Opinion
No. 67-747.
March 19, 1968. Rehearing Denied April 8, 1968.
Appeal from the Circuit Court for Dade County, J. Fritz Gordon, J.
Horton Schwartz, Miami, Roy L. Struble, Miami Beach, for appellants.
Fowler, White, Collins, Gillen, Humkey Trenam and James S. Roth, Koppen Watkins, Miami, for appellees.
Before CHARLES CARROLL, C.J., and PEARSON and SWANN, JJ.
The appellants, as trustees under a deed of trust, sued L.G. Ball and Clifford H. Ball, who are residents of Dade County, Florida, to recover upon an alleged guarantee of payment of a defaulted promissory note. Clifford H. Ball, as next friend and father of Clifford Ball and Freddie Ball, minors, filed a petition in the cause setting forth that the minors are the beneficiaries of the deed of trust and praying for the right of his minor sons to intervene as party defendants in the cause. He also prayed for the appointment of guardian ad litem, and for leave of the guardian to file on behalf of the minors a counterclaim against the plaintiffs. On this petition the trial court granted the leave to intervene; appointed a guardian ad litem; designated the minors as co-party defendants, and granted them the leave to file such counterclaim as the guardian ad litem might find necessary to protect the interest of the minors in the subject matter. No appeal was taken from this order.
Walter F. Novak, as guardian ad litem, filed a counterclaim in which he alleged that the loan, the guarantee of which, was the subject of the initial suit, was unauthorized, reckless and in wanton disregard of the rights of the minors, beneficiaries under the trust and, further, that the loan was in the violation of the statutory law of Pennsylvania, the situs of the trust. In the counterclaim, the minors claimed damages against the trustees in the sum of $165,000.00 for the alleged breach of trust. In addition, the minors claimed the following relief:
"B. Deny to the said counter-defendants their compensation for the current year and deny to said counter-defendants any rights which they may claim to reimbursement of their costs and counsel fees in connection with this cause.
"C. Enter judgment against counter-defendants individually, or alternatively as co-trustees, and in favor of counter-claimant for costs, a reasonable Guardian Ad Litem's fee, and a reasonable attorneys fee for counsel for the Guardian Ad Litem herein.
"D. Enter judgment for punitive damages against counter-defendants, individually and as co-trustees in the sum of Two Hundred Fifty Thousand ($250,000.00) Dollars.
"E. Enter an order removing counter-defendants as co-trustees under deed of trust of L.G. BALL, dated 18 December, 1943."
The plaintiffs, counterdefendants, moved to dismiss the counterclaim upon the ground that service upon their attorney in Florida was not sufficient and that no personal service had been had upon the counterdefendants. The trial court denied the motion to dismiss.
The appellants present a single point on appeal as follows:
"WHETHER A COURT OBTAINS JURISDICTION OVER THE PERSON OF ORIGINAL PLAINTIFFS WHO SUE IN THEIR REPRESENTATIVE CAPACITY AS TRUSTEES UPON A COUNTER CLAIM BROUGHT AGAINST THEM IN THEIR INDIVIDUAL CAPACITY, BY AN INTERVENING DEFENDANT WHO WAS NOT SUED BY THE ORIGINAL PLAINTIFFS, AND WHO DOES NOT OBTAIN SERVICE OF PROCESS AGAINST THEM."
Appellant, in effect, takes two positions; first, that an intervenor may not file a counterclaim, and second, that if a counterclaim is permitted under the Florida practice, then the scope of the counterclaim is limited to an action against the plaintiffs-appellants in their capacity as trustees and that the instant cross-claim may not be maintained against the appellants individually. We hold that the appellants are incorrect in their contention that an intervenor under Rule 1.230, Florida Rules of Civil Procedure, 30 F.S.A., may not file a counterclaim. Upon the other hand, we hold that under the circumstances of this case, the counterclaim is limited to an action against the plaintiffs in the capacity in which they brought the suit. Therefore, the trustees may not be sued by counterclaim in this action upon their alleged individual responsibility.
Rule 1.230, Florida Rules of Civil Procedure, providing for intervention in civil actions, is as follows:
"Interventions. Anyone claiming an interest in pending litigation may at any time be permitted to assert his right by intervention, but the intervention shall be in subordination to, and in recognition of, the propriety of the main proceeding, unless otherwise ordered by the court in its discretion."
This rule does not limit the right of a trial court to permit intervention except by the provision that the intervention shall be in subordination to and in recognition of the propriety of the main proceeding, "unless otherwise ordered by the court in its discretion." It is apparent that in the present case the trial court was advised of the nature of the counterclaim when it permitted the petition to intervene and that its order permitting intervention must be interpreted as an exercise of the discretion of the trial court to permit the filing of the claim set forth in the counterclaim. The appellant has not challenged the right of the court to exercise this discretion, nor has he appealed the order by which the intervention was granted.
It is true that there are cases holding that an intervenor may not file a counterclaim. See Coffin v. Talbot, 110 Fla. 131, 148 So. 184 (1933); Everglade Cypress Co. v. Tunnicliffe, 107 Fla. 675, 148 So. 192 (1933). It appears, however, that all of these cases were decided prior to the adoption of the present Rule 1.170, Florida Rules of Civil Procedure, which provides for counterclaims and crossclaims. This rule was adopted from the Federal Rules of Civil Procedure, Rule 13. The cases decided in the federal courts, under the rule, have in the vast majority of instances, approved an interpretation of the rule which allows the filing of a counterclaim by an intervenor. Stewart-Warner Corp. v. Westinghouse Elec. Corp., C.A.2d 1963, 325 F.2d 822, cases collected in 2 Barron Holtzoff, Federal Practice and Procedure, § 603.1, p. 408 note 7.2.
Upon the question of the propriety of the counterclaim filed, we note that the principle relief sought seems to be a personal judgment against the trustees. It is elemental that such a judgment may not be entered in the absence of personal service and an opportunity to be heard. The fact that the appellants have submitted themselves as trustees to the jurisdiction of the Florida courts does not amount to a submission of themselves to the jurisdiction of the court for the purpose of adjudicating claims against them personally. See Pioche Mines Consol., Inc. v. Fidelity-Philadelphia Trust Co., C.A. 9th, 1953, 206 F.2d 336, cert. den. 346 U.S. 899, 74 S.Ct. 225, 98 L.Ed. 400; Stevenson v. Reed, D.C.Mun.App. 1953, 96 A.2d 268, 269.
This view is substantiated by the language of Rule 1.170(b) F.R.C.P., which reads as follows:
"(b) Permissive Counterclaim. A pleading may state as a counterclaim any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim."
The fact that the rule recites that a counterclaim may be made only "against any opposing party" is, we think, determinative. There can be no doubt that the counterdefendants in their personal capacity are not in fact opposing parties. See 1A Barron Holtzoff, Federal Practice and Procedure, § 398, see also reasoning in Scott v. United States, 173 Ct.Cl. 650, 354 F.2d 292, 300 (1965).
We therefore hold that insofar as the counterclaim sought relief against the appellants in their capacity as trustees, it is an allowable counterclaim, but that insofar as it sought relief against the appellants in their personal capacity, it is not a proper counterclaim under the Florida Rules of Civil Procedure.
The order appealed is reversed and remanded with directions to enter an order dismissing the counterclaim with leave to amend the same and for further proceedings in accordance with the views set out herein.
Reversed and remanded.
I respectfully dissent only from that portion of the majority opinion which holds that the relief sought in the counterclaim, against the co-trustees as individuals was improper.
The majority opinion acknowledges that the trial court was advised of the nature of the counterclaim when it permitted the intervention, and that its order must be interpreted, as an exercise of its proper discretion, in permitting the filing of the claim set forth in the counterclaim. The prayer of the counterclaim sought relief against the appellants, as co-trustees, or individually, and also prayed for general relief. Rule 1.110(b) R.C.P.
In Sessions v. Willard, 126 Fla. 848, 172 So. 242 (1937) a suit was filed against T.E. Willard as "Administrator". A motion to dismiss, on the grounds that "no relief can be obtained therefor except against T.E. Willard in his personal capacity * *" was denied, and judgment was entered against the defendant individually. The Supreme Court of Florida affirmed this personal judgment, saying:
"It is first contended that the bill of complaint is fatally defective because it is brought against Willard as administrator and does not make him a defendant individually, and that consequently no decree could be rendered against him other than as administrator.
This contention is without merit * * the bill prays that T.E. Willard be required to account for the assets of the estate in his hands as administrator and that the court decree the payment by defendants to plaintiffs and such other persons of like interest as may join in this suit. Under the 1931 Chancery Act (Acts 1931, c. 14658), it was deemed to have prayed for general relief.
The bill correctly described the status of the parties and recites facts which give complainants a right of action against the defendants personally or as administrators."
In my opinion, the counterclaim herein also recites such facts.
In State ex rel. First Trust Sav. Bank v. Southerland, 106 Fla. 103, 142 So. 883 (1932) an action at law was filed against "First Trust Savings Bank, as Executor of the Estate of Parker A. Henderson deceased." The summons was issued to and served on the defendants in its representative capacity as executor, and the defendant entered its appearance as executor. After the defendant filed a demurrer, plaintiff moved to amend the complaint by striking from the title and caption the words "as Executor of the Estate of Parker A. Henderson deceased." In the same manner as appellants in the cause before this court moved to dismiss the counterclaim of appellees, the First Trust Savings Bank objected to the proposed amendment on the grounds that the same:
"* * * amounted to a dismissal of the said cause of action, and the institution of a new separate suit against the new defendant without the service of process upon such new defendant in a manner not provided by law which if it prevailed would result in a judgment to be satisfied only out of the assets of the bank individually, whereas the declaration as it stood could only result in judgment to be satisfied out of the assets of said estate." (142 So. 884).
In affirming the order permitting said amendment, the Supreme Court of Florida stated at page 884:
"The authorities generally agree that changes in the character or capacity in which a defendant is charged are permissible so long as the cause of action remains the same, and a suit against one in a representative capacity may be changed so as to charge him as an individual * * *"
See also Baskin v. Montedonico, 26 F. Supp. 894 (W.D.Tenn., 1939).
I, therefore, respectfully dissent.