Crosson v. Conlee

• Decision Date: 08 November 1984
• Docket Number: No. 83-2035,83-2035
• Citation: 745 F.2d 896
• Parties: Charles W. CROSSON, Jr., Appellee, v. Wendell F. CONLEE, the Executor of the Estate of E. Douglas Via, Deceased, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 896

745 F.2d 896

Charles W. CROSSON, Jr., Appellee, v. Wendell F. CONLEE, the Executor of the Estate of E. Douglas Via, Deceased, Appellant.

No. 83-2035.

United States Court of Appeals Fourth Circuit.

Argued May 10, 1984.

Decided Oct. 4, 1984.

Rehearing and Rehearing In Banc Denied Nov. 8, 1984.

William B. Hopkins, Jr., Roanoke, Va. (P. Brent Brown, Martin, Hopkins, Lemon & Carter, P.C., Roanoke, Va., on brief) for appellant.

Robert F. Rider, Roanoke, Va., for appellee.

Before RUSSELL and CHAPMAN, Circuit Judges, and HAYNSWORTH, Senior Circuit Judge.

DONALD RUSSELL, Circuit Judge:

This action is brought by Charles W. Crosson, Jr., plaintiff/appellee, against Wendell F. Conlee, the executor of the estate of E. Douglas Via, defendant/appellant, alleging breach of a contract of employment entered into by Crosson and Via. Subject matter jurisdiction rests on diversity of citizenship, 28 U.S.C. Sec. 1332(a)(1), plaintiff Crosson being a resident of Virginia, while defendant Conlee is a Florida attorney appointed under Florida law as personal representative for E. Douglas Via, a resident of Florida at the time of his death. The principal issues before us are, first, whether the federal district court in Virginia had personal jurisdiction over defendant where no property of the estate of the decedent was located in Virginia, and second, whether plaintiff's claim against the executor is barred due to noncompliance with Florida's nonclaim statute, not having been presented to the Florida probate court within three months of the first publication of notice of administration. The case was tried before a jury, which rendered a verdict for plaintiff in the amount of $20,296.46. Defendant moved for judgment n.o.v., which the district court denied, entering judgment on the verdict. Defendant appeals, and we reverse.

I

The pertinent facts are not subject to dispute. Plaintiff's complaint alleged that he was employed in September 1978 as a manufacturer's representative for Via's business, a sole proprietorship located in Roanoke, Virginia, A condition of plaintiff's acceptance of employment was that Via would retire from the business at the close of 1980, and plaintiff would then assume control. During 1979 and 1980 the business was effectively carried on by plaintiff, Via having moved from Virginia to Florida, making only occasional visits to Roanoke. Via refused to honor his agreement to retire at the end of 1980, and also withheld commissions due to plaintiff in 1981 under the terms of his contract of employment. Plaintiff has asserted without contest that the contract was entered into in Virginia.

Via died on May 5, 1982 in the State of Florida, where he was then a resident and domiciled. All of Via's property, real and personal, was located in Florida at the time of his death and remains there. Defendant qualified as the personal representative of Via's estate in the Probate Division of the Circuit Court for Sarasota County, Florida on May 28, 1982. Notice of administration of the estate was first published on May 31. Plaintiff filed his complaint in the United States District Court for the Western District of Virginia against defendant in his capacity as executor on July 2, 1982, but failed to file any claims with the Probate Court in Florida within three months of the publication of notice of administration.

Defendant generally pled the "applicable statute of limitations" as a bar in his answer of July 29, 1982, but did not specifically raise the issue of the nonclaim statute until he moved for summary judgment in December 1982, after the three-month period had elapsed.

II

Personal jurisdiction over defendant is asserted on the basis of the Virginia long-arm statute, Va.Code, Secs. 8.01-328 to 330, and Fed.R.Civ.P. 4(d)(7) and 4(e), which authorize extraterritorial service of process in accordance with the laws of the state in which the district court is held. Va.Code Sec. 8.01-328.1(A)(1) confers personal jurisdiction on the Virginia courts as to a cause of action arising from a "person's ... [t]ransacting any business in this Commonwealth." The statute expressly defines "person" to include "an individual, his executor, administrator, or other personal representative," Va.Code Sec. 8.01-328, thereby bringing defendant within its ambit.

This jurisdictional question is complicated, however, by the old Virginia common law rule that an executor or administrator is not subject to suit in a state other than that of his appointment, unless he brings into or collects from the state assets of the decedent's estate. Sylvania Industrial Corp. v. Lilienfeld's Estate, 132 F.2d 887, 890 (4th Cir.1943); Fugate v. Moore, 86 Va. 1045, 11 S.E. 1063 (1890). In Sylvania, we recognized that Virginia law is controlling on whether a foreign executor is subject to suit in a federal court in Virginia, 132 F.2d at 890, and applied the rule of Fugate in holding that the defendant, a foreign executrix, could be sued in federal court there because Virginia was the situs of corporate stock belonging to the estate. Id. at 891. Here, however, no assets of the estate of Via are found in Virginia, so that the exception to the prohibition against suing a foreign executor in Fugate and Sylvania cannot be met. The issue, then, is whether the common law prohibition against such a suit as this has been removed by the enactment of the Virginia long-arm statute in 1964.

Sylvania explained the Virginia rule thus:

"The reason that a foreign executor is not ordinarily subject to suit is that a grant of administration has no legal operation outside the state from whose jurisdiction it is derived. [citation omitted] The exception recognized by the Virginia decisions is based upon the right of the state to protect local creditors with respect to the property of the decedent found or brought within the state. As to such property, the power of the state can be asserted without regard to the powers granted the executor by the foreign state."

132 F.2d at 891. Likewise, the comments to Restatement (Second) of Conflict of Laws Sec. 358 (1971) indicate that the judicial reluctance to entertain suits against foreign executors is not necessarily due to a want of jurisdiction, but because "the courts have deemed themselves incompetent to entertain the suit in the absence of statute," since a foreign executor holds the assets of the estate subject to the direction of the appointing court. Comment b. The rule permitting suit against a foreign executor where assets lie within the forum state is predicated on the state's in rem jurisdiction over property within its own territory. Comment c.

Sylvania was decided two years before the revolution in personal jurisdiction wrought by the Supreme Court's enunciation of the "minimum contacts" due process doctrine in International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). A suit such as that before us falls within the permissible limits of due process, being "based on a contract which had substantial connections with" the forum state, Virginia. McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957). We conclude that the facts of this case also come within the "transacting business" clause of the Virginia long-arm statute. There can be no doubt that personal jurisdiction could have been obtained over Via during his lifetime, as he had operated a business in Virginia and entered into a contract with plaintiff concerning that business in Virginia. As the Virginia Supreme Court and this Circuit have repeatedly held, the long-arm statute represents a deliberate and conscious effort by the Virginia legislature to assert jurisdiction over nonresident defendants to the extent permitted by due process. Brown v. American Broadcasting Co., Inc., 704 F.2d 1296, 1301 (4th Cir.1983); Peanut Corp. of America v. Hollywood Brands, Inc., 696 F.2d 311, 313 (4th Cir.1982); John G. Kolbe, Inc. v. Chromodern Chair Co., 211 Va. 736, 180 S.E.2d 664, 667 (1971); Carmichael v. Snyder, 209 Va. 451, 164 S.E.2d 703, 707 (1968). The Virginia Supreme Court has not yet addressed the issue before us, but we are convinced that it would recognize, as we do now, that the enactment of the Virginia long-arm statute in 1964, over two decades after Sylvania, considerably broadened the scope of personal jurisdiction in Virginia and superseded the rule of Fugate and Sylvania. ¹ That common law doctrine, with its focus on the location of property, was more suited to the narrow concept of personal jurisdiction embodied in Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877). By defining persons subject to the statute to include an executor, the legislature necessarily rejected the possibility that personal jurisdiction might disappear with the fortuitous death of an individual defendant. ² A finding of personal jurisdiction here is in accord with the rule expressed in Restatement (Second) of Conflict of Laws Sec. 358 (hereinafter Restatement):

"An action may be maintained against a foreign executor or administrator upon a claim against the decedent when the local law of the forum authorizes suit in the state against the executor or administrator and

"(a) suit could have been maintained within the state against the decedent during his lifetime because of the existence of a basis of jurisdiction other than mere physical presence."

The Massachusetts Supreme Judicial Court has addressed an analogous situation in Saporita v. Litner, 371 Mass. 607, 358 N.E.2d 809 (1976). In Saporita, the plaintiff sought to recover against the defendant executor on a contract for services performed for the testator in Massachusetts. The testator, however, had left no assets in Massachusetts, and the executor had been appointed by a Connecticut probate court. The executor relied on the general rule that in Massachusetts a foreign executor was not subject to suit in the state courts....