United States of America v. Distribuidora Batiz, S.A. De C.V. et al

Filing 95

ORDER granting 93 Motion for Specially Authorized Service and 94 Motion for Issuance of an Amended Summons. Plaintiff is authorized to serve the thirteen unserved Defendants via certified mail directed to their counsel of record, Robert Ted Parker. No later than ninety (90) days from the date this Order is filed, Plaintiff shall file a Status report regarding Plaintiff's efforts to serve the unserved Defendants. Signed by Judge William Q. Hayes on 11/3/10. (lao)

United States of America v. Distribuidora Batiz, S.A. De C.V. et al

Doc. 95

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES OF AMERICA, Plaintiff, vs. DISTRIBUIDORA BATIZ CGH, S.A. DE C.V.; et al., Defendants. HAYES, Judge: The matters before the Court are the Motion for Specially Authorized Service (ECF No. 93), and the Motion for Issuance of an Amended Summons (ECF No. 94). BACKGROUND On February 27, 2007, Plaintiff United States of America filed the Complaint against Distribuidora Batiz, S.A. De C.V. (hereinafter "Distribuidora Batiz"), and Silvia Del Carmen Batiz Esquer, Rodolfo Batiz Guillen, Raul Batiz Echavarria, Raul Guillermo Batiz Guillen, Raul Guillermo Batiz Gamboa, Ricardo Batiz Gamboa, Olga Elena Batiz Esquer, Jorge Guillermo Batiz Guillen, Jorge Guillermo Batiz Esquer, Gabriela Maria Batiz Gamboa, Angela Maria Batiz Gamboa, Gerardo Batiz Esquer, Grupo Batiz CGH, S.A. de C.V., Greenver, S.A. de C.V., Invernaderos La Pequena Joya, S.A. De C.V., and Pedro Batiz Guillen (collectively, "Guarantor Defendants"). (ECF No. 1). The Complaint alleges that the United States, through its agency, the Export-Import Bank of the United States, holds a promissory note on
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
CASE NO. 07cv370-WQH-JMA ORDER

Dockets.Justia.com

1 which Distribuidora Batiz defaulted. The Complaint alleges that the Guarantor Defendants 2 unconditionally guarantied repayment of the full amount of Distribuidora Batiz's indebtedness 3 on the note, but Defendants failed to pay the amount due. The Complaint seeks payment of 4 principal in the amount of $2,641,574.61, plus accrued interest. 5 Between approximately April 2008 and July 2008, Plaintiff attempted to serve seven

6 of the Defendants in Mexico pursuant to the Inter-American Convention on Letters Rogatory, 7 but the efforts were unsuccessful. (ECF No. 65-9, 65-10). For five of the Defendants, the 8 Mexican authorities stated that they could not locate the Defendants at the given addresses. 9 (ECF No. 65-9). 10 On November 7, 2008, the Court issued a Judgment against Defendant Raul Batiz

11 Echavarria pursuant to Federal Rule of Civil Procedure 54(b). (ECF No. 46). On December 12 5, 2008, the Court issued a Judgment against Defendant Rodolfo Batiz Guillen pursuant to 13 Rule 54(b). (ECF No. 51). 14 On May 12, 2009, based upon service of process at the San Diego, California offices

15 of Wilson Batiz LLC, "a Batiz family business," the United States moved for default judgment 16 against the following fourteen defendants: Distribuidora Batiz; Grupo Batiz CGH, S.A. de 17 C.V.; Greenver, S.A. de C.V.; Invernaderos la Pequena Jolla, S.A. de C.V.; Pedro Batiz 18 Guillen; Silvia del Carmen Batiz Esquer; Raul Guillermo Batiz Guillen; Raul Guillermo Batiz 19 Gamboa; Olga Elena Batiz Esquer; Jorge Guillermo Batiz Guillen; Jorge Guillermo Batiz 20 Esquer; Gabriela Maria Batiz Gamboa; Angela Maria Batiz Gamboa; and Gerardo Batiz 21 Esquer. (ECF No. 59-2 at 5). 22 On May 22, 2009, thirteen of the fourteen Defendants who were the subject of the May 23 12, 2009 Motion for Default Judgment,1 as well as Defendant Ricardo Batiz Gamboa ("Moving 24 Defendants"), through counsel Robert Ted Parker, filed an Opposition to Plaintiff's Motion 25 for Default Judgment (ECF No. 60) and a Motion to Set Aside Clerk's Default and Dismiss 26 Action as to Moving Defendants (ECF No. 61). The Moving Defendants contended that 27 Of the fourteen Defendants who are the subject of the May 12, 2009 Motion for 28 Default Judgment, Defendant Pedro Batiz Guillen is the only Defendant who did not file an opposition to the Motion.
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1 Plaintiff had failed to effectuate service against them, and therefore the action against them 2 should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5). In support, the 3 Moving Defendants submitted a declaration from Defendant Jorge Guillermo Batiz Guillen 4 stating that "[e]ach of the Moving Defendants is of Mexican citizenship and domicile, and each 5 of them resides in Mexico." (Jorge Guillermo Batiz Guillen Decl., ECF No. 61-3, ¶ 6). He 6 stated that "I first learned of the lawsuit when I received a copy of the letter [dated] February 7 26, 2009 that was signed by [Plaintiff's counsel] and addressed to me and numerous other 8 members of the Batiz family at addresses which are not the residences or usual places of abode 9 or business of any of the Moving Defendants." Id. ¶ 3. 10 On June 8, 2009, Plaintiff filed a Motion to Withdraw the Motion for Default Judgment

11 as to the Moving Defendants. (ECF No. 66). On June 9, 2009, Plaintiff filed a Motion for 12 Limited Early Discovery, seeking discovery "to obtain addresses it needs to effect 13 undisputedly proper service upon fourteen defendants and to move this litigation expeditiously 14 towards an adjudication on the merits." (ECF No. 67-1 at 2). Plaintiff attached an email 15 exchange wherein attorney Parker refused to answer the following two questions posed by 16 Plaintiff's counsel: "1) Will you provide me with addresses at which each of your 14 clients 17 may be served with process in this case? 2) Will you accept service of process on behalf of 18 your 14 clients?" (ECF No. 67-2 at 1). 19 On June 18, 2009, the Moving Defendants filed an opposition to the Motion for Limited

20 Early Discovery. (ECF No. 71). The Moving Defendants contended that any discovery taken 21 on the Moving Defendants prior to service would violate their right to Due Process. 22 On August 10, 2009, the Court issued an Order (1) granting the Motion to Withdraw

23 the Motion for Default Judgment as to the Moving Defendants; (2) granting the Motion to Set 24 Aside Clerk's Default as to the Moving Defendants; (3) denying the Motion to Dismiss Action 25 as to the Moving Defendants; (4) denying without prejudice the Motion for Limited Early 26 Discovery; and (5) granting the Motion for Default Judgment as to Defendant Pedro Batiz 27 Guillen. (ECF No. 75). The Court stated that "there exists a reasonable prospect that service 28 may be obtained as to the Moving Defendants. Plaintiff may discover the Moving Defendants'
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1 Mexican addresses through discovery on the served Defendants or non-parties. Additionally, 2 Plaintiff may move for an order allowing service via Federal Rule of Civil Procedure 3 4(f)(3)...." Id. at 14 (citation omitted). 4 On October 14, 2009, the Magistrate Judge issued an Order granting Plaintiff's motion

5 for limited early discovery seeking to take early discovery from non-party First National Bank 6 and Judgment Debtors Raul Batiz Echavarria, Pedro Batiz Guillen and Rodolfo Batiz Guillen 7 "to obtain information reasonably necessary to effect service of process upon the fourteen 8 Defendants who reside in Mexico and have not yet been served." (ECF No. 78 at 1). On 9 December 16, 2009, the Magistrate Judge issued a Protective Order which had been agreed 10 upon by Plaintiff and the Judgment Debtors. (ECF Nos. 80, 81). 11 12 13 14 15 On July 22, 2010, the Court issued an Order stating: The docket reflects that, since the Magistrate Judge authorized limited discovery and issued the Protective Order, no proof of service has been filed as to any of the Unserved Defendants and no proceedings have been taken against any Unserved Defendant. ... It appearing to the Court that dismissal for want of prosecution may be appropriate in this case, Plaintiff is hereby ORDERED TO SHOW CAUSE as to why this case should not be dismissed without prejudice for failure to prosecute as to the Unserved Defendants.

16 (ECF No. 90 at 2). 17 On August 20, 2010, Plaintiff filed a response to the Court's July 22, 2010 Order; the

18 Motion for Specially Authorized Service; the Motion for Issuance of an Amended Summons; 19 and a certificate of service indicating that Defendant Olga Elena Batiz Esquer was served with 20 the Summons and Complaint pursuant to the Hague Convention on November 12, 2009. (ECF 21 Nos. 91-94). Plaintiff's response outlined Plaintiff's "tedious and time consuming" attempts 22 "to effect service in Mexico under the Hague Convention." (ECF No. 92 at 5). "Because 23 service under the Hague Convention is the best way to ensure the international enforceability 24 of an eventual judgment, the United States respectfully requests that the Court permit a further 25 attempt to serve the defendants in Mexico." Id. The Motion for Issuance of an Amended 26 Summons requests that the Court direct the Clerk to issue a revised summons to comply with 27 the Mexican Central Authority's "newly disclosed additional requirements" that the summons 28 specify whether the twenty day period for answering the complaint is measured in calendar
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1 days or business days. Id. Because "the United States appreciates that there are practical 2 limitations on how long the Court can wait for a plaintiff to complete service," id. at 6, Plaintiff 3 also filed the Motion for Specially Authorized Service which "requests that the Court enter an 4 order authorizing Rule 4(f)(3) service of the thirteen unserved defendants by delivering the 5 summons and complaint via certified mail to their attorney of record, Mr. Parker." (ECF No. 6 93-1 at 10). 7 The Motion for Specially Authorized Service and Motion for Issuance of an Amended

8 Summons contain certificates of service indicating that Parker, counsel of record for the 9 thirteen unserved Defendants, and Jeffrey D. Cawdrey, counsel of record for the three 10 Judgment Debtors, each received electronic service of the pending motions. The docket 11 reflects that no opposition to either motion has been filed. 12 13 14 15 16 17 18 19 DISCUSSION Motion for Specially Authorized Service Federal Rule of Civil Procedure 4(f) provides, in pertinent part: [S]ervice upon an individual ... may be effected in a place not within any judicial district of the United States: (1) by any internationally agreed means reasonably calculated to give notice, such as those means authorized by the Hague Convention ...; or ... (3) by other means not prohibited by international agreement as may be directed by the court.

20 Fed. R. Civ. P. 4(f). Service under Rule 4(f)(3) must be (1) directed by the court; (2) not 21 prohibited by international agreement; and (3) comport with constitutional notions of due 22 process. See Rio Props., Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1014-16 (9th Cir. 2002). 23 To meet the due process requirement, "the method of service crafted by the district court must 24 be reasonably calculated, under all the circumstances, to apprise interested parties of the 25 pendency of the action and afford them an opportunity to present their objections." Id. at 26 1016-17 (quotation omitted). "[A]s long as court-directed and not prohibited by an

27 international agreement, service of process ordered under Rule 4(f)(3) may be accomplished 28 in contravention of the laws of the foreign country." Id. at 1014 (citation omitted). "[S]ervice
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1 of process under Rule 4(f)(3) is neither a last resort nor extraordinary relief. It is merely one 2 means among several which enables service of process on an international defendant." Id. at 3 1015 (quotation omitted). In Rio Properties, the Court of Appeals for the Ninth Circuit held 4 that "when [plaintiff] presented the district court with its inability to serve an elusive 5 international defendant, striving to evade service of process, the district court properly 6 exercised its discretionary powers" to authorize service upon defendant's attorney. Id. at 1016; 7 see also id at 1017 ("Service upon [defendant's attorney] was ... appropriate because he had 8 been specifically consulted by [defendant] regarding this lawsuit. He knew of [defendant]'s 9 legal positions, and it seems clear that he was in contact with [defendant] in Costa Rica. 10 Accordingly, service to [defendant's attorney] was ... reasonably calculated in these 11 circumstances to apprise [defendant] of the pendency of the present action."). 12 After review of the Motion and the record, the Court finds that Plaintiff has been

13 reasonably diligent in seeking to serve the thirteen unserved Defendants. The facts and 14 circumstances of this case warrant the Court's intervention pursuant to Rule 4(f). Plaintiff has 15 demonstrated that service of the thirteen unserved Defendants by delivering the Summons and 16 Complaint via certified mail to Parker, their attorney of record, is not prohibited by 17 international agreement and is "reasonably calculated, under all the circumstances, to apprise 18 [Defendants] of the pendency of the action and afford them an opportunity to present their 19 objections." Rio Props., 284 F.3d at 1016-17. The Motion for Specially Authorized Service 20 is granted. 21 22 Motion for Issuance of an Amended Summons Currently, the Summons in this case states that the Defendant must file an answer to the

23 Complaint "within 20 days after service of this summons upon you, exclusive of the day of 24 service," without specifying whether the twenty-day period is counted in business days or 25 calendar days. (ECF No. 2 at 1). "So that the United States may comply with the Mexican 26 authorities' requirements and complete service of process in Mexico," Plaintiff moves the 27 Court for an order requiring the Clerk to issue an amended summons to state, in pertinent part: 28 You are hereby summoned and required to file with the Clerk of this Court and serve upon Plaintiff's attorney, Kyle A. Forsyth, whose address is P.O. Box 875,
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Ben Franklin Station, Washington, DC 20044, an answer to the complaint which is herewith served upon you, no later than the first business day occurring at least 21 calendar days (including Saturdays, Sundays, and legal holidays) after service of this summons upon you, exclusive of the day of service. If you fail to do so, judgment by default will be taken against you for the relief demanded in the complaint. (ECF No. 94-1 at 2-3). The requested language reflects the 2009 amendment to Rule 12 that provides twenty-one days for a defendant to answer a complaint. See Fed. R. Civ. P. 12(a)(1)(A)(i); see also Fed. R. Civ. P. 6(a)(1) ("When the period is stated in days or a longer unit of time: (A) exclude the day of the event that triggers the period; (B) count every day, including intermediate Saturdays, Sundays, and legal holidays; and (C) include the last day of the period, but if the last day is a Saturday, Sunday, or legal holiday, the period continues to run until the end of the next day that is not a Saturday, Sunday, or legal holiday."). Federal Rule of Civil Procedure 4(a) provides that "[t]he court may permit the summons to be amended." Fed. R. Civ. P. 4(a)(2). After review of the Motion and the record, the Court concludes that, pursuant to Rule 4(a), the Motion for Issuance of an Amended Summons should be granted. CONCLUSION IT IS HEREBY ORDERED that Plaintiff has shown cause why this action should not be dismissed for failure to prosecute as to the unserved Defendants. IT IS FURTHERED ORDERED that the Motion for Specially Authorized Service is GRANTED. (ECF No. 93). Pursuant to Federal Rule of Civil Procedure 4(f)(3), Plaintiff is authorized to serve the thirteen unserved Defendants via certified mail directed to their counsel of record, Robert Ted Parker, at his office located at: Parker Law Firm, 7 Mira Loma, Orinda, California 94563.2 // //
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The thirteen unserved Defendants are: Distribuidora Batiz, S.A. de C.V.; Grupo Batiz CGH, S.A. de C.V.; Greenver, S.A. de C.V.; Invernaderos la Pequena Jolla, S.A. de C.V., a/k/a 27 Invernaderos la Pequena Joya, S.A. de C.V.; Ricardo Batiz Gamboa; Silvia del Carmen Batiz Esquer; Raul Guillermo Batiz Guillen; Raul Guillermo Batiz Gamboa; Jorge Guillermo Batiz 28 Guillen; Jorge Guillermo Batiz Esquer; Gabriela Maria Batiz Gamboa; Angela Maria Batiz Gamboa; and Gerardo Batiz Esquer.
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IT IS FURTHER ORDERED that the Motion for Issuance of an Amended Summons

2 is GRANTED. (ECF No. 94). Pursuant to Federal Rule of Civil Procedure 4(a)(2), the Clerk 3 of the Court shall issue an amended summons in the form requested in Exhibit B to the Motion 4 for Issuance of an Amended Summons, ECF No. 94-3 at 1. 5 No later than ninety (90) days from the date this Order is filed, Plaintiff shall file a

6 status report regarding Plaintiff's efforts to serve the unserved Defendants. 7 DATED: November 3, 2010 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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WILLIAM Q. HAYES United States District Judge