Rodd v. Region Const. Co., 85-1914

• Decision Date: 06 February 1986
• Docket Number: No. 85-1914,85-1914
• Citation: 783 F.2d 89
• Parties: , 7 Employee Benefits Ca 1153 Thomas RODD, et al., Plaintiffs-Appellants, v. REGION CONSTRUCTION CO., a corporation, Defendant, First Bank of Whiting, Indiana, Citation Respondent-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 89

783 F.2d 89

4 Fed.R.Serv.3d 384, 7 Employee Benefits Ca 1153

Thomas RODD, et al., Plaintiffs-Appellants, v. REGION CONSTRUCTION CO., a corporation, Defendant, First Bank of Whiting, Indiana, Citation Respondent-Appellee.

No. 85-1914.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 2, 1985.

Decided Feb. 6, 1986.

Alan H. Auerbach, Baum & Sigman, Ltd., Chicago, Ill., for plaintiffs-appellants.

Robert J. Walinski, Robert J. Walinski, Ltd., Chicago, Ill., for citation respondent-appellee.

Before BAUER and POSNER, Circuit Judges, and GRANT, Senior District Judge. ^*

BAUER, Circuit Judge.

Plaintiffs appeal from an order vacating a judgment against First Bank of Whiting under Rule 60(b)(4) of the Federal Rules of Civil Procedure. The judgment was vacated on the ground that the court in the original action lacked personal jurisdiction over the citation-respondent, First Bank of Whiting. The district court found that the First Bank of Whiting acted in good faith when it refused to submit itself to citation proceedings in Illinois and that it was not subject to service of process by a court in Illinois. We affirm the judgment of the district court.

I.

Plaintiffs, Trustees of certain collectively-bargained fringe benefit funds pursuant to the provisions of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Sec. 1132, ("ERISA"), brought suit to recover delinquent fringe benefit contributions due plaintiffs from defendant, Region Construction Company. The district court entered judgment in favor of plaintiffs, whereupon plaintiffs sought to enforce their judgment and recover the money due. Plaintiffs caused a Citation in Supplemental Proceedings to be issued and served upon the First Bank of Whiting, citation-respondent, who was not a party to the action against Region Construction Company. The bank failed to comply with the court's order compelling post-judgment discovery and refused to appear. The district court entered a finding of contempt against the bank and entered judgment for the full balance of the principal judgment remaining outstanding in an order dated February 21, 1985.

After the entry of judgment, the First Bank of Whiting filed a motion to vacate pursuant to Rule 60(b)(4) of the Federal Rules of Civil Procedure, which the district court correctly granted. This appeal followed.

II.

The First Bank of Whiting is not a defendant within the meaning of ERISA and is not subject to service of process in the same manner as an ERISA defendant. Consequently, the district court's order of February 21, 1985, is void for want of jurisdiction.

Both parties agree that nationwide service of process is authorized for original ERISA defendants pursuant to 29 U.S.C. Sec. 1132(e). Plaintiffs contend that the district court had jurisdiction over First Bank of Whiting in the post judgment supplemental proceeding because the provisions of ERISA that govern service of process and personal jurisdiction are applicable to post judgment proceedings. We disagree. Section 1132(e) provides:

[an action] may be brought in the district where the plan is administered, where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found.

Section 1132(e) does not authorize service of process on parties to supplementary proceedings, and we are not persuaded that Congress intended to extend jurisdiction to parties who are not named defendants in the original action. The statute does not refer to a citation-respondent, garnishee, or any other party to a supplementary proceeding. Accordingly, the language of Section 1132(e) does not on its face authorize service on the First Bank of Whiting.

Plaintiffs fail to cite any statutory or case authority for the proposition that a citation-respondent is a defendant within the meaning of this particular act of Congress. They argue primarily by analogy from cases that do not deal with service of process in post-judgment proceedings. For example, plaintiffs rely on Fitzsimmons v. Barton, 589 F.2d 330, 332 (1979), which deals with Section 27 of the Securities Exchange Act of 1934. In Fitzsimmons we held that a district court in Illinois could properly exercise in personam jurisdiction over an Oklahoma defendant. However, Fitzsimmons deals with a named defendant in the original proceedings. First Bank of Whiting is a citation-respondent. Fitzsimmons relies on the Securities Exchange Act of 1934 to confer jurisdiction while plaintiffs claim jurisdiction pursuant to ERISA, an entirely different statute. Plaintiff's reliance on Mariash v. Morrill, 496 F.2d 1138 (2d Cir.1974) is equally misplaced because it again deals with a defendant named in the original action.

Plaintiffs contend that there is no rational basis for distinguishing between service of process on the original defendants and service on parties to supplementary proceedings. We disagree. The intention of Congress was to extend service of process nationwide in ERISA matters because public policy justifies requiring persons who violate its provisions to defend themselves in courts across the country. This reasoning was not intended to apply to a party, such as respondent, who has no involvement whatsoever with the pension or profit sharing plan.

III.

Next, plaintiffs argue that even if the court lacks personal jurisdiction, the respondent waived its objection to personal jurisdiction as a matter of law because it failed to appear to contest jurisdiction in the original action or to promptly move to vacate. We disagree. If the court lacks personal jurisdiction over the citation-respondent, the underlying...