Menon v. Water Splash, Inc.

• Decision Date: 30 June 2015
• Docket Number: NO. 14–14–00012–CV,14–14–00012–CV
• Citation: 472 S.W.3d 28
• Parties: Tara Menon, Appellant v. Water Splash, Inc., Appellee
• Court: Texas Court of Appeals

472 S.W.3d 28

Tara Menon, Appellant

v.Water Splash, Inc., Appellee

NO. 14–14–00012–CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinions filed June 30, 2015

Rehearing En Banc Overruled October 6, 2015

Timothy A. Hootman, Houston TX, for Appellant.

Andrew K. Meade, Jeremy Jason Gaston, Houston TX, for Appellee.

Panel consists of Justices Christopher, Donovan, and Wise

OPINION

John Donovan, Justice

Appellant, Tara Menon ("Menon"), appeals the trial court's default judgment granted after she failed to answer the suit filed by appellee, Water Splash, Inc. ("Water Splash"). In four issues, Menon contends that the trial court erred in refusing to set aside the default judgment because state law cannot allow service of process in foreign nations where the service does not comport with the requirements of the Hague Service Convention. We reverse and remand.

I. BACKGROUND

Menon is a citizen of Canada, residing in Quebec. Water Splash is a Delaware corporation with its principal office located in Champlain, New York. Water Splash sued Menon in Galveston, Texas. In its original petition, Water Splash alleged that Menon was its regional sales representative and that Menon also began to act as a sales manager for South Pool, a competitor of Water Splash. Sometime in 2012, Water Splash discovered that South Pool had used some of Water Splash's designs and drawings when submitting a bid to the City of Galveston for the construction of splash pads at two parks. A year later, Water Splash sued South Pool and Menon for unfair competition, conversion, tortious interference with business relations, and conspiracy.

To effectuate service, Water Splash filed a motion for alternative service of process pursuant to Texas Rule of Civil Procedure 108a. See Tex. R. Civ. P. 108a. The motion requested that the trial court order service on Menon in Quebec, Canada, by "first class mail, certified mail, and Federal Express to Menon's address" and "by email to each of Menon's known email addresses." The trial court granted the motion.

After Menon did not file an answer or otherwise appear, Water Splash moved for default judgment alleging it had diligently sought service on Menon utilizing the methods allowed for substituted service. The motion stated that service was accomplished by sending a letter to Menon's Quebec address by certified mail, return receipt requested and first class mail, and Water Splash introduced evidence of those attempts at service. Water Splash also alleged that Menon's emails proved she knew of the existence of the suit. The trial court granted the motion for default judgment against Menon and awarded actual and exemplary damages and attorneys' fees.

Menon filed a motion for new trial seeking to set aside the default judgment because service was not accomplished pursuant to the terms of article 10(a) of the Hague Service Convention. Water Splash responded, arguing Rule 108a was an acceptable form of alternative service. The trial court denied Menon's motion for new trial.

II. ANALYSIS

In four interrelated issues involving the interpretation of particular words in the Hague Service Convention, appellant attacks the trial court's grant of default judgment and denial of her motion for new trial.

A. Standard of Review

We review a trial court's denial of a motion for new trial for abuse of discretion. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 925 (Tex.2009). A trial court abuses its discretion if it reaches a decision without reference to any guiding rules or principles, or acts in an arbitrary or unreasonable manner. Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex.2004) ; Stevens v. Anatolian Shepherd Dog Club of Am., Inc., 231 S.W.3d 71, 76 (Tex.App.–Houston [14th Dist.] 2007, pet. denied).

Absent waiver, a trial court lacks personal jurisdiction over a defendant to whom citation has not been "issued and served in a manner provided for by law." See Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex.1990). In a direct appeal from a no-answer default judgment, there is no presumption of valid issuance, service, and return of citation. See id. (quoting Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884, 886 (Tex.1985) ) (per curiam). Thus, a default judgment cannot withstand a direct attack unless the record affirmatively shows strict compliance with the rules for service of citation. Primate Constr., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex.1994) (per curiam). Whether a trial court has personal jurisdiction over a defendant is a question of law, which we review de novo. Haaksman v. Diamond Offshore (Bermuda), Ltd., 260 S.W.3d 476, 479 (Tex.App.–Houston [14th Dist.] 2008, pet. denied).

B. Hague Convention

Articles 2 through 7 of the Hague Convention require a signatory nation to establish a "Central Authority" which acts as an agent to handle various matters regarding requests for service, service of documents and proof of service. Article 10(a) of the Hague Convention, at issue here, states:

Provided the State of designation does not object, the present Convention does not interfere with

(a) the freedom to send judicial documents, by postal channels, directly to persons abroad,

(b) the freedom of judicial officers, officials or other competent person of the State of origin to effect service of judicial documents directly through the judicial officer, officials or other competent persons of the State of designation,

(c) the freedom of any person interested in a judicial proceeding to effect service of judicial document directly through the judicial officers, officials, or other competent persons of the State of destination.

Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, art. 10, No. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163, available at http:www.hcch.net/index_en.php? act=conventions.text & cid=17 (last visited June 22, 2015) ("Hague Convention"). The question before us turns on the meaning attributed to "send" and "service."

Where it applies, compliance with the provisions of the Hague Convention is "mandatory." Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698–99, 108 S.Ct. 2104, 100 L.Ed.2d 722 (1988). Its purpose is to provide a more efficient and effective manner of service of process abroad and to ensure that defendants sued in foreign jurisdictions receive timely notice of suit. Id. at 699, 108 S.Ct. 2104 ; see also Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 383 (5th Cir.2002). In Nuovo, plaintiff attempted service by mailing service of process to the defendant's office in Italy. See Nuovo, 310 F.3d at 383. Arguing that service by mail violated Federal Rule of Civil Procedure. 4(f)(1)because it did not comply with the Hague Convention, the defendant urged that the drafters used the term "send" in connection with the delivery of judicial documents, but used "serve," "service," and "to effect service" in other sections, including article 10. Id. The Nuovo court discussed how other courts have construed "send" and determined that, because "service" was used throughout the Hague Convention while "send" was confined solely to article 10(a), this demonstrated that the drafters did not "intend to give the same meaning to ‘send’ that they intended to give to ‘service.’ " Id. at 384. In short, the drafters intended to attach meaning to the specific word used. See id.

The Hague Convention applies "in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad." 20 U.S.T. 361, art. 1. The Hague Convention "preempts any inconsistent methods of service prescribed by Texas law in all cases where the Convention applies." Wuxi Taihu Tractor Co, Ltd. v. York Group, Inc., No. 01–13–00016–CV, 2014 WL 6792019, at *5 (Tex.App.–Houston [1st Dist.] Dec. 4, 2014, no pet.) (mem.op.) (citing Paradigm Entm't Inc. v. Video Sys. Co., No. Civ. A. 3.99–CV–2004P, 2000 WL 251731, at *4 (N.D.Tex. Mar. 3, 2000) ) (concluding service was effective where secretary of state forwarded a copy of service of process to defendant pursuant to Texas law, and Japan did not object to this manner of service).

C. Application of article 10(a)

Menon argues the default judgment should not have been rendered because she was not served with process. See Tex. R. Civ. P. 124 ("In no case shall judgment be rendered against any defendant unless upon service...."). Menon further asserts that Water Splash did not effectuate service under Rule 108a, providing for service in a foreign country "pursuant to the terms of any treaty or convention," because she was not served pursuant to the Hague Convention service of process provisions. She argues "the drafters use the words ‘serve,’ ‘service,’ and ‘to effect service’ in other sections, including subparts (b) and (c) of article 10," but they only used the word "send" in subsection (a), which applies only to sending judicial documents. See Nuovo, 310 F.3d at 383.

Water Splash argues that article 10(a) allows service of process by mail, and relies on the "majority view" which holds that article 10(a) allows service of process by mail, so long as the state of destination does not object.¹ Courts following this view include the Second, Fourth, Seventh and Ninth Circuits.²

We conclude that the better-reasoned approach is to follow the so-called "minority view" which adheres to and applies the meaning of the specific words used in article 10(a) and prohibits service of process by mail.

‘Absent a clearly expressed legislative intention to the contrary,’ a statute's language ‘must ordinarily be regarded as conclusive.’ Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 64 L.Ed.2d 766 (1980). And because the drafters purposely elected to use forms of the word ‘service’ throughout the Hague Convention, while confining use of the word ‘send’ to article 10(a), we will not presume that the drafters intended to give the same meaning to ‘send’ that they

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