Lai v. Lu

Background

Xiaoyong Lai, an attorney representing himself, sued Mengjing Lu and Lu Zhang to recover $422,463 in fees and costs that Lai claims were owed for legal services. The complaint asserts diversity jurisdiction and claims for breach of contract and other common-law claims against Lu, along with fraudulent-transfer and conspiracy claims against both defendants. Lu disputes the amount owed and contends that Lai’s work was not all within the parties’ agreements and that his billed time was excessive. Lu says Lai instead owes her more than $175,000.

Lai filed documents stating that Lu and Zhang had each been served by certified mail, with a return receipt requested, on January 22, 2025, at an address in Las Vegas, Nevada. The postal receipts contained a signature reading “Lu Zhang” next to a box marked “Agent.” After Zhang did not respond, Lai asked the clerk to enter her default; that request remained pending.

Lu does not dispute that she was served and has represented herself in the case. She filed the motion at issue, titled “Motion to Quash Service,” stating that she—not Zhang—signed the postal receipts without realizing that the mail contained legal documents. Lu said Zhang had authorized her to sign non-legal documents but had not authorized her to accept service of process. Lu also said she returned the mail after realizing her mistake. Lai opposed the motion, arguing that service complied with California law and that Lu’s motion was untimely and could not seek relief on Zhang’s behalf.

Legal framework and analysis

Federal Rule of Civil Procedure 4(e)(1) permits service on an individual in a judicial district by following the law of the state where the district court is located or where service is made. California law permits service on a person outside California by first-class mail, postage prepaid, requiring a return receipt. Such service is valid only when there is evidence satisfactory to the court establishing actual delivery to the person served, through a signed receipt or other evidence.

The court was not persuaded by Lu’s general argument that authority to accept mail for Zhang necessarily excluded authority to accept legal process. The court noted that when a defendant designates another person to receive mail on the defendant’s behalf, receipt by the authorized person can constitute actual delivery to the defendant.

The court nevertheless found unresolved issues specific to this case. Lu’s statements that Zhang did not live in the United States, was not in the United States when the certified-mail service allegedly occurred, and had no notice of the lawsuit were unrefuted and not addressed by Lai. Other docket materials suggested that Zhang was a Chinese citizen residing in China. These facts raised questions about whether the Hague Convention applied and whether service was required under Rule 4(f), which governs service on individuals in a foreign country and includes methods involving internationally agreed means, the foreign country’s law, or other court-ordered means not prohibited by international agreement.

Ruling

Judge Virginia K. DeMarchi declined to grant the motion to quash because Lu acknowledged that she could not represent Zhang or seek relief on Zhang’s behalf. At the same time, the court could not conclude on the record that Zhang had been properly served. The court therefore denied Lu’s motion to quash service, without prejudice to a later determination about whether service on Zhang was proper. The order terminated the motion listed as Docket No. 23.