, Ontario, Candada M5J2J5

can be shown to be proper.” (Doc. No. 13 at 3.) Plaintiff provides no documentation

to support the assertion that RBC Cayman is in fact a wholly owned subsidiary of the

Royal Bank of Canada, nor cites any law for the proposition that service upon a parent

corporation excuses the requirement to effect service upon a subsidiary under the

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Hague Convention. Cf. Fleming v. Yamaha Corp., USA, 774 F. Supp. 992, 994 (W.D.

Va. 1991) ([I]f a corporation and its wholly-owned subsidiary maintain separate

corporate identities, ‘though perhaps merely formal,’ service on the subsidiary is not

valid service on its parent, despite the identity of interests between the parent and its

subsidiary and despite control by the parent over the subsidiary’s operations.”) (citing

Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333, 336-37 (1925)).

Conclusion

For the foregoing reasons, the Court vacates without prejudice the Clerk’s entry

of default as to Defendant Royal Bank of Canada Trust Company (Cayman) Limited. 

(Doc. No. 6.)

IT IS SO ORDERED

Dated: May 8, 2014

________________________________

Marilyn L. Huff, District Judge

UNITED STATES DISTRICT COURT

COPIES TO:

All parties of record

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