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KITTANNING COAL CO. v. INTERNATIONAL MINING CO.

November 9, 1982

KITTANNING COAL CO., INC. and ALLEN & COMPANY INCORPORATED, Plaintiffs
v.
INTERNATIONAL MINING CO., INC., BALLY COAL CO., INC., KITT COAL CO., INC., ARTHUR COAL COMPANY, BLACK DIAMOND SALES COMPANY, ANGELINA COAL CO., INC., PENNSYLVANIA REFRIGERATION CO., INC., WILLIAM K. KERSCHBAUMER, EDWARD T. McERLEAN, JOSEPH C. RIPP, PETER FITZPATRICK, JOHN H. McCANN, III, JOHN W. BENSON, JR., and JOSEPH P. O'CONNOR, Defendants v. FRANK BLAIR, ROBERT WERBEL, HERBERT A. ALLEN, JR., and ROLAND D. CRANDALL, Third Party Defendants



The opinion of the court was delivered by: MANSMANN

 This matter is before the Court on three separate Motions filed by Plaintiffs seeking special orders authorizing service of process by publication upon various Defendants named in the present action. The first Motion concerns service of process upon an individual, non-resident; the second concerns four Pennsylvania corporations; and, the third concerns a business entity whose residence and exact legal nature have not been determined. Each of these Motions will be dealt with separately below; and, for the reasons set forth below, each of the Plaintiffs' Motions is granted.

 * * *

 I.

 In this action the Plaintiffs bring their Complaint seeking treble damages and attorneys' fees under the Racketeer Influenced and Corrupt Organizations Act of 1970, 18 U.S.C. § 1961 et seq., and seeking damages for violations of Section 17 of the Securities Act, 15 U.S.C. § 77q(a), Section 10 of the Securities Exchange Act, 15 U.S.C. § 78j (b), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5.

 The Plaintiffs base the requests for substitute service on the provisions of Rules 2079(c) (5) and 2180 (d) of the Pennsylvania Rules of Civil Procedure, as applicable pursuant to the Federal Rules of Civil Procedure. *fn1" In essence, the operative language of both rules is that the court may authorize the manner of service by "special order." However, neither rule affords explicit guidance as to the acceptable methods of providing substitute service thereunder. And, we have noted no instance of the application of these provisions by the Pennsylvania courts. We turn first to the question of whether publication is a permissible manner of effectuating substitute service of process under Pennsylvania law.

 One lower Pennsylvania court's treatment of a notice by publication situation under an earlier Pennsylvania service of process statute is helpful. In Spaar v. Spaar, 94 Montg. Co. L.R. 73 (1971), the court disallowed service attempted by publication stating that "(publication) is only used as a matter of necessity . . . in order to acquire jurisdiction over the defendant." Further, the court intimated that as a premise to the resort to publication "the plaintiff must act in good faith in ascertaining the defendant's whereabouts . . . and that all specific requirements of the statute are complied with."

 As to the due process aspects incorporated into service of process statutes we find the case of Stateside Machinery Co., Ltd. v. Alperin, 591 F.2d 234, 241 (3d Cir. 1979) to be on point. There the court, in construing the then-applicable Pennsylvania long-arm statute, determined the validity of the substituted service attempted in that litigation by the following test: whether a method of service of process accords the intended recipient with due process depends on "whether or not the form of the service used is reasonably calculated to give actual notice of the proceedings and an opportunity to be heard," citing Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 85 L. Ed. 278 and Mullane v. Central Hanover Bank, 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865.

 Thus it seems that the probable posture of Pennsylvania law as to this issue may be discerned. It is that publication is a permissible method of providing an unlocated, defendant with substitute service of process whenever other good faith efforts to effectuate the service by more direct means have failed and the intended publication is reasonably calculated to notify such person(s) of the proceedings against him. Stated differently, before the plaintiff can justifiably move for a substitute manner of service he must first present a good faith effort to locate the other party in order to provide him with a more direct manner of service; *fn2" and, thereupon, he must prove to the satisfaction of the court, in light of the particulars of the situation, that the proposed manner of substitute service is reasonably certain to give the unlocated party a fair opportunity to learn of the proceedings against him.

 With the foregoing analysis in mind we move to an examination of each motion under the Pennsylvania Rules of Civil Procedure thereby invoked. The federal courts are bound by the Pennsylvania courts' construction of its substituted service statutes. Phillips v. Flynn, 61 F.R.D. 574 (E.D. Pa., 1974). However, no case authority has been noted as to the treatment of these matters by the Pennsylvania courts. Therefore, it becomes necessary and important to set out briefly the appropriate rules of construction as applied by the courts of Pennsylvania in the interpretation of its substitute service statutes.

 The Pennsylvania Supreme Court has held that, as a statute authorizing substitute service is in derogation of the common law, it must be strictly construed. McCall v. Gates, 354 Pa. 158, 47 A.2d 211 (1946). However, the statute is to be interpreted in a manner to accord as nearly as possible with the rules existing at the time of its enactment. March v. Philadelphia & West Chester Traction Co., 285 Pa. 413, 132 A. 355 (1926). It must be construed as an integral part of the whole structure affected and not as a distinct and separate matter having an independent meaning of its own. West v. Lysle, 302 Pa. 147, 153 A. 131 (1931); Heaney v. Mauch Chunk Boro., 322 Pa. 487, 185 A. 732 (1936).

 * * *

 II.

 INDIVIDUAL DEFENDANT

 By Motion dated June 30, 1982 the Plaintiffs indicate that they are unable to locate the individual Defendant, Joseph Ripp, ("Ripp") for the purpose of providing him with service of process. They assert that he is not a resident of Pennsylvania. Accordingly, they are requesting that this Court authorize service of process upon Ripp by publication of notice in the Miami Herald and Philadelphia Inquirer newspapers. *fn3" This Motion is based upon Pa. R. Civ. P. 2079(c) (5) as applicable through Fed. R. Civ. P. 4(e).

 The Plaintiffs have outlined, by sworn affidavit attached to their motion, the extent of their efforts to locate Ripp. These may be summarized as follows:

 
1. Forwarded service by certified mail to Ripp's last known address, as of December 4, 1979: Pompano Beach, Florida. These mailings were returned by postal authorities stamped with the notation that the forwarding address had expired.
 
2. Obtained from the Assistant District Attorney, West Palm Beach, Florida, a more recent business address for Ripp (1981): Boca Raton, Florida. Service of process sent to that address by certified mail was returned by postal authorities with a notation that it was not forwardable.
 
3. Contacted telephone directory assistance for the Pompano Beach, Boca Raton and West Palm Beach areas. No Joseph Ripp could be located. *fn4"

 Under these facts, as set forth by the Plaintiff, Fed. R. Civ. P. 4(e) specifically provides for the application of the Pennsylvania Rules of Civil Procedure. The applicable notes of the Advisory Committee on Rules make this clear, stating that Fed. R. Civ. Proc. 4(e) "expressly allows for resort in original Federal actions to the procedures provided by state (i.e., Pennsylvania) law for effectuating service on non-resident parties (as well as domiciliaries not found within the state)."

 As there is no case law to guide us in the application of the substitute service provision of the Pennsylvania Rules of Civil Procedure here invoked by the Plaintiffs, we resort to an examination of the language and origins of the rule. Our approach will accord that followed by the Pennsylvania courts when interpreting rules and statutes authorizing substituted service.

 Pa. R. Civ. P. 2079(c) (5) was promulgated upon the authority of 42 Pa. Cons. Stat. § 5323 which provides the statutory basis for service of process on non-residents (i.e., Pennsylvania's long-arm service procedure). The specific statutory language from which this rule derives may be set forth as follows:

 
§ 5323 Service of process on persons outside this Commonwealth.
 
(a) Manner of service. When the law authorizes service of process outside this Commonwealth. (a) Manner of service. When the law authorizes service of process outside this Commonwealth, the service, when ...

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