Kahan v. Longiotti

263 S.E.2d 345 (1980)

Donald A. KAHAN and Jack S. Jacobs, Plaintiffs,
Hanover Brook, Inc., Plaintiff Intervenor,
v.
Samuel M. LONGIOTTI, Defendant.

No. 7915SC616.

Court of Appeals of North Carolina.

March 4, 1980.

Purrington, McNamara & Pipkin, by Ashmead P. Pipkin, Raleigh, for plaintiffs and plaintiff intervenor appellants and appellees.

Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston, by Mark R. Bernstein and Fred T. Lowrance, Charlotte, for defendant appellant and appellee.

VAUGHN, Judge.

The trial court's ruling denied defendant's motion to dismiss for insufficiency of process and improper service of process. Without proper and sufficient service of process, the trial court had no jurisdiction over his person. An adverse ruling on the jurisdiction of the court is immediately appealable.

Any interested party shall have the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of the defendant. . . .

G.S. 1-277(b). Rule 3(c) of the North Carolina Rules of Appellate Procedure permits appeal from "a judgment or order" within ten days after its entry. The order in this case which was signed and filed on 27 February 1979 states "The motion of the defendant to dismiss the Intervenor's Complaint on the ground of insufficiency of process and insufficiency of service of process is hereby denied." (Emphasis added). The date of entry of this written order and not the earlier date of hearing is the date of entry for purposes of appeal and defendant's notice of appeal was served within ten days of the entry of the order. The clerk's notation is ordinarily the date from which time for notice of appeal runs. G.S. 1A-1, Rule 58; see also Drafting Committee Note to Rule 3 of the Rules of Appellate Procedure. Here, however, the trial judge, as reflected in the record of the hearing, indicated a later date. The clerk should not have noted an entry of judgment in defendant's motion on 20 February 1979. The trial judge directed a date contrary to the hearing date.

The granting of a motion to intervene pursuant to Rule 24 is not ordinarily appealable. Wood v. City of Fayetteville, 35 N.C.App. 738, 242 S.E.2d 640 (1978). However, the question before us involves an immediately appealable adverse ruling to defendant that plaintiff intervenor has jurisdiction over him. The issue is thus whether, after a motion to intervene, which must be accompanied by a proposed pleading, has been served upon all affected parties and the motion is granted, is service of process pursuant to Rule 4 of the Rules of Civil Procedure required or is the former service of the motion and complaint pursuant to Rule 5 of the Rules of Civil Procedure sufficient. We hold that an intervenor party who is granted permission to intervene pursuant to Rule 24(b)(2) is not required to then issue a summons and complaint pursuant to Rule 4 but that the service pursuant to Rule 5 of the motion to intervene accompanied with the complaint is sufficient service upon the party against whom relief is sought or denied in the intervenor's pleading and is sufficient process to acquire jurisdiction over the party if all other requisites for jurisdiction over the party are met.

The procedure for intervention is provided in subsection (c) of Rule 24.

A person desiring to intervene shall serve a motion to intervene upon all parties affected thereby. The motion shall state the grounds therefor and shall be accompanied by a pleading setting forth the claim or defense for which intervention is sought. The same procedure shall be followed when a statute gives a right to intervene, except when the statute prescribes a different procedure.

G.S. 1A-1, Rule 24(c); see also Raintree Corp. v. Rowe, 38 N.C.App. 664, 248 S.E.2d 904 (1978). In the Federal Rules of Civil Procedure, subsection (c) states that "[a] person desiring to intervene shall serve a motion to intervene upon the parties as provided in Rule 5." The North Carolina rule merely ends the sentence with the words "all parties affected thereby" instead of "the parties as provided in Rule 5." While our rule does not expressly provide for service of the motion to intervene pursuant to Rule 5, we think this is the better procedure and certainly in keeping with the spirit and purpose of the Rules of Civil Procedure.

(a) Service—when required.—Every order required by its terms to be served, every pleading subsequent to the original complaint unless the court otherwise orders because of numerous defendants, every paper relating to discovery required to be served upon a party unless the court otherwise orders, every written motion other than one which may be heard ex parte, and every written notice, appearance, demand, offer of judgment and similar paper shall be served upon each of the parties, but no service need be made on parties in default for failure to appear except that pleadings asserting new or additional claims for relief against them shall be served upon them in the manner provided for service of summons in Rule 4.

(b) Service—how made.—A pleading setting forth a counterclaim or crossclaim shall be filed with the court and a copy thereof shall be served on the party against whom it is asserted or on his attorney of record. With respect to all pleadings subsequent to the original complaint and other papers required or permitted to be served, service with due return may be made in the manner provided for service and return of process in Rule 4 and may be made upon either the party or, unless service upon the party himself is ordered by the court, upon his attorney of record. With respect to such other pleadings and papers, service upon the attorney or upon a party may also be made by delivering a copy to him or by mailing it to him at his last known address or, if no address is known, by filing it with the clerk of court. Delivery of a copy within this rule means handing it to the attorney or to the party; or leaving it at the attorney's office with a partner or employee. Service by mail shall be complete upon deposit of the pleading or paper enclosed in a post-paid, properly addressed wrapper in a post office or official depository under the exclusive care and custody of the United States Postal Service.

G.S. 1A-1, Rule 5(a), (b); see Shuford, N.C. Civil Practice and Procedure § 24-10 (1975). Service of the motion and pleading upon all affected parties in this manner will give them an opportunity to be heard on the motion.

An intervenor is not considered a party until an order is entered granting his motion to intervene. Minneapolis-Honeywell Regulator Co. v. Thermoco, Inc., 116 F.2d 845 (2d Cir. 1941). The granting or denial of this motion to intervene pursuant to Rule 24(b)(2) as in this case is discretionary with the trial judge and reviewable only for abuse of that discretion. Ellis v. Ellis, 38 N.C.App. 81, 247 S.E.2d 274 (1978). Defendant contends that once the trial judge has granted the motion to intervene because the "applicant's claim or defense and the main action have a question of law or fact in common", G.S. 1A-1, Rule 24(b)(2), the intervenor must issue summons and serve the complaint pursuant to Rule 4. He points to the cases of In the Matter of the Indiana Transportation Company, 244 U.S. 456, 37 S. Ct. 717, 61 L. Ed. 1253 (1917) and Ruck v. Spray Cotton Mills, 120 F. Supp. 944 (M.D.N.C.1954).

Indiana Transportation was a libel in admiralty for the death of an individual, arising out of the capsizing of a steamer. An agent of the corporation happened to be in the Northern District of Illinois and was properly served with summons and complaint by the original libellant. In less than a year, 373 other libellants, each alleging a different cause of action for wrongful death arising out of the same sinking, were permitted to intervene. The shipping corporation, an Indiana corporation objected to the jurisdiction of the Northern District of Illinois because one of its agents happened to be inside the district. The Court held:

Not having any power in fact over the defendant unless it can seize him again, it cannot introduce new claims of new claimants into an existing suit simply because the defendant has appeared in the suit. The new claimants are strangers and must begin their action by service just as if no one had sued the defendant before.

244 U.S. at 458, 37 S. Ct. at 718, 61 L.Ed. at 1255. Indiana Transportation is distinguishable in that new claims were introduced after the defendant was no longer subject to process in the jurisdiction. Defendant in the case before us does not contend that he is not subject to the jurisdiction of our courts and service of process here but that it should be served pursuant to Rule 4 instead of Rule 5 of the Rules of Civil Procedure. Further, there is some question whether the rule of this case relied on by defendant survived the adoption of the Federal Rules of Civil Procedure. Berman v. Herrick, 30 F.R.D. 9 (E.D.Pa.1962); Tatem v. Southern Transportation Co., 5 F.R.D. 36 (E.D.Pa.1945); 3B Moore's Federal Practice ¶ 24.20 (2d ed. 1979). Finally, each death in Indiana Transportation was a separate cause of action while in the case at hand, the same basic facts—the existence of a partnership for development of a shopping center and subsequent losses—are alleged by both plaintiff and plaintiff intervenor and the same rules of partnership law are applicable.

In Ruck, the other case relied on by defendant, again the reach of the court's jurisdiction was involved and not just a matter of proper service to obtain jurisdiction. The original plaintiff in Ruck, a Swiss citizen, brought an action in North Carolina to compel Spray Cotton Mills to pay a dividend. After defendant filed answer, the parties settled the dispute without bothering to inform plaintiff's counsel whom plaintiff also neglected to pay. Plaintiff's counsel, upon learning of the events, withdrew as counsel and intervened in the action they had prosecuted to recover compensation for their services and the costs of the action. The original plaintiff moved to dismiss for lack of service on him and the defendants moved to dismiss the proposed intervention. The federal district court ruled against the intervenor holding that this was an independent action for collection of fees. As to the original defendants, the court found no diversity of citizenship between intervenors and defendants in this independent action. The intervenor had attempted to serve the original plaintiff by mailing a copy of the intervenor's complaint to the last known address of the original plaintiff. The court held "That the purported service of the notice and motion to intervene on the plaintiff, Ruck, was ineffectual to bring him into court in this proceeding, an independent one, and failed in compliance with the Rules of Civil Procedure as set out in 24a-c, 5(a), 4(c)." 120 F. Supp. at 947 (emphasis added). In the case at hand, we do not have an independent proceeding. It is a claim on common questions of fact and law.

Defendant's motion to dismiss under Rule 12(b) did not recite as grounds lack of jurisdiction over the person. G.S. 1A-1, Rule 12(b)(2). He moved to dismiss only for insufficiency of process and insufficient service of process. G.S. 1A-1, Rule 12(b)(4), (5). Defendant does not argue any ground that the court does not have jurisdiction over his person other than the sufficiency of process. The Indiana Transportation and Ruck cases involved more basic and fundamental questions of the court's jurisdiction than insufficient or improper service of process. In this case, defendant reaches an attack on the jurisdiction of the court over his person only through the sufficiency of the process served upon him.

Thus today, we do not reach the question of the proper manner to serve a party with notice of intervention where the party claims he is no longer subject to personal service in the jurisdiction. We do note that the commentators on the Federal Rules would in such a case find service on the attorneys for the parties pursuant to Rule 5(b) sufficient. 7A Wright & Miller, Federal Practice and Procedure § 1919 at 610 (1972); 3B Moore's Federal Practice ¶ 24.20 at 24-911 (2d ed. 1979).

In the case at hand, service of the motion and proposed complaint pursuant to Rule 5 is sufficient service of process on defendant where the intervenor's complaint is not entirely independent of the original complaint and there is no objection that the intervenor's complaint could not be properly served on defendant in this jurisdiction. Plaintiff intervenor did not commence an action for purposes of Rule 3 of the Rules of Civil Procedure. G.S. 1A-1, Rule 3. Rather, he entered the already existing action, and his complaint did not commence a new action. Further, the trial judge in his order gave defendant ample time to respond to the new complaint in the cause of action. At this stage, having a clerk of court issue a summons to answer a complaint after a superior court judge has already provided for such is superfluous. Only service on all parties is required of the intervenor, not summons to the party against whom the intervenor makes complaint or defense.

Affirmed.

HEDRICK and CLARK, JJ., concur.