Davies v. Jobs & Adverts Online, GmbH

Davies (plaintiff) sued German corporation Jobs and Adverts Online, GmbH (JAO) (defendant) for breach of contract. JAO hired Davies to be the president of JAO’s subsidiary, Jobs and Adverts USA, Inc. (JAUSA). JAUSA was wholly owned by JAO but operated as a separate entity. Davies’s employment contract stated that either party could terminate the contract without cause with three months’ notice or JAO could terminate the contract with no notice for cause. Several months after hiring Davies, JAO notified Davies that her employment was being terminated without cause. However, a subsequent audit of JAUSA’s books revealed that Davies had committed multiple acts of financial misconduct as JAUSA’s president. JAO promptly reclassified Davies’s termination as for cause and refused to pay the severance Davies would have received had her termination remained without cause. Davies filed suit and attempted to serve process on JAO per the Virginia statute for substituted service on a foreign corporation by serving the Clerk of the State Corporation Commission (clerk) in Richmond, Virginia, who mailed a copy of the complaint to JAO’s office in Germany. JAO moved to dismiss the complaint for improper service because Davies failed to comply with the provisions of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Convention). Davies conceded that the service failed to comply with the Hague Convention because Germany had expressly objected to service of process by mail, but rather than dismiss the lawsuit, the trial court allowed Davies 60 days to properly serve process on JAO. Davies then served JAO’s U.S.-based attorney, Kelm, who was also the registered agent for JAUSA. JAO again moved to dismiss for insufficient service of process. Davies argued that service was sufficient because, as JAO’s attorney, Kelm was JAO’s agent, and also, service upon JAUSA’s registered agent constituted proper service on its parent company, JAO.