Federal Deposit Ins. Corp. v. Oaklawn Apartments

• Decision Date: 17 March 1992
• Docket Number: No. 91-6015,91-6015
• Citation: 959 F.2d 170
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Vernon Savings and Loan Association, FSA, Plaintiff-Appellee, v. OAKLAWN APARTMENTS, a California general partnership and its general partners; David T. Starr; Cynthia A. Starr; Keith D. Starr; Mary Lou Starr; Johnny N. Robertson, as personal representative of the estates of James N. Robertson and Clella A. Robertson; Johnny N. Robertson; Angela O. Robertson; Dan Young; Janet Young; Gary Young; Lola J. Young; Richard B. Adams; Donna L. Adams; Tommy J. Brown; Clarice E. Brown; 1414 Partnership, an Oklahoma corporation; Solon Automated Services, Inc., a Delaware corporation; Wanda Cavel, County Treasurer of Comanche County; Board of County Commissioners of Comanche County, Oklahoma, Defendants, and James A. Reep; Fatima J. Reep; Zan F. Calhoun, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 170

959 F.2d 170

22 Fed.R.Serv.3d 952

FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Vernon Savings and Loan Association, FSA, Plaintiff-Appellee, v. OAKLAWN APARTMENTS, a California general partnership and its general partners; David T. Starr; Cynthia A. Starr; Keith D. Starr; Mary Lou Starr; Johnny N. Robertson, as personal representative of the estates of James N. Robertson and Clella A. Robertson; Johnny N. Robertson; Angela O Robertson; Dan Young; Janet Young; Gary Young; Lola J Young; Richard B. Adams; Donna L. Adams; Tommy J. Brown Clarice E. Brown; 1414 Partnership, an Oklahoma corporation; Solon Automated Services, Inc., a Delaware corporation; Wanda Cavel, County Treasurer of Comanche County; Board of County Commissioners of Comanche County Oklahoma, Defendants, and James A. Reep; Fatima J. Reep; Zan F. Calhoun, Defendants-Appellants.

No. 91-6015.

United States Court of Appeals, Tenth Circuit.

March 17, 1992.

Robert W. Dace and Michael F. Lauderdale of McAfee & Taft, Oklahoma City, Okl., for defendants-appellants.

Eric A. Overby of Arter & Hadden, Oklahoma City, Okl., for plaintiff-appellee.

Before McKAY, Chief Judge, TACHA and BALDOCK, Circuit Judges.

BALDOCK, Circuit Judge.

Defendants-appellants James A. Reep, Fatima J. Reep and Zan F. Calhoun appeal a summary judgment in favor of Plaintiff-appellee Federal Deposit Insurance Corporation. Appellants contend that the service of process was insufficient and that the district court lacked personal jurisdiction. The district court never reached these issues as it concluded that Appellants had waived the defenses. Our jurisdiction is under 28 U.S.C. § 1291, and we reverse.

Appellants are former partners of defendant Oaklawn Apartments ("Oaklawn"), a California general partnership. ¹ In November 1979, Oaklawn executed and delivered a loan modification agreement which assumed the unpaid balance of a note payable to Old Vernon Savings and Loan Association ("OVSLA"). In September 1986, Oaklawn defaulted on the note. On September 1, 1989, Plaintiff, as receiver for OVSLA, filed suit against Defendants for breach of the note and loan modification agreement, foreclosure, and appointment of a receiver. ² Plaintiff attempted to serve a copy of the summons and complaint on Appellants, who are California residents, by certified mail delivered to the California office of defendant David Starr, an Oaklawn partner.

On September 20, 1989, attorney Eddie Newcombe, purporting to act on behalf of defendants David, Cynthia and Mary Lou Starr, as well as Appellants, filed a motion to dismiss. ³ The district court denied the motion. On November 29, 1989, Newcombe filed an answer, again purporting to act on behalf of the Starrs and Appellants, generally denying the material allegations of the complaint and asserting the defenses of lack of personal jurisdiction and failure to state a claim. On March 5, 1990, Newcombe filed a status report, on behalf of several defendants including Appellants, stipulating to personal jurisdiction as to all parties except Oaklawn and further stipulating to the Reeps' status as partners of Oaklawn. On May 11, 1990, Newcombe filed a response to Plaintiff's discovery requests on behalf of several defendants including Appellants.

On July 20, 1990, Appellants, represented by attorney Robert Dace, filed a motion to dismiss for lack of service, Fed.R.Civ.P. 12(b)(5), and lack of personal jurisdiction. Id. 12(b)(2). Appellants submitted affidavits in support of their motion stating that they had never been served and never resided or kept an office at the location of David Starr's office (where the summons and complaint in each of their names was sent), that neither they nor their agents or representatives had authorized Newcombe to represent them or file any pleadings on their behalf, and that they had never spoken to Newcombe before October 3, 1989, the date they believed that Newcombe filed the first pleading purportedly on their behalf. ⁴ Plaintiff countered with an affidavit from Newcombe stating that he filed the September 20 motion to dismiss on behalf of Appellants, and filed the subsequent answer, status report, and discovery request response on behalf of Appellants "in their capacity as partners." Newcombe also averred that "to the best of [his] knowledge and belief, [he] represented [Appellants] in their capacity as partners of Oaklawn ... at the direction of Mr. David Starr ... until the Motion to Dismiss was filed on their behalf by attorney Robert Dace...."

On September 6, 1990, the district court denied Appellants' motion, characterizing their affidavits as "conclusory self-serving statements insufficient to overcome the presumption that Mr. Newcombe did in fact represent them...." The district court noted that "Newcombe ha[d] been filing pleadings on [Appellants'] behalf ... for almost one year, and the trial [was] scheduled [the following] week." The court stated that it would "not permit [Appellants] to go along with the alleged charade for nearly a year, then wait until the eve of trial, when the fire is getting hot, to assert the Court has no personal jurisdiction over them." The court held that Appellants failure to raise insufficiency of service and lack of personal jurisdiction in their first responsive pleading waived the defenses. The district court granted Plaintiff's motion for summary judgment on the same day. ⁵

We review de novo a district court's grant of summary judgment. Osgood v. State Farm Mut. Auto Ins. Co., 848 F.2d 141, 143 (10th Cir.1988). Similarly, "[w]e review a district court's ruling on a jurisdictional question de novo." Rambo v. American Southern Ins. Co., 839 F.2d 1415, 1417 (10th Cir.1988) (citing Ten Mile Indus. Park v. Western Plains Serv., 810 F.2d 1518, 1524 (10th Cir.1987)). While our review of a dismissal for untimely service is for an abuse of discretion, Cox v. Sandia Corp., 941 F.2d 1124, 1125 (10th Cir.1991); Putnam v. Morris, 833 F.2d 903, 904 (10th Cir.1987), when a district court denies such a motion on the pleadings and affidavits, the de novo standard is proper. See Cutco Indus. v. Naughton, 806 F.2d 361, 364-65 (2d Cir.1986) (clearly erroneous standard applies to district court's findings from evidentiary hearing; de novo standard applicable when district court's ruling is based on pleadings and affidavits). Finally, the determination of waiver is a mixed question of law and fact which would require us to accept the district court's factual conclusions unless clearly erroneous but review the application of the facts to the law under a de novo standard. See Midamerica Federal Sav. & Loan Ass'n v. Shearson/American Express, Inc., 886 F.2d 1249, 1259 (10th Cir.1989). See also Mullan v. Quickie Aircraft Corp., 797 F.2d 845, 850 (10th Cir.1986) (mixed question of law and fact reviewed under de novo standard when it involves primarily a consideration of legal principles).

"The district court is given discretion in determining the procedure to employ in considering a motion to dismiss for lack of jurisdiction...." Ten Mile, 810 F.2d at 1524. Facts regarding jurisdictional questions may be determined by reference to affidavits, see Rambo, 839 F.2d at 1417, by a pretrial evidentiary hearing, see Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981), or at trial when the jurisdictional issue is dependent upon a decision on the merits. See Schramm v. Oakes, 352 F.2d 143, 149 (10th Cir.1965). While the plaintiff has the burden of establishing personal jurisdiction, Williams v. Bowman Livestock Equip. Co., 927 F.2d 1128, 1130 (10th Cir.1991); Behagen v. Amateur Basketball Ass'n, 744 F.2d 731, 733 (10th Cir.1984), cert. denied, 471 U.S. 1010, 105 S.Ct. 1879, 85 L.Ed.2d 171 (1985), and of establishing the validity of the service of process, Saez Rivera v. Nissan Mfg. Co., 788 F.2d 819, 821 n. 2 (1st Cir.1987) (per curiam); Norlock v. City of Garland, 768 F.2d 654, 656 (5th Cir.1985), this burden varies depending on the pretrial procedure employed by the district court. See Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 150, 112 L.Ed.2d 116 (1990); Forsythe v. Overmyer, 576 F.2d 779, 781 (9th Cir.), cert. denied, 439 U.S. 864, 99 S.Ct. 188, 58 L.Ed.2d 174 (1978).

"When a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing." Behagen, 744 F.2d at 733 (citations omitted). The "well pled facts" of the complaint must be accepted as true if uncontroverted by the defendant's affidavits, and factual disputes at this initial stage must be resolved in the plaintiff's favor when the parties present conflicting affidavits. Ten Mile, 810 F.2d at 1524. See also Bowman Livestock, 927 F.2d at 1130-31; Behagen, 744 F.2d at 733. Cf. Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66 (3d Cir.1984) ("mere affidavits which parrot and do no more than restate plaintiff's allegations without identification of particular defendants and without factual content do not end the inquiry").

On the other hand, when the district court holds a pretrial evidentiary hearing to resolve factual disputes relating to jurisdictional questions, the plaintiff has the burden to prove facts supporting jurisdiction by a preponderance of the evidence. See Ball, 902 F.2d at 197; Cutco Indus., 806 F.2d at 365.

Nevertheless, and in our view dispositive, "[w]hatever degree of proof is required initially, a plaintiff must have proved by the end of trial the jurisdictional facts by a preponderance of the evidence." Forsythe, 576 F.2d at 781. See also Cutco Indus., 806 F.2d at 365 ("plaintiff has the ultimate burden of establishing jurisdiction"); Marine Midland Bank, 664 F.2d at 904 (regardless of procedure "[e]ventually ... plaintiff must establish jurisdiction ... either at pretrial evidentiary hearing or at...