Morgenthau v. Avion Resources Ltd.

898 N.E.2d 929, 11 N.Y.3d 383
CourtNew York Court of Appeals
DecidedNovember 20, 2008
StatusPublished
Cited by23 cases

This text of 898 N.E.2d 929 (Morgenthau v. Avion Resources Ltd.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morgenthau v. Avion Resources Ltd., 898 N.E.2d 929, 11 N.Y.3d 383 (N.Y. 2008).

Opinion

OPINION OF THE COURT

Ciparick, J.

In this civil forfeiture action, we are asked to determine whether service of process pursuant to CPLR 313 on defendants in a foreign country is sufficient to confer personal jurisdiction or whether one must additionally satisfy the service requirements of that foreign locale. Because compliance with CPLR 313 alone constitutes proper service upon foreign defendants where, as here, no treaties or international agreements supplant New York’s service requirements, and because principles of international comity do not mandate a different result, service was sufficient. Plaintiffs were not compelled to serve defendants in accordance with the service requirements of the foreign nation, Brazil, via letters rogatory.

I.

The genesis of this appeal is a forfeiture proceeding initiated by plaintiff, New York County District Attorney Robert M. Morgenthau, seeking to obtain proceeds of an allegedly illegal international money transfer scheme engaged in by defendant depositors, operating out of Brazil. Defendants allegedly transferred money from Brazil to a Manhattan bank in violation of Brazilian monetary regulations and New York banking laws. Many of the defendants were indicted by a New York County grand jury and charged with violating Banking Law § 650 (2) (b) (1). Along with these pending indictments, plaintiff instituted this CPLR article 13-A forfeiture proceeding in Supreme Court, seeking $636,924,865 in alleged proceeds and [386]*386instrumentalities from the defendant depositors’ criminal, international banking activities1 (see CPLR 1311 [8]).

Before plaintiffs involvement in this matter, federal agents uncovered this alleged operation, which took place during a six-month period in 2002. Defendants utilized a money transfer station2 to transfer money from Brazil to the United States in violation of Brazilian currency laws. A bank employee in Manhattan received the money and set up parallel accounts at her bank.3 In 2002, after discovering these transfers and investigating the matter further, federal authorities obtained ex parte warrants from the United States District Court for the District of New Jersey, authorizing a seizure of just over $21 million, which had been deposited into the New York bank. The Government then transferred the funds to an undisclosed account within its control and obtained a criminal forfeiture order to freeze the money. Defendants moved in District Court to vacate that order. The court held that the Government had failed to demonstrate a rightful claim to the money and ordered that control of the funds be relinquished.

Subsequently, federal authorities approached District Attorney Morgenthau to ascertain his interest in proceeding with New York State prosecutions against defendants. On June 20, 2006, plaintiff commenced this civil forfeiture action pursuant to CPLR article 13-A and Supreme Court signed an ex parte temporary restraining order to freeze defendants’ assets. Later that day, plaintiff secured an order of attachment, also ex parte.4 In response, defendants claimed that plaintiff had failed to timely satisfy the order by failing to confirm it within five days as required by statute. Plaintiff then obtained a second order of attachment, claiming that any untimeliness in confirming the first order became moot. On August 8, 2006, Supreme Court [387]*387vacated the June 20 attachment order, and thereafter defendants moved to quash the second order of attachment.

During July 2006, plaintiff served 14 individual defendants and representatives of five corporate defendants in Brazil.5 As for certain defendants who allegedly could not be reached by personal service, plaintiff served their respective attorneys pursuant to an August 10 order of Supreme Court, permitting the use of alternative service methods under CPLR 308 (5), 311 (b) and 313. After defendants were indicted, plaintiff allegedly served many of them by mailing the summons and complaint to their attorneys. Most of the remaining defendants were served personally in Brazil by Brazilian law enforcement officials under an agreement with local New York authorities. Four other individuals were served under New York service procedures pursuant to CPLR 308 (2) and (4) via “delivery and mail” or “nail and mail.” Because service on those four defendants was not completed in a timely fashion, they are not affected by our holding today.

On February 8, 2007, Supreme Court vacated the second attachment order, noting that at the time the order was issued the funds were located beyond the court’s jurisdiction, in New Jersey. Additionally, Supreme Court dismissed the complaint, concluding that plaintiffs service of process failed to comply both with service requirements prescribed by the Inter-American Convention on Letters Rogatory and the service requirements of Brazil, which utilizes only letters rogatory or a letter of request transmitted through diplomatic channels, and with principles of comity.

The Appellate Division affirmed, finding no abuse of discretion in Supreme Court’s decision to decline to confirm the attachment orders (49 AD3d 50 [2007]). The court further held that plaintiffs service procedures were improper because they did not comply with Brazilian law and failed to defer to principles of international comity.6 Finally, the court stated that plaintiff did not effectuate service in accordance with the Mutual Legal Assistance Treaty in Criminal Matters, because serving defendants by Brazilian law enforcement authorities under an informal agreement with New York law enforcement authorities [388]*388did not comply with the treaty. The Appellate Division certified the following question: “Was the order of this Court, to the extent that it affirmed the order of the Supreme Court . . . properly made?”7 We answer that certified question in the negative and reinstate the complaint.8

II.

Defendants argue that plaintiff’s service was improper because it offends notions of international comity and requirements of international treaties and Brazilian law that service in Brazil be made exclusively via letters rogatory. Plaintiff argues that he was not obligated to serve defendants by letters rogatory because service made under a means recognized by CPLR 313 complies with due process requirements and constitutes proper service upon defendants outside of this state—there being no treaty or international agreement requiring otherwise. Plaintiff further argues that principles of comity do not warrant the importation of another country’s service of process rules. We agree with plaintiff that service pursuant to CPLR 313 is sufficient.

We begin with the words of the statute:

“A person domiciled in the state or subject to the jurisdiction of the courts of the state under section 301 or 302, or his executor or administrator, may be served with the summons without the state, in the same manner as service is made within the state, by any person authorized to make service within the state who is a resident of the state or by any person authorized to make service by the laws of the state, territory, possession or country in which service is made or by any duly qualified attorney, solicitor, [389]*389barrister, or equivalent in such jurisdiction” (CPLR 313).9

“As

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cannabis Impact Prevention Coalition, LLC v. New York State Cannabis Control Bd.
2025 NY Slip Op 25045 (New York Supreme Court, Albany County, 2025)
Paukman v. Uvaydov
2024 NY Slip Op 51689(U) (New York Supreme Court, Kings County, 2024)
Quinn v. GCB Capital, LLC
New York Supreme Court, 2023
Iraq Telecom Ltd. v. IBL Bank S.A.L.
43 F.4th 263 (Second Circuit, 2022)
Matter of United Jewish Community of Blooming Grove, Inc. v. Washingtonville Sch. Cent. Sch. Dist.
2021 NY Slip Op 34140(U) (New York Supreme Court, Albany County, 2021)
J-K Apparel Sales Co., Inc. v. Jacobs
2020 NY Slip Op 07360 (Appellate Division of the Supreme Court of New York, 2020)
Matter of Citigroup Global Mkts., Inc. v. Fiorilla
2017 NY Slip Op 5328 (Appellate Division of the Supreme Court of New York, 2017)
Madden International, Ltd. v. Lew Footwear Holdings Pty Ltd.
143 A.D.3d 418 (Appellate Division of the Supreme Court of New York, 2016)
John Wiley & Sons, Inc. v. Grossman
132 A.D.3d 559 (Appellate Division of the Supreme Court of New York, 2015)
Matter of B&M Kingstone, LLC v. Mega Intl. Commercial Bank Co., Ltd.
131 A.D.3d 259 (Appellate Division of the Supreme Court of New York, 2015)
Barclays Bank PLC v. Kemsley
44 Misc. 3d 773 (New York Supreme Court, 2014)
VisionChina Media Inc. v. Shareholder Reppesentative Services., LLC
109 A.D.3d 49 (Appellate Division of the Supreme Court of New York, 2013)
Premier Staffing Services of New York, Inc. v. RDI Enterprises, Inc.
39 Misc. 3d 978 (New York Supreme Court, 2013)
Romero v. Ramirez
100 A.D.3d 909 (Appellate Division of the Supreme Court of New York, 2012)
Brown v. Ryvkin
78 A.D.3d 981 (Appellate Division of the Supreme Court of New York, 2010)
Alfred E. Mann Living Trust v. ETIRC Aviation S.A.R.L.
78 A.D.3d 137 (Appellate Division of the Supreme Court of New York, 2010)
New York State Thruway Authority v. Fenech
29 Misc. 3d 644 (New York Supreme Court, 2010)
Cargill Financial Services International, Inc. v. Bank Finance & Credit Ltd.
70 A.D.3d 456 (Appellate Division of the Supreme Court of New York, 2010)
Koehler v. Bank of Bermuda Ltd.
911 N.E.2d 825 (New York Court of Appeals, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
898 N.E.2d 929, 11 N.Y.3d 383, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgenthau-v-avion-resources-ltd-ny-2008.