Su v. Sotheby's, Inc.
| Decision Date | 03 October 2018 |
| Docket Number | 17-CV-4577 (VEC) |
| Parties | WEI SU and HAI JUAN WANG, Plaintiffs, v. SOTHEBY'S, INC., Defendant. SOTHEBY'S, INC., Counter-Claimant and Third-Party Plaintiff, v. WEI SU and HAI JUAN WANG, Counterclaim Defendants, -and- YEH YAO HWANG, Third-Party Defendant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiffs Wei Su ("Wei") and Hai Juan Wang ("Wang") sued Defendant Sotheby's, Inc. ("Sotheby's") for breach of contract, replevin, and unlawful detention. See Pls.' Compl., Dkt. 1. Sotheby's filed a counterclaim against Plaintiffs for breach of contract, in addition to a claim for Rule 22 interpleader against Plaintiffs and Third-Party Defendant Yeh Yao Hwang ("Yeh"). See Sotheby's Compl., Dkt. 13. Sotheby's moves, with the consent of Plaintiffs, for alternative service of process on Yeh, pursuant to Rule 4(f)(3). See Notice of Mot., Dkt. 40. Sotheby's also moves for discharge from its interpleader claim and for the attorneys' fees and costs incurred in connection with bringing that claim. See Notice of Mot., Dkt. 14. For the following reasons, Sotheby's motion for alternative service is GRANTED IN PART. Provided that Sotheby's takes the additional steps to effect service specified in this order no later than November 16, 2018, the Court will deem Yeh properly served. Sotheby's motion for discharge and for attorneys' fees and costs is HELD IN ABEYANCE pending Sotheby's additional steps to effect service on Yeh.
This case arises out of a dispute over the ownership of an ancient Chinese wine vessel, called the Zhou Zha Hu (the "Vessel"). Wei claims that he owns the Vessel. See Pls.' Compl. ¶ 8. On August 11, 2014, Wang, acting as agent for Wei, executed a Consignment Agreement (the "Agreement") with Sotheby's, an international auction house. See id. ¶¶ 10-11.1 In the Agreement, Wang agreed to remit the Vessel to Sotheby's, and Sotheby's agreed to offer the Vessel for sale at auction in exchange for a commission. See id. ¶¶ 10-11; Sotheby's Ans., Dkt. 13, ¶ 11; Sigda Decl. Ex. A. Wang represented in the Agreement that she had good title to the Vessel and that she would indemnify and hold harmless Sotheby's and the ultimate purchaser of the Vessel from any damages relating to a breach of the Agreement. See Sigda Decl. Ex. A, ¶ 7.
In late August 2014, Wang transferred the Vessel to Sotheby's for sale, see Pls.' Compl. ¶ 11; Sotheby's Ans. ¶ 11; Sigda Decl. ¶ 6, and Sotheby's included it in its catalogue for an upcoming auction of Chinese art. See Sigda Decl. ¶¶ 3, 6. Prior to the auction, however, Yehcontacted Sotheby's through his attorneys (The Correct Law Office, located in Taiwan) and asserted an ownership interest in the Vessel. See Sotheby's Ans. ¶ 13; Sigda Decl. ¶ 7; Reply Declaration of Stacey Chervin Sigda in Supp. of Mot. for Discharge ("Sigda Reply Decl."), Dkt. 27, Ex. 1. Sotheby's subsequently notified Wang that it had received a competing claim to the Vessel and that the Vessel would be withdrawn from the upcoming auction. See Pls.' Compl. ¶ 13; Sotheby's Ans. ¶ 13; Sigda Decl. ¶¶ 7, 9.2 Since that time, Sotheby's has retained possession of the Vessel. See Pls.' Compl. ¶ 17; Sotheby's Ans. ¶ 17; Sigda Decl. ¶ 9.
Wei and Wang filed this action against Sotheby's on June 17, 2017. See Pls.' Compl. According to the Complaint, Sotheby's breached the Consignment Agreement in two ways: it refused to offer the Vessel at auction, and it disclosed Plaintiffs' identities to Yeh. See id. ¶¶ 22-26, 45-49. In addition to their breach of contract claims, Plaintiffs assert claims for replevin and unlawful detention, seeking return of the Vessel and depreciation damages. See id. ¶¶ 27-44.
On August 11, 2017, Sotheby's answered and filed a counterclaim against Wei and Wang for breach of contract, alleging that they had breached their representation in the Consignment Agreement that they had good title to the Vessel. See Sotheby's Compl. ¶¶ 20-25. Sotheby's also instituted an interpleader action against Wei, Wang, and Yeh. See id. ¶¶ 16-19. The interpleader is styled as a counterclaim against Wei and Wang and a third-party complaint against Yeh. See id.3
On August 18, 2017, Sotheby's filed a motion for discharge, attorneys' fees, and costs, arguing that it is entitled to be discharged from the interpleader claim and seeking attorneys' fees and costs incurred in connection with bringing that claim. See Sotheby's Discharge Mem. of Law at 2. Wei and Wang oppose the motion. See Pls.' Mem. of Law in Opp. to Mot. for Discharge, Dkt. 21.
While the motion for discharge was pending, in September and October 2017, Sotheby's attempted to serve Yeh with the third-party complaint for interpleader. Sotheby's first contacted The Correct Law Office, the attorneys who had originally notified Sotheby's of Yeh's claim to the Vessel. See Sotheby's Mem. of Law in Supp. of Alternative Service ( ), Dkt. 41, at 4-5. The Correct Law Office stated that it would not accept service for Yeh but provided Sotheby's with two addresses at which Yeh could be reached. See id. at 5. Sotheby's sent the third-party complaint via international registered mail to Yeh at those addresses, but the mail was returned from both locations as undeliverable. See id. Sotheby's then engaged counsel in Taiwan to personally deliver the third-party complaint to Yeh at those two addresses, but no one at either location would accept service for Yeh. See id.
Sotheby's then sought and received letters rogatory from this Court, whereby the Court sought international assistance from Taiwan's judicial authority to effect service on Yeh at the two addresses associated with him. See Order (Oct. 4, 2017), Dkt. 33. In early January 2018, Taiwanese authorities notified Sotheby's that service could not be effected because the occupants of those addresses refused to accept the documents. See Sotheby's Ltr. (Jan. 25, 2018), Dkt. 37; Sotheby's Alt. Service Mem. of Law at 5-6.
On January 31, 2018, this Court denied Sotheby's motion for discharge without prejudice, reasoning that the Court could not rule on the motion before Yeh had been properly served with the third-party complaint. See Order (Jan. 31, 2018), Dkt. 39. Accordingly, the Court directed Sotheby's to move for alternative service pursuant to Federal Rule of Civil Procedure 4(f). See id. Sotheby's filed the motion for alternative service on February 16, 2018, requesting that the Court deem service upon The Correct Law Office as sufficient service upon Yeh or, alternatively, that the Court order Plaintiffs to attempt to effect service on Yeh. See Sotheby's Alt. Service Mem. of Law at 1-2. Plaintiffs opposed the motion. See Pls.' Mem. of Law in Opp. to Mot. for Alt. Service, Dkt. 43.
In April 2018, the Court reserved decision on the motion for alternative service and ordered Plaintiffs to attempt to effect service on Yeh. See Order (Apr. 2, 2018), Dkt. 45. Plaintiffs, through an agent, visited The Correct Law Office in Taiwan and attempted to serve it with the summons and third-party complaint, but the Law Office refused to accept service. See Affidavit of Szeto Nang ("Nang Aff."), Dkt. 46, Ex. B, ¶ 2. Plaintiffs also visited an additional address associated with Yeh (separate from the two addresses for Yeh provided in the letters rogatory), but Plaintiffs were unable to enter the premises or to locate a person on whom to effect service there. See id. ¶ 2. Finally, Plaintiffs attempted to obtain Yeh's contact information through Taiwanese authorities, but the authorities refused to disclose the information on the ground that it was protected by the country's privacy laws. See id. ¶ 3.
After attempting to effect service on Yeh, Plaintiffs withdrew their opposition to Sotheby's motion for alternative service. See Declaration of Xuejie Wong in Supp. of Alt. Service, Dkt. 46. To date, Yeh has not appeared in this action.
Under Federal Rule of Civil Procedure 4(f)(3), service may be effected upon individuals in foreign countries by any means "not prohibited by international agreement, as the court orders." Fed. R. Civ. P. 4(f)(3). "The decision of whether to order service of process under Rule 4(f)(3) is committed to the sound discretion of the district court." Stream SICAV v. Wang, 989 F. Supp. 2d 264, 278 (S.D.N.Y. 2013) (collecting cases). Before ordering alternative service under this rule, "district courts in this Circuit have generally required: (1) a showing that the plaintiff has reasonably attempted to effectuate service on the defendant, and (2) a showing that the circumstances are such that the court's intervention is necessary." United States v. Lebanese Canadian Bank SAL, 285 F.R.D. 262, 267 (S.D.N.Y. 2012) (collecting cases); see also Stream SICAV, 989 F. Supp. 2d at 278. Additionally, before ordering alternative service, courts must ensure that the means of service "comports with constitutional notions of due process." Stream SICAV, 989 F. Supp. 2d at 278 (quoting Secs. Exch. Comm'n v. Anticevic, No. 05-CV-6991, 2009 WL 361739, at *3 (S.D.N.Y. Feb. 13, 2009)).
Sotheby's asks this Court to deem service on The Correct Law Office a proper means of serving Yeh. See Sotheby's Alt. Service Mem. of Law at 1-2, 4. This form of service is not prohibited by international agreement, as Taiwan is not a party to the Hague Convention or to any other treaty or agreement with the United States regarding service of process. See Tatung Co., Ltd. v. Shu Tze Hsu, No. 13-CV-1743, 2016 WL 7634672, at *2 (C.D. Cal. Aug. 18, 2016); U.S. Dep't of State, Judicial Assistance Country Information: Taiwan (Nov. 15, 2013),https://travel.state.gov/c...
To continue reading
Request your trial