United States District Court, W.D. Kentucky, Louisville Division
PHOENIX PROCESS EQUIPMENT CO. PLAINTIFF
CAPITAL EQUIPMENT & TRADING CORPORATION, et al DEFENDANTS
MEMORANDUM OPINION & ORDER
H. McKinley, Jr., Chief Judge.
matter is before the Court on a motion to reconsider portions
of the Court's January 13, 2017 memorandum opinion and
order by Defendants Capital Equipment & Trading
Corporation, Coralina Engineering, LLC, and Alexander
Chudnovets (DN 60), as well as a motion for authorization of
substituted service by Plaintiff Phoenix Process Equipment
Co. (DN 66.) Fully briefed, these matters are ripe for
Coralina and Chudnovets filed a motion to dismiss pursuant to
Fed.R.Civ.P. 12(b)(2), (5), (6), and the doctrine of forum
non conveniens, and Trading Corporation filed a motion to
dismiss pursuant to Fed.R.Civ.P. 12(b)(6). The Court's
memorandum opinion and order on January 13, 2017, granted the
motions to dismiss Counts II and V and denied the motions to
dismiss Counts III and IV. The Court also denied Coralina and
Chudnovets' motion to dismiss for lack of personal
jurisdiction and forum non conveniens as it pertained to both
defendants. Finally, the Court denied the motion to dismiss
for insufficient service as to Chudnovets, but it granted the
motion as to Coralina and quashed service upon it. Trading
Corporation, Coralina, and Chudnovets now move for
reconsideration of the Court's decisions regarding
personal jurisdiction over Coralina and Chudnovets, service
of process on Chudnovets, and the civil conspiracy claim.
Phoenix also now moves for authorization to serve Coralina
via its Kentucky-based attorney.
Standard of Review
Civ. P. 59(e) permits a court to “alter or amend”
its prior judgment for one of four reasons: “(1) a
clear error of law; (2) newly discovered evidence; (3) an
intervening change in controlling law; or (4) a need to
prevent manifest injustice.” Schlaud v.
Snyder, 785 F.3d 1119, 1124 (6th Cir. 2015) (citations
omitted). However, Rule 59(e) is a limited rule, whose
purpose is “to allow the [Court] to correct its own
errors” that are timely presented. Howard v. United
States, 533 F.3d 472, 475 (6th Cir. 2008) (citations
omitted). It is not an opportunity for the losing party to
simply offer old arguments a second time or “to offer
additional arguments in support of its position” that
were not properly presented initially. Elec. Ins. Co. v.
Freudenberg-Nok, Gen. P'ship, 487 F.Supp.2d 894, 902
(W.D. Ky. 2007).
Motion For Reconsideration
Service of Process
first asks this Court to reconsider its previous decision
that Phoenix sufficiently served process upon him. Phoenix
served Chudnovets by sending process via certified mail to
2042 Brentwood Drive, Houston, Texas, the address on file for
Chudnovets as CEO of Trading Corporation with the Texas
Secretary of State. As a result of a mail forwarding
directive, it was delivered to 2727 Kirby Drive, Houston,
Texas, a high rise condominium building that Chudnovets has
never been to. The certified mail was delivered and
apparently signed for by a doorman at the building. The Court
previously held that Chudnovets was sufficiently served, as
the Hague Service Convention, 20 U.S.T. 361, was not
implicated due to service being effected within the United
States, and that service of process otherwise complied with
the Texas Rules of Civil Procedure. (DN 57, at 12-13.)
Chudnovets argues that this service was insufficient, as it
failed to comply with the requirements for service of a
foreign resident under the Hague Convention, which preempts
other methods of service permitted under the Federal Rules of
Civil Procedure. He also argues that even if the Hague
Convention was not implicated, service was insufficient under
the Texas Rule of Civil Procedure.
Hague Service Convention states that it “shall apply 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. However, the Supreme
Court has stated that, “[i]f the internal law of the
forum state defines the applicable method of serving process
as requiring the transmittal of documents abroad, then the
Hague Service Convention applies.” Volkswagenwerk
Aktiengesellschaft v. Schlunk, 486 U.S. 694, 700 (1988).
As a result, when the laws of the forum state allow for
service to be effected within the United States, then service
need not comply with the Convention, even if the individual
being served is a foreign resident.
Court previously found that Rule 4(e)(1) permitted Phoenix to
serve Chudnovets according to the Texas Rules of Civil
Procedure, as that was the state in which service would be
effected. Because the Texas rules did not require service to
be transmitted abroad, the Hague Convention was not
implicated. Chudnovets argues that Rule 4(e) is inapplicable,
since Chudnovets is a resident of a foreign country; instead,
service must be effected under Rule 4(f), which would require
compliance with the Hague Convention. Based on this argument,
the Court must determine whether service under Fed.R.Civ.P.
4(e) is permissible when the party being served is a foreign
individual. At first glance, the answer would appear to be
no, as Rule 4(e) is titled “Serving an Individual
Within a Judicial District of the United States.”
Likewise, Rule 4(f) is titled “Serving an Individual in
a Foreign County.” The most grammatical reading of
those titles implies that each rule will provide the method
for serving an individual when that individual is located
either in a judicial district of the United States (4(e)) or
abroad (4(f)). However, the actual text of the rules implies
otherwise. Rule 4(e) reads, in pertinent part,
Unless federal law provides otherwise, an individual . . .
may be served in a judicial district of the United States
by following state law for serving a summons in an action
brought in courts of general jurisdiction in the state where
the district court is located or where service is made[.]
(subdivisions omitted). Rule 4(f) likewise reads, in
Unless federal law provides otherwise, an individual . . .
may be served at a place not within any judicial district of
the United States by any internationally agreed means of
service that is reasonable calculated to give notice, such as
those authorized by the Hague Convention on the Service
Abroad of Judicial and Extrajudicial Documents[.]
rules make no mention of the location of the individual upon
whom service is being effected. Instead, all references to
location are to the location of where service is being
effected. This reading of the rules harmonizes with
well-accepted methods of service, such as serving an
appointed agent, that are acknowledged by the federal rules
and the rules of many states. E.g., Fed.R.Civ.P.
4(e)(2)(C); Ky. R. Civ. P. 4.04. An individual who is
actually located abroad is certainly permitted, and sometimes
required, to appoint an agent located within the United
States to receive service on their behalf, and the fact that
individual is located abroad does not mean that Rule 4(f)
must instead be invoked. See also Calista Enter. Ltd. v.
Tenza Trading Ltd., 40 F.Supp.3d 1371, 1376 n.
2 (D. Or. 2014) (“[I]f service is properly effected
under Rule 4(e)(2)(B) by delivery at the person's
dwelling located within a judicial district of the United
States, the Convention is not triggered simply because the
person being served may, at the time of service, be
vacationing in the Czech Republic”). The text of the
rules reference the location of the service being effected,
not the location of the individual to be served. Therefore,
so long as the Texas Rules of Civil Procedure permitted
service upon an individual abroad to be effected within the
United States, then service of process fell wholly within
Rule 4(e), and the Hague Convention is not implicated at all.
Accord Charles v. Sanchez, 2013 WL 12087219, at *3
(W.D. Tex. Aug 5, 2013) (“Rule 4(e)(1) . . . allows a
plaintiff to serve a foreign individual within a
judicial district of the United States pursuant to the law of
the state in which the district court is located [or service
is effected] . . . the Hague Convention is not initially
applicable because service was not effected in [the
foreign country]”) (emphasis in original).
Court previously found that Texas allows for service by
certified mail at “the defendant's usual place of
business or usual place of abode or other place where the
defendant can probably be found.” Tex.R.Civ.P. 106(b).
Because Chudnovets could “probably be found” at
the company address listed with the Secretary of State, the
Court found that the Texas rules for service of process did
not “requir[e] the transmittal of documents abroad,
” and the Hague Convention was not implicated at all.
Chudnovets now argues that the Texas Rules of Civil Procedure
do not allow service by direct mail for ...