Tolson v. Hodge

• Decision Date: 08 May 1969
• Docket Number: 12825.,No. 12824,12824
• Citation: 411 F.2d 123
• Parties: Troy L. TOLSON, Appellant, v. Melba Joyce HODGE, Administratrix of the Estate of Arthur Eugene Hodge, Appellee. Troy L. TOLSON, Appellee, v. Melba Joyce HODGE, Administratrix of the Estate of Arthur Eugene Hodge, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

411 F.2d 123 (1969)

Troy L. TOLSON, Appellant, v. Melba Joyce HODGE, Administratrix of the Estate of Arthur Eugene Hodge, Appellee.

Troy L. TOLSON, Appellee, v. Melba Joyce HODGE, Administratrix of the Estate of Arthur Eugene Hodge, Appellant.

Nos. 12824, 12825.

United States Court of Appeals Fourth Circuit.

Argued January 8, 1969.

Decided May 8, 1969.

David M. Watkins, High Point, N. C. (Morgan, Byerly, Post & Keziah, High Point, N. C., on brief), for Troy L. Tolson.

Charles H. McGirt, Lexington, N. C. (Walser, Brinkley, Walser & McGirt, Lexington, N. C., on brief), for Melba Joyce Hodge.

Before SOBELOFF, BOREMAN and WINTER, Circuit Judges.

WINTER, Circuit Judge:

These appeals present a variety of issues requiring an accommodation between the provisions of the Federal Rules of Civil Procedure and the state law of North Carolina which, by virtue of several of the rules, is made applicable to proceedings in the federal courts. A subsidiary question is the correctness of the entry of a judgment by default against plaintiff on defendant's asserted counterclaim and dismissal of the complaint.

The case arose as a result of an automobile accident in North Carolina between plaintiff and defendant's decedent, Arthur Eugene Hodge, alleged to have occurred on June 12, 1965. Plaintiff filed suit for personal injuries allegedly sustained as a result of the accident in the district court, under its diversity jurisdiction, against defendant, a citizen of the State of Alabama, who was the administratrix of the estate of the decedent, having been appointed by an Alabama court. Service of process was made on defendant, in accordance with N.C.Gen.Stat. § 1-105 (1967 Supp.), which prescribes the procedure for service upon nonresident administrators.¹ Defendant moved to quash the summons, upon the grounds that service did not comply with the statute, that defendant did not have the capacity to be sued in a federal court in North Carolina, and that N.C.Gen.Stat. § 1-105 was unconstitutional as applied to the circumstances of the particular case.

The motion was denied, and defendant filed an answer and a counterclaim for the wrongful death of defendant's decedent, allegedly as a result of the same accident. Plaintiff failed to file an answer to the counterclaim and, one day after the time for answering had expired, defendant obtained the entry of a default judgment against plaintiff. Within three days thereafter, plaintiff sought leave to file an answer to the counterclaim out of time, but plaintiff's motion was denied. Since defendant formally advised the court that she did not desire the assessment of damages on her wrongful death judgment by default, a final judgment was entered by the district court dismissing plaintiff's cause of action as an adjudication on the merits.

In the consolidated appeals, plaintiff appeals from the denial by the district court of his motion to file a reply to defendant's counterclaim out of time and the entry of a default judgment against him dismissing his complaint on the merits. Plaintiff also appeals the ruling of the district court allowing defendant to assert a counterclaim, contending that defendant lacked the capacity to do so in North Carolina. Defendant, on the other hand, appeals from the order of the district court denying her motion to quash the summons. She contends, alternatively, that N.C.Gen.Stat. § 1-105 is unconstitutional as applied to her, and that if she is sued in North Carolina she must necessarily be afforded an opportunity to assert a counterclaim.

I

Defendant's capacity to be sued in North Carolina is governed by Rule 17 (b), Fed.R.Civ.P., which provides that the capacity of an individual, other than one acting in a representative capacity, to sue or be sued "shall be determined by the law of his domicile" and that in all other cases (of which the instant case is one) capacity to sue or be sued "shall be determined by the law of the state in which the district court is held," with certain exceptions not here pertinent. Rule 4(e), Fed.R.Civ.P., permits service of process upon a party not an inhabitant of or found within the state in which the district court is held in accordance with a statute or rule of court of the state in which the district court is held. We look, therefore, to the law of North Carolina to determine if defendant has capacity to be sued, and the manner in which service of process upon her may be effected.

N.C.Gen.Stat. § 1-105 clearly permits nonresident administrators to be sued in that state, in actions "growing out of any accident or collision in which said nonresident may be involved by reason of the operation by him, for him, or under his control or direction, express or implied, of a motor vehicle anywhere within the state."² North Carolina's original substituted service on nonresident motorists statute, enacted in 1929, was amended in 1953 to permit service upon the personal representatives of deceased nonresident drivers of motor vehicles, and in Franklin v. Standard Cellulose Products, 261 N.C. 626, 135 S.E.2d 655, 658 (1964), the North Carolina Supreme Court specifically stated that "the authorization of such an action against nonresident administrators and service of process therein was the only purpose and significant effect of the 1953 amendment." In light of Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091 (1927), and its progeny, no contention could be sustained, and none is urged in the instant case, that this statute as originally enacted is invalid on its face. Since the amendment, we have had occasion to uphold its constitutionality in other contexts. Davis v. St. Paul-Mercury Indemnity Company, 294 F.2d 641 (4 Cir. 1961). And the overwhelming weight of authority sustains the assertion of jurisdiction over personal representatives of nonresident motorists.³

While North Carolina, by virtue of § 1-105, permits a suit against the nonresident administrator of a motorist who became involved in an auto accident in North Carolina, nonresident administrators are otherwise held to lack the capacity to sue or be sued. Brauff v. Commissioner of Revenue, 251 N.C. 452, 111 S.E.2d 620 (1959); Cannon v. Cannon, 228 N.C. 211, 45 S.E.2d 34 (1947); Monfils v. Hazlewood, 218 N.C. 215, 10 S.E.2d 673 (1940). This rule, defendant asserts, renders § 1-105 invalid as applied to her since she could not sue in North Carolina and, arguably, would lack capacity to assert a counterclaim, although she may be sued.⁴

The argument that the lack of capacity to initiate suit, while having capacity to be sued, renders a statute, like § 1-105, "grossly unfair," was specifically rejected in Parrott v. Whisler, 313 F.2d 245 (6 Cir. 1963), a case in which a nonresident administrator was sued, and which held that capacity to be sued was a legitimate extension of the doctrine of Hess v. Pawloski, supra. We agree with and rely on that authority. We do not consider the further argument not reached in Parrott, that capacity to sue but lack of capacity to assert a counterclaim would render § 1-105 invalid, because, as we subsequently hold, the district court correctly decided that defendant could assert a counterclaim in this case.

We perceive no merit in defendant's argument that there was any invalidity in the service of process on her. It is true that the return on the first summons, dated September 28, 1967, recites merely that a copy was left with Miss Becky Watkins, process agent for the Commissioner of Motor Vehicles, instead of reciting that service upon defendant was effected by leaving a copy with the Commissioner of Motor Vehicles; but if the initial service failed to comply with § 1-105, the procedural error was corrected when another summons, dated October 27, 1967, was served and returned as having been served on defendant by leaving a copy with the Commissioner of Motor Vehicles as process agent for defendant.

II

Whether, in the instant case, defendant may assert a counterclaim depends upon whether her right (or obligation) to do so is governed by Rule 13, relating inter alia to counterclaims, alone, or by Rule 17(b), and the law of North Carolina, as we have assumed it to be, as conditions precedent to the application of Rule 13.⁵ If Rule 13 alone is applicable, defendant had not only a right but an obligation to assert a counterclaim or else be barred from ever asserting one. Since her cause of action is alleged to have arisen out of the same accident which was the genesis of the plaintiff's claim, and since it does not require the presence of third parties of whom the district court could not acquire jurisdiction, Rule 13(a) literally applies.

We start with the proposition that jurisdiction — both in the sense of diversity of citizenship, together with requisite amount in controversy, and diversity between parties having capacity to sue and be sued — was initially established; and we are mindful of the admonition of the Supreme Court that "one of the shaping purposes of the Federal Rules is to bring about uniformity in the federal courts by getting away from local rules. This is especially true of matters which relate to the administration of legal proceedings, an area in which federal courts have traditionally exerted strong inherent power, completely aside from the powers Congress expressly conferred in the Rules" Hanna v. Plumer, 380 U.S. 460, 472-473, 85 S.Ct. 1136, 1145, 14 L.Ed.2d 8 (1965), quoting, Lumbermen's Mut. Cas. Co. v. Wright, 322 F.2d 759, 764 (5 Cir. 1963). Granted initial jurisdiction, this strong policy of uniformity, and the equally strong policy of Rule 13(a) to prevent a multiplicity of litigation arising out of a single transaction or occurrence except when full justice cannot be done, would be significantly undermined if, after commencement of suit, Rule 13(a) were subordinated to Rule 17(b) and the state rules governing capacity which it incorporates. Sufficient scope is assigned to Rule 17(b) when it...