Hudson Insurance Company v. Klamath Superior Motor Company et al

Filing 93

OPINION AND ORDER: Hudson is ordered to serve Zachary J. Taylor or show cause why he cannot be served within 120 days of the entry of this Order. Failure to comply with the Court's order will result in the dismissal of defendant Zachary Taylor from this action without prejudice. Signed on 11/26/2019 by Judge Ann L. Aiken. (Mailed to Pro Se parties on 11/26/2019.) (ck)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MEDFORD DIVISION

HUDSON INSURANCE COMPANY,

Case No. 1:17-cv-00984-CL
OPINION AND ORDER

Plaintiff,
vs.
KLAivIATH SUPERIOR MOTOR
COMPANY INC., et al.,
Defendants.

AIIIBN, District Judge:
This case comes before the Court on a Findings and Recommendation ("F&R")
(doc. 89) issued by United States Magistrate Judge Mark Clarke. See 28 U.S.C. §
636(b); Fed. R. Civ. P. 72.
This is a statutory interpleader action brought by plaintiff Hudson Insurance
Company ("Hudson") to resolve competing claims to a $40,000 motor vehicle dealer
bond held by Hudson on behalf of defendant Klamath Superior Motor Company, Inc.
("Klamath Superior"). One claimant, Zachary J. Taylor, was overseas on active-duty

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military service with the United States Air Force when the action was filed. Shortly
after the action was filed, he communicated with Hudson's attorneys via email.
Taylor informed Hudson's attorneys that he was overseas on active-duty service and
that regular communication with them would be difficult. He also informed them
that Klamath Superior owed him $6,000 and expressed interest in pursuing his claim.
Eventually, Taylor stopped replying to Hudson's attorney's emails.

He was not

served, did not waive service, and has not otherwise appeared before the court.
On the stipulation of the parties who did appear, the Court set aside a share
of the interpleaded funds for Taylor. Then, the Court determined the claimants'
relative shares and ordered that the remainder of the bond be distributed to the other
claimants in a pro rata fashion. The case remained open to give Taylor an opportunity
to file his claim and potentially recover his share follO\ving his return from activeduty service.
When Taylor did not appear for over a year, Judge Clarke ordered Taylor to
submit his claim form or ,vithdraw his claim ,vithin 90 days and warned him that
failure to respond would result in dismissal of his claim. (Doc. 87). Taylor did not
respond, and Judge Clarke issued a Findings and Recommendation (doc. 89)
recommending that Taylor's claim be dismissed and the parties be ordered to submit
a proposed order to withdraw the remaining funds and interest. The matter is now
before me. 1

I No objections were timely filed. Although this relieves me of my obligation to perform a de
nova review, I retain the obligation to "make an informed, final determination." Britt v. Simi Valley
Unified Sch. Dist., 708 F.2d 452, ,15,J (9th Cil'. 1983), overruled on othe,· grounds, United States u.
Reyna-Tapia, 328 F.3d 1114, 1121-22 (9th Cir. 2003) (en bane). The Magistrates Act does not specify

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The record shows that no process was served upon Taylor and that Taylor did
not formally waive service or file any pleading. Taylor does not appear to have
communicated with the Court, formally or informally. Federal courts cannot exercise
personal jurisdiction over a defendant without proper service of process or the
defendant's consent to the court's exercise of jurisdiction. Omni Capital Int'/, Ltd. v.
Rndolf Wolff & Co., 484 U.S. 97, 104 (1987). Accordingly, the Court does not have

personal jurisdiction over Taylor and cannot dismiss his claim with prejudice.
Ordinarily, service must be accomplished by employing one of the methods
authorized in Rule 4(e). And, "[i]f a defendant is not served within 90 days after the
complaint is filed, the court-on motion or on its own after notice to the plaintiffmust dismiss the action without prejudice against that defendant or order that
service be made within a specified time." Fed. R. Civ. P. 4(m). That rule does not
apply, however, to service in a foreign country. Id.
Rule 4(1) governs service of an individual in foreign country and demonstrates
the complexity of the procedures that may be involved in effecting service
internationally. Under Rule 4(1), such individual may be served:
(1) by any internationally agreed means of service that is reasonably
calculated to give notice, such as those authorized by the Hague
Convention on the Service Abroad of Judicial and Extrajudicial
Documents;

a standard of rnview in cases where no objections arc filed. Ray u. Astrue, No. 3: 11-cv-69-S1', 2012 WL
1598239, *1 (D. Or. May 7, 2012). Following the recommendation of the Rules Advisory Committee, I
review the F&R for clear error on the face of the record[.]" Fed. R. Civ. P. 72 advisory committee's
note (1983) (citing Campbell u. United States District Court, 501 F.2d 196, 206 (9th Cir. 1974)); see also
United States v. Vonn, 636 U.S. 55, 64 n.6 (2002) (stating that, "[i]n the absence of a clear legislative
mandate, the Advisory Committee Notes provide a reliable source of insight into the meaning of' a
federal rule).
11

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(2) if there is no internationally agreed means, or if an international
agreement allows but does not specify other means, by a method that is
reasonably calculated to give notice:
(A) as prescribed by the foreign country's law for service in that
country in an action in its courts of general jurisdiction;
(B) as the foreign authority directs in response to a letter rogatory

or letter ofrequest; or
(C) unless prohibited by the foreign country's law, by:
(i) delivering a copy of the summons and of the complaint
to the individual personally; or
(ii) using any form of mail that the clerk addresses and
sends to the individual and that requires a signed receipt;
or
(3) by other means not prohibited by international agreement, as the
court orders.
Fed. R. Civ. P. 4(f). The time to effect service will depend on the authority followed,
but generally exceeds the 90-day deadline in Rule 4(111). See Fed. R. Civ. P. 4 advisory
committee's note (2016) (explaining the amendment to subsection 4(f)).
Some general authorities suggest that it may be possible to proceed in an
interpleader action whern personal jurisdiction over a defendant cannot be obtained.
See 48 C.J.S. Interpleader § 20 ("[W]here the court has jurisdiction of the subject
matter of the suit, it may be entitled to decide issues relating to the res even though
jurisdiction of the litigants cannot be obtained."). However, on the record before the
Court, there is no basis to conclude that personal jurisdiction over Taylor could not
be obtained.

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Accordingly, Hudson is ordered to serve Taylor within 120 days of the entry of
this order or show cause why he cannot be served by filing a status report with the
Court that explains the steps that Hudson has taken to find, contact, and serve Taylor
and how the parties propose the Court should proceed in this matter.
CONCLUSION

For the reasons stated above, Hudson is ordered to serve Zachary J. Taylor or
show cause why he cannot be served within 120 clays of the entry of this Order.
Failure to comply with the Court's order will result in the dismissal of defendant
Zachary Taylor from this action without prejudice.
IT IS SO ORDERED.
Dated t h i ~ ~ f November 2019.

Ann Aiken
United States District Judge

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