Rauch v. Day & Night Mfg. Corp.
| Decision Date | 03 May 1978 |
| Docket Number | No. 76-1972,76-1972 |
| Citation | 576 F.2d 697 |
| Parties | Carl Thomas RAUCH, III, Plaintiff-Appellant, v. DAY AND NIGHT MANUFACTURING CORPORATION et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Robert C. Livo, Hile & Livo, Nicholas V. Hile, Cheboygan, Mich., for plaintiff-appellant.
Robert L. Hetzler, Smith & Brooker, P.C., Carl H. Smith, Bay City, Mich., for defendants-appellees.
Before PECK, LIVELY and ENGEL, Circuit Judges.
The single issue in this appeal is whether a district court may sua sponte dismiss a diversity action against defendants for lack of personal jurisdiction over them where the defendants themselves have waived any objection on this account and have acted in the case inconsistently with that defense. We hold that it may not and that the district court here erred in granting relief which the defendants themselves were precluded, under Rule 12, Fed.R.Civ.P., from seeking.
The complaint alleged that on January 6, 1971, plaintiff Carl Thomas Rauch, III and others in his family were overcome by carbon monoxide poisoning resulting from the malfunction of a gas-fired wall heater in a motel room which plaintiffs were occupying while on vacation in Juarez, Mexico. The complaint further alleged that the heater was manufactured by the defendant Day and Night Manufacturing Corporation. Four individual officers and directors of Day and Night were also alleged to be personally liable and an unknown successor corporation to Day and Night was named as an additional defendant. Separate counts charged defendants with negligence, breach of warranty, strict liability, and intentional tort.
While several members of the Rauch family had originally joined in the suit and while a distributor of the wall heater had been named as a defendant, only the claim of Carl Thomas Rauch, III against the Day and Night defendants remains and is the subject of this appeal. Rauch allegedly incurred extensive permanent injuries from being overcome by the carbon monoxide, necessitating the appointment of a guardian to handle his affairs.
The plaintiffs, domiciled in Michigan, had originally commenced suit against Day and Night in Texas on January 14, 1974. The instant action was commenced in the United States District Court for the Eastern District of Michigan on June 11, 1974. Service of process as to the corporate defendant was made upon the Secretary of State of Delaware, Day and Night having been a Delaware corporation.
On August 30, 1974 the defendant manufacturer and the individual defendants, who will be referred to collectively as "Day and Night," filed an appearance and, in a separate document, moved to stay the Michigan proceedings on the ground of the pendency of an identical action in Texas, alleging that the parties had appeared therein and that "there have been some hearings involving the merits of plaintiffs' cause of action." The motion also sought dismissal of the Michigan claim because:
the action by plaintiffs is barred by the Statute of Limitations. The injuries complained of were allegedly received on January 6, 1971, and this action was not filed until June 12, 1974.
No objection to the in personam jurisdiction over Day and Night was made.
On March 10, 1975 the Texas action was dismissed without prejudice. This was followed on March 25, 1975 by a stipulation between counsel for the plaintiffs and for Day and Night to an order in the Michigan case staying all proceedings until the further order of the court, and by a subsequent stipulation between the same parties on May 29, 1975, vacating the stay order and reinstating the cause to full and active status.
After reinstatement of the Michigan action, counsel for Day and Night on November 17, 1975 served upon Carl Rauch, III extensive interrogatories, 87 in number, and covering all aspects of the case. Those interrogatories were fully answered by Rauch on December 18, 1975.
On March 8, 1976, Day and Night noticed on for hearing the motion to dismiss which it had previously filed. On March 31, 1976, attorneys for the other defendant in the case filed an amended motion to dismiss, alleging for the first time as grounds therein that "(t)his court lacks in personum (sic) jurisdiction over this defendant." It nowhere appears that Day and Night joined in the March 31 motion of the other defendant.
On May 17, 1976 the district court in a memorandum opinion and order held with respect to the statute of limitations defense that the actions had been filed in an untimely manner with regard to plaintiffs Kathy Rauch and Bill Rauch, and that their actions were barred by Michigan's three-year statute of limitations in Mich.Stat.Ann. § 27A.5805 (M.C.L.A. § 600.5805). The district judge held that the question of whether the applicable statute of limitations was tolled as to Carl Rauch was a factual issue. It appeared that a guardian had been appointed for him by the Probate Court of Cheboygan County, Michigan after the accident and had not been discharged of his duties until June 12, 1972. Nonetheless, the trial judge made the following determination:
However, the court finds that there is no proper basis for personal jurisdiction over any of the defendants and therefore may not allow this case to proceed. Although only some of the defendants have raised the issue of lack of jurisdiction, the Court is required sua sponte to review the amended complaint of plaintiffs and determine if all the defendants are properly before the Court. Giving plaintiffs' amended complaint a fair reading the Court cannot find any basis for gaining personal jurisdiction over any of the defendants under the applicable state and federal laws.
We conclude that the trial judge erred in failing to distinguish between concepts of subject-matter jurisdiction and those relating to in personam jurisdiction. The former may never be waived and may always be reached by the court sua sponte, 1 for the plain reason that parties may not confer upon a court subject-matter jurisdiction which does not in fact exist. 2 On the other hand, personal jurisdiction over a defendant may be acquired in a variety of ways, including voluntary appearance, and objections may be barred by the failure timely to assert them. Such clearly occurred here.
Defendants Day and Night have neither filed a motion to dismiss for lack of in personam jurisdiction nor joined in a like motion of others. In addition, however, the following inconsistent acts were taken:
August 30, 1974: an appearance was filed on behalf of Day and Night.
August 30, 1974: Day and Night moved to dismiss on the grounds of the statute of limitations, praying also for a stay of the Michigan proceedings because of the pendency of the identical action in Texas.
May 29, 1975: Day and Night joined in a stipulation reinstating the Michigan action.
November 18, 1975: Day and Night filed extensive interrogatories directed to Carl Rauch, III.
March 31, 1976: while attorneys for the other defendant amended their motion to dismiss to add the grounds of lack of in personam jurisdiction, Day and Night did not join in that motion.
In Goldey v. Morning News, 156 U.S. 518, 521, 15 S.Ct. 559, 560, 39 L.Ed. 517 (1895), the Supreme Court observed:
It is an elementary principle of jurisprudence that a court of justice cannot acquire jurisdiction over the person of one who has no residence within its territorial jurisdiction, except by actual service of notice within the jurisdiction upon him or upon someone authorized to accept service in his behalf, or by his waiver, by general appearance or otherwise, of the want of due service. (emphasis added).
In Pennoyer v. Neff, 95 U.S. 714, 725, 729, 24 L.Ed. 565 (1878), the Supreme Court specifically recognized that personal jurisdiction could be founded upon voluntary appearance. Likewise, the parties themselves can contractually agree to submit to the jurisdiction of a given court. National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 84 S.Ct. 411, 11 L.Ed.2d 354 (1964). The question in this case, therefore, is whether under the existing law and under the Federal Rules of Civil Procedure, the conduct by defendants Day and Night amounts to a waiver of any objection to the personal jurisdiction of the court over it.
Rule 12(b) of the Federal Rules of Civil Procedure provides in pertinent part:
Every defense, in law or fact, to a claim for relief in any pleading . . . shall be asserted in the responsive pleading thereto except that the following defenses may at the option of the pleader be made by motion:
(7) failure to join a party under Rule 19.
A motion making any of these defenses shall be made before pleading if a further pleading is permitted. No defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion. (emphasis added).
Rule 12(h) provides in pertinent part:
(1) A defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in subdivision (g), or (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course. (emphasis added).
(3) Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.
While Rule 12(h)(3) preserves and recognizes the court's time-honored obligation, even sua sponte, to dismiss any action over which it has no subject-matter jurisdiction, the rule does not accord similar...
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