Alfred E. Mann Living Trust v. ETIRC Aviation S.A.R.L.

78 A.D.3d 137, 910 N.Y.S.2d 418
CourtAppellate Division of the Supreme Court of the State of New York
DecidedOctober 19, 2010
StatusPublished
Cited by31 cases

This text of 78 A.D.3d 137 (Alfred E. Mann Living Trust v. ETIRC Aviation S.A.R.L.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alfred E. Mann Living Trust v. ETIRC Aviation S.A.R.L., 78 A.D.3d 137, 910 N.Y.S.2d 418 (N.Y. Ct. App. 2010).

Opinion

OPINION OF THE COURT

Saxe, J.P.

This appeal concerns the defense of improper service of process relied on by defendant guarantor Roland Pieper; specifically, he challenges the validity of service on him by e-mail while he was a resident of the Netherlands. The motion court rejected Pieper’s defense because of the guaranty’s provision waiving personal service of process and the provision in the related funding agreement, specifically referenced by the guaranty, authorizing service of notices, demands, requests or other communications by e-mail to Pieper at two specified e-mail addresses. For the reasons that follow, we affirm.

Plaintiff Alfred E. Mann Living Trust and defendant ETIRC Aviation S.A.R.L. entered into a funding agreement pursuant to which each agreed to provide $10 million in funding to a company known as Eclipse Aviation Corp. The parties further agreed that if the Trust provided ETIRC’s $10 million share of the funding, ETIRC would be obligated to repay the Trust pursuant to the terms of a $10 million promissory note. The Trust subsequently provided the entire $20 million in financing and, pursuant to the funding agreement, the promissory note was executed by ETIRC, with Pieper signing as ETIRC’s Managing Director. As the funding agreement required, Pieper also signed the separate unconditional, irrevocable and absolute personal guaranty covering ETIRC’s obligations, which guaranty is the subject of this appeal.

The note and the guaranty each explicitly provided that it was governed by the laws of New York and that any legal action [139]*139to enforce it could be brought in New York courts, and expressly waived Pieper’s right to service of process of any summons or complaint. Further, section 8 of the guaranty provides that “whenever any notice, demand, request or other communication shall or may be given to or served upon any party by any other party . . . each such notice, demand, request or other communication shall be delivered in accordance with the provisions of the Funding Agreement” (emphasis added). Section 8 of the funding agreement provides that such notice or service may be effected by e-mail to Pieper at two specified e-mail addresses.

It is undisputed that ETIRC defaulted on the promissory note and that the Trust served this CPLR 3213 motion on Pieper by e-mailing process to him at the addresses set forth in the funding agreement.

The comprehensive consent to jurisdiction, waiver of personal service, and waiver of any objection to lack of personal jurisdiction contained in the guaranty precludes a viable challenge to the court’s jurisdiction over plaintiff’s CPLR 3213 motion against Pieper. The provision reads:

“GUARANTOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN GUARANTOR AND LENDER PERTAINING TO THIS GUARANTY OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS GUARANTY; PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE GUARANTY OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER. GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND GUARANTOR HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. GUAR[140]*140ANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT.”

Nevertheless, Pieper disputes the propriety of service on him by e-mail, protesting that the guaranty did not authorize service of process by e-mail, and citing Maddaloni Jewelers, Inc. v Rolex Watch U.S.A., Inc. (2002 WL 31509881, 2002 US Dist LEXIS 21730 [SD NY, Nov. 6, 2002]) for the proposition that absent clear authorization of service by e-mail, a waiver of personal service is not sufficient to authorize service by e-mail. However, Maddaloni is not helpful, because unlike Pieper, the individual in that case who was served by e-mail and ordinary mail had not waived his right to formal service of process; rather, the court found, he had merely agreed to accept service on behalf of all the defendants. Pieper, by contrast, expressly waived, in writing, any right to formal service of process in an action under his guaranty.

Pieper cannot dispute that parties to a contract are free to contractually waive service of process (see e.g. Comprehensive Merchandising Catalogs, Inc. v Madison Sales Corp., 521 F2d 1210, 1212 [7th Cir 1975]; National Equip. Rental v DecWood Corp., 51 Misc 2d 999 [App Term 1966]; see generally 86 NY Jur 2d, Process and Papers § 7). By definition, such waivers render inapplicable the statutes that normally direct and limit the acceptable means of serving process on a defendant. Indeed, a stipulation waiving service confers jurisdiction, precluding the defendant from successfully challenging the court’s jurisdiction over him: “Jurisdiction over the person of the defendant may be acquired by his consent” (Gilbert v Burnstine, 255 NY 348, 355 [1931] [internal quotation marks and citation omitted]), and jurisdiction is conferred by a stipulation waiving service (id.).

Yet Pieper suggests, albeit without support, that the dictates of the Hague Convention as to service of process in the international context (Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 20 UST 361, TIAS No. 6638 [1965]) may not similarly be avoided by a written waiver.

Although the Convention, including its service requirements, must be treated as the law of the land (see Morgenthau v Avion Resources Ltd., 11 NY3d 383, 390 [2008], citing US Const, art VI, cl 2; see also Volkswagenwerk Aktiengesellschaft v Schlunk, [141]*141486 US 694 [1988]), we see no reason why the requirements of the Convention may not be waived by contract. Notably, in none of the cases Pieper relies on did the foreign defendants agree to waive service (see Volkswagenwerk, 486 US 694; Morgenthau, 11 NY3d 383; Sardanis v Sumitomo Corp., 279 AD2d 225 [2001]; Reynolds v Woosup Koh, 109 AD2d 97 [1985]). We observe that precluding a contractual waiver of the service provisions of the Hague Convention would allow people to unilaterally negate their clear and unambiguous written waivers of service by the simple expedient of leaving the country.

We conclude that Pieper’s waiver of personal service freed plaintiff from the requirements of law that would otherwise dictate the manner in which to serve Pieper with process — both under CPLR 308 and, given his presence in the Netherlands, under the Hague Convention.

Of course, while Pieper’s waiver of personal service and consent to jurisdiction prevents him from successfully interposing a jurisdictional defense, absent a waiver of his due process right to notice and an opportunity to be heard, he would still be entitled to notice of plaintiffs CPLR 3213 motion (see Fiore v Oakwood Plaza Shopping Ctr., 78 NY2d 572, 581 [1991], cert denied 506 US 823 [1992]). Therefore, if there had been no contractual provision directing the manner in which plaintiff was to communicate with Pieper in the event that “notice[s], demand[s], request[s] or other communication[s]” were to be “given to

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Bluebook (online)
78 A.D.3d 137, 910 N.Y.S.2d 418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alfred-e-mann-living-trust-v-etirc-aviation-sarl-nyappdiv-2010.