George v. Lewis, Civ. A. No. 7338.

• Citation: 204 F. Supp. 380
• Decision Date: 06 April 1962
• Docket Number: Civ. A. No. 7338.
• Parties: George T. GEORGE, Plaintiff, v. John L. LEWIS, Josephine Roche and Henry G. Schmidt, Individually, and as Trustees of The United Mine Workers of America Welfare and Retirement Fund, Defendants.
• Court: United States District Courts. 10th Circuit. United States District Court of Colorado

204 F. Supp. 380

George T. GEORGE, Plaintiff, v. John L. LEWIS, Josephine Roche and Henry G. Schmidt, Individually, and as Trustees of The United Mine Workers of America Welfare and Retirement Fund, Defendants.

Civ. A. No. 7338.

United States District Court D. Colorado.

April 6, 1962.

Carmel A. Garlutzo, Trinidad, Colo., for plaintiff.

Zarlengo, Zarlengo & Seavy, Anthony F. Zarlengo, Denver, Colo., and Val J. Mitch, Harold H. Bacon, Charles L. Widman, Washington, D. C., for defendants.

ARRAJ, Chief Judge.

Suit was initiated in the District Court of the State of Colorado, Las Animas County. The plaintiff seeks relief in the amount of $8,600.00 for accrued pension benefits and hospitalization coverage alleged to be due to him under the United Mine Workers of America Welfare and Retirement Fund of 1950, a trust created in accordance with the National Bituminous Coal Wage Agreement of 1950 and authorized in the Labor Management Relations Act of 1947 (29 U.S. C.A. § 186(c)). Further relief is requested in the form of an Order directing that the defendants place the plaintiff on the pension rolls as a beneficiary.

Defendants removed the case to this Court. It appears from the petition for removal that Washington, D. C., is the situs of the trust. The grounds for removal rest upon diversity of citizenship, and the defendants allege that each is a citizen of a state other than Colorado. The petition for removal asserts that the amount in controversy exceeds $10,000.00. The defendants have also filed a motion to dismiss for improper service of process, lack of jurisdiction over the subject matter, and improperly laid venue.

A motion to remand the case to the state court was filed in due course by the plaintiff, based primarily on the ground that the matter in controversy does not exceed $10,000.00 exclusive of costs and interest.

The pleadings disclose that the plaintiff attached and garnished funds, pursuant to Rules 102 and 103 of the Colorado Rules of Civil Procedure, in the possession of the Colorado Fuel & Iron Corporation, doing business in Pueblo, Colorado. By stipulation between counsel for plaintiff and garnishee, $9,500.00 of the funds owed by garnishee to defendants has been set aside for the satisfaction of any judgment in favor of plaintiff. Personal service of process on the defendants was not made within the State of Colorado; however, it appears that the defendants were personally served elsewhere.

Before an action may be removed to a United States District Court, it must be one which could have been brought therein originally; 28 U.S.C. § 1441(a). Therefore, when defendants petition for removal, they must show that the jurisdictional prerequisites, including the amount in controversy, are satisfied within the meaning of 28 U.S.C. § 1332. McNutt v. General Motors Acceptance Corp., 1936, 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135; Gaitor v. Peninsular & Occidental Steamship Company, 5 Cir., 1961, 287 F.2d 252; 1A Moore's Federal Practice Para. O.157(6). Section 1447(c) of Title 28 of the United States Code commands a Federal Court to remand a case which has been improvidently removed or where the court is without jurisdiction.

The defendants support their averment of the requisite jurisdictional amount by maintaining that future pension benefit payments predicated upon the plaintiff's life expectancy should be considered. First, the defendants assert that the plaintiff's request to be placed on the pension rolls is an indication that future payments thereunder are in controversy. Next, the defendants argue that before the plaintiff is entitled to recover anything, even the accrued benefits which admittedly do not meet the jurisdictional amount, he must be declared a beneficiary of the trust fund. From this point the defendants reason that such a ruling in favor of the plaintiff would make his status binding in subsequent litigation for future installments which will become due. The inference of this rationale is that the doctrines of res judicata and collateral estoppel will operate upon any judgment rendered in this suit, thereby increasing the value of the right which the plaintiff asserts to an amount which, when future benefit payments based upon the plaintiff's life expectancy are considered, will exceed the jurisdictional minimum.

The object which is sought to be accomplished by the plaintiff may be looked to in determining the value of the matter in controversy. Hunt v. New York Cotton Exchange, 1907, 205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. 821; Bitterman v. Louisville and Nashville R.R. Co., 1907, 207 U.S. 205, 28 S.Ct. 91, 52 L.Ed. 171; Glenwood Light & Water Co. v. Mutual Light Co., 1915, 239 U.S. 121, 36 S.Ct. 30, 60 L.Ed. 174; Ronzio v. Denver & R. G. W. R. Co., 10 Cir., 1940, 116 F.2d 604; 30 A.L.R.2d 602. However, if it appears legally certain that the plaintiff has no reasonable expectation of recovery of an amount within the jurisdictional requirement, the case should be remanded. St. Paul Mercury Indemnity Co. v. Red Cab Co., 1938, 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845; Lion Bonding & Surety Co. v. Karatz, 1923, 262 U.S. 77, 43 S.Ct. 480, 67 L.Ed. 871; Payne v. State Farm Mutual Automobile Insurance Co., 5 Cir., 1959, 266 F.2d 63; Odell v. Humble Oil & Refining, 10 Cir., 1953, 201 F.2d 123; Wyoming Ry. Co. v. Herrington, 10 Cir., 1947, 163 F.2d 1004; Colorado Life Co. v. Steele, 8 Cir., 1938, 95 F.2d 535; 1A Moore's Federal Practice Para. 0.157(6).

Service of process was made upon the defendants in Washington, D. C., by a United States Marshal. Under the doctrine laid down in Pennoyer v. Neff, 1877, 95 U.S. 714, 24 L.Ed. 565, personal jurisdiction is required before a binding personal judgment may be rendered. This concept still survives where nonresident individuals who are not engaged in transacting business in a state are not personally served therein; Ehrenzweig, Pennoyer Is Dead — Long Live Pennoyer, 30 R.M.L.R. 284, 292 (1958). Also, unless a state has provided a legislative basis for asserting its power over nonresident entities which engage in sufficient activities to justify the recognition of personal jurisdiction, a court within the state cannot render binding personal judgments where there has been no service of process based upon physical presence within the state. Restatement of Judgments, Sections 1-6.

It has not been shown that the service of process which was completed upon the defendants herein conformed with any statutory procedure prescribing the method for acquiring personal jurisdiction over nonresident trusts or trustees. Therefore, the state court does not appear to have in personam jurisdiction over these defendants. Since personal jurisdiction cannot be acquired on removal, it follows that none has been acquired in this case. General Investment Co. v. Lake Shore Ry., 1922, 260 U.S. 261, 43 S.Ct. 106, 67 L.Ed. 244; Lambert Run Coal Co. v. Baltimore & Ohio R. Co., 1922, 258 U.S. 377, 42 S.Ct. 349, 66 L.Ed. 671; Garden Homes, Inc. v. Mason, 1 Cir., 1956, 238 F.2d 651; 1A Moore's Federal Practice Para. O.157(3). Consequently, future benefit payments which would possibly result from placement of the plaintiff on the pension rolls of the trust should not be considered in determining the amount in controversy when it appears certain that such relief cannot be granted.

One recognized method used for satisfying most claims against nonresidents that cannot be personally served within the state is commonly referred to as in rem or quasi in rem jurisdiction acquired through attachment or garnishment of the defendant's property within the state. Restatement, Conflict of Laws, Section 107. A judgment which is rendered in such a case operates solely upon the res attached; Freeman v. Alderson, 119 U.S. 185, 7 S.Ct. 165, 30 L.Ed. 372; Goodrich, Conflict of Laws, Section 68. Colorado has recognized this concept by providing for service of process on owners of specific property without regard to residence or domicile; Colorado Rules of Civil Procedure, Rule 4(f) (3).

In general, if a nonresident defendant does not submit his person to the Court's jurisdiction, a judgment rendered in an action which is based upon quasi in rem jurisdiction is binding with regard to the specific...