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FRANCES G. HOLDEN v. DIANE HOLDEN (05/10/88)

filed: May 10, 1988.

FRANCES G. HOLDEN, APPELLEE,
v.
DIANE HOLDEN, APPELLANT



Appeal From Order Entered September 2, 1986 Court of Common Pleas, Civil Division, Luzerne County No. 3842-C of 1985

COUNSEL

James F. Geddes, Jr., Wilkes-Barre, for appellant.

Steven A. Bergstein, Allentown, for appellee.

Cirillo, President Judge, and Cavanaugh, Brosky, Rowley, McEwen, Olszewski, Montemuro, Popovich and Johnson, JJ. Cirillo, President Judge, files concurring opinion joined by Rowley, Montemuro and Johnson, JJ. Brosky, J. files dissenting opinion.

Author: Cavanaugh

[ 374 Pa. Super. Page 185]

The issue in this case is whether a court in Pennsylvania may exercise in personam jurisdiction over the appellant, Diane Holden, in a civil action where all of the conduct by the appellant took place in Texas. If such jurisdiction does not exist, the court below erred in refusing to open a

[ 374 Pa. Super. Page 186]

    default judgment entered against the appellant and the complaint against her must be dismissed.

The appellee, Frances G. Holden, and Dr. Stanley Holden, who is not a party to this litigation, were divorced in Luzerne County, Pennsylvania, following extended and complex proceedings. A property settlement agreement was entered into between the parties to the divorce action which provided inter alia for alimony for Frances G. Holden during her lifetime. Subsequently, Dr. Holden married Diane Holden, the appellant herein, who has been a resident of the State of Texas at all times relevant to this action.

The appellee commenced the present action in Luzerne County. The complaint was served on Diane Holden at her residence in Humble, Texas on November 6, 1985. She did not file a responsive pleading and on December 18, 1985 a notice of intention to take default judgment was sent to her. On January 13, 1986 default judgment as to liability was entered against the appellant who filed a petition to open the default judgment on May 7, 1986. The petition to open alleged lack of personal jurisdiction over the appellant. The court below denied the petition and this appeal followed.*fn1

The basis for jurisdiction over Diane Holden, if it exists, would be found in the Pennsylvania Long Arm Statute which provides in part at 42 Pa.C.S. § 5322(a)(4):

(a) General rule. -- A tribunal of this Commonwealth may exercise personal jurisdiction over a person (or the personal representative of a deceased individual who would be subject to jurisdiction under this subsection if not deceased) who acts directly or by an agent, as to a cause of action or other matter arising from such person:

[ 374 Pa. Super. Page 187]

(4) Causing harm or tortious injury in this Commonwealth by an act or omission outside this Commonwealth.

The appellant has had no contact with Pennsylvania at all. The settlement agreement was reached in Pennsylvania between the appellee and Stanley Holden, but Diane Holden was not a party to the divorce proceedings or the settlement agreement. The complaint alleges factually that "Defendant [Diane Holden] has induced Stanley J. Holden to breach said contract by threatening to dissolve her marriage to Stanley J. Holden if he complied with said contract." The other allegations are that the appellant "induced" Stanley Holden to breach his contract and prevented him from complying with the terms of the settlement agreement, and has "interfered with the contractual relationship" between Stanley Holden and Frances Holden. The complaint also alleges that appellant has negligently inflicted emotional distress upon the appellee. None of the allegations set forth any activities by the appellant in Pennsylvania.

The Pennsylvania Long Arm Statute does not permit our courts to extend their jurisdiction to persons beyond the boundaries of this Commonwealth except in limited circumstances. Beginning with International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), innumerable cases have stated that in order for a state to fulfill the requirement of due process, it may exercise personal jurisdiction over a non-resident defendant only if there are "minimum contacts" between the defendant and the forum state so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. The defendant's conduct must be such that it is reasonable and fair to require him to defend his actions in a foreign state. Kulko v. Superior Court of California, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978). The Supreme Court of the United States has noted that there are "territorial limitations on the power of the respective states." Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 1283, 1296 (1958).

[ 374 Pa. Super. Page 188]

In the case before us, the appellant performed no acts in Pennsylvania, but it is alleged that she interfered in Texas with performance of a contract made in Pennsylvania. The complaint seeks to embroil the appellant in the long continued and bitter dispute between appellee and her former husband, Dr. Stanley Holden. The predecessor to the current Long Arm Statute was found at 42 Pa.C.S. § 8305, (Purdon Supp.1974-75), which was repealed in 1976. Chief Justice Nix discussed conduct by a defendant occurring outside of the state which has a harmful effect upon one within Pennsylvania in the context of 42 Pa.C.S. § 8305 in Kenny v. Alexson Equipment Company, 495 Pa. 107, 116-117, 432 A.2d 974, 979 (1981) stating:

Section 8305 ". . . requires that (1) the non-resident [shall] have acted outside of Pennsylvania, (2) his action [shall] have caused 'any harm' within Pennsylvania, and (3) the cause of action [shall] have arisen out of the conduct causing the harm" B.J. McAdams, Inc. v. Boggs, 426 F.Supp. 1091, 1098 (E.D.Pa.1977). This section is a formulation of what has been termed the "effects test" of extra-territorial jurisdiction. Under the "effects test," derived from the American Law Institute's Restatement (Second) of Conflict of Laws § 37 (1971):

A state has power to exercise judicial jurisdiction over an individual who causes effects in the state by an act done elsewhere with respect to any cause of action arising from these effects unless the nature of the effects and of the individual's relationship to the state make the exercise of such jurisdiction unreasonable.

In Kenny v. Alexson Equipment Company, supra, the Supreme Court dismissed a complaint by a Pennsylvania resident against a non-resident individual, Mr. Piracci, Sr., who never did business nor maintained an office in Pennsylvania. Mr. Piracci sold a hoist in Maryland which was eventually used in Philadelphia, Pennsylvania. Allegedly, the hoist caused injuries because of a defect in it. The court stated at 495 Pa. at 117, 432 A.2d at 980:

[ 374 Pa. Super. Page 189]

. . . the issue of whether Piracci, Sr. can be subjected to the jurisdiction of the courts of this Commonwealth does not end with a finding that his activities allegedly come within the literal language of the Long-Arm Statute.

The analysis of whether a state may exercise jurisdiction over a non-resident individual must be tested against both statutory and constitutional standards. The due process clause of the Fourteenth Amendment imposes a limit on the state's exercise of jurisdiction over a non-resident defendant. McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957).*fn2

As noted above, the due process requirements as set forth in International Shoe Company v. Washington, supra are that there must be minimum contacts with the forum state and this necessitates an examination of the facts in each case. Vacu-Maid, Inc. v. Covington, 530 P.2d 137 (Oklahoma Appellate Division 1974). In the instant case, the acts complained of occurred in Texas and consisted principally of the appellant threatening to leave her husband if he complied with the terms of the agreement between her husband and his former wife. The appellant, at most, only indirectly harmed the appellee. It was the

[ 374 Pa. Super. Page 190]

    appellant's husband who caused direct harm, if any, to the appellee by not carrying out the terms of the settlement agreement. In any event, the alleged conduct by the appellant set forth in the complaint is too tenuous to invoke the jurisdiction of our courts under the Long-Arm Statute as the appellant had no contact with the Commonwealth of Pennsylvania.*fn3

Our case is analogous to DeFay v. McMeekin, 352 Pa. Super. 409, 508 A.2d 324 (1986) in which the plaintiff brought suit against a New Jersey defendant, alleging negligence in an automobile accident which occurred in New Jersey. The plaintiff suffered pain while recuperating in Pennsylvania. The defendant, though served, did not file a responsive pleading and default judgment was entered against him. A petition to open the judgment was denied and an appeal was taken to this court. We stated at 352 Pa. Super. at 411, 508 A.2d at 325:

Before considering the merit of appellant's argument in favor of opening the default judgment, we must necessarily address appellant's contention that the court lacks personal jurisdiction over him because he is a New Jersey ...


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