Opinion
Tyler & Stetter, Washington, D.C., for plaintiff.
Richard Merrick, John W. Jackson, Washington, D.C., for Morris Luff.
R. Sidney Johnson, J. Richard Earle, Washington, D.C., for Willard Luff and John Slacks.
TAMM, District Judge.
The plaintiff, Eugene D. Hegarty, has brought suit against three defendants for the payment of an arbitrator's fee. The three defendants are Morris Luff of Washington, D.C., Willard J. Luff, who resides in Maryland and who is employed in Pennsylvania, and John W. Slacks of Arizona. The defendant, Morris Luff, was served personally within this jurisdiction.
Upon motion of the plaintiff, summary judgment was entered by the Court in favor of the plaintiff against the defendant Morris Luff in the amount of $6,378, said sum to be paid to the plaintiff from a fund of $20,000 that had been deposited in the Registry of the Court. This fund was created pursuant to an order of Court on January 30, 1958 in Civil Action 557-55.
The plaintiff also petitioned the Court for an order directing the two remaining defendants to appear, plead or answer, in accordance with § 1655, Title 28 United States Code.
This petition was granted, and personal service was made upon the defendant Willard J. Luff in Pennsylvania and upon the defendant John W. Slacks in Arizona. These non-resident defendants now ask this Court to vacate the order entered under § 1655, Title 28 U.S.C. and to quash the service of process. The plaintiff has filed opposition to said motion. A hearing was afforded the parties, at which time arguments were presented.
The main grounds relied upon by these defendants in support of their motion are that this is not a proceeding to enforce a lien upon, or claim to, or to remove any incumbrance or lien or cloud upon the title to real or personal property within the district within the meaning of the pertinent statute and that the plaintiff's cause of action is 'in personam' and, therefore, personal service within this jurisdiction must be obtained upon these non-resident defendants to bring them within this Court's jurisdiction.
The plaintiff, in opposing the motion of these defendants, relies upon Title 28 U.S.C. § 1655 and alleges that he comes
within the scope of the statute by virtue of having a lien and making a claim to 'personal property within the jurisdiction.' The plaintiff also denies that this proceeding is 'in personam.'
The determination of two questions will lead to an answer in the present controversy. First, is the action presently pending 'in personam'? Second, does the plaintiff have a 'lien' or 'claim' within the meaning of the statute?
The plaintiff is seeking to collect a fee for services that he rendered as an arbitrator, pursuant to a written agreement between him and the three defendants. There seems to be no dispute that these services were rendered, although no fee was set by this contract as payment to the arbitrator. Thus, the plaintiff may be classed as a contract creditor.
This leads to a determination or resolving of the first question presented, for in order for the plaintiff to accomplish service under the provisions of Title 28 U.S.C. § 1655, the proceedings cannot be 'in personam.' While not every action in rem is within the descriptive terms of the statute * * * it has been generally held that the statute contemplates only actions which under traditional concepts may be classed as actions in rem or quasi in rem, and not one which under these concepts is labeled an action in personam where jurisdiction of the person of a necessary party is essential. It has been sometimes said that the statute applies to 'local' but not to transitory actions.
'The Statute is not applicable in any sort of a lawsuit merely because property of a defendant may be found within the district. Nor may a case be brought within the statute because the plaintiff asserts rights in personam against the defendant growing out of or connected with property within the district of the suit. Jurisdiction under the statute is limited to suits to enforce a lien upon or claim to property within the district of suit, or to remove an encumbrance, lien or cloud upon the title to such property. In order to invoke such jurisdiction, a party must have a specific lien on or a specific claim to specific property located within the district of the suit * * *
'It has been generally, though not uniformly held that a 'claim' within the meaning of the statute is only a claim existing anterior to the commencement of a suit, and not one caused by or arising out of the institution of the suit itself.' 30 A.L.R.2d 218, 220.
In the case of Dan Cohen Realty Co. v. National Savings & Trust Co., 6 Cir., 125 F.2d 288, at page 289, the Court wrote:
And at page 290:
In Volume 2 of Moore's Federal Practice, at page 1009, it is stated:
The plaintiff in the present suit is asking for a money judgment against the defendants for services that he performed in their behalf. The action is aimed basically at the defendants and secondarily at the fund. That is, the action is primarily brought to compel the defendants to pay the fee claimed; and it points out the fund in the Registry is a 'res' out of which satisfaction may be obtained. But this 'satisfaction' or action against the fund must be predicated upon an established claim against these defendants. Thus, the action is essentially aimed or directed against the defendants and is, therefore, a proceeding 'in personam.'
This leads to a determination of the second question-- does the plaintiff have a 'lien' or 'claim' within the meaning of the statute?
The only theory advanced by the plaintiff by which he could claim any kind of a lien is that he has an arbitrator's lien. In the plaintiff's opposition to the present motion of the defendant, he writes as follows: '3 Am.Jur. 926, Arbitration and Award, Sec. 97-- Lien for Fees-- 'It is uniformly held that Arbitrators have a lien on their award for their fees and may withhold it from the parties until payment is made or the matter of fees is determined by a court. '' Conceding that what the plaintiff states is correct but without determining whether it is a lien within the meaning of Title 28 U.S.C. § 1655, the plaintiff in the present case does not have any such lien. The section from which the plaintiff quotes goes farther and states: 'Such action by the arbitrators will not invalidate an award, even though it is withheld beyond the period fixed for its delivery. The lien is a possessory one, however, and terminates if the award is relinquished by the arbitrators.' (Emphasis supplied).
In the case of Flanagan v. Northern Lumber Co., D.C., 17 F.R.D. 432, 28 U.S.C. § 1655 was involved in a determination of the suit. The Court, at page 434, writes:
And at page 435:
In the case of Vidal v. South American Securities Co., 2 Cir., 276 F. 855, the court discussed the word 'claim' as used in § 57 of the Judicial Code, which was a re-enactment of § 8 of the Act of March 3, 1875, and in turn, a forerunner of the present § 1655. The Court writes at page 871:
'The term 'claim,' as used in the section, is the right to lay claim to specific property which is in another's possession * * *
'In Ladew v. Tennessee Copper Co., C.C., 179 F. 245, 251, Judge Sanford, construing section 57 and the words 'claim to * * * property', said that
In the cited case, the plaintiff alleged that under an agreement with one Bright, he, the plaintiff, was entitled to thirty percent of the profits to be realized by Bright from the sale which Bright made of a railroad concession granted by Uruguay to one Juan Castro. The trial court found for the complainant, but the appellate court reversed with directions to dismiss the complaint and cross-bills for want of jurisdiction.
Here, although the plaintiff has a claim against the defendants for services rendered, it is not a claim within the meaning of the statute. He stands in no better position than a contract creditor whose claim has been determined to be short of that required by Title 28 U.S.C. § 1655.
As stated previously, this Court concludes that this action is 'in personam' and this precludes the invoking of the statute in question, and the Court also finds that the plaintiff does not have a claim or lien within the meaning of the statute.