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LOUIS SCHLESINGER CO. v. KRESGE FOUND.

December 10, 1964

LOUIS SCHLESINGER CO., Plaintiff,
v.
The KRESGE FOUNDATION and Kresge Department Store, Inc., Defendants



The opinion of the court was delivered by: WORTENDYKE

This diversity action was removed to this Court after having been instituted in attachment in the Superior Court of New Jersey. One of the defendants, The Kresge Foundation, hereinafter Foundation, a Michigan corporation not registered or licensed to transact business in the State of New Jersey, has moved this Court for an order dismissing the action as to movant, or, in lieu thereof, quashing the writ of attachment issued against the property of Foundation. Levy was made under the writ upon a mercantile retail department store building and premises owned by Foundation in the City of Newark, and the lien of the levy was released by the filing of an appropriate bond before the transfer to this Court was effected.

Movant urges in support of its motion that this Court does not have jurisdiction over the defendant or its property because the New Jersey courts, upon whose jurisdiction the Federal Courts must rely after removal, Lambert Run Coal Co. v. Baltimore & Ohio R.R. Co., 258 U.S. 377, 42 S. Ct. 349, 66 L. Ed. 671 (1922), did not acquire jurisdiction either by virtue of the attachment proceedings or by personal service of process. The plaintiff has not shown that personal service was effected on the defendant, so the matter in issue is reduced to the propriety and efficacy of the attachment proceedings.

 Basically the moving defendant's argument that these attachment proceedings are fatally defective is, generally, that the writ of attachment was not issued in conformity with the applicable New Jersey Statutes or Rules of Court and, more specifically, that the attachment action was not commenced by filing a complaint as N.J.R.R. 4:77-3 provides and that prima facie proof of the cause of action was not submitted in support of the State Court's Order of Attachment as required by N.J.R.R. 4:77-7(a).

 The motion was duly briefed and fully argued by both parties thereto and affidavits in opposition to the motion have been filed with the Court. At the conclusion of the oral arguments decision was reserved and is now embodied in this opinion.

 The record discloses that the writ of attachment was issued pursuant to an order of the Superior Court of New Jersey, made September 15, 1964, upon a complaint, verified by affidavit. Plaintiff represented that Foundation is a trustee corporation of the State of Michigan, not authorized to do business in New Jersey and has no agent or office in the State of New Jersey. Plaintiff, a New Jersey real estate brokerage corporation claims to be entitled to commissions based upon the rent reserved in a five year lease (hereinafter described as the subsequent lease) of space from Foundation in the department store building hereinabove mentioned. Plaintiff's claim is based upon the existence of the subsequent five-year lease, in conjunction with the brokerage agreement associated with an earlier lease agreement (hereinafter designated as the original lease). Plaintiff had negotiated this earlier lease for the moving defendant with the Western Electric Company, the same tenant now holding under the subsequent lease. The original lease had covered a substantial portion of the premises demised under the subsequent lease during the years immediately preceding the entry into the subsequent lease. The original lease remained in effect until the subsequent lease was entered into.

 The complaint alleges that some time in June, 1964, Western Electric Company became a tenant of additional space on three other floors of the department store building under the terms of a lease agreement (the subsequent lease) unknown to the plaintiff at the time the complaint was filed. Plaintiff says that on May 11, 1964, when it learned of a proposed sale of the building and premises, it communicated with Foundation and with Kresge Department Store, Inc., asserted its right to commission in connection with the leasing of the additional space in the building to the Western Electric Company, and inquired respecting the terms of the lease agreement covering the additional space. Plaintiff received no response to its said notice and inquiry and charges that, pursuant to the provisions of the original commission agreement dated December 12, 1956, Foundation and Kresge Department Store, Inc. have become jointly and severally obligated to the plaintiff for additional commissions resulting from the execution of the subsequent lease.

 The action was commenced in attachment in the New Jersey Superior Court. After the defendants had posted bond to relieve the real property attached under the writ, the defendant Foundation removed the cause to this court for diversity, and brought the present motion to dismiss the action and quash the writ of attachment.

 Since in personam jurisdiction has not been claimed by the plaintiff, the existence of jurisdiction depends on the validity of the attachment. Foundation denies the validity of the attachment, and contends that the writ was not issued in conformity with applicable New Jersey statutes and rules of court.

 The movant first contends that the writ should be quashed because the procedure followed in obtaining it failed to conform with N.J.R.R. 4:77-3 in that the complaint which, with the verifying affidavit, was treated by the Judge as the basis for the making of his order for the issuance of the writ, had not been 'filed' as the term is defined in N.J.R.R. 4:5-6(a). That cited Rule provision requires generally that the filing of pleadings be effected with the Clerk of the Court but that a Judge thereof may permit the original and a copy of a pleading to be filed with him, in which event, he or someone at his direction, 'shall note thereon the filing date with the initials of his name and office and he shall forth-with forward the same to the clerk for filing.' It is conceded in this case that the complaint was left with the State Court Judge who imprinted his stamped name and date upon the complaint. This is an indication that the complaint was filed with him pursuant to the intention of counsel in presenting it to him. I consider that the complaint was duly filed. The record also discloses that on September 30, 1964, the Judge who had ordered that the writ issue entered an order nunc pro tunc that the complaint and supporting affidavit be filed. Such was done. There has been no showing that the moving defendant has been or will be in any way prejudiced by the failure of the plaintiff to file the complaint with the Clerk prior to applying for the Court's order for the writ, or by any delay in the actual receipt by the Clerk of the complaint and affidavit which were actually filed with him in due course. The order for the writ was not procedurally invalid.

 'This chapter shall be liberally construed, as a remedial law for the protection of resident and nonresident creditors and claimants.'

 Therefore, even if the complaint in the present case was not strictly 'filed' as required by the provisions of the applicable Rule, the liberal construction directed by the statute and the rules protects the complaint against dismissal and the writ from being quashed. See Hillside National Bank v. McGruder, App.Div.1953, 28 N.J.Super. 340, 343, 100 A.2d 682. Finally, the corrective nunc pro tunc order made by the Judge who had made the order for the writ, while the cause was still within the jurisdiction of the New Jersey Court, eliminated any technical invalidity which might have been inferable from the lack of a strict 'filing' of the complaint at the time the application for the writ was made. See Seiden v. Fishtein, App.Div.1957, 44 N.J. Super. 370, 130 A.2d 645.

 The primary argument of the moving defendant, however, is not directed to the issue of adequate filing, but to the question whether the complaint and supporting affidavits evince prima facie proof of the plaintiff's claim. The New Jersey rules require such a showing of prima facie proof in order for the writ of attachment to be valid, N.J.R.R. 4:77-7. The first issue presented in this regard is whether the supplementary affidavits, allowed under N.J.R.R. 4:77-16 in order to sustain the writ of attachment against a motion to vacate, are permissible once the case has been removed to the Federal District Court. Three cases and 28 U.S.C. § 1450 are dispositive of this question. The statute reads:

 ' § 1450. ATTACHMENT OR SEQUESTRATION: SECURITIES

 'Whenever any action is removed from a State court to a district court of the United States, any attachment or sequestration of the goods or estate of the defendant in such action in the State court shall hold the goods or estate to answer the final judgment or decree in the same manner as they would have been held to answer final judgment or decree had it been rendered by the State court.

 'All bonds, undertakings, or security given by either party in such action prior to its removal shall remain valid and ...


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