Rittenberry v. Lewis

• Citation: 222 F. Supp. 717
• Decision Date: 09 October 1963
• Docket Number: 4082.,4162,4161,4116,Civ. A. No. 4104
• Parties: Charlie RITTENBERRY v. John L. LEWIS et al. Joe SISK v. John L. LEWIS et al. William Hamilton MAYES v. John L. LEWIS et al. Gladstone HACKNEY v. John L. LEWIS et al. George RAMSEY d/b/a Ramsey Coal Company v. UNITED MINE WORKERS OF AMERICA WELFARE AND RETIREMENT FUND.
• Court: U.S. District Court — Eastern District of Tennessee

222 F. Supp. 717

Charlie RITTENBERRY v. John L. LEWIS et al.

Joe SISK v. John L. LEWIS et al.

William Hamilton MAYES v. John L. LEWIS et al.

Gladstone HACKNEY v. John L. LEWIS et al.

George RAMSEY d/b/a Ramsey Coal Company v. UNITED MINE WORKERS OF AMERICA WELFARE AND RETIREMENT FUND.

Civ. A. Nos. 4104, 4162, 4161, 4116, 4082.

United States District Court E. D. Tennessee, S. D.

October 9, 1963.

H. H. Gearinger, Chattanooga, Tenn., William M. Ables, Jr., South Pittsburg, Tenn., Sizer Chambliss, Chattanooga, Tenn., for plaintiffs.

E. H. Rayson, R. R. Kramer, Knoxville, Tenn., Charles L. Widman, Washington, D. C., for defendants.

FRANK W. WILSON, District Judge.

These cases are before the Court upon the defendants' motions to dismiss or in the alternative to quash the service of process. The actions were instituted in each of the first four cases against the trustees of the United Mine Workers of America Welfare and Retirement Fund (hereinafter referred to as the "Fund") which was created by the trust indenture contained in the National Bituminous Coal Wage Agreement of 1950, pursuant to authority in the Labor Management Relations Act of 1947 (29 U.S.C. § 186 (c)). In the Ramsey case suit was instituted solely against the Fund. The plaintiffs in the first four cases contend that they have met all of the qualifications requisite for receiving a pension from the Fund and that the defendant trustees have arbitrarily and capriciously refused the plaintiffs' claims. The suits seek to establish that the plaintiffs are Fund beneficiaries and entitled to pensions. The plaintiff, Ramsey, a coal producer, seeks the refund of monies allegedly illegally collected by the Fund. Service of process upon the trustees and the Fund was effected in each case under authority of Section 20-223, Tennessee Code Annotated, as amended by Chapter 254 of the Public Acts of Tennessee, 1963.

The defendants' motions in all of the cases raise identical issues for the most part. A number of grounds are asserted in support of the defendants' motions to dismiss or, in the alternative, to quash the service of process. Consideration will be given initially only to the first four cases, Rittenberry, Sisk, Mayes, and Hackney, and to each ground of the motions in these cases in the following order: (1) and (2) process under Section 20-223, T.C.A., is invalid and ineffective in that the Trust Fund is not a suable entity and the statute does not provide for service of process upon the trustees in their individual capacity; (3) the Trust Fund and the trustees are not doing business in Tennessee as contemplated by Section 20-223, T.C.A.; (4) the Trust Fund is a trust of movables with its situs in the District of Columbia and its administration may be reviewed only by the courts of that jurisdiction; and (5) the attempted service of process violates the due process and full faith and credit provisions of the United States Constitution.

Grounds (1) and (2) as heretofore stated complain of the service of process under Section 20-223, Tennessee Code Annotated, which, as amended by Chapter 254 of the Public Acts of Tennessee for 1963, provides for substituted service upon "non-resident trusts" doing business in Tennessee.¹ The defendants contend that the statute is in derogation of the common law and should be strictly construed. Tabor v. Mason Dixon Lines, Inc., 196 Tenn. 198, 264 S.W.2d 821; Ellis v. Georgia Marble Co., 191 Tenn. 229, 232 S.W.2d 45. Here service was effectuated upon the trustees, rather than the trust as such, which is not provided for in a literal reading of the statute. It is also pointed out by the defendants that service would not be maintainable if effected solely upon the "trust." Yonce v. Miners Memorial Hospital Association, D.C., 161 F.Supp. 178. Thus the question presented is whether the statutory language is broad enough to validate service upon the trustees of the Trust Fund and the applicable rules of statutory construction. Conceding that a statute in derogation of the common law must be given a strict construction, "* * * it should nevertheless be construed sensibly and in harmony with the purpose of the statute, so as to advance and render effective such purpose and the intention of the legislature." Harbison v. Welch, 195 Tenn. 191, 258 S.W.2d 755, quoting 50 Am.Jur., Statutes, Sec. 404. The legislature will not be presumed to have done a useless and vain thing. Texas Gas Transmission Corp. v. Atkins, 205 Tenn. 495, 327 S.W. 2d 305. The Court is of the opinion, therefore, that the statutory amendment contemplated and was sufficient to accomplish the purpose of regulating the doing of business in Tennessee by non-resident trusts by providing for substituted personal service upon the trustees of the trust fund through the secretary of state. It is not deemed necessary at this time to decide the propriety of serving the "trust."

Turning now to the third ground asserted in the defendants' motions to dismiss, wherein it is asserted that the defendants are not doing business in Tennessee as required by Section 20-223, T.C.A., in order to sustain substituted personal service upon the trustees through the secretary of state, the following appears undisputed from the affidavits and interrogatories of the parties:

Under the National Bituminous Coal Wage Agreement the Fund has been entitled to collect 30¢ per ton and since 1952, 40¢ per ton, upon all coal mined in Tennessee under the Agreement. Since its inception in 1950 the Fund has accordingly collected royalties upon much of the coal mined in Tennessee. The Fund admits that "a substantial amount of money" has been raised from coal royalties in Tennessee, but states that the records are too voluminous to ascertain the exact amount collected. Likewise, it is conceded that "there are numerous beneficiaries of the Trust Fund located in Tennessee," but states that to separate these from the 1,500,000 beneficiaries of record as of June 1962 would be too onerous a burden. The Fund has itself resorted to court action in courts located within Tennessee to collect royalties upon coal mined within this state upon numerous occasions, having twelve such suits currently pending in which royalties in the sum of $801,149.76 are sought to be collected. The Fund maintains an area medical office in Knoxville, Tennessee for the purpose of "making arrangements for the purchasing of medical care for Trust Fund beneficiaries." Representatives of the Fund visit applicants in order to assist such applicants in compiling information and reports necessary to apply for Fund benefits. Auditors representing the Fund visit Tennessee to check employers' records, nine such auditors having been in the state at various times during the past three years to make checks upon coal production and royalty payments.

In the opinion of the Court these facts clearly satisfy the test of doing business in Tennessee as that test is applied in the courts of this state. As stated in the case of Smartt v. Coca Cola Bottling Corp., 318 F.2d 447 (C.C.A. 6 Cir., 1963), the "* * * Tennessee test appears to be satisfied when the minimal contacts making it fair and reasonable to exercise judicial power are established." The activities of the Fund are not unlike those of an insurance company or association. The form of business organization, whether that of a trust, such as the defendant, or that of a corporation or association, as more customarily met with in the insurance field, does not alter the nature of the activities engaged in within the state nor alter the test of whether such activities met the "doing business" requirement of the substituted service statute. Substituted service of process under Tennessee law upon an insurance association has been upheld upon the basis of much less activity within the state than has been shown in the principal case. In the case of Schutt v. Commercial Travelers Mutual Accident Ass'n, 229 F.2d 158 (C.C.A. 2 Cir., 1956) mail order activities of a non-resident insurance carrier were held sufficient to satisfy the "doing business" requirement in the Tennessee statute.

The Fund contends that Section 20-223, T.C.A., as interpreted by the case of McDaniel v. Textile Workers Union of America, 36 Tenn.App. 236, 254 S.W.2d 1, permits substituted service of process only in actions seeking redress of a "wrong committed by one doing business within the state and arising out of business done within the state." While the McDaniel case may be distinguished as involving a tort action, the rule of that case would nevertheless be satisfied under the facts of this case. The primary activity of the trustees is the collection and payment of money. Their activity both in the collection and payment of money in Tennessee constitutes "minimum contact" and it is the payment feature of the business done that is the subject of this litigation.

Turning to the next contention of the defendants, it is stated that this Court would have no jurisdiction over the administration of a trust of movables which has its situs in the District of Columbia. In this connection the defendants place their principal reliance upon the case of Hobbs v. Lewis, 197 Tenn. 44, 270 S.W.2d 352 (1954), as establishing the law in Tennessee to be followed in this diversity action.² The Hobbs case involved a similar action to that brought by the plaintiffs here. In that case, Hobbs deemed himself entitled to a pension from this same defendant, the United Mine Workers of America Welfare and Retirement Fund. Since he could not get personal service in Tennessee, Hobbs sought to attach a debt owing the Fund by a third party. The bill was dismissed by the Chancery Court of Hamilton County, Tennessee. Upon appeal to the Supreme Court of Tennessee, the Court stated:

"Since the situs of this trust of movables is at Washington, D. C., it seems necessary to hold, both by reason of principle as well as persuasive precedent, that the Courts of

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