Geldermann & Co., Inc. v. Dussault

• Decision Date: 25 October 1974
• Docket Number: No. 74 C 1662.,74 C 1662.
• Citation: 384 F. Supp. 566
• Court: U.S. District Court — Northern District of Illinois
• Parties: GELDERMANN & CO., INC., Plaintiff, v. John A. DUSSAULT, Individually and d/b/a Pinedale Polled Hereford Ranch, Defendant.

384 F. Supp. 566

GELDERMANN & CO., INC., Plaintiff, v. John A. DUSSAULT, Individually and d/b/a Pinedale Polled Hereford Ranch, Defendant.

No. 74 C 1662.

United States District Court, N. D. Illinois, E. D.

October 25, 1974.

COPYRIGHT MATERIAL OMITTED

James L. Fox, Moses, Gibbons, Abramson & Fox, Chicago, Ill., for plaintiff.

Stephen M. Murray, Lord, Bissell & Brook, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

BAUER, District Judge.

This cause before the Court on defendant's motion to quash service of summons and to dismiss for lack of personal jurisdiction.

Plaintiff is an Illinois corporation engaged as a broker in commodities futures which maintains branch offices in a number of different states. The defendant is a citizen and resident of Pinedale, Wyoming. The complaint contains two counts, Count I alleging liability under the terms of a customer agreement executed by the defendant, and Count II purportedly stating a claim in tort for an allegedly false representation made by defendant to plaintiff's officer, John T. Geldermann. Count I alleges that in September, 1973 the defendant opened a trading account with plaintiff and executed a customer agreement, a customer data sheet and a hedge letter, which documents were attached to the complaint as exhibits A, B and C respectively. Count I further alleges that subsequent thereto plaintiff purchased feeder cattle and pork belly futures contracts for defendant's account and that commencing on May 1, 1974 began, as agent for defendant, to accept delivery of 101 lots of feeder cattle. It is further alleged that defendant failed to reimburse plaintiff for the amounts advanced by plaintiff in accepting delivery of 79 lots, and that as a consequence thereof, after liquidating defendant's account, defendant is indebted to plaintiff under section 5 of the aforementioned customer agreement in the amount of $176,051.77.

Count II of the complaint alleges that prior to May 1, 1974 defendant told plaintiff's officer, John T. Geldermann, that sufficient funds were immediately available to defendant to permit him to meet his obligations to plaintiff upon the latter accepting delivery of 101 lots of feeder cattle. It is further alleged that this representation was false, and was relied upon by plaintiff to its detriment.

Plaintiff invokes the subject matter jurisdiction of this Court on the basis of 28 U.S.C. § 1332, and seeks to assert personal jurisdiction over this defendant on the basis of the Illinois long-arm statute (Chapter 110, Ill.Rev.Stat., 1973, §§ 17(1) (a) and (b)). Service of process over this defendant was purportedly made on July 26, 1974 by delivery of a copy of the summons and complaint to one Richard C. Rutledge, an employee of the defendant, at the Pinedale Polled Hereford Ranch, Pinedale, Wyoming, owned and operated by the defendant.

The affidavits submitted to the Court in support of this motion show that the summons was delivered as follows: On July 26, 1974 Rutledge was approached by a visitor who informed him that he had some papers to be served and directed Rutledge to accept the summons. Rutledge stated that he was not authorized to accept service of papers of any kind, that he was simply an employee of Mr. Dussault and that he would not and could not accept service of any papers. At that point the process server dropped the papers on the ground about 10 yards from Rutledge and left the scene. Whether or not the nature of the papers were explained to Rutledge is a factual question disputed by the parties.

I. SERVICE OF PROCESS ON AN EMPLOYEE OF DEFENDANT, NOT RESIDING WITH OR A MEMBER OF DEFENDANT'S HOUSEHOLD, AND NOT AUTHORIZED BY DEFENDANT TO ACCEPT SERVICE OF PROCESS IS INVALID UNDER THE APPLICABLE PROVISIONS OF THE ILLINOIS CIVIL PRACTICE ACT.

Service of process in this case was purportedly made under Rule 4(d)(7) of the Federal Rules of Civil Procedure which states in pertinent part:

"Upon a defendant of any class referred to in paragraph (1) or (3) of this subdivision of this rule, it is also sufficient if the summons and complaint are served in the manner prescribed by any statute of the United States or in the manner prescribed by the law of the state in which the district court is held for the service of summons or other like process upon any such defendant in an action brought in the courts of general jurisdiction of that state."

The statute available in the instant case under Rule 4(d) (7) is the Illinois long-arm statute, Chapter 110, Ill.Rev.Stat., 1973, § 17. Service thereunder must be made according to Chapter 110, Ill.Rev. Stat., 1973, § 13.2, which states:

"Except as otherwise expressly provided, service of summons upon an individual defendant shall be made (1) by leaving a copy thereof with the defendant personally or (2) by leaving a copy at his usual place of abode, with some person of the family, of the age of 10 years or upwards, and informing that person of the contents thereof, provided the officer or other person making service shall also send a copy of the summons in a sealed envelope with postage fully prepaid, addressed to the defendant at his usual place of abode. The certificate of the officer or affidavit of the person that he has sent the copy in pursuance of this section is evidence that he has done so."

Service in the instant case upon Richard C. Rutledge, the defendant's foreman, does not comply with requirements of Illinois law. Rutledge is not now and was not on July 26, 1974 a resident of defendant's home. He was not a member of defendant's household. Although he was an employee of the defendant he was not authorized to accept service of process on behalf of the defendant.

Plaintiff in opposition to the motion to quash service argues that the "spirit of the law and its purpose must be considered". It points out that the specially appointed United States Deputy Marshal spent approximately 32 hours in seeking to make service upon the person of the defendant.¹ However, there is no doubt that the defendant was successful in eluding him and was never personally served.

The Court fully agrees with plaintiff that the service provisions of the Illinois and Federal statutes were not intended to establish rules for a child's game of hide-and-seek. This Court has never sought to enforce technicalities where the spirit of rules would be defeated. Nevertheless, difficulties in obtaining service of process cannot form the basis for ignoring the clear statutory requirements. The rule that requires personal service is not a technicality but rather a mainstay in the foundation of due process upon which our legal system is built. The Court cannot lightly ignore the requirements of the rule merely because plaintiff has made a good — yet unsuccessful — attempt at compliance.

The law in Illinois requiring service of process upon the defendant personally or by leaving summons with a member of his family at his usual place of abode was discussed recently in Cumbo v. Cumbo, 9 Ill.App.3d 1056, 293 N.E.2d 694 (1973). The court found that if a summons was left at the abode with someone other than the defendant that person must be a permanent resident — or some rough equivalent. The court held that the service in Cumbo was insufficient because it was made on defendant's son who was visiting in defendant's home for two days. Similarly in the instant case service upon defendant's employee, Richard C. Rutledge, was insufficient since he was not a permanent resident in the home of the person sought to be served. In his affidavit Rutledge stated that he lived in the vicinity of the defendant's residence. It is clear, however, that he maintained his own personal residence at least 100 yards distant from defendant's home. The Illinois courts have upheld service upon maids,² and even landlords of rooming houses,³ but, never upon the next door neighbor. The distinction made by the courts is based on the requirement of the rule that service be at the defendant's abode upon a family member, who is also a permanent resident. "Family" was given an extended interpretation in Edward Hines Lumber Co. v. Smith, 29 Ill.App.2d 35, 172 N.E. 2d 429 (1961) wherein the court defined "family" as used in section 13.2(a) as:

"A collective body of persons who live in one house, and under one head or manager; a household, including parents, children and servants, and, as the case may be, lodgers or boarders" 29 Ill.App.2d at 43, 172 N.E.2d at 432.

Plaintiff is correct in its assertion that the courts do not favor those who seek to evade service of summons. However, in addition of the failure to physically serve the defendant there is a serious question as to whether jurisdiction is proper under the Illinois long-arm statute.

II. THE ASSERTION OF PERSONAL JURISDICTION OVER THE DEFENDANT IN THIS CASE WOULD VIOLATE DUE PROCESS.

In order to satisfy the requirements of due process under the Fourteenth Amendment, a court must find that a defendant has had those "minimum contacts" with the state deemed necessary to subject him to the personal jurisdiction of the courts of that state. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). The purpose of the long-arm statute is to extend the personal jurisdiction of the Illinois courts to the greatest extent permitted by the due process clause and the "minimum contacts" test. Grobark v. Addo Machine Co., 16 Ill.2d 426, 158 N.E.2d 73 (1959). This test as interpreted by the state and federal courts of Illinois has not been satisfied in this instance.

A review of the facts as presented by affidavits submitted by the parties demonstrates that there was not sufficient "minimum contacts". The defendant states that his initial contact with the plaintiff was made at plaintiff's branch office in Ogden, Utah. The customer agreement as well as the other documents attached as exhibits to the...