Nicholson v. Yamaha Motor Co.

WILNER, Judge. Appellant, who now undoubtedly wishes that he hadn’t, purchased a 1982 Yamaha motorcycle, Model XJ 400J. The motorcycle was manufactured by Yamaha Motor Company Ltd. of Japan, a Japanese corporation (Yamaha Japan). It entered the American stream of commerce through Yamaha Japan’s American distributor, Yamaha Motor Corporation, U.S.A.

(Yamaha America), which, in turn, distributed it to a regional distributor, Maryland Yamaha, Inc. (Yamaha Maryland). Yamaha Maryland ultimately sold the vehicle to appellant. On November 21, 1984, while driving his motorcycle in Baltimore City, appellant was struck by an automobile that made a left turn into his path. As a result of the collision, appellant suffered injury to his left leg.

Believing that his injuries were due, at least in part, to the absence of a crash bar or other protective device on the motorcycle, he sued all three Yamaha corporations in the Circuit Court for Baltimore City. Appellant attempted service on Yamaha Japan by sending a copy of the complaint and writ of summons to its president in Japan by registered mail, return receipt requested. A receipt, signed by one Tomoko Kato, was eventually returned. Nonetheless, Yamaha Japan successfully moved to quash the service as not being in accord with the requirements for service on a Japanese defendant set forth in a 1965 treaty to which the United States and Japan are parties. 1 The other two defendants moved to dismiss the ⁶⁹⁸ complaint on more substantive grounds, basically that it failed to state a cause of action.

Those motions were granted, with leave to amend. Appellant thereupon filed an amended complaint alleging five causes of action against the three defendants — “gross negligence” in the design of the motorcycle and in the defendants’ failure to warn of the defect in design (Count One), breach of implied warranties of safety, fitness, and merchantability (Count Two), strict liability for design defect (Count Three), strict liability for failure to warn (Count Four), and misrepresentation (Count Five). He made no attempt to serve the amended complaint directly on Yamaha Japan but instead served that defendant’s copy on the attorneys who had entered their appearance on behalf of Yamaha America and who had filed the earlier motion to quash on behalf of Yamaha Japan. Eventually, the court disposed of the case by (1) granting Yamaha Japan’s motion to dismiss for lack of effective service and (2) granting motions to dismiss, which it treated as motions for summary judgment, filed by the other two defendants based on failure to state a cause of action.

In this appeal, appellant complains about the dismissal of Yamaha Japan and the judgment entered for the other defendants with respect to four of the five counts in the amended complaint. He makes no argument with respect to the judgment as to Count Five (Misrepresentation). SERVICE ON YAMAHA JAPAN When he filed his initial complaint, appellant treated all three defendants as completely separate entities and attempted service on each individually. Service on Yamaha America was obtained by serving process on its president, ⁶⁹⁹ Takeshi Kimura, in Cypress, California; service on Yamaha Maryland was effected by serving process on one Joseph H. Rouse in Glen Burnie, Maryland.

Yamaha Japan was alleged to be “a foreign corporation doing business in the State of Maryland”; service on it was attempted by sending a copy of the complaint, prayer for jury trial, and summons, all in English, to its president, Hideto Eguchi, in Iwata City, Japan, by certified mail. As we observed, the material sent to Mr. Eguchi was apparently received by someone else, Tomoko Kato. The record does not reveal Mr. Kato’s connection with Yamaha Japan. Although never denying the actual receipt of the papers sent by appellant, Yamaha Japan responded with a motion to quash the service as not being in accord with the Hague Convention.

In November, 1986, the court granted that motion. Appellant made no further effort to serve Yamaha Japan directly. He attempted to serve the amended complaint, which was filed about a month before the court’s ruling on the motion to quash, on Yamaha Japan by serving a copy on counsel for Yamaha America. That too the court found wanting.

In this appeal, appellant urges that service was properly effected on Yamaha Japan (1) by sending the process to its president by restricted delivery mail pursuant to Rule 2-121(a) and (2) by serving the amended complaint on its “domestic agent,” Yamaha America. We have considerable difficulty with the second of these propositions under the facts of this case, but we need not reach that issue because we find merit in the first argument. The Hague Convention, which revised parts of two earlier treaties on the subject, “was intended to provide a simpler way to serve process abroad, to assure that defendants sued in foreign jurisdictions would receive actual and timely notice of suit, and to facilitate proof of service abroad.” Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 , 108 S.Ct. 2104, 2107 , 100 L.Ed.2d 722 (1988). The Convention applies, and its procedures must be gratified, “in all cases, in civil and commercial matters, where there is ⁷⁰⁰ occasion to transmit a judicial or extrajudicial document for service abroad.” Art. 1; 20 U.S.T. 361, 362.

The mechanism devised by the Convention for achieving its several purposes is the creation or designation by each adherent of a Central Authority to receive requests for service of documents from other countries and to serve those documents in accordance, or in a manner consistent, with the internal law of the recipient nation. Art. 5 of the Convention, being part of the Chapter on “Judicial Documents,” states, in relevant part, that: “The Central Authority of the State addressed shall itself serve the document or shall arrange to have it served by an appropriate agency, either— (a) by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its territory, or (b) by a particular method requested by the applicant, unless such a method is incompatible with the law of the State addressed.” Art. 3 of the Convention requires the “authority or judicial officer” competent under the law of the requesting State to forward to the Central Authority of the recipient State “a request conforming to the model annexed to the present Convention” accompanied by “[t]he document to be served or a copy thereof____” Upon service of the document, the Central Authority prepares and sends to the applicant a certificate attesting to the service and stating the date, place, and method of service and the person served. Id. at art. 6. Japan designated its Minister of Foreign Affairs as its Central Authority under the Convention.

Appellant concedes that he never sent either a request or the relevant documents to the Minister for service on Yamaha Japan. The method of service particularly selected by the Convention, therefore, was not used. Service through a Central Authority is not necessarily an exclusive method of serving defendants resident in party- ⁷⁰¹ nations. The Convention itself allows for alternative methods under certain circumstances, and in Volkswagenwerk Aktiengesellschaft v. Schlunk, supra, 108 S.Ct. 2104 , the Supreme Court concluded that the Convention did not apply when process is served on a foreign corporation through service on a domestic subsidiary deemed under State law to be the foreign corporation’s involuntary agent for service.

Of the several alternative methods provided for in the Convention itself, appellant relies on two — art. 10 and art. 19. 2 Art. 10 states: “Provided the State of destination does not object, the present convention shall not interfere with— (a) the freedom to send judicial documents, by postal channels, directly to persons abroad, (b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination^] (c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.” (Emphasis added.) Japan did indeed object to paragraphs (b) and (c), and so only paragraph (a) of art. 10 applies with respect to Japanese defendants. Art. 19 provides: “To the extent that the internal law of a contracting State permits methods of transmission, other than those provided for in the preceding articles, of documents coming from abroad, for service within its territory, the present Convention shall not affect such provisions.” ⁷⁰² Appellant argues that service of process by mail is allowed under Maryland law by Md. Rule 2-121 and under Japanese law by articles 162, 169, 170, 171, and 172 of the Japanese Code of Civil Procedure. Accordingly, he contends, service by certified mail directed to the president of Yamaha Japan does not offend the Convention and indeed is permissible under articles 10(a) and 19. There are two different questions here: first, whether the authority in art. 10(a) “to send judicial documents, by postal channels, directly to persons abroad” (emphasis added) includes the authority to serve process by those channels; and, second, whether internal Japanese law permits service of process in that manner.

We shall deal with the second of these questions first, as it affects, to some extent, our analysis of the first question. The sections of the Japanese Code of Civil Procedure cited by appellant are part of Book I, Ch. IV, § 3, dealing with Service. Section 3 consists of articles 160-81.

Article 161 states the general principle that “[t]he business relating to service shall be administered by a court clerk.” Article 162 permits service to be effected “by a bailiff or by mail” but provides that “[i]n regard to service by mail, a postman shall be an official effecting service.” Succeeding articles in § 3 deal with the manner of effecting service, where service may be made, and upon whom it may be made. There is no doubt that service may be effected by mail. Article 162 makes that clear as do articles 170 and 172. It also seems clear, however, when these succeeding articles are read in conjunction with articles 161 and 162, that, whatever method is used, it is the clerk or. his agent that must make the service.

Robert W. Peterson makes that point succinctly in Jurisdiction and the Japanese Defendant, 25 Santa Clara L. Rev. 555 , 577 (1985): “Civil law countries generally view service of process as a purely sovereign act; consequently, they require service to be made through government officials or official channels. Japan, whose legal system is modeled after the German Civil Code, is no exception. The Japanese ⁷⁰³ Civil Procedure Code provides 'All matters concerning service shall be handled by court clerks.’ Unlike the American practice, neither Japanese attorneys nor private citizens may serve process either in Japan or abroad. When process is served by mail in Japan, the court clerk uses a special form of mail.

The court clerk stamps the outside of the envelope with a notice of special service (‘tokubetsu sootatsu’). The mail-carrier acts as a special officer of the court by recording the proof of delivery on a special proof of service form and returning it to the court clerk.” (Footnotes omitted; emphasis added.) See also Y. Fujita, Service of American Process Upon Japanese Nationals by Registered Airmail and Enforceability of Resulting American Judgments in Japan, 12 Law in Japan 69 (Z. Kitagawa ed. 1985). At 73, Mr. Fujita states: “Service of process (sotaisu) is clearly distinguished from a mere notification (isuchi), requiring no officiality or formality. The official formality is required to warn the addressee that an authoritative, public action has been taken against him, as well as to prevent future disputes as to whether a sufficient notice has been given.

In an ordinary domestic case, indeed, delivery of a Japanese summons and complaint is usually done by a mailman rather than a bailiff or clerk, the mailman acting by law as an officer of the court. In that sense, one might say that service by mail is not inconsistent with Japanese internal law. However, ‘any form of mail’ is not sufficient. The special form, bearing the stamp ‘tokubetsu sotatsu’ (special service) as described by law, is required.

This special form of mail is not accessible to anyone but a court clerk, and the proof of service is documented by the mailman in a special form and submitted to the court in accordance with the law. Therefore, service of process by mml in Japan cannot be attempted or effected by any private person; service by ⁷⁰⁴ mail avoids inconsistency with Japanese internal law only when resorted to by a court clerk.” (Footnotes omitted; emphasis added.) The formality of this process in Japan — the commitment of it to the court clerk — raises the question of whether, in acceding to art. 10(a) of the Hague Convention, Japan intended to permit foreign citizens to do what its own citizens could not do — serve Japanese defendants in Japan directly by mail. American courts are very much divided on that issue. The courts and commentators taking the negative of the issue and holding that art. 10(a) does not permit direct mail service of a Japanese citizen in Japan stress the incongruity of the contrary approach.

They also look at the particular language of art. 10(a), which speaks of the freedom “to send” judicial documents by postal channels, and contrast it with art. 10(b) and (c), which were rejected by Japan, allowing foreign plaintiffs “to effect service” of judicial documents through Japanese judicial officers or other officials. This difference in language, they conclude, suggests that art. 10(a) does not encompass documents that require formal service. A good, and representative, exposition of this view is found in Suzuki Motor Co. v. Superior Court, 200 Cal.App.3d 1476, 1481 , 249 Cal.Rptr. 376 (1988): “Given the fact that Japan itself does not recognize a form of service sufficiently equivalent to America’s registered mail system, it is extremely unlikely that Japan’s failure to object to Article 10, subdivision (a) was intended to authorize the use of registered mail as an effective mode of service of process, particularly in light of the fact that Japan specifically objected to the much more formal modes of service by Japanese officials which were available in Article 10, subdivisions (b) and (c). Instead, it seems much more likely that Japan interpreted Article 10, subdivision (a) as allowing only the transmission of judicial documents, rather than the service of process.

This interpretation is all the more reasonable given the fact that the Convention persistently refers to ⁷⁰⁵ ‘service’ as opposed to ‘send,’ e.g., ‘forward documents, for the purpose of service’ (Article 9, [emphasis] added); ‘transmission of judicial documents for service’ (Article 14 [emphasis] added); and ‘transmitted abroad for the purpose of service’ (Arts. 15 and 16, [emphasis] added), in contrast to ‘the freedom to send judicial documents, by postal channels, directly to persons abroad, ... ’ (Art. 10, subd. (a), [emphasis] added). (1) It is a well-recognized canon of statutory interpretation that words in a statute or similar enactment are to be given their common and ordinary meaning ..., and that every word and phrase used is presumed to have a meaning and to perform a useful function____ (2) To interpret the phrase ‘to send’ as used in Article 10, subdivision (a) of the Convention to mean ‘to serve’ would fly in the face of both these rules; the common and ordinary meaning of ‘to send’ is ‘to cause to be conveyed by an intermediary to a destination’ or ‘to dispatch, as by mail or telegraph’ (see ‘send,’ The American Heritage Diet, of the English Language (1969) p. 1179) not ‘to serve,’ and the fact the Convention’s drafters used both the phrase ‘to send’ and the phrase ‘service of process’ indicates they intended each phrase to have a different meaning and function.” (Citations omitted.) For other cases and articles adopting this view, see Mommsen v. Toro Co., 108 F.R.D. 444 (S.D.Iowa 1985); Pochop v. Toyota Motor Co., Ltd., 111 F.R.D. 464 (S.D.Miss.1986); Cooper v. Makita, U.S.A., Inc., 117 F.R.D. 16 (D.Me.1987); Bankston v. Toyota Motor Corp., 123 F.R.D. 595 (W.D.Ark.1989); Hantover, Inc. v. Omet, S.N.C. of Volentieri & C., 688 F.Supp. 1377 (W.D. Mo.1988); Ordmandy v. Lynn, 122 Misc.2d 954 , 472 N.Y. S.2d 274 (1984); Reynolds v. Koh, 109 A.D.2d 97 , 490 N.Y.S.2d 295 (App.Div.1985); see also R. Peterson, supra, 25 Santa Clara L.Rev. at 577-78; Y. Fujita, supra, 12 Law in Japan at 73, 80; E. Routh, Litigation Between Japanese and American Parties, A.B.A., Current Legal Aspects of Doing Business in Japan and East Asia 188, 190 (J. Haley ed. 1978). ⁷⁰⁶ The contrary view was first expressed by another California court. In Shoei Kako Co. v. Superior Court, 33 Cal.App.3d 808, 821 , 109 Cal.Rptr. 402 (1973), the Court noted the difference in language between art. 10(a) and the other articles of the Convention and considered the argument that the freedom “to send” documents provided for in art. 10(a) did not encompass documents required to be “served.” It concluded, however, at 821 that: “Although there is some merit to the proposed distinction it is outweighed by consideration of the entire scope of the convention.

It purports to deal with the subject of service abroad of judicial documents. The reference to 'the freedom to send judicial documents by postal channels, directly to persons abroad’ would be superfluous unless it was related to the sending of such documents for the purpose of service. The mails are open to all. Moreover, the reference appears in the context of other alternatives to the use of the 'Central Authority’ created by the treaty.

If it be assumed that the purpose of the convention is to establish one method to avoid the difficulties and controversy attendant to the use of other methods ..., it does not necessarily follow that other methods may not be used if effective proof of delivery can be made.” (Citations omitted.) The Court observed that ratification of the Hague Convention by the United States Senate came only four years after promulgation of Rule 4(i)(1)(D) of the Federal Rules of Civil Procedure, allowing service in a foreign country by any form of mail requiring a signed receipt, addressed to the person to be served. It suggested, then, that, in approving art. 10(a), the Senate would not have intended to abrogate “what it had impliedly approved four years earlier” but found it “more reasonable to infer that in approving subdivision (a) of article 10 the Senate intended to retain service by mail, as provided in subdivision (i) of rule 4, as an effective method of service of process in a foreign country ⁷⁰⁷ unless that country objected to those provisions.” Id. at 821-22 , 109 Cal.Rptr. 402 . Finally, the Court noted: “[I]t does not appear that service by mail with evidence of delivery is not ‘a method prescribed by the internal law of [Japan] for the service of documents in domestic actions upon persons who are within its territory____’ (Art. 15, subd. (a).) From all that appears in the record the internal law of Japan permits transmission by postal channels of documents coming from abroad for service within its territory.

The failure to object to the provisions of subdivision (a) of article 10 may be so construed.” Shoei, supra, 33 Cal.App.3d at 822 , 109 Cal.Rptr. 402 (footnote omitted). For other cases and articles supporting that view and holding that service by registered mail is acceptable under art. 10(a), see Ackermann v. Levine, 788 F.2d 830, 839 (2d Cir.1986); Zisman v. Sieger, 106 F.R.D. 194, 199 (N.D.Ill.1985); Chrysler Corp. v. General Motors Corp., 589 F.Supp. 1182, 1206 (D.C.1984); Weight v. Kawasaki Heavy Industries, Ltd., 597 F.Supp. 1082, 1085-86 (E.D.Va.1984); Lemme v. Wine of Japan Import, Inc., 631 F.Supp. 456, 463-64 (E.D.N.Y.1986); Newport Components v. NEC Home Electronics, 671 F.Supp. 1525, 1541-42 (C.D.Cal.1987); Smith v. Dainichi Kinzoku Kogyo Co., Ltd., 680 F.Supp. 847, 850 (W.D.Tex.1988); Sandoval v. Honda Motor Co., Ltd., 364 Pa.Super. 136 , 527 A.2d 564, 566 (1987). See also Practical Handbook on the Operation of the Hague Convention of 15 November on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Practical Handbook) 112 (1983); 1 B. Ristau, International Judicial Assistance (Civil and Commercial) § 4-28 at 165-67 (1984); Service of Process Abroad: A Nuts and Bolts Guide, Committee on Federal Courts of the New York State Bar Association, 122 F.R.D. 63 , 79-81 (1988). The Ackermann Court, indeed, citing Ristau’s work, concluded, 788 F.2d at 839 : “[T]he word ‘send’ in Article 10(a) was intended to mean ‘service.’ See Ristau, supra, § 4-28 at 165-67 (reviewing ⁷⁰⁸ the Rapporteur’s report on the final text of the Convention and reaching the ‘inescapable’ conclusion that use of ‘send’ rather than the otherwise consistently used ‘service’ ‘must be attributed to careless drafting).’ ” The official Japanese position on this issue of whether direct service by mail is allowed is, as best we can gauge it, ambiguous.

The Hague Convention was, apparently, largely the product of the Hague Conference on Private International Law, which continues to monitor the operation of the Convention. At a special meeting of the members of the Convention in April, 1989, called to discuss some of the problems arising under the Convention, the issue of service by post under art. 10(a) arose. The minutes of that meeting reveal the following: “QUESTION D — On the invitation of the Chairman, the Secretary General reminded delegates that postal means of service is a method quite separate from service via the Central Authorities or between judicial officers. The best evidence of this, in his view, was that this type of service could be the subject of a reservation by Contracting States who considered that service by post was an infringement of their sovereignty.

Therefore, in the opinion of the Permanent Bureau, theoretical doubts about the legal nature of the procedure were unjustified. The Japanese delegation explained that their Government wished the following statement of position to be made known: ‘Japanese position on Article 10(a) of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters Japan has not declared that it objects to the sending of judicial documents, by postal channels, directly to persons abroad. In this connection, Japan (in the statement by its representative to the Special Com ⁷⁰⁹ mission of April 1989 on the operation of the Conventions on the Service of Documents Abroad and on the Taking of Evidence Abroad) has made it clear that no objection to the use of postal channels for sending judicial documents to persons in Japan does not necessarily imply that the sending by such a method is considered valid service in Japan; it merely indicates that Japan does not consider it as infringement of its sovereign power. ’ The Permanent Bureau made note of this declaration and expressed the intention to include the Japanese position in the Practical Handbook.” 3 The question of whether service can be validly effected on a Japanese defendant by restricted delivery mail may well have to be decided in two different fora. If a judgment based on such service is sought to be enforced against the defendant’s assets located in the United States, the Supreme Court would seem to be the ultimate arbiter, having to choose between the two competing views.

No views have yet been expressed by the Supreme Court. If the judgment is sought to be enforced in Japan, however, the Japanese courts may well have the last word, especially in light of the above Declaration. We are not privy to whatever evidence led the Second Circuit Court of Appeals in Ackermann v. Levine, supra, 788 F.2d 830 , to conclude that the word “send,” as used in art. 10(a), was intended to mean “serve.” The record before us is bare in that regard, and we are therefore not willing to attribute the use of that word to sloppy