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Thrivent Financial for Lutherans v. Savercool

December 29, 2008


The opinion of the court was delivered by: Judge McClure



Plaintiff Thrivent Financial for Lutherans (hereinafter "Thrivent") instituted an interpleader complaint on November 3, 2004 to pay a portion of the proceeds of an annuity into court until liability to the beneficiaries was determined. The annuity listed three primary*fn1 beneficiaries, two of whom survived the annuitant -Darlene Savercool and Nelson Swartz. According to the policy, the proceeds of the annuity, valued at $140,101.88, should be split evenly between the two surviving beneficiaries. Initially, one-half of the policy, $70,050.94 was paid to Darlene Savercool. Thrivent petitioned to, and did, pay the remaining $70,050.94 into court because it was unable to find the other beneficiary, Nelson Swartz, as his address was not supplied to Thrivent by the annuitant.

In its complaint, Thrivent admitted the last known address for Swartz was Milton, Pennsylvania. (Rec. Doc. No. 1 at ¶ 3). Thus, in an effort to find Swartz, Thrivent found three listings with the last name Swartz in New Cumberland, Pennsylvania, none of whom had any knowledge of Nelson Swartz. (Rec. Doc. No. 8-3). Thrivent also contacted the pastor of the deceased annuitant, located in Shiremanstown, Pennsylvania. (Id.) The pastor was not familiar with Nelson Swartz. (Id.) Thrivent also conducted a database search in Juniata County and found no listings under that name. (Id.) Thrivent conducted a nationwide internet search for Swartz, and found a listing in New Hope, Pennsylvania, who was ruled out as the beneficiary. (Id.) Finally, Thrivent did a nationwide internet search adding a "ch" to Swartz to search by the name"Schwartz" and found one Nelson Schwartz in Pennsylvania, who was not the beneficiary either. (Id.)

As a result of these attempts, on December 23, 2004, Thrivent moved for service by publication, which this court granted. (Rec. Doc. Nos. 7 and 9). This court ordered the advertisement to be placed in newspapers of general circulation in Juniata, Cumberland, Huntington, and Northumberland Counties, notice to run once a week for two consecutive weeks. (Rec. Doc. No. 9). Because there was no response to the advertisement, Thrivent moved for entry of default judgment against Swartz, which was granted by this court on March, 30, 2005. (Rec. Doc. No. 20). This court also ordered the funds on deposit with the Registry of Court to be paid to Savercool. (Rec. Doc. No. 22).

On September 30, 2008, Swartz filed a motion to set aside the entry of default and the default judgment pursuant to Fed. R. Civ. P. 60(b)(4), arguing that there was improper service of the complaint, and that therefore the judgment is void for lack of personal jurisdiction over Swartz. (Rec. Doc. No. 23). The parties filed responsive briefs. This court also ordered further briefing, to determine how Swartz learned of the default judgment, and to ensure Swartz was unaware of the attempts at service when the default was entered. (Rec. Doc. No. 36). All briefs have been filed and the matter is ripe for disposition.

Now, for the following reasons, the court will set aside the entry of default and the default judgment.


Rule 55(c) of the Federal Rules of Civil Procedure states that "[t]he court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b)." Rule 60(c)(1) of the Federal Rules of Civil Procedure states that, "[a] motion under Rule 60(b) must be made within a reasonable time -and for reasons (1), (2), and (3) no more than a year after the entry of the judgment or order or the date of the proceeding." What is a reasonable time depends, to a large extent, on the circumstances alleged. Lasky v. Continental Products Corp., 804 F.2d 250, 255 (3d Cir. 1986). The determination to grant or deny relief under Rule 60(b) is within the sound discretion of the court. Id.

Relief under 60(b)(4) is appropriately sought when the judgment is void. See Fed. R. Civ. P. 60(b). "A default judgment entered when there has been no proper service of the complaint is, a fortiori, void, and should be set aside." Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d, 14, 19 (3d Cir. 1985). The entry of a default judgment without proper service of a complaint renders a judgment void. U.S. v. One Toshiba Color TV, 213 F.3d 147, 156 (3d Cir. 2000).

"[A]n individual...may be served... by following state law for servi[ce]... in the state where the district court is located or where service is made..."Fed. R. Civ. P. 4(e). Pennsylvania Rule of Civil Procedure 430(a) allows service by publication:

If service cannot be made under the applicable rule the plaintiff may move the court for a special order directing the method of service. The motion shall be accompanied by an affidavit stating the nature and extent of the investigation which has been made to determine the whereabouts of the defendant and the reasons why service cannot be made.

Pa. R. Civ. P. 430(a). "The purpose of this procedure is to provide proof that a good faith effort has been made to effect service under normal methods."Deer Park Lumber, Inc. v. Major, 559 A.2d 941, 944 (Pa. Super. 1989). "Only after such proof has been offered is the court authorized to direct publication or another method of substitute service." Id. The note accompanying Pennsylvania Rule of Civil Procedure 430 states:

An illustration of a good faith effort to locate the defendant includes (1) inquires of postal authorities including inquiries pursuant to the Freedom of Information Act, 39 C.F.R. Part 265, (2) inquiries of relatives, neighbors, friends, and employers of the defendant, and (3) examinations of local telephone ...

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