Petition for Writ of Certiorari — Intercontinental Electronics, S. p. A. v. American Keyboard Products, Inc.

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FILED

() Supreme Court, U.S.

No. 041065 JAN 2 4 2095

) OFFICE OF inc

IN THE

Supreme Court of the Anited States

INTERCONTINENTAL ELECTRONICS, S.p.A.,

a foreign corporation,

Petitioner,

Vv.

AMERICAN KEYBOARD PRODUCTS, INC.,

a Michigan corporation,

ROBERT C. Kotz and GREGORY WYSOCKI,

jointly and severally,

Respondents.

Petition for a Writ of Certiorari to the

Michigan Supreme Court

PETITION FOR A WRIT OF CERTIORARI

S. PATRICK MCKEY *

WALLACE C. SOLBERG

JOEL C. GRISWOLD

BELL, BOYD & LLOYD, LLC

Three First National! Plaza

70 West Madison Street, Suite 3700

Chicago, Illinois 60602

(312) 372-1121

JAMES E. BRENNER

PAUL C. SMITH

BRIAN M. ZIFF

CLARK HILL PLC

500 Woodward Avenue, Suite 3500

Detroit, Michigan 48226

(313) 965-8300

* Counsel of Record Attorneys for Petitioner

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -—- WASHINGTON, D.C. 20001

QUESTIONS PRESENTED FOR REVIEW

1. Whether Petitioner Was Denied Due Process When

Service Of A Counterclaim Was Made Only Upon An

Attorney Who Filed A Complaint And Began Prosecuting A

Lawsuit Solely In Petitioner’s Name—Without Petitioner’s

Authorization, Knowledge Or Participation.

2. Whether Petitioner Was Denied Due Process And/Or

An Opportunity To Defend When Served With Notice Of

Hearing On Entry Of A $2,552,012.97 Default Judgment

Against It Where Such Notice Was: (1) Sent By U/S.

Mail And Registered Mail From The United States To Italy;

(2) Received The Day Before The Hearing; And, (3) Written

In English When Petitioner’s Language Was Italian.

(i)

CORPORATE DISCLOSURE STATEMENT

Petitioner, Intercontinental Electronics, S.p.A. by its under-

signed attorneys, hereby furnishes the following disclosure

statement in compliance with Supreme Court Rules 14(b)

and 29.6:

1. Full Name of Party Represented: Intercontinental

Electronics, S.p.A.

Is Party a Corporation?: Yes

a. Parent Corporation: None

b. List of Corporate Stockholders that are Publicly

Held Companies Owning 10% or More of the

Stock of Represented Party: None

TABLE OF CONTENTS

PETITIONER WAS DENIED DUE PROC-

ESS BECAUSE IT WAS NOT SERVED

WITH THE COUNTERCLAIM UPON

WHICH THE TRIAL COURT ENTERED A

MULTI-MILLION DOLLAR DEFAULT

REESE RETRO

Il. PETITIONER WAS DENIED ITS DUE

PROCESS BECAUSE IT DID NOT

RECEIVE NOTICE OF THE DEFAULT

JUDGMENT HEARING ON DAMAGES

THAT WAS REASONABLE UNDER ALL

THE CIRCUMSTANCES ..............ccccccscsccecsoseses

ARAN eens A a

(iii)

)

TABLE OF AUTHORITIES

Cases Page

American Central Corp. v. Stevens Van Lines,

103 Mich. App 507, 303 NW2d 234 (1981)...... 14

Bye v. Ferguson, 138 Mich App 196, 360 NW2d

A Fae CU ea cnpeisisnsuhisusiensasasintndiicbiiinabeeanisineimbabiiain 13

Deeb v. Berri, 118 Mich App 556; 325 NW2d

a ictcisisvinceinameniaadinniniaeniiimenimands 13

Dollar Rent-A-Car Systems v. Nodel Constr. Co.,

Inc., 172 Mich App 738; 432 NW2d 423........... 15

Frankenmuth Insurance Co. v. ACO, Inc., 193

Mich App 389, 484 NW2d 718 (1992).........0.... 12

Grosjean v. American Press Co., 297 U.S. 233,

I itishiiniiatihdsndeninteitdahadehndipipdishisiieambiséstiaiag 8

In re AMB, 248 Mich App 144, 640 NW2d 262

CII Picccapsiicsctascciicsinsalsinipiesinsccediascuadaanigiedediinneadeusie 13

Meyer v. Walker Land Reclamation, Inc., 103

Mich App 526; 302 NW2d 906 (1981) ............. 14

Mullane v. Central Hanover Bank & Trust Co.,

339 U.S. 306, 70 S.Ct. 652 (1950) .........0... 8,9, 14, 15

National Car Rental v S & D Leasing, Inc.,

89 Mich App 364, 280 NW2d 529 (1979)......... 13

Perry v. Perry, 176 Mich App 762; 440 NW2d

Fe Sei cisvnienesSceniicsicaineineaen daglacdeetinchehamapeieaipacaaintics 13

Sinai Hospital of Detroit v. Sivak, 88 Mich App

wes fore ere 9,10

Traxler v. Ford Motor Co., 227 Mich App 276;

FO Ee Be Cr iacicirntniscnsiensientniniaatianndicnn 13

Federal Authorities

Hague Convention on Service Abroad.................. 12

United States Constitution,

Fourtoceth Asmendamentt ............0cscsessssesscssecosseee 8

TABLE OF AUTHORITIES—Continued

Michigan Statutes

vee ce Ee ENO ie Men AN te

EIRENE. bishinenienionemameniamaimainisaneaeee

Ee ET siivnincstnioncuinbabiiaaad cinder eee

IN THE

Supreme Court of the United States

INTERCONTINENTAL ELECTRONICS, S.p.A..

a foreign corporation.

Petitioner,

Vv.

AMERICAN KEYBOARD PRODUCTS. INC..

a Michigan corporation,

ROBERT C. Kotz and GREGoRY Wysocki,

jointly and severally,

Respondents

Petition for a Writ of Certiorari to the

Michigan Supreme Court

PETITION FOR A WRIT OF CERTIORARI

OPINIONS AND ORDERS BELOW

On May 15, 2002, the Michigan Circuit Court for Oakland

County entered a default judgment against Petitioner in the

amount of $2,552,012.97. Intercontinental Electronics.

S.p.A. v. American Keyboard Products, Inc., et al. Oakland

CC No. 00-024354-CK (Unpublished). On June 12, 2002.

the Circuit Court denied Petitioner's Motion to Vacate the

Default Judgment. Jd. On July 2, 2002, Petitioner filed an

appeal to the Michigan Court of Appeals. On March 18,

2004, the Court of Appeals affirmed the default, but reduced

the amount of the default judgment to $1,552,012.97.

Intercontinental Electronics, S.p.A. v. American Keyboard

Products, Inc., et al, COA No. 242455 (Unpublished). On

October 25, 2004, the Michigan Supreme Court declined

review of the decision of the Michigan Court of Appeals.

Intercontinental Electronics, Sp.A. v. American Keyboard

Products, Inc., et al.. SC No. 126058 (Unpublished)

JURISDICTIONAL STATEMENT

On March 18, 2004, the Michigan Court of Appeals

affirmed the default, but reduced the amount of the default

vent to $1,552,012.97. In so doing, the Michigan Court

of Appeals, like the tnal court, despite acknowledging the

possibility that Petitioner may not be a real party-plaintiff to

t and opposing counsel may not represent

Petitioner, held that Petitioner received service of process

sufficient to satisfy due process requirements under the

Fourteenth Amendment of the United States Constitution

when Respondents served opposing counsel. Moreover, the

Court of Appeals found that service of the notice of the

default judgment hearing was sufficient to satisfy due process

requirements under the Fourteenth Amendment of the United

States Constitution because notice of the hearing was

deposited in the United States mail seven (7) davs prior to the

earing—consistent with Michigan statute—despite the fact

that the notice was not received by Petitioner in Italy until the

eve of the hearing halfway across the globe

On October 25, 2004, the Michigan Supreme Court

declined review of the decision of the Michigan Court of

Appeals. This Court has jurisdiction over this matter under

28 U.S.C. § 1257

CONSTITUTIONAL PROVISIONS

The Fourteenth Amendment to the United States Con-

stitution provides

No state shall make or enforce any law which shall

abridge the privileges or immunities of citizens of the

United States; nor shall any state deprive any person of

life, liberty or property without due process of law; nor

deny to any person within its jurisdiction the equal

protection of the laws.

U.S. Const., 14th Amend.

MISC.

Hague Convention on Service Abroad (See Appendix

at 20)

STATUTORY PROVISIONS

MCR 2.107 (See Appendix at 17)

MCR 2.201 (See Appendix at 18)

MCR 2.603 (See Appendix at 19)

STATEMENT OF THE CASE

1. Respondents Fail To Pay Their Debt To Petitioner.

Intercontinental Electronics, S.p.A. (“Petitioner”) is an

Italian corporation that exports electronic pianos from Italy to

the United States. (Appendix at 5, Ex. 1, 93). American

Keyboard Products, Inc. (“AKP”), a Michigan corporation,

entered into an agreement with Petitioner to distribute, in the

United States and Canada, pianos exported from Italy by

Petitioner. (/d., Ex. 1, 94). During the course of the parties’

relationship, AKP became indebted to Petitioner for more

than $85,000 worth of goods, which Petitioner delivered, but

for which Petitioner was not paid. Although AKP paid some

of its debt, in 1998 it refused, or otherwise became unable, to

pay the remaining balance. (/d., Ex. 1, 995-9.)

2. Petitioner Subrogates Its Claim Against Respondents

To Petitioner’s Insurer.

As a result of the bad debt, Petitioner submitted a claim to

EULER-SIAC Societa Italiana Assicurazione Crediti S.p.A.

(“EULER SIAC”). EULER SIAC is an Italian insurance

company that provides coverage to Italian businesses for bad

foreign (i.e., non-Italian) contractual debt. EULER SIAC

paid Petitioner’s claim arising from the AKP debt. As a

condition of this payment, Petitioner became obligated, under

Italian law, to allow EULER SIAC to pursue a subrogation

action against AKP. (/d., 4910-11, 13.)

3. KKG&R And Euler File Suit Against Respondents

Solely In Petitioner’s Name—Without Petitioner’s Knowl-

edge, Authorization Or Participation.

in furtherance of its subrogation rights, EULER SIAC’s

United States’ based sister corporation, EULER ACI

Collection Services, Inc. (“EULER ACF’) (collectively,

“EULER”), hired Richard Roosen of the Michigan law firm

of Kahn, Kahn, Gibson & Roosen, P.C. (collectively,

“KKG&R”) to collect the debt from AKP. Accordingly,

KKG&R filed a collection action against AKP. (/d., 412).

Although EULER hired KKG&R, and was the real party in

interest, KKG&R inexplicably filed the complaint solely in

Petitioner’s name instead of filing it in EULER's name, as

subrogee of Petitioner. (Appendix at 15). That crucial

mistake is where the problems begin.

4. Respondents File A Counterclaim Against Petitioner

And Serve The Counterclaim On KKG&R.

On April 26, 2001, AKP and two of its shareholders

(collectively, “Respondents”) filed a counterclaim against

Petitioner (“Counterclaim”). Respondents mailed a copy of

the Counterclaim to KKG&R’s office, as purported service

upon Petitioner. Petitioner received no notice that a Coun-

terclaim had been filed, nor did Petitioner ever retain

KKG&R to defend the Counterclaim. (Appendix at 5, Ex. 1,

415).

On June 4, 2001, KKG&R filed an Answer to the

Counterclaim and Affirmative Defenses on behalf of Peti-

tioner—again, without Petitioner’s authorization, knowledge

or participation. (Appendix at 14).

5. _KKG&R Withdraws And A Default Is Entered Against

Petitioner.

On July 18, 2001, the trial court granted KKG&R’s

unopposed motion to withdraw from the case. The trial court

ordered, in pertinent part, that KKG&R was to provide

Petitioner with notice of the court's order and ordered

Petitioner to file a substitute appearance within 30 days or a

default may be entered on the Counterclaim. (Appendix at

12). Petitioner, however, never received a copy of the

July 18, 2001 Order. (Appendix at 5, Ex. 1, 916).

Without notice of KKG&R’s withdrawal, and not being the

real party in interest, Petitioner did not file an appearance

within the 30 days allotted by the trial court. On August 28,

2001, Petitioner, without notice, did not appear at the pretrial

conference and the trial court entered a default against

Petitioner.’ (Appendix at 10).

6. Respondents Move For Entry Of Judgment On Default

Against Petitioner For Over $2.5 Million — And Serve Notice

Of The Hearing Upon Petitioner By Mail, In Italy, Which Is

Received The Night Before The Hearing On The Motion In

Michigan.

On May 1, 2002, Respondents moved for entry of a

judgment on the default. (Appendix at 9). On that same day,

Respondents sent notice of the motion, in English only, to

' In September 2001, Petitioner received a copy of the default and

faxed it to EULER SIAC for an explanation, which was not forthcoming.

On October 16, 2001, Petitioner received an additional copy of the default

and again sent it to EULER SIAC for explanation. EULER responded

with a letter to Petitioner stating: “After receiving the attached documents,

it is recommended they be ignored since the case was dismissed and no

further action was being taken.” (Appendix at 5, Ex. 1, 422). On Novem-

ber 9, 2001, Petitioner was advised that the collection action had been

concluded. (/d., 419-23.) Nothing else happened in the case until May

2002.

Petitioner, in Italy, by U.S. mail. (Appendix at 8). The

hearing on Respondents’ motion was set to take place on May

15, 2002 at 8:30 a.m. (Appendix at 5, Ex. 1, Internal Ex. M).

Petitioner, in Italy, did not receive the notice until May 14,

2002, on the eve of the hearing Michigan. (Id., Ex. 1, 424)

Petitioner promptly sent the motion to counsel in the United

States for an explanation, but this transmission was not

received until after 8:30 on the morning of May 15, 2002.

At the hearing, the trial court awarded Respondents all

damages requested against Petitioner—totaling more than

$2.5 million. (Appendix at 6; Appendix at 7).

7. Petitioner Moves to Set Aside Default and Default

Judgment

On June 5, 2002, within the period of time prescribed by

Michigan law to move to set aside such a judgment,

Petitioner (represented by its own counsel for the first time in

the litigation) filed a motion to set aside the default and

judgment. MCR 2.603(D) In the motion, which was sup-

ported by the affidavit of Mauro Galanti (Petitioner’s

President), Petitioner argued, in pertinent part, that: (1) the

Complaint had been filed by KKG&R and EULER in

Petitioner’s name without Petitioner’s participation or direc-

tion (Petitioner having already been made whole by EULER);

and, (2) that Petitioner did not receive adequate notice of the

default judgment hearing.

On June 12, 2002, the trial court denied Petitioner’s

Motion to Set Aside the Default and Default Judgment. In

doing so, the trial court refused to address the issue of

whether Petitioner was, in fact, a party to the lawsuit.

Specifically, the trial court stated that it was “not up to this

court to determine who is the real party in interest but

simply to see that notices are given to - to the plaintiff and

the counter-defendant.” (Appendix at 4, pp. 17-18 (em-

phasis added)). Astonishingly, the trial court held that, even

if Petitioner was not a real party-plaintiff, that fact would not

“overcome the numerous notices and attempts to get the

attention of Intercontinental." (/d., p. 18). On that basis, the

trial court erroneously exercised personal jurisdiction over

Petitioner, found that notice of the default hearing was

sufficient and, accordingly, denied Petitioner’s motion to set

aside the default - thereby allowing its $2.5 million judgment

to stand.

8. The Court of Appeals Affirms The Default.

On July 7, 2002, Petitioner appealed, as a matter of right,

from the trial court's denial of the Motion to Set Aside the

Default to the Michigan Court of Appeals. In the Court of

Appeals, Petitioner argued, amongst other things, that: (1)

the trial court never acquired personal jurisdiction over

Petitioner because EULER was the real party in interest and

KKG&R wrongfully named Petitioner as plaintiff to the

action, (Appendix at 2, p. 3); and, (2) Petitioner was denied

due process because it did not receive reasonable notice of the

default judgment hearing, (/d., pp.1-3).

On March 18, 2004, the Court of Appeals panel issued its

opinion. (Appendix at 2). The Court of Appeals rejected

Petitioner’s personal jurisdiction and due process arguments,

despite the requirement of MCR 2.201(b) that “an action must

be prosecuted in the name of the real party in interest,” and

affirmed the entry of the default, but reduced the amount of

the default judgment to $1,552,012.97. In affirming the trial

court’s entry of default and default judgment, the Court of

Appeals, like the trial court, ignored the issue of whether

Petitioner was, in fact, a real party-plaintiff to the action.

Though the Court of Appeals did not address the issue of

whether Petitioner was a party or non-party tc the litigation, it

opined, nonetheless, that Petitioner received adequate notice.

Instead of addressing the issue, the Court of Appeals noted

that "[i]f plaintiff's attorney of record improperly represented

himself as the attorney for the plaintiff, plaintiff's remedy lies

in a suit against its counsel." (Appendix at 2, p. 3).

9. The Michigan Supreme Court Declines Review Of

Petitioner’s Appeal.

On April 29, 2004, Petitioner filed a petition for review of

the Michigan Court of Appeals decision with the Michigan

Supreme Court. On October 25, 2004, the Michigan Supreme

Court declined review of the Petitioner’s appeal. (Appendix

at 1).

REASONS FOR GRANTING CERTIORARI

The Petition should be granted because the Michigan

Circuit Court for Oakland County (“trial court”) and the

Michigan Court of Appeals (“Court of Appeals”) have

decided an important federal question in a way that conflicts

with the decisions of this Court regarding due process under

the Fourteenth Amendment and, by doing so, have deprived

Petitioner of its property in the amount of $1,552,012.97, plus

interest and costs.”

The Fourteenth Amendment to the United States

Constitution provides:

No state shall make or enforce any law which shall

abridge the privileges or immunities of citizens of the

United States; nor shall any state deprive any person of

life, liberty or property without due process of law; nor

deny to any person within its jurisdiction the equal

protection of the laws.

U.S. Const., 14th Amend. (emphasis added). In Mullane v.

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

Petitioner is entitled to the due process protections of the Fourteenth

Amendment. Grosjean v. American Press Co., 297 U.S. 233. 244 (1936)

(“[A] corporation is a ‘person’ within the meaning of the equal protection

and due process clauses . . .”)

S.Ct. 652, 657 (1950), the Supreme Court defines the due

process requirements of notice. Specifically, in Mullane, the

Court explains that:

An elementary and fundamental requirement of due

process in any proceeding which is to be accorded

finality is motice reasonably calculated, under all the

circumstances, to apprise interested parties of the

pendency of the action and afford them an opportunity

to present their objections. The notice must be of such

nature as reasonably to convey the required information

. and it must afford a reasonable time for those

interested to make their appearance.

Id. (internal quotations omitted)(emphasis added).

The trial court and Court of Appeals entered and affirmed,

respectively, a default judgment against Petitioner in the

amount of $1,552,012.97. In doing so, both courts ac-

knowledged the possibility that Petitioner may have been a

non-party rather than a real party-plaintiff to the litigation.

(Appendix at 4, pp. 17-18; Appendix at 2, p. 3). Although the

issue of whether Petitioner was a party to the litigation

determines the type of notice and service required, both

courts ignored this issue in rejecting Petitioner’s argument

that it did not receive notice of the Counterclaim and default

judgment hearing consistent with due process.

The trial court and Court of Appeals deprived Petitioner of

its right to due process by declining to determine whether

Petitioner was a real party-plaintiff to the action. In

Michigan, “[a]n action must be prosecuted in the name of the

real party in interest...” MCR 2.201(B). “The subrogee is

generally recognized as the real party in interest.” See Sinai

Hospital of Detroit v. Sivak, 88 Mich.App. 68, 72, 276 NW2d

518, 520 (1979) (insurer, not insured, was the real party in

interest and action was required to be brought in name of

insurer). “Generally, an insured, who no longer has any

interest in the recovery, cannot sue.” Jd. g

KKG&R was obligated to name EULER as the subrogee of

- Petitioner and, therefore, the real party in_ interest.

Specifically, EULER, through its insurance contract with

Petitioner, became a subrogee to Petitioner and was vested

with the right to pursue a collection action against AKP.

(Appendix at 5, Ex. 1, 911.) Accordingly, KKG&R was

obligated to file suit in the name of EULER, the real party in

interest. See MCR 2.201(B); see also Sinai Hospital, 88

Mich App at 72.

Furthermore, as Petitioner repeatedly explained to the trial

court and Court of Appeals, KKG&R had filed the Complaint

solely in Petitioner’s name without Petitioner’s authorization,

knowledge or participation. (Appendix at 4; Appendix at 5).

In denying Petitioner’s Motion to Set Aside the Default,

the trial court erred in ruling that it was not required to

determine the real party in interest as long as notices were

sent to the named party-plaintiff. (Appendix at 4, pp 17-18).

Specifically, the Court held:

[T]he defense appears to be that Petitioner was not the

real party in interest here and simply was told by real

party in interest that it didn’t have to do anything, and as

also presented what—I’m going to assume that there’s a

meritorious defense that has been presented.

So I’m looking at the good cause and | think that there

were numerous attempts by this Court to get the

attention of Petitioner and its not up to this Court to

determine who is the real party in interest but simply to

see that notices are given to — to the plaintiff and to the

counter-defendant.

(/d.) (emphasis added). Because the trial court failed to

determine whether Petitioner was a party to the litigation, the

trial court erred in: (1) asserting personal jurisdiction over

Petitioner because Petitioner never filed suit or was served

with process for suit in Michigan; and, (2) ruling that any

notices purportedly sent to Petitioner were proper, including,

OOOO

but not limited to the May 15, 2002 hearing for entry of the

default judgment.

Unfortunately, the Court of Appeals, like the trial court,

declined to address the issue of whether Petitioner was the

real party in interest and a party to the litigation, stating:

. the proof of service indicated that the coun-

terclaim was properly served on [Petitioner’s] attorney,

and the affidavit by one of [Petitioner’s] officers

indicates that [Petitioner] received notice on March 31,

2001, that defendant considered filing a counterclaim. If

[Petitioner’s] attorney of record improperly represented

himself as the attorney for [Petitioner], [Petitioner’s]

remedy lies in a suit against its counsel.

(Appendix at 2, p. 3) (emphasis added). The Court of Ap-

peals’ opinion on this matter, like that of the trial court, is

based upon the faulty premise that KKG&R was authorized

to accept service on behalf of Petitioner. Without a

determination of whether Petitioner was the real party in

interest, however, both the trial court and Court of Appeals

could not, and should not, have determined that Petitioner

was properly served with the Counterclaim or any subsequent

pleadings.

I. PETITIONER WAS DENIED DUE PROCESS

BECAUSE IT WAS NOT SERVED WITH THE

COUNTERCLAIM UPON WHICH THE TRIAL

COURT ENTERED A MULTI-MILLION DOL-

LAR DEFAULT JUDGMENT.

The trial court and Court of Appeals deprived Petitioner of

due process by acknowledging the possibility that KKG&R

did not represent Petitioner, yet finding that mailing the

Counterclaim to KKG&R was sufficient service upon

Petitioner. Indeed, if Petitioner was not the real party in

interest, and therefore not a party to the litigation, Re-

spondents would have been obligated to serve process upon

Petitioner pursuant to the Hague Convention on Service

Abroad (“Hague Convention”), as both the United States and

Italy are signatories to the treaty. See Frankenmuth Mutual

Ins. Co. v. Aco, Inc., 193 Mich App 389, 392-393; 484 NW2d

718 (1992). The Hague Convention “applies in all cases

where there is occasion to transmit a judicial or extrajudicial

document for service abroad.” /d. at 392. The Hague

Convention “preempts inconsistent methods of service

prescribed by state law in all cases to which the convention

applies.” /d.

The Counterclaim was not served on Petitioner in Italy,

much less pursuant to the Hague Convention. (Appendix at

16). Rather, the Counterclaim was mailed to the office of

KKG&R. (/d.). KKG&R was not an authorized agent for the

receipt of service of process or counsel for Petitioner.

(Appendix at 5, Ex. 1, 9912-15). Accordingly, without a

determination as to whether Petitioner was the true party in

interest, both courts erred in ruling that Petitioner had

received proper service and/or notice. Only by determining

who is the real party in interest could a ruling be made on

which method of service/notice is correct: service of process

in Italy upon Petitioner or service as was done in this

litigation, by mailing a copy of the Counterclaim to KKG&R.

Both the trial court and the Court of Appeals committed error

in determining that Petitioner had been properly served and

received proper notice.

Accordingly, Petitioner was denied a meaningful oppor-

tunity to be heard in the proceeding that triggered the default

and was thus denied due process of law. Due process

> While Petitioner received a notice of the August 28, 2001 pre-trial

conference from the trial court, it did not receive such notice until August

29, 2001—after the hearing had already been conducted. (Appendix at 5,

Ex. 1, 917). In any event, the notice did not indicate that: (1) KKG&R

had withdrawn; or, (2) Intercontinental would be defaulted for failing to

appear at the pre-trial conference.

————————

a |

“requires notice of the nature of the proceedings, an

opportunity to be heard in a meaningful time and manner, and

an impartial decisionmaker.” Traxler v. Ford Motor Co., 227

Mich App 276, 288; 576 NW2d 398 (1998); see also Bye v.

Ferguson, 138 Mich App 196, 205-206, 360 NW2d 175

(1984)(holding that due process requires that a party receive

actual notice of the withdrawal of his or her attorney before

further proceedings are conducted); Deeb v. Berri, 118 Mich

App 556, 563; 325 NW2d 493 (1982) (explaining that the

failure to receive the requisite notice regarding default

proceedings amounts to a denial of due process).

Moreover, if it was determined that Petitioner was not a

party to the litigation, service of the Counterclaim upon

Petitioner in Italy would have been required in compliance

with the Hague Convention in order for the trial court to

assert personal jurisdiction over Petitioner. Indeed, lack of

notice must be considered a “jurisdictional” defect. In re

AMB, 248 Mich App 144, 640 NW2d 262 (2001); National

Car Rental v. S & D Leasing, Inc., 89 Mich App 364, 367-

370; 280 NW2d 529 (1979) (holding that the lack of actual

notice to the plaintiff regarding a counterclaim was “suffi-

cient to set aside the default” entered against the plaintiff).

II. PETITIONER WAS DENIED ITS DUE PROC-

ESS BECAUSE IT DID NOT RECEIVE NOTICE

OF THE DEFAULT JUDGMENT HEARING ON

DAMAGES THAT WAS REASONABLE UNDER

ALL THE CIRCUMSTANCES.

Even assuming, arguendo, the Counterclaim was properly

served upon Petitioner, the award of damages should be

vacated in its entirety because Petitioner was not given

reasonable notice of the May 15, 2002 default judgment

hearing on damages. “[OJnce a valid default is taken, the

defaulting party is entitled to full participatory rights in any

hearing necessary for the adjudication of damages.” Perry v.

Perry, 176 Mich App 762, 767, 440 NW2d 93 (1989), citing

Wood v. DAME, 413 Mich. 573, 583-585; 321 NW2¢ 653

(1982). A damages hearing is necessary where the amount of

damages is unliquidated. See, e.g., American Central Corp v.

Stevens Van Lines, 103 Mich App 507, 513; 303 NW2d 234

(1981). Denial of the right to fully participate in the damages

hearing after a default constitutes a denial of the

constitutional right to due process and is reversible error.

See, e.g., Perry, at 770; see also Meyer v. Walker Land Recla-

mation, Inc., 103 Mich App 526, 541; 302 NW2d 906 (1981).

Petitioner did not receive notice “reasonably calculated

under all the circumstances” to “afford [it] an opportunity to

present its objections” to the default judgment. Mullane v. |

Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 |

S.Ct. 652, 657 (1950). The United States Supreme Court

explains that :

An elementary and fundamental requirement of due

process in any proceeding which is to be accorded

finality is notice reasonably calculated, under all the

circumstances, to apprise interested parties of the

pendency of the action and afford them an opportunity

to present their objections. The notice must be of such

nature as reasonably to convey the required information

.. . and it must afford a reasonable time for those

interested to make their appearance.

a ee

Id. (emphasis added) (internal citations omitted). A notice of

a hearing for a default judgment, in English only, that is sent

by U.S. Mail to an Italian speaking party in Italy—and

which is received on the eve such hearing is to be held in

Michigan— is not notice reasonably calculated to afford an

opportunity to appear and present objections.

The Michigan Court of Appeals erred in holding that

Petitioner’s receipt of notice, in Italy, on the day before the

default judgment hearing in Michigan, was sufficient due

process. Specifically, the Court of Appeals found that the

EE E—————

notice given to Petitioner was sufficient to satisfy due process

because: (1) it was served in compliance with Michigan Court

Rules governing notice; (2) Petitioner received actual notice

of the hearing on the default judgment; and, (3) Petitioner had

notice that a default had been entered. (Appendix at 2, p. 2);

see MCR 2.603; see also MCR 2.107(C\(3). Under MCR

2.603, the party seeking judgment on a default must give the

defaulted party at least seven (7) days notice before entry of

the requested judgment. MCR 2.603(B)(1); Dollar Rent-A-

Car Systems v Nodel Constr. Co, Inc., 172 Mich App 738,

744; 432 NW2d 423 (1988). Under MCR 2.107, service is

complete upon mailing. MCR 2.107(C)(3).

Assuming, arguendo, that Respondents served notice

consistent with Michigan statute and received the notice

before the hearing began, “process which is a mere gesture is

not due process.” Mullane, 339 U.S. at 314, 70 S.Ct. at 657.

Indeed, the circumstances surrounding the notice at issue in

effect rendered the notice meaningless. On May 1, 2002,

Respondents deposited notice of the May 15, 2002 hearing in

the U.S. Mail, thereby purportedly complying with MCR

2.603(B)(1). On May 14, 2002, thirteen (13) days later,

Petitioner received notice of the hearing to take place the next

morning.* (Appendix at 5, Ex. 1, 924). Nothing in the record

* This case illustrates the need for due process review beyond mere

compliance with state statutes regarding notice. Indeed, following the

Court of Appeals’ reasoning, the notice to Petitioner would have been

adequate even if mailed on May 8, 2002 because such service would have

comported with MCR 2.603(B)(1) since the notice was mailed seven (7)

days in advance of the hearing. However, as demonstrated by the un-

disputed record in this case, it took thirteen (13) days from mailing for the

notice of the default hearing to reach Petitioner in Italy. Accordingly, if

the notice was mailed on May 8, 2002, assuming thirteen (13) days

delivery time, the notice would not have been received by Petitioner until

May 21, 2002—-six (6) days after the hearing took place. Under these

circumstances, MCR 2.603{b)(1) cannot pass constitutional muster

because it is not calculated to provide a party with reasonable opportunity

to be heard and defend itself.

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refutes this fact. Moreover, the notice was sent in English

only to an Italian recipient—located in Italy - that does not

“speak or read the English language to any significant or

meaningful degree.” (/d., Ex. 1, 42).

Receiving notice the day before the hearing on the entry of

default judgment did not afford Petitioner reasonable time to

interpret the notice, retain counsel on a different continent

and appear the very next morning at the hearing to raise

objections. Petitioner simply did not receive notice that was

“reasonable under the circumstances” and, accordingly, was

denied its right to due process.

CONCLUSION

WHEREFORE, for the foregoing reasons, Petitioner,

Intercontinental Electronics S.p.A., respectfully requests that

the Court grant its Petition for Writ of Certiorari.

Respectfully submitted,