Elmer J. Jonnet v. Dollar Savings Bank of the City of New York

530 F.2d 1123
CourtCourt of Appeals for the Third Circuit
DecidedFebruary 9, 1976
Docket75--1529
StatusPublished
Cited by100 cases

This text of 530 F.2d 1123 (Elmer J. Jonnet v. Dollar Savings Bank of the City of New York) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elmer J. Jonnet v. Dollar Savings Bank of the City of New York, 530 F.2d 1123 (3d Cir. 1976).

Opinions

OPINION OF THE COURT

ROSENN, Circuit Judge.

Once again the constitutionality of Pennsylvania foreign attachment procedures 1 are before this court. Four years ago in Lebowitz v. Forbes Leasing & Finance Corp., 456 F.2d 979 (3d Cir. 1972), cert. denied, 409 U.S. 843, 93 S.Ct. 42, 34 L.Ed.2d 82, rehearing denied, 409 U.S. 1049, 93 S.Ct. 509, 34 L.Ed.2d 502 (1972), we sustained the constitutionality of these procedures against a procedural due process attack. Due process, however, is a dynamic concept; refinements are evolved from time to time. In light of the latest elaborations by the Supreme Court, we conclude that Lebowitz is no longer viable and that the Pennsylvania foreign attachment procedures must be declared unconstitutional.

I.

In Lebowitz, Chief Judge Seitz succinctly described Pennsylvania foreign attachment procedures as follows:

Pennsylvania foreign attachment procedures authorize the issuance of a writ by the prothonotary without notice to the defendant, without any hearing, without an affidavit of meritorious action, without the posting of a [1125]*1125bond, and without intervention by a judicial officer. Indeed, the attachment may precede the filing of the complaint by as much as five days. Once the attachment becomes effective, it is not dissolved by the general appearance of the defendant. Rather, dissolution occurs only if, inter alia, the defendant posts an adequate bond or other acceptable security or the plaintiff fails to prosecute his case with due diligence. Also, provision is made that if the defendant can demonstrate that the amount of property attached is excessive when compared to the amount in controversy he may obtain a reduction. 456 F.2d at 980.

Only a few additional provisions need be mentioned. A foreign attachment can issue only against an individual who is a nonresident of the Commonwealth, a partnership or unincorporated association without a regular place of business in the Commonwealth, or a foreign corporation which is not registered in the Commonwealth. Pa.R.Civ.P. 1252. The action is commenced by filing with the prothonotary2 a praecipe for a writ which shall direct the sheriff to attach stated property. “The prothonotary shall immediately enter the attachment against the defendant in the judgment index.” Pa.R.Civ.P. 1255. The statute does not require that the defendant be served with the writ or complaint. Pa.R. Civ.P. 1265, 1267, 1269. The function of notifying the defendant is delegated to the garnishee. Pa.R.Civ.P. 1267.

Plaintiffs Elmer J. Jonnet, Jonnet Development Corporation, and Jonnel Enterprises, Inc., (collectively, Jonnet) invoked these procedures by filing “Complaint in Assumpsit with Foreign Attachment,” alleging that Dollar Savings Bank of the City of New York (Dollar) wrongfully failed to honor a mortgage commitment for $1,100,000.3 Several days later, plaintiffs filed a praecipe for writ of foreign attachment pursuant to Pa.R.Civ.P. 1255.4 The writs were issued by the U.S. Clerk of Court and served by the U.S. Marshal on two corporate garnishees, who were indebted to Dollar in an aggregate amount over $1,300,000 and who were obliged to make monthly installment payments to Dollar in amounts totaling over $10,000. Monthly payments for August 1973 were not made to Dollar because of the attachments.

On August 20, 1973, the district court, acting on Dollar’s motion and pursuant to Pa.R.Civ.P. 1272(c), dissolved the attachment and permitted Dollar to substitute security in the form of U.S. Treasury notes totaling $50,000. In its motion to dissolve the attachment, its answer, and subsequent motion filed October 11, 1974, Dollar challenged the constitutionality of the instant procedures. Judge Teitelbaum, in a carefully considered opinion, held the foreign attachment procedures unconstitutional and granted Dollar’s motion to dismiss the action. This appeal followed.5

II.

The basic issue before us is whether Pennsylvania summary procedures for jurisdictional attachment of property of [1126]*1126a Corporation not registered and having no regular place of business in the Commonwealth in a suit by a resident plaintiff comports with fundamental fairness, in the absence of notice to the defendant prior to attachment, an opportunity for prompt hearing to challenge the attachment, and other procedural safeguards against wrongful seizure.

Procedural due process issues have been the subject of much recent Supreme Court litigation.6 None of these cases have specifically considered the issue before us, but several have analyzed prejudgment attachment procedures for debtor-creditor suits. The Supreme Court opinions have produced not only varying results, but differing analytical approaches to due process problems.

The earliest case in this line of decisions is Sniadach v. Family Finance Corporation, 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969), which held Wisconsin prejudgment garnishment procedures unconstitutional. That decision appeared to evince a particular concern for “wages —a specialized type of property”, 395 U.S. at 340, 89 S.Ct. 1820, and mandated that the affected individual receive notice and a hearing before garnishment.

Sniadach spawned two divergent lines of cases — one limiting Sniadach’s pre-deprivation notice and hearing rule to wages or property of similar importance to the individual, the other invalidating prejudgment procedures generally.7 The Supreme Court put its imprimatur on the latter line in Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). The Court there held unconstitutional Florida and Pennsylvania prejudgment replevin procedures utilized to recover household goods purchased under conditional sales contracts and on which payments were allegedly overdue. The Court stated that even a temporary, non-final deprivation of property in which an individual had less than full title was sufficient to invoke due process protection. 407 U.S. at 84-87, 92 S.Ct. 1983. Furthermore, procedural guarantees were not limited to items of “necessity.” 407 U.S. at 88-90, 92 S.Ct. 1983. The constitutional rule enunciated was that except in “extraordinary situations,”8 notice and hearing must precede any deprivation of property.

Two years later the Court seemingly interred Fuentes when it approved Louisiana sequestration procedures. Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974). The Court appeared to abandon the strict pre-sei-zure hearing rule of Fuentes and instead substitute a balancing of interests analysis.9 The Court identified two policies behind the Louisiana procedures — (1) protecting from concealment, or waste, [1127]*1127property in which the creditor, as well as the debtor, had a proprietary interest, 416 U.S. at 604-5, 94 S.Ct. 1895, and (2) averting self-help measures by the creditor, which could engender violence. 416 U.S. at 605, 94 S.Ct. 1895.

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Bluebook (online)
530 F.2d 1123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elmer-j-jonnet-v-dollar-savings-bank-of-the-city-of-new-york-ca3-1976.