Barclays Bank, S.A. v. Tsakos, 86-1410.

• Decision Date: 03 June 1988
• Docket Number: No. 86-1410.,86-1410.
• Parties: BARCLAYS BANK, S.A., Appellant, v. Basil A. TSAKOS & Laura Farmaki Tsakos, Appellees.
• Court: D.C. Court of Appeals

543 A.2d 802

BARCLAYS BANK, S.A., Appellant, v. Basil A. TSAKOS & Laura Farmaki Tsakos, Appellees.

No. 86-1410.

District of Columbia Court of Appeals.

Argued December 8, 1987.

Decided June 3, 1988.

Geoffrey Judd Vitt, with whom Julie W. Davis, Washington, D.C., was on the brief, for appellant.

Michael W. Beasley, Washington, D.C., for appellees.

Before NEWMAN, ROGERS and STEADMAN, Associate Judges.

STEADMAN, Associate Judge:

Appellant Barclays Bank., S.A., (Bank) is a corporation organized under the laws of France and a wholly-owned subsidiary of the well-known English bank of the same name. Appellees Basil A. and Laura Farmaki Tsakos (the Tsakos) are Greek citizens now living in France. The Bank brought suit against the Tsakos in Superior Court, levying a prejudgment attachment against a cooperative apartment owned by the Tsakos in the Watergate complex. The case was dismissed on grounds of forum non conveniens. The Bank argues that 1) by reason of the levy of attachment, at least some limited jurisdiction may constitutionally be asserted by our courts relating to the entirely foreign controversy between the parties and 2) the trial court abused its discretion in dismissing the complaint on grounds of forum non conveniens. Holding that such jurisdiction exists and believing that the trial court may not have taken into account the possible alternative of simply staying the action pending completion of litigation in Europe, we reverse the dismissal and remand for further consideration.

I.

According to the Bank's amended complaint, the Tsakos guaranteed a $1.4 million loan to their son from a Paris office of the Bank. The loan is in default. The Bank brought actions on the guaranty against the Tsakos in France and Switzerland, as well as the District of Columbia. Personal service was effected in both foreign actions. Although prejudgment writs of attachment were obtained in those foreign actions, the Tsakos had previously taken steps to move their assets in both countries beyond the reach of the Bank.

The Bank's complaint here also set forth a claim based on fraudulent conveyance; the Bank alleged that the Tsakos were about to sell their apartment and remove the proceeds out of the District in order to defeat the just claim of the Bank.

Pursuant to D.C. Code § 16-501 (1981), the Bank obtained a prejudgment attachment against the Watergate apartment, on grounds both of the Tsakos' non-residency and of the impending sale of the apartment, the Tsakos' only asset in the District, and removal from the District of the proceeds.¹

The Tsakos moved to quash the attachment and dismiss the suit based on lack of personal jurisdiction. The trial court ordered the complaint dismissed for want of such jurisdiction but permitted an amended complaint to be filed asserting quasi in rem jurisdiction based on the attachment of the apartment. The Tsakos again moved to dismiss, asserting lack of quasi in rem jurisdiction under the holding of Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), and raising as an additional ground for dismissal forum non conveniens.

The trial court granted the motion to dismiss on grounds of forum non conveniens and concluded that "ipso facto the attachment before judgment should be quashed." It did not expressly rule on the jurisdictional argument. The Bank has appealed to this court.

II.

We turn first to the question of jurisdiction. Prior to 1977, this would have presented no issue. Quasi in rem jurisdiction was regularly asserted over a nonresident defendant through the seizure of an asset belonging to the defendant located within the tribunal's territorial jurisdiction. Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905); Western Urn Mfg. v. American Pipe & Steel Corp., 109 U.S. App.D.C. 145, 284 F.2d 279 (1960). In the District, we interpreted our prejudgment attachment statute to open our doors to such litigation even where both parties were nonresidents and the cause of action arose elsewhere. See Rice v. Salnier, 86 A.2d 175 (D.C. 1952).

In 1977, the Supreme Court decided Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569. It held that the seizure of property belonging to a defendant could not in itself suffice for jurisdiction; rather, "all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny." Id. at 212, 97 S.Ct. at 2584. The case referred to, International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), had encapsulated the test thus: "due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Id. 326 U.S. at 316, 66 S.Ct. at 158 (citation omitted).

Although the full implications of Shaffer v. Heitner are to this day yet to be worked out, the decision does not make irrelevant the presence of assets of a defendant within a tribunal's territorial jurisdiction. This fact in itself may be included in the congeries of considerations bearing upon the issue of sufficient "minimum contacts." See, e.g., Intermeat, Inc. v. American Poultry, Inc., 575 F.2d 1017, 1022-23 (2d Cir. 1978). Furthermore, the opinion recognizes the relevance of such considerations as the movement of property to evade obligations and the satisfaction of judgments obtained where in personam jurisdiction unquestionably lies, through levy on assets located elsewhere. 433 U.S. at 210 & nn. 35 & 36, 97 S.Ct. at 2583 & nn. 35 & 36. Indeed, most relevant to the case now before us, in its discussion of the primary rationale underlying the old quasi in rem practice (that a wrongdoer should not be permitted to avoid payment of obligations by removing his assets to a place where he is not subject to an in personam suit) the Court specifically notes that "[a]t most, [this justification] suggests that a State in which property is located should have jurisdiction to attach that property, by use of proper procedures, as security for a judgment being sought in a forum where the litigation can be maintained consistently with International Shoe." Id. at 210, 97 S.Ct. at 2583 (footnote omitted).²

In Carolina Power & Light Co. v. Uranex, 451 F.Supp. 1044 (N.D.Cal. 1977), the applicability of this approach as a basis of jurisdiction consistent with Shaffer v. Heitner was put to test. There, the court considered whether it could maintain a prejudgment garnishment under the California statute where no personal jurisdiction lay because neither the defendant French corporation nor the plaintiff's claims had sufficient connection with California. It concluded:

[A] fair reading of the Supreme Court's opinion in Shaffer v. Heitner, requires that the application of notions of "fair play and substantial justice" include consideration of both the jeopardy to plaintiff's ultimate recovery and the limited nature of the jurisdiction sought, that is, jurisdiction merely to order the attachment and not to adjudicate the underlying merits of the controversies. In some circumstances, even limited jurisdiction to attach property would nevertheless violate standards of "fair play and substantial justice," for example, where the attached property was merely moving through the state in transit to another country. But where the facts show that the presence of defendant's property within the state is not merely fortuitous, and that the attaching jurisdiction is not an inconvenient area for defendant to litigate the limited issues arising from the attachment, assumption of limited jurisdiction to issue the attachment pending litigation in another forum would be constitutionally permissible. Id. at 1048.³

We think this principle applies to the case before us. As we understand the Bank's present posture, it is willing to forbear adjudication here of the underlying claim against the Tsakos, which can await the outcome of the litigation in Europe. What the Bank seeks at bottom is simply to preserve the status quo of the attachment lien pending that outcome.

We do not deal here with just a bare-bones attachment to secure jurisdiction. An allegation is made of intended effective removal of the property by way of sale and nonavailability of assets elsewhere. Furthermore, the Tsakos' historical contacts with the District consist of more than their ownership of property for the moment located in the District. As their brief itself acknowledges, Mr. Tsakos operated in the early 1980's a business venture from an office in Washington, D.C., and he and his wife lived for a period of time between 1982 and 1984 in the apartment.⁴ The trial court found that they had "resided" there. Furthermore, the property attached is not in transitory passage through the District nor an intangible; it is immovable realty.⁵ Although these contacts existed prior to the making of the disputed loan and may be insufficient to support in personam jurisdiction, a point the Bank does not press upon us and on which we express no views, they need not be ignored⁶ We think them sufficient, when coupled with a continuing presence by way of real property ownership, to warrant imposing upon the Tsakos any steps necessary to deal with issues arising⁷ from the attachment itself. Cf. Intermeat, Inc. v. American Poultry, Inc., 575 F.2d 1017 (2d Cir. 1978) (garnishment of debt in New York unrelated to plaintiff's claim; defendant's business contacts with New York, although insufficient for personal jurisdiction, could require it to defend interest in the debt on quasi in rem jurisdictional grounds); accord Excel Shipping Corp. v. Seatrain Int'l, S.A., 584 F.Supp. 734 (E.D.N.Y. 1984). In short, we follow Uranex and hold that the trial court had jurisdiction to grant the Bank the provisional relief sought.⁸

III.

The trial...