In The Matter Of The Estate Of Clemens Graf Droste Zu Vischering, J. Dixon Tews

• Court: Supreme Court of Iowa
• Decided: May 7, 2010
• Docket: 08–1888
• Status: Published

Opinion

IN THE SUPREME COURT OF IOWA No. 08–1888

Filed May 7, 2010

IN THE MATTER OF THE ESTATE OF CLEMENS GRAF DROSTE ZU VISCHERING, Deceased,

J. DIXON TEWS,

Appellant,

Appeal from the Iowa District Court for Mitchell County, Bryan H.

McKinley, Judge.

In proceedings to reopen an estate, the executor appeals from an

interlocutory order in which the district court determined it was

unnecessary for petitioners to comply with the Hague Service Convention

in serving process on the estate beneficiary, who resides in Germany.

DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED

FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.

Eric G. Hoch and Jerry P. Alt of Finley, Alt, Smith, Scharnberg,

Craig, Hilmes & Gaffney, P.C., Des Moines, for appellant.

Michael M. Sellers of Sellers, Heraldson and Binford, Des Moines,

for appellee. 2

BAKER, Justice.

In proceedings to reopen an estate, the executor appeals from an

interlocutory order in which the district court agreed with petitioners

that it was unnecessary for them to comply with international treaty

requirements for service abroad in serving process on the estate

beneficiary, who resides in Germany. We find the district court erred in

ruling that service of process on the estate beneficiary did not require

compliance with the Hague Service Convention.

I. Background Facts and Proceedings.

In April 2008, the petitioners filed an application in district court

to reopen the estate of Clemens Graf Droste Zu Vischering. All of the

petitioners were, at one time, tenants of a commercial building in West

Des Moines, Iowa. Clemens was the sole owner of this office building

from approximately 1982 until at least November 1997. Petitioners

allege Clemens breached their rental agreements and defrauded them by

using a secret formula to increase the rent charged for the office spaces

the petitioners occupied. They claim the lease language guaranteed

them a specific number of square feet of office space for the price being

charged pursuant to the terms of the written contracts. They have

petitioned to reopen the estate to procure the information necessary to

properly pursue their claims.

In November 1997, Clemens transferred his interest in the building

to a limited liability company, Vischering, L.L.C. Vischering, L.L.C.’s

principal place of business activity is located at the building in West Des

Moines. Clemens then sold his interest in the L.L.C. to his son Benedikt

Graf Droste zu Vischering. Clemens died on June 3, 1998. 3

A petition for the probate of Clemens’s will was filed in February

1999. Benedikt was the sole beneficiary of Clemens’s estate. Due to

Clemens’s status as a nonresident alien, there was a dispute with the

German taxing authority concerning the estate’s federal and state tax

liabilities. Clemens’s estate finally closed on October 5, 2006. At that

time, the court declared there were no claims filed against the estate.

The petitioners’ application to reopen the estate was filed on April

18, 2008. The district court issued an order scheduling a hearing on the

application and directing that a copy of the order and a copy of the

petitioners’ application be served upon Benedikt at his residence in

Germany. The executor of Clemens’s estate filed a resistance to the

petitioners’ application to reopen the estate.

The petitioners attempted to serve Benedikt at his residence in

Germany by mail on July 9, 2008, and through personal service on July

30, 2008. The executor moved to quash the service, claiming it was

defective as petitioners failed to comply with the Hague Convention on

the Service Abroad of Judicial and Extrajudicial Documents in Civil or

Commercial Matters [hereinafter “Hague Service Convention”]. The

estate alleged that the district court’s ruling demanded that Benedikt be

personally served in Germany, triggering the application of the Hague

Service Convention which required the petitioners serve him through the

German Central Authority and provide German translations of the

petition. Because the executor claimed the petitioners failed to comply

with these requirements, he asked the court to dismiss their claims

without prejudice as they failed to serve Benedikt with original notice

within ninety days of the filing of the petition. 4

Petitioners’ original claims were dismissed. A new case, involving

the same parties and claims, was filed against Clemens’s estate. In

connection with this case, the petitioners filed a supplemental

application to reopen the estate. The application also requested that the

court order direct personal service of Benedikt at his residence in

Germany in accordance with the court’s order concerning petitioners’

original claim. The court subsequently entered an order declaring the

executor’s motion to quash the service moot.

The executor filed a resistance to the petitioners’ supplemental

application. The district court ruled that service of process on Benedikt

did not require compliance with the Hague Service Convention. The

court reasoned that since neither Iowa Rule of Civil Procedure 1.305 or

Iowa Rule of Civil Procedure 1.306 define the applicable method of

serving process as requiring the transmittal of documents abroad, the

Hague Service Convention did not apply and petitioners were not

required to comply with its provisions. The court once again ordered

that a copy of the petitioners’ application, the amended application, and

the court’s order requiring notice be served on Benedikt at his residence

in Germany.

Soon after this order, the Clemens’s estate filed an application for

interlocutory appeal, claiming the district court erred in determining the

Hague Service Convention did not apply, and therefore the petitioners

were not required to comply with its provisions in serving Benedikt with

original notice. The estate also asked that the proceedings below be

stayed during the pendency of the appeal. The petitioners filed a

resistance to Benedikt’s appeal. We granted the executor’s application. 5

II. Scope of Review.

In federal court, the trial court’s interpretation of a treaty is subject

to de novo review. State v. Lopez, 633 N.W.2d 774, 781 (Iowa 2001)

(citing Blake v. Am. Airlines, Inc., 245 F.3d 1213, 1215 (11th Cir. 2001)).

Our review is, likewise, de novo. State v. Buenaventura, 660 N.W.2d 38,

44 (Iowa 2003). The meaning of the language used in a treaty, however,

is a question of law. Lopez, 633 N.W.2d at 781.

III. Discussion and Analysis.

The executor claims that the Hague Service Convention applies to

this case, and its requirements demand service of German-translated

original notice documents upon and through Germany’s Central

Authority. The Hague Service Convention is a multilateral treaty that

was formed in 1964 at the Hague Conference of Private International

Law. Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698,

108 S. Ct. 2104, 2107, 100 L. Ed. 2d 722, 730 (1988). We have never

had occasion to consider the Hague Service Convention and its interplay

with the Iowa Rules of Civil Procedure concerning the service of process

when the party to be served is living abroad in one of the signatory

countries to the Convention.

The Hague Service Convention was intended to revise parts of the

Hague Convention Treaties on Civil Procedure from 1905 and 1954. Id.;

Hague Convention on the Service Abroad of Judicial and Extrajudicial

Documents in Civil or Commercial Matters, Nov. 15, 1965 [1969], 20

U.S.T. 361, T.I.A.S. No. 6638. The revisions were intended to

simplify the service of process abroad so as to insure that judicial and extrajudicial documents to be served abroad are brought to the notice of the addressee in sufficient time, and to make available one method of service that will avoid the difficulties and controversy attendant to the use of other methods. 6

Marjorie A. Shields, Annotation, When Is Compliance with Hague

Convention on Service Abroad of Judicial and Extrajudicial Documents in

Civil and Commercial Matters, Art. 1 et seq., Required, 18 A.L.R. Fed. 2d

185, 197 (2007). Both the United States and Germany have ratified or

acceded to the Convention. Volkswagenwerk, 486 U.S. at 698, 108 S.

Ct. at 2107, 100 L. Ed. 2d at 730.

The scope of the Convention is defined by Article 1. Id. at 699, 108

S. Ct. at 2108, 100 L. Ed. 2d at 730. It states: “The present Convention

shall apply in all cases, in civil or commercial matters, where there is

occasion to transmit a judicial or extrajudicial document for service

abroad.” Hague Service Convention art.1, 20 U.S.T. at 362. The United

States Supreme Court has declared that this language is mandatory.

Volkswagenwerk, 486 U.S. at 699, 108 S. Ct. at 2108, 100 L. Ed. 2d at

730 (citing Société Nationale Industrielle Aérospatiale v. U.S. Dist. Ct., 482

U.S. 522, 534 n.15, 107 S. Ct. 2542, 2550 n.15, 96 L. Ed. 2d 461, 478

n.15 (1987)). “By virtue of the Supremacy Clause, U.S. Const. Art. VI,

the Convention pre-empts inconsistent methods of service prescribed by

state law in all cases to which it applies.” Id.

Our task is to determine whether this is a case to which the

Convention applies. The district court held that because the Iowa Rules

of Civil Procedure do not define the applicable method of serving process

in this case as requiring the transmittal of documents abroad, the Hague

Service Convention did not apply. The court came to this conclusion by

analyzing the requirements of Iowa Rules of Civil Procedure 1.305 and

1.306. 7

Iowa Rule of Civil Procedure 1.305 outlines acceptable forms of

personal service of original notice under Iowa law. Iowa R. Civ. P. 1.305.

The Rule provides in pertinent part:

Original notices are “served” by delivering a copy to the proper person. Personal service may be made as follows:

1.305(1) Upon any individual who has attained majority and who has not been adjudged incompetent . . . by serving the individual personally; or by serving, at the individual’s dwelling house or usual place of abode, any person residing therein who is at least 18 years old . . . .

....

1.305(14) If service cannot be made by any of the methods provided by this rule, any defendant may be served as provided by court order, consistent with due process of law.

Id. The district court determined that 1.305(14) was applicable in this

case because the court’s earlier order directed the petitioners to serve a

copy of the application to reopen the estate on Benedikt at his residence

Iowa Rule of Civil Procedure 1.306 states:

Service may be made on any . . . individual . . . as provided in rule 1.305 within or without the state or, if such service cannot be so made, in any manner consistent with due process of law prescribed by order of the court in which the action is brought.

Nothing herein shall limit or affect the right to serve an original notice upon any . . . individual . . . within or without this state in any manner now or hereafter permitted by statute or rule.

The court reasoned that the Hague Service Convention did not apply to

the case because the district court had ordered service in a manner

authorized by rule 1.305, and under rule 1.306 nothing could limit the

right to serve individuals outside Iowa utilizing the methods approved in

rule 1.305. The court indicated that following the requirements of the 8

Hague Service Convention would have limited or affected the ability to

serve those outside the state with personal service.

We find the district court erred in both its interpretation of the

controlling case law and its application of Iowa Rule of Civil Procedure

1.306. The Supreme Court decision in Volkswagenwerk holds that

American plaintiffs need not serve foreign defendants at locations abroad

if the law of the forum state allows for plaintiffs to serve the defendant’s

domestic agent within the United States. Volkswagenwerk, 486 U.S. at

707, 108 S. Ct. at 2112, 100 L. Ed. 2d at 735–36. Volkswagenwerk

concerned a wrongful death action brought against Volkswagen of

America, Inc. Id. at 696, 108 S. Ct. at 2106, 100 L. Ed. 2d at 728–29. In

Volkswagenwerk, the plaintiff successfully served Volkswagen of

America, but Volkswagen of America denied it had designed or

assembled the automobile at issue. Id. The plaintiff amended the

complaint to include Volkswagen Aktiengesellschaft, Volkswagen of

America’s German parent company. Id. The plaintiff then served

Volkswagen Aktiengesellschaft by serving Volkswagen of America as its

agent. Id. at 697, 108 S. Ct. at 2106, 100 L. Ed. 2d at 729. Illinois, the

state where Volkswagen of America was registered to do business, has a

long-arm statute that authorizes plaintiffs to serve foreign defendants by

substituted service on their domestic agents. Id. at 706, 108 S. Ct. at

2111–12, 100 L. Ed. 2d at 735. The Court determined that the Illinois

long-arm statute provided “ ‘notice reasonably calculated, under all the

circumstances, to appraise interested parties of the pendency of the

action and afford them an opportunity to present their objections.’ ” Id.

at 707, 108 S. Ct. at 2112, 100 L. Ed. 2d at 735 (quoting Mullane v.

Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 9

657, 94 L. Ed. 865, 873 (1950)). The Court also determined that

Volkswagen of America was the domestic agent of Volkswagen

Aktiengesellschaft. Id. Because the Court determined that service on a

domestic agent is valid and service abroad was not required, the Court

held that the Hague Service Convention did not apply. Id.

In the case at issue, the district court ordered the petitioners to

serve Benedikt at his residence in Germany and, in fact, documents have

been served abroad, first by mail and then by personal service. “If the

. . . forum state defines the applicable method of serving process as

requiring the transmittal of documents abroad, then the Hague Service

Convention applies.” Id. at 700, 108 S. Ct. at 2108, 100 L. Ed. 2d at

731. While the internal law of the forum state may determine whether

serving notice on a defendant must be accomplished through personal

service abroad, once the court orders documents to be transmitted

abroad, the provisions of the Convention apply. Id.

Iowa Rule of Civil Procedure 1.306 allows for defendants outside of

Iowa to be served in the manners set forth in rule 1.305. Iowa R. Civ. P.

1.306. It also states that “[n]othing herein shall limit or affect the right

to serve an original notice upon any . . . individual . . . within or without

this state in any manner now or hereafter permitted by statute or rule.”

Id. The district court appears to have interpreted this provision as

declaring that anything that conflicts with the methods of service allowed

by the law of Iowa is void or need not be followed.

The Supremacy Clause establishes the United States Constitution,

federal statutes, and U.S. treaties as “the supreme Law of the Land.”

U.S. Const., Art. VI, § 2. The United States has ratified the Hague

Service Convention. Volkswagenwerk, 486 U.S. at 698, 108 S. Ct. at 10

2107, 100 L. Ed. 2d at 730. It is the supreme law of the land and pre-

empts any inconsistent service methods allowed by state law. Id. at 699,

108 S. Ct. at 2108, 100 L. Ed. 2d at 730. Iowa Rules of Civil Procedure

do not trump the Hague Service Convention and allow Benedikt be

personally served in Germany when the Convention requires that he be

served through the German Central Authority. See Eto v. Muranaka, 57

P.3d 413, 420 (Haw. 2002) (“It is evident, then, that Hawai‘i law cannot

override the Hague Convention, when the Convention applies.”). The

district court erred in determining the Hague Service Convention did not

apply in this case. Having determined that the Hague Service Convention applies, we must determine if the manner of service complies with the Convention. Three liberal methods of service employed by the petitioners are permitted under the Hague Service Convention. Dahya v. Second Judicial Dist. Court ex rel. County of Washoe, 19 P.3d 239, 242 (Nev. 2001). First, service may go through the central authority of the receiving country. Id. (citing Hague Service Convention art. 5, 20 U.S.T. at 362). Second, service may go through diplomatic or consular agents that the receiving country considers “non-objectionable.” Id. (citing Hague Service Convention art. 8–11, 20 U.S.T. at 363–64). Third, service may be done by any method permitted by the internal law of the receiving country. Id. (citing Hague Service Convention art. 19, 20 U.S.T. at 365). In Germany, service is only permitted through the Central Authority although personal service may be affected by court personnel if specifically requested through the Central Authority. Hague Convention Conference on Private International Law, Germany—Central Authority & practical information, Replies to the 2003 and/or 2008 Service Convention Questionnaire, http://www.hcch.net/index_en.php?act=auth 11

orities.details&aid=257 (detailing Germany’s objection to Article 10 of the Convention which allowed for direct personal service); see also Hague Service Convention art. 10, 20 U.S.T. at 363 (providing authority for the country of destination to object to the methods of service allowed by Article 10 of the Convention). The petitioners attempted to serve Benedikt at his residence in Germany by mail and through personal service. The record contains a return receipt which confirms that they attempted to serve Benedikt personally in compliance with German law through the Coesfeld District Court in Germany; however we are unable to discern if this attempted service was properly commenced through the Central Authority. We are also unable to determine whether the documents were translated into German before being served. As these are two central requirements of the Hague Service Convention, on this record we are unable to determine whether the petitioners complied with the requirements of the Convention. IV. Disposition. We hold the district court erred in ruling that service of process on Benedikt did not require compliance with the Hague Service Convention and that the petitioners need not comply with the Convention’s requirements of German-translated documents sent through the German Central Authority. The case is remanded to determine if service as accomplished complied with the requirements of the Hague Service Convention. DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.