Court Opinion

ID: 2994078
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:12:40.037725+00
Date Added: 2024-06-11T11:45:20.124659
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 99-1526

Central Laborers’ Pension, Welfare
and Annuity Funds,

Plaintiffs-Appellees,

v.

Ted Griffee, d/b/a Midwest Landscape
Design and Construction,

Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 96 C 6702--James B. Zagel, Judge.

Argued September 27, 1999--Decided December 28, 1999

  Before Posner, Chief Judge, and Ripple and Rovner,
Circuit Judges.

  Posner, Chief Judge. This appeal presents issues
concerning service of process. The plaintiffs, a
trio of affiliated multiemployer ERISA plans (a
defined-benefit pension plan, a defined-
contribution pension plan, and a welfare plan)
for construction employees in Illinois, brought
suit against a contractor named Griffee to
recover some $29,000 in delinquent contributions,
which if recovered were to be allocated among the
three plans. The complaint was filed in October
of 1996. In September of the following year,
having failed to serve Griffee, the funds asked
the district judge to dismiss their suit without
prejudice, and he did so. Why they wanted to
dismiss their suit is unclear; they didn’t intend
to abandon their efforts to collect the
delinquent contributions, and they could have
asked the judge for additional time within which
to serve the defendants. Fed. R. Civ. P. 4(m);
Troxell v. Fedders of North America, Inc., 160
F.3d 381 (7th Cir. 1998). They told us at
argument that they felt that the district judge
would prefer not to have an aging, inactive case
on his docket.

  By a curious coincidence, the very day after the
suit was dismissed the summons and complaint in
the now defunct suit were served upon Mr. Griffee
by an official of one of the local unions whose
members (including the official) are participants
in the plans. A month later the plans moved the
district court to reinstate their suit nunc pro
tunc, backdating the reinstatement to the day on
which the suit had been dismissed. And a month
after that they filed a motion for entry of a
default judgment. When Griffee, to whom they
mailed a copy of the motion, did not respond to
it, the judge granted the motion and entered
judgment in the amount sought. Some months later,
after the plaintiffs began efforts to collect the
judgment, Griffee moved the court to vacate the
default judgment as void, Fed. R. Civ. P.
60(b)(4); Swaim v. Moltan Co., 73 F.3d 711, 717-
18 (7th Cir. 1996), on the ground that service
had been improper, not only because the suit had
been dismissed before service was made but also
because service had been made by a person who had
a financial stake in the litigation.

  A judgment is void if the court issuing it does
not have jurisdiction over the defendant, e.g.,
Hanson v. Denckla, 357 U.S. 235, 249-50 (1958);
In re Crivello, 134 F.3d 831, 838 (7th Cir.
1998); Koehler v. Dodwell, 152 F.3d 304, 306-07
(4th Cir. 1998), and it does not if the defendant
is not served, e.g., Rogers v. Hartford Life &
Accident Ins. Co., 167 F.3d 933, 940 (5th Cir.
1999); LSJ Investment Co. v. O.L.D., Inc., 167
F.3d 320, 324 (6th Cir. 1999), unless he waives
service or makes an appearance in the case
without reserving an objection to jurisdiction.
Fed. R. Civ. P. 12(h); Ruhrgas AG v. Marathon Oil
Co., 119 S. Ct. 1563, 1570 (1999); Koehler v.
Dodwell, supra, 152 F.3d at 306. When Griffee was
served in the initial lawsuit, that suit had been
dismissed. A new suit (or reinstated old suit--
the difference, of no moment here because there
is no statute of limitations issue, is only
whether the plaintiffs had to pay a second filing
fee, Central States, Southeast & Southwest Areas
Pension Fund v. Lady Baltimore Foods, Inc., 960
F.2d 1339, 1346 (7th Cir. 1992)) was filed, but
was never served, and so the court never acquired
jurisdiction over the defendant. Hence the Rule
60(b)(4) motion should have been granted.
  It is no answer that by granting the order of
reinstatement nunc pro tunc the district judge
brought the original suit back to life as of the
day that Griffee was served, which was the day
after that suit had been dismissed in order to
keep the judge’s docket pristine. As we have
reminded the district courts time and again, the
only proper office of a nunc pro tunc order is to
correct a mistake in the records; it cannot be
used to rewrite history. E.g., Transamerica Ins.
Co. v. South, 975 F.2d 321, 325-26 (7th Cir.
1992); United States v. Daniels, 902 F.2d 1238,
1240 (7th Cir. 1990); King v. Ionization Int’l,
Inc., 825 F.2d 1180, 1188 (7th Cir. 1987). If the
suit had been dismissed on September 12 (the day
after service), but the court’s docket sheet had
erroneously recorded the date of dismissal as
September 10, then an order correcting the record
as of the date of entry would have been proper.
But there was no mistake to be corrected. The
original suit really was dismissed on September
10, the day before service.

  We are not being formalists. Griffee was not
represented by counsel, and if having been served
on September 11 he had called the clerk of the
district court to find out what this was all
about, he would have been told that it was about
nothing, because the suit had been dismissed.
There is no indication, incidentally, that he had
been trying to evade service; the plaintiffs’
lawyer could not explain to us why they had taken
so long to serve him.

  The district judge brushed aside Griffee’s
objection to the server merely by observing that
Fed. R. Civ. P. 4(c)(2) says that "service may be
effected by any person who is not a party and who
is at least 18 years of age" and the union
official who served Griffee was not a party to
the litigation. The observation is correct but
misses the point. When a suit is brought by a
fiduciary, his beneficiary, while not a named
party, is the real party in interest, e.g., Riggs
Nat’l Bank v. Zimmer, 355 A.2d 709, 713-14 (Del.
Ch. 1976), and it would be curious, to say the
least, to have service performed by a real party
in interest. It would be in the interest of that
party to flush the summons and complaint down the
toilet, execute an affidavit of service, and move
for a default judgment.

  In the case of a pension or welfare fund--a
trust, but one with thousands of participants and
beneficiaries--the financial stake of a
participant will often be too attenuated to
present a serious risk of a real conflict of
interest. One of the plans is a defined-benefit
plan, which means that the interest of Mr. Downs
(the official who served Griffee) is fixed and
does not depend on the assets of the plan, Hughes
Aircraft Co. v. Jacobson, 119 S. Ct. 755, 761
(1999), and another is a defined-contribution
plan to which the money sought from Griffee is
irrelevant because he is not Downs’s employer.
But in pointing out these things the plaintiffs
ignore the facts that there is a third plan, a
welfare plan that may for all we know be
unfunded; that defined-benefit plans can go broke
and when they do the insurance provided by the
Pension Benefit Guaranty Corporation is limited,
Commonwealth Edison Co. v. Vega, 174 F.3d 870,
874 (7th Cir. 1999); Jay Conison, Employee
Benefit Plans in a Nutshell 430 (2d ed. 1998);
and that in the event the plans (or one or two of
them) are liquidated, their assets may be
distributed in whole or part to participants such
as Mr. Downs.

  We need not pursue the issue of service by a
trust beneficiary further. The question whether
"party" in Rule 4(c)(2) might include a real
party in interest that is not a named party is
interesting, but also esoteric (we cannot find
any cases discussing it), as most trustees know
better than to use their beneficiaries as their
process servers; and it is not squarely posed
here, first because the default judgment must be
set aside anyway and second because Griffee does
not deny that he was served. If receipt of
service is conceded, we suppose it would not
matter if the server were a two-month old
orangutan. All that is conceded, however,
recurring to the first point, is the receipt of
service in a defunct case, and that is not enough
to confer jurisdiction over a case later filed or
revived.

  The judgment is reversed with instructions to
vacate the default judgment.

Reversed.