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Skevofilax v. Quigley

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


May 7, 1986

MARCOS SKEVOFILAX, LOUISE SKEVOFILAX, AND MICHAEL MICHAELS
v.
SERGEANT WILLIAM QUIGLEY, PATROLMAN CHARLES L. FEKETE, PATROLMAN DOMINICK SEMENZA, PATROLMAN FRED GALATI, PATROLMAN ROGER BOETTINGER, PATROLMAN DONALD MERKER, PATROLMAN WILLIAM REVILL, SERGEANT LOUIS LA PLAGA, SERGEANT HAROLD THOMAS, INDIVIDUALLY, AND AS POLICE OFFICERS OF THE POLICE DEPARTMENT OF EDISON TOWNSHIP, NEW JERSEY, WILLIAM T. FISHER, INDIVIDUALLY AND AS CHIEF OF THE POLICE DEPARTMENT OF EDISON TOWNSHIP, NEW JERSEY, TOWNSHIP OF EDISON, NEW JERSEY, THE CAPTAIN'S WHEEL, INC., AND GEORGE LEONTARAKIS, TOWNSHIP OF EDISON, APPELLANT

On Appeal from the United States District Court for the District of New Jersey - Trenton (D.C. Civil No. 79-2783).

Author: Stapleton

Before ADAMS, GIBBONS and STAPLETON, Circuit Judges

STAPLETON, Circuit Judge

I.

In October, 1977, there was a barroom fight between several off-duty members of the Edison Township police department and appellees Marcos Skevofilax and Michael Michaels. This ultimately gave rise to a civil rights action based on 42 U.S.C. § 1983 which resulted in jury verdicts and substantial judgments in favor of Mr. and Mrs. Skevofilax and Michaels and against the Township and three individual police officers, Quigley, Fekete, and Semenza.

After the entry of the judgment against the, the individual police officers brought suit against the Township in the Superior Court of New Jersey, Middlesex County, seeking an order requiring it to pay the judgments entered against them. They relied upon a provision in their collective bargaining agreement with the Township that provided for indemnification by the Township of any liabilities incurred by a police officer "arising out of or incidental to the performance of his duty." The Township denied liability contending, inter alia, that the liability of these police officers had not arisen out of and was not incidental to the performance of their police duties.

Approximately a year after the entry of the federal judgments and while the state case remained pending, the federal plaintiffs moved in the district court for an order requiring the Township to pay the judgments against the individual police officers. Their argument was predicted on the same clause of the collective bargaining agreement that was the basis for the state case brought by the police officers. The individual police officers joined in this motion and secured a stay of their state action.

In response to a rule to show cause why such an order should not be entered, the Township insisted that the district court lacked jurisdiction to adjudicate the police officers' indemnity claim. It also advised the court that it denied liability on this claim not only because the officers' liability did not arise out of the performance of their duty*fn1 but also because the indemnification clause, if construed to be applicable, would violate New Jersey law.

The district court, one day before cross motions for summary judgment were to have been heard in the state court, decided that it had jurisdiction to resolve the controversy between the police officers and the Township. It then held that the officers were entitled to indemnification under the collective bargaining agreement based in part on a finding "as a matter of law that they [the police officers] were operating under color of state law." Purporting to act under Rule 69 of the Federal Rules of Civil Procedure, the district court ordered the Township to pay the judgments against the police officers. Because we conclude that the court lacked jurisdiction to enter this order, we reverse.

II.

A.

The plaintiffs-appellees do not contend that the district court had subject matter jurisdiction to grant them the relief they obtained on any basis independent of the underlying civil rights action. There is no diversity of citizenship between the Township and the police officers and their contract dispute raises no federal question. However, plaintiffs posit that, because the district court had subject matter jurisdiction over the underlying civil rights claim, it had the ancillary authority to resolve the dispute between the Township and its officers.

Federal Rule of Civil Procedure 69 provides:

Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. The procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution shall be in accordance with the practice and procedure of the state in which the district court is held, existing at the time the remedy is sought, except that any statute of the United States governs to the extent that it is applicable...

Fed. R. Civ. P. 69(a).

Plaintiffs read Rule 69 as authorizing a district court, in aid of its ability to enforce its own judgments, to take any action that could be taken by a court of the state in which it sits. They refer this court to certain New Jersey statutes, to wit, N.J. Stat. Ann. §§ 2A:17-59, 61, 62 and 63,*fn2 which they argue permit a New Jersey court to adjudicate any dispute between a judgment debtor and a third party so as to effect the satisfaction of a judgment rendered by that court. Plaintiffs insist that Rule 69 combined with these New Jersey statutes authorizes a federal district court sitting in New Jersey to adjudicate any dispute between a judgment debtor and a third party for the purpose of satisfying a judgment rendered by it. We disagree.

Section 2A-17-63, New Jersey's garnishment statute, applies only "if the garnishee admits the debt."*fn3 This statute is, accordingly, inapplicable here.

Plaintiffs' strongest argument is based on the New Jersey statutes that authorize an executing officer, in his own name, to pursue, through "proper judicial proceedings," a judgment debtor's claim against a third party. According to plaintiffs, this authority "to obtain [for the plaintiff] such recovery or relief as [the] defendant ... would be entitled to" was sufficient to allow the district court to adjudicate the police officers' claim against the Township for plaintiffs' benefit. We fault this analysis on two grounds.

First, these New Jersey statutes do no more than authorize an executing officer to take advantage of available legal proceedings. They do not purport to create any new legal proceedings or to grant jurisdiction to litigate claims of judgment debtors against third parties. Thus, while Rule 69, to the extent it incorporates these New Jersey statutes, might arguably authorize an officer executing on a federal judgment to bring suit in a state court of general jurisdiction, it cannot be read to authorize a district court to adjudicate any claim that it would not otherwise have authority to decide.

More important, Rule 69 simply cannot confer jurisdiction on district courts to resolve controversies they would not otherwise have jurisdiction to resolve. The Rules themselves, in Rule 82, expressly direct that no federal rule of civil procedure "shall ... be construed to extend or limit the jurisdiction of the United States district courts." Thus, any interpretation of Rule 69 that is consistent with Rule 82 will countenance only those state procedures which do not extend the federal court's jurisdiction. See Owen Equipment & Erection Company v. Kroger, 437 U.S. 365, 370 (1978); see also Blackburn Truck Lines, Inc. v. Francis, 723 F.2d 730, 732 (9th Cir. 1984); Duchek v. Jacobi, 646 F.2d 415, 417 (9th Cir. 1981) (Rule 69(a) is one of procedure, not jurisdiction; compare Kenrose Manufacturing Co. v. Fred Whitaker Co., 512 F.2d 890 (4th Cir. 1972) (where jurisdiction does not otherwise appear, mere permission in the rules to assert a claim does not itself confer jurisdiction over that claim).

This principle is of crucial significance here because plaintiffs' construction of Rule 69 requires the conclusion that this rule authorizes a federal district court to adjudicate disputed claims of a federal judgment debtor against third parties whether or not those claims bear any relationship to the claim underlying the federal judgment. This would constitute a substantial expansion of federal jurisdiction. See Owen, 437 U.S. at 376-77 (factual similarity and logical dependence between claims is necessary for the exercise of ancillary jurisdiction); Aldinger v. Howard, 427 U.S. 1, 11-12 (1976) (no claim can be considered as ancillary unless it directly relates to assets actually or constructively drawn into the court's control by the principal claim); Ambromovage v. United Mine Workers of America, 726 F.2d 972, 989-91 (3d Cir. 1984) (ancillary jurisdiction only extends to claims arising out of common issues of operative fact and which bear a logical relationship to the primary claim); Danner v. Anskis, 256 F.2d 123, 124 (3d cIR. 1958).

The ultimate issue posed by plaintiffs' reading of Rule 69 is whether the mere existence of an unsatisfied federal judgment, by itself, bestows ancillary jurisdiction on a district court to adjudicate any claim the judgment debtor may have against a third party. We believe this issue was authoritatively resolved by the Supreme Court in H. C. Cook Co. v. Beecher, 217 U.S. 497 (1910). In Beecher, the plaintiff secured a money judgment against a Connecticut corporation in a patent infringement suit. It therefore brought suit against the directors of that corporation, asserting that they were answerable for the federal judgment already obtained. The district court rejected the argument that, because of the federal judgment, it had ancillary jurisdiction to entertain the plaintiff's claim. The Supreme Court affirmed and explained that "if the directors are under obligation by Connecticut law to pay a judgment against their corporation, that is not a matter that can be litigated between citizens of the same State in ... [the courts] of the United States 217 U.S. at 499.

We find this case virtually on all fours with the Beecher case. Congress has allowed federal courts discretion to exercise ancillary jurisdiction to satisfy practical interests in "protect[ing] legal rights [and] effectively ... resolv[ing] an entire, logically entwined law suit." Owen Equipment, 437 U.S. at 377. As in Beecher, neither justification for the exercise of ancillary jurisdiction is present in this case. There is no contention that a federal judgment was in jeopardy and that the district court was required to act to protect it. Nor is there any suggestion that the police officers or the plaintiffs needed the federal forum in order to protect their interests. Not only were the state courts available to both groups, but a state action had been instituted, and indeed is still pending, in which the issue they wished resolved was present for resolution.

B.

The dissent has constructed an alternative justification for the district court's order. its analysis begins with the proposition that a district court exercising its ancillary jurisdiction may adjudicate Rule 13 cross-claims and Rule 14 third-party claims that assert that the claimant is entitled to be indemnified if he or she is found liable to the plaintiff. We agree that this proposition is accurate as applied to cross-claims and third-party claims which are litigated as a part of the original case. See, e.g., Pennsylvania Railroad Co. v. Erie Avenue Warehouse Co., 302 F.2d 843 (3d Cir. 1962). We know of no authority, however, which would sanction an exercise of ancillary jurisdiction in the circumstances currently before us.

The dissent's analysis oversimplifies the issues presented by this case. It suggests that the police officers, when they joined plaintiffs' post-judgment motion, "in effect made a Rule 13(g) cross-claim against the Township." Had the police officers sought to pursue this course of action, they would have been required to amend their pleadings pursuant to Rule 15(a) n.4 (FOOTNOTE OMITTED) to assert such a cross-claim. Because of the policies favoring certainty in the conclusion of litigation, however, a court may not authorize amendments under Rule 15(a) after a final judgment is entered unless and until that judgment has been vacated. Kelly v. Delaware River Joint Commission, 187 F.2d 93, 94-95 (3d Cir.), cert. denied 342 U.S. 812 (1951); 3 J. Moore, Moore's Federal Practice §§ 15.07[2] and 15.10 (2d Ed. 1985 Supp.); 6 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure, § 1489 at 445 (1971 and 1985 Supp.).*fn5 Accordingly, the district court could not properly have granted the dissent's hypothetical post-judgment motion with the final judgments still in place.

It is true that where the requirements of Rules 59(a) or 60(b) are met, a judgment may be opened and an amendment permitted. See Kelly; Wright & Miller, supra, at § 1489.*fn6 However, neither provision of the Rules is applicable here. A Rule 59(a) motion must be filed within ten days of the entry of judgment and is inapplicable for that reason alone. Of the six grounds for relief from judgment specified in Rule 60(b), only the catchall sixth ground is even arguably applicable to this case and its very wording demonstrates that Rule 60(b) does not address situations like this one. To obtain relief under Rule 60(b)(6), one must show a compelling reason "justifying relief from the operation of the judgment." Here no one attacks the outstanding final judgments. They are valid and no one claims to be entitled to relief from their operation.

Moreover, even if Rule 60(b)(6) were applicable, relief is unavailable under that section absent a showing that extraordinary circumstances justify the reopening of the judgment and that the movant's delay in seeking an amendment is not unreasonable. Federal Deposit Insurance Corp. v. Alker, 234 F.2d 113 (3d Cir. 1956); see McDonald v. Oliver, 642 F.2d 169 (5th Cir. 1981); Fed. R. Civ. P. 60; Wright & Miller, supra, § 1489 at 446-47. The police officers made not showing of extraordinary circumstances. Nor could they have made such a showing. The officers voluntarily elected not to assert a known claim during five years of litigation, made the Township litigate that claim in new Jersey's courts for a substantial period, and did not even ask the district court to consider it until almost a year after final judgment had been rendered. While this is an extraordinary situation in one sense, we believe the police officers could have shown neither diligence nor extraordinary equities favoring their position.

It follows that the district court's order directing the Township to pay the judgment against the individual police officer could not stand even if it had been premised on some independent basis of subject matter jurisdiction. Because there is not such independent jurisdictional basis here, however, there is another important consideration which the dissent fails to take into account. "[P]ractical needs are the basis of the doctrine of ancillary jurisdiction." Owen Equipment, 437 U.S. at 377. Where "considerations of judicial economy, convenience, and fairness to litigants ... are not present a federal court should hesitate to exercise jurisdiction over state claims.... Needless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law." United Mine Workers of America v. Gibbs, 383 U.S. 715, 726 (1966) (footnote omitted). Where, as here, the primary litigation allegedly giving rise to the ancillary jurisdiction has been concluded before the ancillary claim is even raised, and proper resolution of the ancillary claims will require significant further proceedings in federal court, practical concerns will rarely suffice to override this interest in comity. See id. at 726-27. As the Supreme Court indicated in Beecher, the mere presence of an uncollected federal judgment does not justify an exercise of ancillary jurisdiction in such circumstances.*fn7

At the time the police officers first asserted their contract indemnity claim, the considerations of efficiency and conservation of judicial resources that would have justified an exercise of ancillary jurisdiction had that claim been timely raised were no longer applicable. Neither the plaintiffs nor the police officers have shown that there was any appropriate saving of judicial resources when the district court diverted the contract indemnity claim from the state courts.

While it is true that the district court resolved the newly-raised indemnity claim without additional proceedings, the issues presented therein were not susceptible of such summary resolution. The issue of whether the Township had a duty to indemnify could not appropriately be resolved by a finding that the officers were "acting under color of state law." We agree with the district judge and the plaintiffs that the original jury's verdicts necessarily determined that the individual police officers were acting "under color of state law." However, whether one so acts for the purposes of Section 1983 is determined by reference to whether one purports to act under the authority conferred by state law. See, e.g., Monroe v. Pape, 365 U.S. 167, 187 (1961), overruled on other grounds, Monell v. New York City Department of Social Services, 436 U.S. 658 (1978). That issue is therefore determined without regard to whether the civil rights defendant was performing acts which he and the State contemplated would be performed as a part of his employment. See Monroe, 365 U.S. at 184; Screws v. United States, 325 U.S. 91, 111 (1945); Lopez v. Vanderwater, 620 F.2d 1229 (7th Cir.), cert. dismissed 449 U.S. 1028 (1980). While we express no opinion with respect to the proper construction of the indemnity provision under New Jersey law, there is no reason to conclude that that provision was intended to be coterminous with Section 1983's requirement of state action.

The dissent relies on equitable considerations, as well as on presumed facts not in the record concerning the parties' insurance coverage in arguing that the district court should be permitted to see that its judgment is fully satisfied. However, we have no authority to disregard the interest in comity inherent in our federal system and laws of jurisdiction, or to ignore the need for finality in judgments reflected in the federal rules discussed above, simply to reach a preferred result. In any event, the dissent does not demonstrate that the federal plaintiffs will be unable to satisfy their judgment in state court proceedings instituted for that purpose.

III.

The plaintiffs' motion for a post-judgment order directing the Township to indemnify its police officers brought before the district court for the first time a state law claim over which it had no independent basis of jurisdiction. At that point, the district court lacked ancillary jurisdiction to entertain that claim and its order granting the requested relief cannot stand. Accordingly, the court's order of April 25, 1985 is reversed insofar as it orders the Township to pay the judgments against defendants Quigley, Fekete, and Semenza.

GIBBONS, Circuit Judge, dissenting:

A judicial system that is impotent to enforce its own judgments effectively is as useless to the society it purports to serve as a gelding would be to the owner of a brood mare. The labored effort of the majority to construct an elaborate "jurisdictional" theory so as to deprive federal courts of the capacity to enforce their money judgments by garnishment of third party debts owed to judgment debtors is fundamentally unsound. The proposition that any court must have a independent source of subject matter jurisdiction in order to enforce claims owed to judgment debtors is inconsistent with any rational approach to judicial administration. Endorsing the conduct of the compensated liability insurance carrier that defended this case by reversing the district court is an open invitation to similar conduct by other carriers. The majority opinion will, I am confident, be deplored by district judges who in so many cases must deal with indemnitors that control prejudgment litigation by virtue of their convenants to defend. It is bad ancillary jurisdiction law and worse policy.

I.

The Township of Edison, New Jersey appeals from a district court's post-judgment order directing the township to pay a judgment entered in favor of Marcos and Louise Skevofilax and Michael Michaels against three co-defendant police officers employed by the township. The Skevofilaxes and Michaels obtained separate damage awards in the district court against both the individual police officers and the township.*fn1 Those awards are not challenged. At the time of the events giving rise to the lawsuit, the township employed the police officers under the terms of a collective bargaining agreement that provided that the township would provide "the necessary means for the defense" in any action arising out of or incidental to the performance of their duty. The collective bargaining agreement also provided that

[i]n the event of a judgment against a member of the bargaining unit arising out of or incidental to the performance of his duty, the employer agrees to pay for said judgment or arrange for the payment of said judgment.

We are called upon to decide whether, in light of this provision, the district court properly ordered the township to satisfy the judgments rendered against the individual defendant police officers.

II.

It is undisputed that the township contracted for liability insurance, and at the heart of this appeal lies a disagreement amongst the insurance carrier, the township, and the individual police officers. After the district court entered judgment in favor of the plaintiffs, the carrier refused to pay either the $74,964.14 award against the township or the awards totaling $573,484.94 against the police officers. The carrier apparently took the position that, because the conduct of the police officers violated the criminal law of New Jersey, any indemnification agreement, embodied either in a collective bargaining agreement or in an insurance contract, was void as a violation of New Jersey public policy. Although that ground for resisting payment had no relevance to the judgment against the township for negligence, the carrier nevertheless refused to pay the judgment against the township unless it first obtained from the officers a release of any right to indemnification they had under the collective bargaining agreement.

Since no payment was forthcoming, the plaintiffs, acting pursuant to Rule 69 of the Federal Rules of Civil Procedure, caused a writ of execution to be levied by the United States Marshal upon the township's assets, specifically its bank account. At the same time and acting pursuant to the same rule, they commenced garnishment proceedings upon the salaries of the police officers. In conjunction with these latter proceedings the district court held a hearing on April 15, 1985, at which time the plaintiffs notified the court that the police officers had commenced in the New Jersey Superior Court an action against the township to compel it to honor the indemnity undertaking contained in the collective bargaining agreement. They also notified the district court that the judgment against the township remained unpaid.

At the district court's suggestion the plaintiffs subsequently obtained and served upon the township an order directing it to show cause why it should not pay the judgments rendered against the individual police officers. In response to this maneuver the police officers obtained a stay of the state proceedings and joined the plaintiffs' motion. In support of that motion the officers supplied to the district court and to counsel for the township copies of the brief they had filed in the New Jersey court in support of their motion for summary judgment on their claim for contract indemnification.

On the return date of the order to show cause the township appeared, represented by two attorneys. One, Peter DeSarno, was the regular township attorney, and the other, Martin McGowan, was a member of the firm that the insurance carrier had retained on behalf of the defendants. The police officers had their own counsel. Neither DeSarno nor McGowan filed papers in opposition to the relief sought by the plaintiffs, nor did they request additional time to do so. Neither suggested that the district court should abstain from deciding any legal issue that might have been resolved in the then-pending state court action. Both addressed the merits of the motion.

The township argued that the district court did not have jurisdiction to order the township to pay the judgments rendered against the individual defendants. Alternatively, it contended that the indemnity agreement in the collective bargaining agreement was void under New Jersey law. It did not claim that there were any issues of material fact concerning the construction of the indemnification clause. The township also contended that the district court could not grant the motion because the parties had not litigated the township's indemnity obligation during the trial. Responding to that argument, the court observed quite accurately, "Why should it have been an issue in the trial? Who is going to pay an obligation that nobody doubted the Township of Edison was going to pay, or its carrier?" Joint Appendix at 103. What the court obviously meant was that, since the carrier was in charge of the trial defense and had not notified the defendants that it would contest its indemnification liability, there was no occasion for the police officers to file a cross-claim against the township. See infra Part III, B.

The district court rejected the township's arguments and ordered it to do the following:

a) To pay and satisfy the portion of said judgment entered against the individual police officers in favor of Marcos Skevofilax for compensatory damages, as reduced by the remittitur in the sum of $296,700.l9;

b) To pay and satisfy the portion of said judgment entered against the individual police officers in favor of marcos Skevofilax in the amount of $55,236.75, being the judgment for compensatory damages as reduced by the remittitur entered by reason of malicious prosecution;

c) To pay and satisfy the portion of the said judgment entered against the Township of Edison in favor of Marcos Skevofilax in the amount of $74,964.14, for compensatory damages for the negligence of said Township[;]

d) To pay and satisfy the portion of said judgment entered against the individual police officers in favor of Michael Michaels in the amount of $11,000.00 for compensatory damages for the negligence of said Township[;]

e) To pay and satisfy the portion of said judgment entered against the individual police officers in favor of Michael Michaels in the amount of $1,000.00 being the judgment for compensatory damages for malicious prosecution[;]

f) To pay the plaintiff the sum of $3,048.70 which is the amount entered by the Clerk of the Court for costs in this action;

g) To pay all above stated sums with interest at the rate of 11.74% from May 31, 1984, being the date of entry of judgment, to the present[;]

h) To pay to the plaintiffs the sum of $199,521.00, being the amount of attorneys fees awarded by this Court[;]

i) To pay to the plaintiffs the sum of $5,706.45, being the amount of disbursements previously awarded by this Court[;]

j) To pay the sums listed in h and i hereof, with interestat the rate of 11.74% from November 28, 1984[;]

k) To pay to plaintiff's [sic] additional attorneys fees and disbursements in the amount of $3,763.00.

Skevofilax v. Quigley, Civ. Action No. 79-2783 (D.N.J. Apr. 25, 1985) (order).

III.

The township objects to that portion of the order requiring it to pay the judgments rendered against the individual officers.*fn2 It advances the same arguments that it proffered to the district court -- that the district court lacked jurisdiction to enter the order and that, even if the court had the requisite jurisdiction, it erred in holding that the indemnity provision in the collective bargaining agreement was enforceable with respect to the instant judgment.

A.

The township's jurisdictional argument starts with the preamble to the district court order, which expressly referred to Rules 69 and 70 of the Federal Rules of Civil Procedure. That reference, the township urges, confines the "jurisdictional" dispute to an inquiry into the district court's authority to issue orders in aid of enforcement of its judgment.

The appellees respond that even if one looks only at the court's authority to enforce its judgment that authority is broad enough to sustain the district court order. They point out that Rule 69 cross-references to "proceedings supplementary to and in aid of judgments" of the state in which the district court is held. In light of this language and New Jersey law, they contend, Rule 69 authorizes a district court to order a debtor of a judgment debtor to pay a judgment rendered against the judgment debtor.

The New Jersey statutory scheme for the enforcement of a judgment against rights and credits of a judgment debtor is clear;

Rights and credits of a defendant in execution ... may be levied upon, taken and sold or collected by virtue of such execution....

N.J. Stat. Ann. § 2A:17-59 (West 1952)

In lieu of a sale, the officer levying the execution may, in his own name as such officer, liquidate such rights and credits by collection, or, with the assent of the judgment creditor and subject to the provisions of this article, in any other manner.

N.J. Stat. Ann. § 2A:17-61 (West 1952).

For the purpose of liquidation the officer levying the execution shall, at the request of the judgment creditor, sue or take proper judicial proceedings, in his own name as such officer, to obtain such recovery or relief as defendant or a receiver of defendant would be entitled to.

N.J. Stat. Ann. § 2A:17-62 (West 1952). This last-quoted provision authorizes the adjudication of a dispute between a judgment debtor and a third party so as to assure the satisfaction of a judgment. See Barret Co. v. United Building & Construction Co., 5 N.J. Misc. 87, 88, 135 A. 477, 478 (1926); Sebring v. Pratt, 91 N.J.L. 393, 393-94, 103 A. 999, 999 (1918); Johnson v. Lyons, 103 N.J.Eq. 315, 318, 143 A. 373, 374 (Ch. 1928).

The majority reasons that the liquidation procedure prescribed by section 2A:17-67 may not be utilized for the enforcement of a federal court judgment because that statutory provision cannot enlarge federal court jurisdiction. Obviously, however, neither the liquidation provision in section 2A:17-62, nor the more summary remedy in section 2A:17-59, nor any other Jew Jersey statute has anything at all to do with federal court jurisdiction. Those statutes, however, constitute "[t]he practice and procedure [of execution] of the state in which the district court is held." Fed. R. Civ. P. 69(a). By virtue of Rule 69 the same relief is available in federal court for the satisfaction of a federal court judgment as would be available in a state court. Rule 69 does not contemplate that the holders of federal judgments must resort to state tribunals for their enforcement.*fn3 Green v. Benson, 271 F.Supp. 90, 93 (E.D. Pa. 1967) (holding that district court had ancillary jurisdiction to adjudicate garnishment action by a judgment creditor against the nonparty insurer of a judgment debtor).

The majority's holding, it should be noted, is equally applicable to the district court's effort to garnish the township's bank account. The bank is in the same debtor relationship to the township as is the township to the individual police officers. Thus, although in this case the township paid the judgment rendered against it after the garnishment of its bank account, in the future, under the majority's holding, such a garnishment will not be possible in the absence of a separate basis of federal subject matter jurisdiction over the garnishee bank. Even the fact that the garnishee may not dispute the debt will not be dispositive, for the summary remedy specified in section 2A:17-59 and the liquidation remedies specified in section 2A:17-60 are equally subject to the majority's requirement of a separate basis of federal subject matter jurisdiction over the garnishee. Since such a separate basis of subject matter jurisdiction will rarely exist, the effect of the majority's position is that in almost all cases federal courts will be unable to enforce their judgments by resort to garnishment process.

Unfortunately, the untoward consequences of the majority's insistence upon a federal district court possessing an independent basis of subject matter jurisdiction over a garnishee will not be confined to efforts at post-judgment enforcement. Under Rule 64 of the Federal Rules of Civil Procedure prejudgment in rem and quasi in rem remedies are available "under the circumstances and in the manner provided by the law of the state in which the district court is held." The majority's approach means that such remedies will be available only in one instance: a case in which there is complete diversity between the plaintiff and both the defendant and the garnishee. Garnishment or any similar provisional prejudgment remedy can never be available in a federal question case, for there will be no federal question claim against the party subject to the prejudgment seizure, but only against the defendant. Yet Rule 64 provides explicitly for prejudgment garnishment and obviously contemplates its availability in diversity cases as well as in federal question cases. The majority rule makes this remedy unavailable in the latter class of cases. No interest of the United States, or of the states in the federal union suggest such a patently ridiculous rule. The majority's reference to interests of comity is totally unpersuasive in the absence of some reference to an interest of the State of New Jersey which would be offended by permitting a federal court to take the steps required to enforce its judgments. A rule requiring that there be a separate state lawsuit to enforce a federal court judgment by garnishment process actually impairs any identifiable interest of that state. It imposes on the state courts the role of serving as an ancillary or adjunct to the district court by cleaning up the loose ends of a district court lawsuit.

The majority finds support for its vasectomy of the district court's judgment enforcement powers in H. C. Cook Company v. Beecher, 217 U.S. 497 (1910). That opinion, by Justice Holmes, is a typically delphic pronouncement. It states the result described by the majority, but not the reasons for that result. Justice Holmes probably intended the opinion to be an interpretation of the then-governing statute, the Conformity Act of 1872, ch. 255, 17 Stat. 196. If it was so intended, Beecher is wholly irrelevant to the issue of ancillary jurisdiction exercised pursuant to Rule 69, a rule that was not drafted until an enactment in 1934 of the Rules Enabling Act, Pub. L. No. 416, 48 Stat. 1064 (codified at 28 U.S.C. § 2072 (1982)). If, on the other hand, Justice Holmes intended his opinion to serve as a pronouncement on the constitutional limits of ancillary jurisdiction, he certainly kept that intention to himself, for it is nowhere mentioned in the opinion. Thus, beyond its superficial factual similarity, Beecher bears no resemblance to this case before us and lends no support to the majority's position.

B.

Entirely apart from the court's authority under Rule 69 and New Jersey law, however, there is in this case a separate basis for subject matter jurisdiction over the dispute with respect to the Township's obligation to indemnity the police officers. Had the carrier in the prejudgment state asserted on behalf of the township that it would not honor the contractual indemnity agreement in the collective bargaining agreement, it would have been appropriate for the police officers to file a cross-claim against the township for contract indemnification pursuant to Rule 13(g). See, e.g., Thomas v. Malco Refineries, Inc., 214 F.2d 884, 886 (10th Cir. 1954); President & Directors of Georgetown College v. Madden, 505 F. Supp. 557, 593-95 (D. Md. 1980), aff'd in part and dismissed in part, 660 F.2d 91 (4th Cir. 1981); Coyne v. Marquette Cement Manufacturing Co., 254 F. Supp. 380, 388 (W.D. Pa. 1966); 6 C. Wright and A. Miller, Federal Practice and Procedure § 1431, at 169 (1971).*fn4

There is no time limit on the filing of such a cross-claim, and a district court may separate its adjudication from the main trial. See Fed. R. Civ. P. 42(b).

When the police officers joined in the plaintiffs' motion, they in effect made a Rule 13(g) cross-claim against the township even though they did not formally so designate their claim. The fact that the officers filed their cross-claim after the adjudication of the main claim does not in these circumstances eliminate the district court's ancillary jurisdiction to consider it. Blackburn Truck Lines, Inc. v. Francis, 723 F.2d 730, 732 (9th Cir. 1984). n.5 (FOOTNOTE OMITTED) Nor does the existence of the additional procedural requirements for the post-judgment amendment of pleadings alluded to by the majority preclude the exercise of such jurisdiction, for the procedural difficulties do not bear upon the district court's subject matter jurisdiction and thus lend no support to the majority's deficient analysis of the scope of ancillary jurisdiction.

C.

Any defect in the proceedings resulting in the order appealed from was at most procedural, not jurisdictional. Whether one approaches the matter as a Rule 69(a) proceeding or as a Rule 13(g) proceeding, the township was entitled to a procedure appropriate to the nature of the dispute, which was limited to the issue of the legality under New Jersey law of the township's indemnity undertaking. There were no disputed issues of material fact, and the township never urged that it required a more adequate opportunity to marshall its legal arguments. Indeed the township's legal position was presented to the district court in substantially the same manner as it is presented on appeal. Thus any procedural irregularities resulting from the summary manner in which the district court resolved the dispute over the township's indemnification undertaking must be regarded as harmless. "At every stage of the proceeding [we] must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties." FED. r. cIV. p. 61.

The majority attempts to bolster is conclusion by relying on procedural technicalities:

These defendants voluntarily elected not to assert a known claim during five years of litigation, made the Township litigate that claim in New Jersey's courts for a substantial period, and did not even ask the district court to consider it until almost a year after final judgment had been rendered.

Typescript at 13. This effort is preposterous because it addresses alleged misconduct by the defendants as a ground for deciding an ancillary jurisdiction issue against the plaintiffs. Until the plaintiffs had a judgment there was not claim they could have aserted against putative garnishees. Moreover, the argument is absurd even from the defendants' perspective, for it ignores totally the conduct of the insurance carrier, which defended the action on behalf of all defendants until after a judgment was rendered without ever asserting the claim that the indemnity undertaking for which it accepted a premium was void. Since both the individual defendants and the township plainly expected the carrier to pay the resulting judgment, there was no reason for the individual defendants to assert a cross-claim for the enforcement of the township's separate indemnity undertaking until the carrier made known its intention not to pay any judgment. The delay of a year on which the majority relies resulted solely from the recalcitrance of the carrier, and the claim for indemnity was asserted shortly after the individuals were subjected to a wage execution.

D.

Since I have no doubt that the district court had ancillary jurisdiction, I address the merits of the township's objection to the district court's disposition of the dispute over the indemnification agreement. The sole substantive defense that the township offers is that the collective bargaining agreement, if construed to mean what it unequivocally says, would be illegal under New Jersey law. That position is without merit.

The New Jersey courts have expressly held enforceable a municipality's obligation, contained in a collective bargaining agreement, to indemnify city officers for compensatory damage awards arising out of unlawful acts. See City Council v. Fumero, 143 N.J. Super. 275, 362 A.2d 1279 (Law Div. 1976). At issue in Fumero was a municipality's obligation under a collective bargaining agreement -- indistinguishable for purposes of this appeal from the one between the Township of Edison and its police officers -- to defend and indemnify municipal officers who were defendants in a section 1983 suit. The municipality had sought a declaratory judgment against its insurance carrier and the defendant officers after the carrier had refused to defend the officers. With respect to the enforceability of the collective bargaining agreement's indemnification provision, the New Jersey court wrote,

The collective bargaining agreement also addressed itself to the issue of indemnification for judgments which might be recovered against members of the bargaining unit. Counsel have not referred to any statutory provision which addresses itself to this issue. In the absence of a controlling statute, the terms of the contract control the rights of the respective parties. The agreement presently before the court requires the municipality to indemnify the individual officers for a judgment of compensatory damages. No right of indemnity exists if a judgment for punitive damage if returned. Such a contractual provision is in accord with public policy.

Id. at 284, 362 A.2d at 1283-84 (citations omitted). The court also held that the insurance carrier was obliged under its policy to defend and indemnify the police officers. Id. at 288; 362 A.2d at 1285.*fn6

Relying on Moya v. City of New Brunswick, 90 N.J. 491, 448 A.2d 999 (1982), and Valerius v. City of Newark, 84 N.J. 591, 423 A.2d 988 (1980), the township contends that the indemnification clause is contrary to New Jersey public policy and is therefore unenforceable. The authorities cited by the township have no bearing upon this appeal. They deal with the entirely distinct matter of the statutory obligation to defend and indemnify imposed upon municipalities and other government agencies by the New Jersey Tort Claims Act. See Moya, 90 N.J. at 495, 448 A.2d at 1001; Valerius, 84 N.J. at 593, 423 A.2d at 989. The statutory liability at issue in Moya and Valerius has nothing to do with the legality of a contract indemnification undertaking.

Fumero is dispositive of the issue of the enforceability of the indemnification clause at issue in this case. Thus, I would reject the township's contention that the district court erred as a matter of law in holding that the indemnification clause required the township to satisfy the judgments rendered against the individual police officers.

IV.

The majority's holding that a district court must have a separate basis of subject matter jurisdiction before it can enforce a judgment by garnishment process is bad law and worse judicial administration. The district court had authority under both Rule 69(a) and Rule 13(g) to decide the issue of the township's duty to indemnify the individual defendant police officers. The district court's holding that the township owed such a duty and that the judgment creditors of the defendant police officers could reach the township is consistent with New Jersey law. The order appealed from should, therefore, be affirmed. I dissent.


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