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GELDERMANN & CO., INC. v. DUSSAULT

October 25, 1974

GELDERMANN & CO., INC., PLAINTIFF,
v.
JOHN A. DUSSAULT, INDIVIDUALLY AND D/B/A PINEDALE POLLED HEREFORD RANCH, DEFENDANT.



The opinion of the court was delivered by: Bauer, District Judge.

  MEMORANDUM OPINION AND ORDER

This cause before the Court on defendant's motion to quash service of summons and to dismiss for lack of personal jurisdiction.

Plaintiff is an Illinois corporation engaged as a broker in commodities futures which maintains branch offices in a number of different states. The defendant is a citizen and resident of Pinedale, Wyoming. The complaint contains two counts, Count I alleging liability under the terms of a customer agreement executed by the defendant, and Count II purportedly stating a claim in tort for an allegedly false representation made by defendant to plaintiff's officer, John T. Geldermann. Count I alleges that in September, 1973 the defendant opened a trading account with plaintiff and executed a customer agreement, a customer data sheet and a hedge letter, which documents were attached to the complaint as exhibits A, B and C respectively. Count I further alleges that subsequent thereto plaintiff purchased feeder cattle and pork belly futures contracts for defendant's account and that commencing on May 1, 1974 began, as agent for defendant, to accept delivery of 101 lots of feeder cattle. It is further alleged that defendant failed to reimburse plaintiff for the amounts advanced by plaintiff in accepting delivery of 79 lots, and that as a consequence thereof, after liquidating defendant's account, defendant is indebted to plaintiff under section 5 of the aforementioned customer agreement in the amount of $176,051.77.

Count II of the complaint alleges that prior to May 1, 1974 defendant told plaintiff's officer, John T. Geldermann, that sufficient funds were immediately available to defendant to permit him to meet his obligations to plaintiff upon the latter accepting delivery of 101 lots of feeder cattle. It is further alleged that this representation was false, and was relied upon by plaintiff to its detriment.

Plaintiff invokes the subject matter jurisdiction of this Court on the basis of 28 U.S.C. § 1332, and seeks to assert personal jurisdiction over this defendant on the basis of the Illinois long-arm statute (Chapter 110, Ill.Rev.Stat., 1973, §§ 17(1)(a) and (b)). Service of process over this defendant was purportedly made on July 26, 1974 by delivery of a copy of the summons and complaint to one Richard C. Rutledge, an employee of the defendant, at the Pinedale Polled Hereford Ranch, Pinedale, Wyoming, owned and operated by the defendant.

The affidavits submitted to the Court in support of this motion show that the summons was delivered as follows: On July 26, 1974 Rutledge was approached by a visitor who informed him that he had some papers to be served and directed Rutledge to accept the summons. Rutledge stated that he was not authorized to accept service of papers of any kind, that he was simply an employee of Mr. Dussault and that he would not and could not accept service of any papers. At that point the process server dropped the papers on the ground about 10 yards from Rutledge and left the scene. Whether or not the nature of the papers were explained to Rutledge is a factual question disputed by the parties.

I.  SERVICE OF PROCESS ON AN EMPLOYEE OF DEFENDANT, NOT
    RESIDING WITH OR A MEMBER OF DEFENDANT'S HOUSEHOLD, AND
    NOT AUTHORIZED BY DEFENDANT TO ACCEPT SERVICE OF PROCESS
    IS INVALID UNDER THE APPLICABLE PROVISIONS OF THE ILLINOIS
    CIVIL PRACTICE ACT.

Service of process in this case was purportedly made under Rule 4(d)(7) of the Federal Rules of Civil Procedure which states in pertinent part:

  "Upon a defendant of any class referred to in
  paragraph (1) or (3) of this subdivision of this
  rule, it is also sufficient if the summons and
  complaint are served in the manner prescribed by
  any statute of the United States or in the manner
  prescribed by the law of the state in which the
  district court is held for the service of summons
  or other like process upon any such defendant in
  an action brought in the courts of general
  jurisdiction of that state."

The statute available in the instant case under Rule 4(d)(7) is the Illinois long-arm statute, Chapter 110, Ill.Rev.Stat., 1973, § 17. Service thereunder must be made according to Chapter 110, Ill.Rev.Stat., 1973, § 13.2, which states:

  "Except as otherwise expressly provided, service
  of summons upon an individual defendant shall be
  made (1) by leaving a copy thereof with the
  defendant personally or (2) by leaving a copy at
  his usual place of abode, with some person of the
  family, of the age of 10 years or upwards, and
  informing that person of the contents thereof,
  provided the officer or other person making
  service shall also send a copy of the summons in
  a sealed envelope with postage fully prepaid,
  addressed to the defendant at his usual place of
  abode. The certificate of the officer or
  affidavit of the person that he has sent the copy
  in pursuance of this section is evidence that he
  has done so."

Service in the instant case upon Richard C. Rutledge, the defendant's foreman, does not comply with requirements of Illinois law. Rutledge is not now and was not on July 26, 1974 a resident of defendant's home. He was not a member of defendant's household. Although he was an employee of the defendant he was not authorized to accept service of process on behalf of the defendant.

Plaintiff in opposition to the motion to quash service argues that the "spirit of the law and its purpose must be considered". It points out that the specially appointed United States Deputy Marshal spent approximately 32 hours in seeking to make service upon the person of the defendant.*fn1 However, there is no doubt that the defendant was successful in eluding him and was never personally served.

The Court fully agrees with plaintiff that the service provisions of the Illinois and Federal statutes were not intended to establish rules for a child's game of hide-and-seek. This Court has never sought to enforce technicalities where the spirit of rules would be defeated. Nevertheless, difficulties in obtaining service of process cannot form the basis for ignoring the clear statutory requirements. The rule that requires personal service is not a technicality but rather a mainstay in the foundation of due process upon which our legal system is built. The Court ...


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