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G. H. McShane Co. v. McFadden

argued: February 23, 1977.

G. H. MCSHANE COMPANY, INCORPORATED, A CORPORATION
v.
WARREN A. MCFADDEN, AN INDIVIDUAL, APPELLANT



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA. Civil No. 74-1046.

Biggs, Adams and Hunter, Circuit Judges.

Author: Adams

Opinion OF THE COURT

ADAMS, Circuit Judge

This appeal presents two issues. The first is whether an owner of property whose rents were seized pursuant to the Pennsylvania foreign attachment procedures*fn1 may recover damages when, at the time of the seizure, there may have been some doubt concerning the constitutionality of such attachment provisions. The second question, entwined with the first, is whether Jonnet v. Dollar Savings Bank of City of New York,*fn2 which expressly invalidated Pennsylvania's foreign attachment procedures, should be applied retroactively so as to permit damages in this case, an action pending when Jonnet was handed down.

Since resolution of these matters is governed by Kacher v. Pittsburgh National Bank,*fn3 only recently decided by this Court, we affirm the judgment of the district court.

I.

The procedural history of this litigation is extraordinarily knotty. For purposes of this appeal, we shall outline only its most salient aspects.

In October of 1974, plaintiff G. H. McShane Company, a realty concern, brought an action in assumpsit in state court against defendant Warren A. McFadden. McShane initiated the suit by writ of foreign attachment, seizing the rents from property that was situated in Pittsburgh and owned by McFadden.*fn4 The underlying claim asserted by McShane was for a real estate brokerage commission of $150,000, purportedly due when McFadden purchased the attached property and other real estate.

Although McFadden entered a general appearance in a timely fashion, McShane refused to release the attachments. Thereafter, McFadden denied the indebtedness, and counterclaimed under 42 U.S.C. § 1983 for damages allegedly caused when McShane employed the attachment procedure that McFadden maintains was unconstitutional. McFadden then instituted his own suit in state court in which he sought to enjoin further attachment of the rents, reiterating his constitutional challenge to the foreign attachment mechanism that McShane continued to employ.

Both lawsuits were removed to federal court, where they were consolidated. The district judge dismissed McFadden's suit for injunctive relief and also the counter-claim for damages in the action that had been brought by McShane. In so doing, the trial court relied on two cases decided in this Circuit subsequent to Fuentes v. Shevin*fn5, cases in which the constitutionality of the Pennsylvania foreign attachment statutes had been upheld.*fn6 McFadden then appealed the dismissal of his injunctive suit,*fn7 and, in July of 1975, this Court vacated that dismissal. The case was remanded to a three-judge panel of the district court, since the constitutionality of a state-wide foreign attachment rule had been challenged.*fn8

Subsequently, in January of 1976, this Court held, in Jonnet, that the Pennsylvania foreign attachment arrangement was unconstitutional as a denial of due process. Six days later, on the basis of Jonnet, the three-judge district court ruled favorably on McFadden's constitutional claims in his suit for injunctive relief, and further attachment of the rents by McShane was enjoined.

Several weeks following the disposition of the injunction action, the district court, to which McShane's original suit had been removed, determined that McFadden was not liable on McShane's claim for the brokerage commission. At that juncture, McFadden moved to vacate the previous dismissal of his counterclaim for damages under § 1983. However, the trial judge denied such ...


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