Kacher v. Pittsburgh Nat. Bank

• Decision Date: 01 July 1971
• Docket Number: Nos. 2966 and 2967,s. 2966 and 2967
• Citation: 545 F.2d 842
• Parties: Application of Dr. Frank Kacher for an Order staying Writs of Replevin at
• Court: U.S. Court of Appeals — Third Circuit

Page 842

545 F.2d 842

Application of Dr. Frank Kacher for an Order staying Writs

of Replevin at Nos. 2966 and 2967 July Term, 1971, in the

Court of Common Pleas of Allegheny County, Pennsylvania, or

for a temporary Restraining Order until such time that a

hearing to test the constitutionality of the Writ of

Replevin may be effected.

Dr. Frank KACHER, an Individual v. PITTSBURGH NATIONAL BANK, a corporation.

Appeal of Dr. Frank A. KACHER.

No. 75-2451.

United States Court of Appeals, Third Circuit.

Submitted Under Rule 12(6) June 8, 1976.

Decided Nov. 2, 1976.

Bart M. Beier and Thomas M. Kerr, Kaufman & Harris, Pittsburgh, Pa., for appellant.

Marten R. Jenkins, Campbell, Thomas & Burke, Pittsburgh, Pa., for appellee.

Before VAN DUSEN, GIBBONS and ROSENN, Circuit Judges.

OPINION OF THE COURT

ROSENN, Circuit Judge.

The question presented in this appeal is whether a creditor which proceeds to enforce its security interest under state replevin procedures later declared to be unconstitutional is answerable in damages to a debtor whose property was seized and sold. The United States District Court for the Western District of Pennsylvania answered this question in the negative. We affirm.

I.

Plaintiff Frank Kacher, a Pittsburgh dentist, borrowed $20,625 from the Pittsburgh National Bank ("Bank") to purchase certain dental equipment and fixtures for which loan he executed a note of even amount secured by a chattel mortgage on the aforesaid personal property. The Bank also held a Pennsylvania Motor Vehicle Installment Sale Contract executed by Kacher and secured by a Porsche automobile.

According to the Bank, after little more than a year Kacher had fallen behind in his payments. Therefore, on June 21, 1971, the Bank filed two complaints in replevin in the Court of Common Pleas of Allegheny County, Pennsylvania, and obtained two writs of replevin with bond to enforce its security interest in the dental equipment, fixtures, and automobile. The Sheriff of Allegheny County immediately executed the writs and in accordance with the existing Pennsylvania Replevin Statute and Rules of Civil Procedure took possession of most of the property. Kacher was allowed to retain four pieces of dental equipment, and he ultimately posted a counterbond for them.

Kacher then petitioned the court of common pleas to stay or set aside the writs of replevin until he could obtain a hearing, but the court denied his petitions as the Pennsylvania replevin statutes did not provide for such a hearing at that stage of the proceedings. Thereupon, on June 29, Kacher applied for a stay of the writs of replevin or a temporary restraining order from the United States District Court for the Western District of Pennsylvania. His petition alleged, inter alia, that his inability to secure a prior hearing denied him due process, that replevin procedures deprive those individuals unable to post counterbonds of equal protection of the law, and that seizure of the goods on his private property constituted an unreasonable search and seizure. The district court denied Kacher's motion, noting that it had no jurisdiction to restrain the replevin action.

Upon Kacher's motion for reconsideration, filed July 9, the district court agreed to hear oral argument. During the hearing, the district judge construed Kacher's application as a petition to convene a three-judge court pursuant to 28 U.S.C. § 2284 (1970) and to issue a temporary restraining order pending the decision of such court. The judge made an express finding "that there is no showing of any unconstitutional procedure" and denied the motion for a restraining order by order of July 16.

A three-judge court on March 31, 1971, had turned aside a challenge to Pennsylvania's replevin statutes which was mounted on grounds identical to those averred by Kacher. See Epps v. Cortese, 326 F.Supp. 127 (E.D.Pa.1971). The United States Supreme Court had noted probable jurisdiction of the appeal on May 24. 402 U.S. 994, 91 S.Ct. 2185, 29 L.Ed.2d 159 (1971). Under the circumstances, the district court understandably refused to find the Pennsylvania replevin procedures unconstitutional and to convene another three-judge court to consider the identical issues raised by Epps. Nonetheless, Kacher appealed to this court.

In the meantime, Kacher had ignored the replevin proceedings in the state court. Since he filed no counterbond and entered no defenses, on July 21, the court entered default judgments in replevin against him for the property which had been seized. The Bank subsequently sold the automobile on August 9 and the dental equipment and fixtures on October 14. In a counterclaim later filed in the district court, the Bank averred that after it had applied the proceeds from both sales to the total outstanding obligation, Kacher still owed $8,901.86 to the Bank. No part of this debt has apparently been paid.

Almost a month after the Bank's final sale of the repossessed property, on November 9, 1971, the United States Supreme Court heard argument in the appeal from the decision in Epps. Parham v. Cortese, 40 U.S.L.W. 2333-34 (U.S. November 16, 1971). Kacher's appeal in this court remained inactive until the Supreme Court on June 12, 1972, handed down its decision holding the Pennsylvania and Florida replevin statutes unconstitutional. Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). Following that decision, Kacher moved in this court for summary reversal and requested that the case be remanded for a determination of damages "and for such additional relief which this Court believes is just and proper." The ex parte motion was unopposed and a panel of this court ordered the motion "granted" on August 29, 1972. The panel did not, as the dissent implies, pass upon the merits of any claim for damages. ¹

The remand generated no small amount of confusion in the district court. The order from which Kacher had appealed and which was summarily reversed was merely the district judge's denial of his motion to restrain the replevin proceedings. As those proceedings had long since advanced to completion with the sale of the replevied property, no purpose would have been served for the district court to enter an order staying those proceedings pursuant to this court's reversal and remand. Furthermore, as Kacher's complaint had stated no claim for damages, this court's remand for determination of damages was apparently premature.

The district judge, however, attempted to comply with this court's order, which he termed "cryptic," by requiring Kacher to file an amended complaint for damages. Kacher complied by filing a complaint alleging that the Bank had taken his property in violation of the fifth and fourteenth amendments, that the Bank had no right to possession of the goods, and that the Bank had sold the goods without notice of the sale or of its time or place.

The complaint set forth the following items of damages:

A. Loss of income commencing June 15, 1971, to the present.

B. Loss of (Kacher's) professional and business reputation.

C. Slander in the presence of persons in the community.

D. Frustration, humiliation, and emotional strain and physical injury.

E. Loss of the cost of the goods replevied and sold.

After discovery was completed, the district judge once more reviewed the record in this case "(i)n an attempt to create order out of chaos." He decided that a trial on the sole issue of damages was premature, and consequently vacated his order that Kacher file an amended complaint, treating all pleadings filed thereafter as "nullities." In fairness to Kacher, however, the judge stated that he would treat the amended complaint for damages as a civil rights action under 42 U.S.C. § 1983 (1970) and directed Kacher to amend the complaint accordingly.

The newly amended complaint, filed August 7, 1974, averred that jurisdiction was conferred by, inter alia, "the Civil Rights Act" and alleged that the Bank had "no right at law to repossess either (Kacher's) dental office equipment and fixtures or his automobile until such time that a due-process hearing . . . had been provided to him." The complaint further charged the Bank with selling the repossessed goods "without either a notice of the sale or a notice of the right of plaintiff to redeem."

Injury to Kacher allegedly stemmed from his loss of the use of the goods and "in having his business and professional reputation and dental practice permanently damaged due to the replevin without a due-process hearing." The complaint sought punitive damages of $100,000 in addition to compensatory damages.

The Bank, in response to the newly amended complaint, filed motions for summary judgment or to dismiss the complaint. Kacher then filed a petition in this court for a writ of mandamus or prohibition, claiming that the district court was obstructing enforcement of this court's order of August 29, 1972. This court denied his petition, ^1A and Kacher thereupon appealed to the United States Supreme Court, which dismissed his appeal and treating it as a petition for a writ of certiorari, denied the petition.

On his return to the district court, Kacher filed a petition for mandatory disqualification of the district judge who had been presiding over this case from its inception. The case was reassigned to another district judge, who heard argument and granted the Bank's motion to dismiss the complaint.

The district court framed the issue before it in terms of the retroactivity of the Fuentes decision. Adhering to the guidelines laid down in Chevron Oil Co. v. Huson 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971), the court reasoned that creditors and attorneys who had relied on the validity of the Pennsylvania replevin procedures before Fuentes were justified in so doing and should not be penalized thereafter. Moreover, it expressed the view that applying Fuentes retroactively was not necessary to further its underlying rationale and that, indeed, such...