Burda Media, Inc. v. Viertel
| Decision Date | 05 August 2005 |
| Docket Number | Docket No. 04-3426-CV. |
| Citation | 417 F.3d 292 |
| Parties | BURDA MEDIA, INC. and Burda Holding GmbH & Co. KG, a German Limited Partnership, Plaintiffs-Counter-Defendants-Appellees, v. Christian VIERTEL, Defendant-Cross-Defendant-Appellant, Hot Line Delivery, Inc., Defendant-Cross-Defendant-Counter-Claimant-Cross-Claimant, Fritz G. Blumenberg, Telecommunication Partners Limited, Transvideo, TV Broadcast Center and Agate Realty, Defendants-Cross-Defendants, Salvadora Blumenberg, Defendant-Counter-Claimant-Cross-Defendant, John Lee, Defendant. |
| Court | U.S. Court of Appeals — Second Circuit |
Daniel G. Heyman, Scarsdale, NY, for Defendant-Cross-Defendant-Appellant.
Rita McCloy Stephanz, Clifford Chance US LLP, New York, N.Y. (Warren L. Feldman and Stephanie Chmiel, on the brief), for Plaintiffs-Counter-Defendants-Appellees.
Before: NEWMAN, McLAUGHLIN, and HALL, Circuit Judges.
Defendant-cross-defendant-appellant Christian Viertel appeals from a decision of the United States District Court for the Southern District of New York (Sweet, J.) denying his motion to vacate the default judgment entered against him. Burda Media, Inc. v. Blumenberg, 2004 WL 1110419 .
In September 1997, plaintiffs-counter-defendants-appellees Burda Media Inc. ("Burda Media") and Burda Media Holding GmbH & Co. KG (together with Burda Media, "Burda" or "Burda plaintiffs") sued Viertel and several other defendants in the Southern District of New York. The Burda plaintiffs sought damages and other relief based on a fraudulent scheme conducted against them by Viertel and the other defendants. After a couple of unsuccessful attempts to serve Viertel in New York and then France, where he was eventually found, Burda served Viertel in France pursuant to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("Hague Convention"), November 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163. Nevertheless, Viertel failed to respond to the complaint and the district court entered a default judgment in April 2000.
In October 2003, Viertel moved to vacate the default judgment principally on the ground that service of process was invalid under the Hague Convention. He set forth two arguments relevant here. First, he argued that service was improper because the French authorities did not complete the required Certificate of service. Second, Viertel alleged that he never received the summons. The district court denied Viertel's motion in its entirety. Burda Media, 2004 WL 1110419, at *10. We affirm.
We now hold that: (1) service of process in this case complied with the Hague Convention because the police report completed by the French authorities who effected service was an adequate substitute for the formal Certificate; and (2) the district court properly found that Viertel received the summons, his affidavit to the contrary notwithstanding.
On September 24, 1997, Burda commenced a civil RICO and fraud action against Fritz G. Blumenberg, Viertel, and various companies owned or operated by Viertel in the Southern District of New York. Burda alleged that Viertel conspired with Blumenberg, the former president of Burda Media, to defraud Burda through a scheme in which Blumenberg submitted fraudulent invoices to Burda Media for services allegedly but not actually performed by sham companies whose bank accounts Viertel controlled. Viertel, a friend of Blumenberg, allegedly participated in and benefitted from the fraudulent scheme.
Burda's repeated efforts to serve Viertel form the core of this appeal.1 The first attempt occurred in New York on September 30, 1997, a few days after the complaint was filed. Burda attempted personal service on Viertel and his companies in New York because the companies operated out of offices in New York and Viertel maintained an apartment there as well. This personal service attempt, however, was unsuccessful.
Although once based in New York, Viertel and his companies were ultimately traced to France. In January 1998, Burda unsuccessfully tried to serve Viertel and his companies by international mail. Around this time, the district court granted what would be the first of two motions by Burda for an extension of time to serve Viertel and his companies.
After discovering Viertel's residence in France, Burda resorted to serving Viertel pursuant to the Hague Convention. On July 14, 1998, Burda transmitted several documents to the Ministry of Justice in Paris, France, requesting service upon Viertel and his companies. The package contained executed USM-94 Forms and two copies of the summons and complaint in both French and English.
The USM-94 Form is a three-page document that conforms to the Hague Convention's standards for submitting service requests to a country's central authority. The first page lists the names and addresses of the applicant, defendant, and foreign receiving authority as well as the documents to be served attached to the USM-94 Form. The second page of the USM-94 Form is entitled "Certificate," and is submitted blank to the foreign agency. The third page of the USM-94 Form contains a summary of the documents to be served.
Burda's USM-94 Forms complied with the Hague Convention: the first page listed Burda's counsel as the applicant, the various defendants on each separate form, and the French Ministry of Justice as the receiving authority, as well as the summons and complaint among the attached documents; the second page, or Certificate, was sent blank; and the third page summarized the attached documents, including the summons and complaint.
Upon receiving Burda's USM-94 Forms and the summons and complaint, the Ministry of Justice dispatched local French police to serve the documents on Viertel in August 1998. Following two visits to Viertel by the police, Burda received back two police reports documenting the service attempts. It is unclear from the record who returned these reports to Burda.
The first police report, dated August 3, 1998, describes the unsuccessful attempt by the French police to serve Viertel on behalf of two of his companies. Viertel refused to accept service because the documents pertained to companies to which he was allegedly not connected.
The second police report, dated August 12, 1998, describes the more successful attempt by the French police to serve Viertel in his personal capacity. The report describes the nature of the visit as "[d]elivery of judicial instruments from the Court of NEW YORK (USA)." According to the declaration log, Viertel "acknowledge[d] having taken possession of two files concerning [him] directly," but refused to accept those documents concerning his former companies. Viertel added, Viertel signed the declaration log, as did Pascal Robert, the French police officer who completed service.
Although the Burda plaintiffs received these two police reports, they did not receive the formal Certificate. In November 1998, Burda submitted Proof of Service to the district court which stated that the papers attached thereto proved that on August 3, 1998 and August 12, 1998, a summons and complaint were served on Viertel and his companies in France pursuant to Rule 4 of the Federal Rules of Civil Procedure and the Hague Convention. The attached papers included (1) the USM-94 Forms sent to the Ministry of Justice on July 14, 1998, (2) the summons and complaint "in the form attached to each" USM-94 Form, and (3) the two police reports from August 1998.
In January 1999, Burda wrote Viertel at his address in France where he had been served by the French police. The Burda plaintiffs advised Viertel that they had received proof of service from the French police, but no one had yet appeared as counsel on his behalf. Viertel did not respond to this inquiry.
In December 1999, Burda filed an application for entry of default against Viertel and Telecommunication Partners Limited ("TPL"), one of Viertel's companies.2 In the accompanying affidavit, Burda's counsel stated that Viertel and TPL were properly served and that more than twenty days had elapsed from the date of service without a response from either defendant. The Clerk of the Court issued a Clerk's Certificate of Default by Viertel and TPL. See Fed.R.Civ.P. 55(a).
In March 2000, Burda moved for entry of default judgment against Viertel and TPL. Although Viertel was served with Burda's motion for default judgment in both France and Florida, where he had recently purchased a home, Viertel did not respond. On April 10, 2000, the district court entered a default judgment against Viertel and TPL in the amount of approximately $2.75 million. See Fed.R.Civ.P. 55(b)(2). It is undisputed that Viertel knew of this default judgment by October 2001 at the latest.
Meanwhile, Viertel was criminally prosecuted in the Southern District of New York for his involvement in the fraudulent scheme. One of the witnesses at his trial was Pascal Robert, the French policeman who served Viertel in August 1998. Robert testified that he knew that the papers he delivered were legal papers "emanating from a court." He also testified that he received the documents "via the office of the Nice prosecutor." In October 2002, a jury found Viertel guilty of mail fraud, wire fraud, and conspiracy to commit mail and wire fraud. See United States v. Viertel, 2003 WL 367867 (S.D.N.Y. Feb.19, 2003) (). He was ultimately sentenced to twenty-one months' imprisonment and three years' supervised release in addition to restitution and fines. See United States v. Viertel, 98 Fed.Appx. 68 (2d Cir. May 28, 2004) (affirming conviction).
In October 2003, Viertel, pro se, moved,...
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