Gunter v. Merchants Warren National Bank

• Decision Date: 25 June 1973
• Docket Number: 14-20.,Civ. No. 13-117
• Citation: 360 F. Supp. 1085
• Parties: June B. GUNTER, Plaintiff, v. MERCHANTS WARREN NATIONAL BANK et al., Defendants. LAKE ARROWHEAD ESTATES, INC. and Leisure Living Communities, Inc., Plaintiffs, v. Russell P. and Rebecca H. CUMMING et al., Defendants.
• Court: U.S. District Court — District of Maine

360 F. Supp. 1085

June B. GUNTER, Plaintiff, v. MERCHANTS WARREN NATIONAL BANK et al., Defendants.

LAKE ARROWHEAD ESTATES, INC. and Leisure Living Communities, Inc., Plaintiffs, v. Russell P. and Rebecca H. CUMMING et al., Defendants.

Civ. Nos. 13-117, 14-20.

United States District Court, D. Maine, S. D.

June 25, 1973.

Thomas A. Cox, David M. Cohen, Portland, Me., for plaintiffs.

Roger S. Elliott, Saco, Me., for all individual defendants.

Roland A. Cole, Wells, Me., for County officials.

Matthew S. Goldfarb, Portland, Me., for bank.

David C. Pomeroy, Asst. County Atty., Portland, Me., for Sharpe.

Martin L. Wilk, Asst. Atty. Gen., Augusta, Me., for Caron.

Before COFFIN, Chief Judge, GIGNOUX and BOWNES, District Judges.

OPINION

GIGNOUX, District Judge.

These two cases present the identical question of whether the provisions of Chapter 507 of Title 14, M.R.S.A. (14 M.R.S.A. § 4451 et seq.) and Rule 4A of the Maine Rules of Civil Procedure, insofar as they permit the prejudgment attachment of real estate without prior notice and hearing, violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Plaintiffs have brought the actions under the Civil Rights Act, 42 U. S.C. § 1983, seeking injunctive relief, damages, and a declaratory judgment pursuant to 28 U.S.C. § 2201.¹ Jurisdiction is properly invoked under 28 U.S.C. § 1343(3), and the relevant facts have been stipulated. In both cases, the same three-judge district court has been convened pursuant to 28 U.S.C. §§ 2281 and 2284 to consider the plaintiffs' challenge to the constitutional validity of the Maine statute and rule.

The provisions of Maine law here attacked permit the attachment of real property of a defendant in a civil action to satisfy any judgment that may be recovered by the plaintiff. 14 M.R.S.A. § 4451.² Under the Maine practice, the plaintiff's attorney obtains from the clerk of courts a blank writ of attachment bearing the signature or facsimile signature of the clerk; the attorney then fills out the writ and delivers it to the officer making the attachment. Me.R.Civ.P. 4A(b) and (c).³ The attachment is made by a sheriff or other authorized officer completing the "return" on the reverse side of the writ and filing an attested copy of his return in the registry of deeds in the county in which the real estate is located. 14 M. R.S.A. § 4454. No provision is made for notice to the defendant or for opportunity for the defendant to be heard before the attachment is made.⁴ An amendment to Rule 4A, effective January 1, 1973, now permits a defendant, "on 2 days' notice to the plaintiff or on such shorter notice as the court may prescribe," to move for the dissolution or modification of the attachment, in which event the court is directed to hear and determine the motion "as expeditiously as the ends of justice require." Me.R. Civ.P. 4A(g).⁵

Plaintiff in No. 13-117, June B. Gunter, is the owner of approximately 50 acres of real property in the town of Standish, Cumberland County, Maine. On March 31, 1972, Merchants Warren National Bank of Salem effected an attachment of all Mrs. Gunter's real estate located in Cumberland County to the value of $4,840. The attachment was incident to a civil action commenced by the Bank against Mrs. Gunter in a Maine District Court to recover a $4,820 balance alleged to be due on a promissory note. Mrs. Gunter received no prior notice of the attachment and had no prior opportunity to challenge it. As permitted by Maine law,⁶ copies of the writ of attachment and of the summons and complaint were not served on her until four days after the attachment, and the complaint was not filed with the Court until 15 days thereafter. She instituted her present action on August 4, 1972. Named as defendants are the Bank, the sheriff who made the attachment, and the Clerk of the Maine District Court from which the writ issued.⁷

Plaintiff Lake Arrowhead Estates, Inc. in No. 14-20 is the owner of a 2250-acre recreational real estate development in the towns of Limerick and North Waterboro, York County, Maine.⁸ On February 26, 1973, six purchasers of individual lots from plaintiff's development effected an attachment of its real property in York County to the value of $330,000. The attachment was incident to a civil action filed in the York County Superior Court seeking $330,000 damages for alleged fraudulent misrepresentations in connection with the purchase of their lots. Plaintiff was provided no prior notice of the attachment or opportunity for hearing before the attachment was made. Service was not completed on plaintiff until nine days after the attachment, and the complaint was not filed with the court until the following day. The present action was filed in this Court on March 14, 1973, naming as defendants the plaintiffs in the state court action, the sheriff who made the attachment, the Clerk of the Superior Court which issued the writ, and the Register of Deeds in whose office the attachment was recorded.⁹

The constitutional issue presented is a narrow one. It is whether the failure of Maine law to afford a defendant an opportunity to be heard, before attachment of his real property, deprives the defendant of due process of law. We have concluded that fundamental principles of procedural due process, which have long been recognized by the Supreme Court and have most recently been reaffirmed by that Court in Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969) and Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L. Ed.2d 556 (1972) make clear that, by denying the defendant any prior opportunity to be heard and to present any defense he may have to the plaintiff's claim, Maine's prejudgment attachment procedure cannot pass constitutional muster.

For over 100 years the controlling principles have been well established: "The fundamental requisite of due process of law is the opportunity to be heard." Grannis v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 783, 58 L.Ed. 1363 (1914); Baldwin v. Hale, 1 Wall. (68 U.S.) 223, 233, 17 L.Ed. 531 (1864); Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965). Such hearing must be "at a meaningful time and in a meaningful manner." Armstrong v. Manzo, supra. "Opportunity for that hearing must be provided before the deprivation at issue takes effect." Fuentes, supra, 407 U.S. at 82, 92 S.Ct. at 1995 (emphasis supplied). In a variety of contexts, the Supreme Court has been insistent that due process so requires. E. g., Bell v. Burson, 402 U.S. 535, 542, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed. 2d 287 (1970); Armstrong v. Manzo, supra, 380 U.S. at 551, 85 S.Ct. 1187; Mullane v. Central Hanover Bank and Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 94 L.Ed. 865 (1950). As the Court observed in Fuentes, "this is no new principle of constitutional law." Fuentes, supra, 407 U.S. at 82, 92 S.Ct. at 1995.

Judged by this standard, the procedure provided by Maine law fails to meet even the minimum demands of due process. The effect of the Maine law is to permit, at the option of the plaintiff, the immediate attachment, without opportunity to be heard, of the real property of the defendant, simply upon the plaintiff's unsubstantiated assertion that he has a meritorious claim for damages. Cf. Fuentes, supra, 407 U.S. at 83, 92 S. Ct. 1983. It may be that Rule 4A, as recently amended, permits the defendant, after he receives notice of the attachment, to obtain an expeditious dissolution or modification of the attachment. But Maine law still allows the defendant's property to be attached for a substantial period of time without his prior knowledge.¹⁰ More fundamentally, opportunity for hearing after the event is no substitute for the right to a prior hearing "that is the only truly effective safeguard against arbitrary deprivation of property." Idem. In both Sniadach and Fuentes, the challenged statutes included provisions permitting the defendants to quickly recover the property taken from them.¹¹ Yet in both cases the Court held that the takings of property had to be preceded by notice and opportunity for hearing. Thus, it is of no consequence that the deprivation of an interest within the protection of the Fourteenth Amendment is temporary and not final. Fuentes, supra, 407 U.S. at 84-86, 92 S.Ct. 1983; Sniadach, supra, 395 U.S. at 343, 89 S.Ct. 1820 (Harlan, J., concurring); Bell v. Burson, supra, 402 U.S. at 536, 91 S.Ct. 1586.

These firmly settled principles underlie the Supreme Court's recent decisions in Sniadach and Fuentes. In Sniadach, the Court invalidated a state pretrial wage garnishment statute because it afforded a defendant neither notice nor an opportunity to be heard prior to the garnishment of his wages. In Fuentes, the Court invalidated for the same reasons two state statutes which provided for the replevin of personal property.¹² Defendants argue, however, that the holdings of Sniadach and Fuentes should not be extended to apply to real estate attachments. They say, first, that an attachment of real estate, which effects only a temporary restriction on the owner's power of alienation, is not a "taking of property" protected by the Fourteenth Amendment. Second, they urge that even if there has been such a taking, the resulting deprivation is nevertheless so insignificant that in view of the state's interest in protecting creditors' rights, due process does not require prior notice and hearing.

It is clear, however, that both contentions were met and rejected by the Supreme Court in Fuentes. As to defendants' first point, the Fuentes court first laid to rest the notion that the requirements of due process are limited to the protection of only a few types of property interests. 407 U.S. at 88-90, 92 S.Ct. 1983. Rejecting a narrow reading of Sniadach and Goldberg v. Kelly, supra, which some lower courts had interpreted as...