Polychronis GRAMMENOS and Theodore Orfanides, Appellants,
v.
C. M. LEMOS and Nile Shipping Co., S. A., a Panamanian
foreign corporation or association, as owners
and/or operators of the LIBERIAN S/T
CHARIOT, Appellees.
No. 27, Docket 71-1057.
United States Court of Appeals,
Second Circuit.
Argued Nov. 1, 1971.
Decided Feb. 23, 1972.
As Modified on Denial of Rehearing March 30, 1972.
John P. Cassapoglou, New York City, (Burt M. Morewitz, Newport News, Va., of counsel), for appellants.
Thomas A. Dillon, Jr., New York City (Burke & Parsons, Raymond J. Burke, New York City, of counsel), for appellees.
Before WATERMAN, SMITH and TIMBERS, Circuit Judges.
J. JOSEPH SMITH, Circuit Judge:
This case arises out of the claims of two foreign seamen for damages under the Jones Act, 46 U.S.C. Sec. 688, and the general maritime law of the United States for injuries sustained when a flash fire broke out on their ship, the S/T Chariot, in Marseilles, France. They name as defendants the Nile Shipping Co., the Panamanian corporation which owns the Chariot, a Liberian flag ship, and C. M. Lemos, a Greek citizen allegedly an American resident and the beneficial owner of Nile. Appellants claim that under the expansive interpretation of Jones Act jurisdiction enunciated in Hellenic Lines Ltd. v. Rhoditis,
Nile Shipping Company was organized in New York City by two Americans, and the original officers were American citizens and residents of New York. The company, a Panamanian corporation, is now owned by Greek citizens. The Chariot is one of many Nile ships; the current certificate of registry, issued in 1969, is from the Republic of Liberia. The Chariot and other Nile ships are managed by Nereus Shipping Co., a Greek corporation with offices in Piraeus, Greece. Nereus' American agent is Triton Shipping Co., which has offices in New York. Triton collects freights payable in New York and receives accounts from subagents in ports in the dollar area of the world. All payments go to a general operating account for Nereus ships, rather than into a separate account for each ship, and Triton pays disbursements for the expenses of running the ships from this account, on approval from Nereus. Triton also solicits some business for Nereus ships in the dollar area.
Mr. Lemos was an American citizen until 1962, when he renounced his citizenship and became a Greek citizen. He maintains a residence in London, and appellants allege that he also owns a home in Rye, New York. They cite an article in Time magazine and a listing of his name with an address and telephone number in the Rye telephone directory to support this contention. Mr. Lemos is intimately involved in the Nile and Nereus companies. In a deposition in another action involving Nereus, Triton's vice-president characterized Mr. Lemos as the mouthpiece or representative of the owners of the Nereus ships, the individual with whom Triton deals in arrangements about the vessels.
Grammenos and Orfanides signed articles for the Chariot in Greece, and the agreement stated that Greek law was to govern disputes between the parties. During the years they served on the Chariot, a tramp tanker, it did not put in at any American ports. When appellants were injured, they were treated by French and Greek doctors. In addition to this action, they filed a companion suit in the district court for the Eastern District of Virginia. After partial pretrial discovery, the case was dismissed on the ground of forum non conveniens. The seamen appealed, and the lower court was reversed by the Court of Appeals for the Fourth Circuit. Grammenos v. Liberian S/T CHARIOT, No. 15,017 May 5, 1971. In that case, Nereus as well as Triton was served and named as a defendant and thus the problem of adequacy of service was not presented as it is here. The case was remanded for further discovery and reconsideration in light of Lekkas v. Liberian M/V Caledonia,
Summons and complaint were served on Nile under Rule 4(d) (3) of the Federal Rules of Civil Procedure by service on Triton through one of its officers. Service on Mr. Lemos was attempted by delivery of the papers to Miss Olive Helmsley, a woman working at Mr. Lemos' sister's apartment in New York City. Appellants claim that both of these attempts at service were successful, and that even if they were not, that appellees waived defects in jurisdiction by making a general appearance in the case.
Appellants' waiver point is not well taken. The need to file a special appearance in order to object to jurisdiction or venue has vanished. A party can file a general appearance and object to personal jurisdiction or venue at any time before the answer is filed or in the answer. Kerr v. Compagnie De Ultramar,
The question, then, is whether there was any defect in the service of process. The standards set in Rule 4(d) for service on individuals and corporations are to be liberally construed, to further the purpose of finding personal jurisdiction in cases in which the party has received actual notice. Nowell v. Nowell,
Personal service on an individual, neither an infant nor an incompetent, can be obtained either by serving the man or woman in person or by leaving the summons with a person of suitable age and discretion at the party's usual place of abode. Under Rule 4(d) (7), service can also be performed in conformity with the rules of the state in which it is made as to service in its own courts of general jurisdiction. In New York, personal service can be accomplished through the use of the methods in the federal rule; the state also permits other forms of service, called "substituted" and "expedient" service. N.Y.C.P.L.R. Sec. 308(4) and (5). Substituted service may be resorted to when the two methods of obtaining personal service common to the state and federal rules have proven fruitless. Substituted service entails affixing the summons to the door of either the actual place of business, dwelling place or usual place of abode within the state of the person to be served and by mailing the summons to the last known residence of that person. Should it be attempted and fail, the New York law allows expedient service, that is, service "in such manner as the court, upon motion without notice, directs." N.Y.C.P.L.R. Sec. 308(5).
Appellants attempted to obtain jurisdiction over Lemos by leaving the summons with a person of suitable age and discretion at his usual place of abode. Many cases have interpreted the phrase "usual place of abode" for purposes of service of process. It has been held acceptable to leave the summons with the landlord or supervisor of the apartment building in which the party resides. See Nowell v. Nowell, supra. But when process was served on defendant's married daughter, living in the same apartment building as her father, but in a different apartment, it was held insufficient. Di Leo v. Shin Shu, supra. In this case, appellants left the documents with an adult woman working for Lemos' sister at her apartment in New York City. Lemos himself did not reside in this apartment or in the city. Therefore, it was not under any construction of the phrase, his usual place of abode. Service was properly quashed.
This is not to say, though, that substituted service would not prove effective; appellants did not attempt to utilize that method in this case. We cannot predict, of course, whether such an attempt would meet with success.1 But the fact of invalidity of the one attempt at service does not automatically require dismissal of the complaint. The mere lapse of time between the date of filing of the complaint and the date of effective service does not cause the complaint to abate. Messenger v. United States,
But while the Court's conclusion . . . does affirm the District Court's action in setting aside the service of process made herein on Holmes, it does not necessarily follow that the final order of dismissal was proper at this stage.
. . . There may be other ways to effect valid service of process, e. g., attachment . . . or perhaps, under some circumstances, on the Secretary of State. Of course, what those means are, or their availability in this case is not before us. Nor was it before the District Court.
There may well come a time in which the Trial Court, in the administration of the affairs of the Court, sees that there is simply no reasonably conceivable means of acquiring jurisdiction over the person of a defendant. When that time comes it may be proper to dismiss the cause. But, on this record, relating to one single attempted service of process, that point has not yet been reached. [
Appellants in this case ought to be given an opportunity to perfect service on Lemos.
The question of service on Nile through Triton is more difficult. Rule 4(d) (3) permits personal service on a domestic or foreign corporation through service on one of its officers, a managing or general agent, or any agent authorized by appointment or by law to receive service of process. In order for the corporation to be amenable to service in a state, it must have minimal contacts with the state, sufficient to warrant subjecting it to suit there without offending due process standards. See McGee v. International Life Insurance,
On the basis of the skimpy record in this case, it is difficult to ascertain whether Nile has sufficient contacts to justify personal jurisdiction in New York. An affidavit of the president of Nile stated that the officers and directors are Greek citizens residing in Athens. The shares of the corporation are held by a Greek citizen residing in London, England. The corporation does not have any office or place of business in New York. It is engaged solely in international shipping.2 Appellants have produced no evidence of any business carried on in New York by Nile other than that of Triton.
The business affairs of Triton in New York, then, must be the basis for the power of the court to exercise jurisdiction over Nile, assuming it were properly served. Triton does solicit some business for Nile, but it is not clear whether this takes place in New York. Nothing indicates that Nile is associated or named in any way in connection with Triton's office or that Triton does business only for Nile. Triton does have bank accounts in New York and an office there. It collects and disburses money for Nereus accounts, but apparently does not exercise discretion in these tasks and does not enter into contracts for Nile. The lower court held, without elaboration, that Nile was not present in New York. Finding, as we do, that service was inadequate under Rule 4(d) (3), we do not have to explore the intricacies of the current "minimum contacts" rule. See Aquascutum of London, Inc. v. S. S. American Champion,
The crucial question in relation to service of process is whether Triton is a "general or managing agent" for Nile. Several cases have treated the issue of agency for foreign corporations and shipping companies. In De Claire Mink Ranches v. Federal Foods, Inc.,
In Arpad Szabo v. Smedvig Tankrederi A. S., supra, the court found that the activities of a shipping company's agent which collected money and paid out funds for expenses incurred in operating the vessels and did occasional hiring for the shipowner, constituted "doing business" on the part of the principal and justified service on the agent. This case was followed in Green v. Compania De Navigacion Isabella, Ltd.,
The situation in the Amicale case included a factor present in this case; the corporation which did the husbanding in Charleston was an agent of a Louisiana corporation which was the shipper's general agent in the United States. The decision may be construed to hold that sub-agents of the owner ought never be considered general agents under Rule 4(d) (3), in which case it would be directly on point, or can be seen as relying on the fact that the Charleston corporation handled only one city and did business on a ship-to-ship basis. In the present case, Triton is the sub-agent for the whole United States, and it does operate a running account for Nereus ships. Its activities are therefore somewhat closer to those of a general agent than were those of the corporation in Amicale. But Triton is in essence a collection agency, and monies are passed on to the principals as soon as possible. Triton does not exercise discretionary power; it is a subagent of Nile in one area for certain specific tasks, but is not the entity with overall authority for Nile's activities in the United States. Nereus fills that role. These facts compel the conclusion that Triton does not fall within those who under Rule 4(d) (3) can be served to obtain jurisdiction over a corporation, and the service on Nile was properly quashed.4 We find no completed service on either defendant but reverse the dismissal of the action.5
One further word is necessary. Should appellants obtain valid service over Lemos in one of the aforementioned ways, they will have to face his objection that he is not their "employer" under the Jones Act and is therefore not a proper party. He would also be expected to renew his objection to the assumption by a United States court of subject matter jurisdiction over these claims of foreign seamen, asserting that contacts with this country sufficient to warrant handling the case are absent. The court below noted in its opinion that had service been valid, it would have granted summary judgment on this ground. Such a conclusion is not warranted at this juncture. Discovery is being conducted on the remand from the companion case in Virginia, and the principles of the Lekkas case, controlling there, are applicable here. The court ought to give appellants an opportunity to substantiate their thesis that Lemos is an American resident who controls and is the beneficial owner of the Chariot; this inquiry will also determine his status as employer for purposes of Jones Act coverage.
There is no need at this time to delve further into the factors treated in Hellenic Lines Ltd. v. Rhoditis, supra, which influence the court's decision on assumption of subject matter jurisdiction. While it is true that on the record as it now stands, the factors which normally incline the courts in this country to accept jurisdiction of the claims of foreign seamen are lacking, discovery may well tip the balance in the other direction. Clarification of the confused circumstances surrounding the ownership of Nile might reveal that Mr. Lemos is indeed the beneficial owner of the company and is an American resident who ought not, through formalities of incorporation, escape the duties toward seamen which Congress has imposed on shipowners.
These issues will be relevant only if appellants obtain valid service over one of the parties. We reverse the dismissal of the complaint and remand for reinstatement so that appellants may attempt to remedy the defects in service.
Notes
The New York courts have construed the terms "dwelling house" and "usual place of abode" for purposes of determining the validity of substituted service. See Karlin v. Avis,
Appellants point out that in Hellenic Lines Ltd. v. Rhoditis, supra, the first affidavits of the president of the shipping company also denied contacts with the United States, but that later discovery revealed ownership by American interests. However, in that case, the plaintiffs had produced enough evidence to support in personam jurisdiction in this country; the issue was whether the court ought to exercise its discretion to decline subject matter jurisdiction. In any case, we can draw no inference from the activities of the parties there, different from those in the present case, to support the conclusion that Nile and Lemos are concealing the truth
In Fraley v. Chesapeake and Ohio Ry. Co.,
Appellants did not, as did the plaintiffs in Aquascutum, supra, make a motion, after service on an agent in this country was declared void, for permission to effect service on the defendants in a foreign country. On remand, they might explore the possibility of serving Nile or Nereus under Rule 4(d) (3) or under New York's long-arm statute. We note, though, that on the current state of the record, the applicability of the latter provision is doubtful. See Delagi v. Volkswagenwerk AG,
Forum non conveniens is not an appropriate ground for dismissal at this point. The doctrine, which "involves the dismissal of a case because the forum chosen by the plaintiff is so completely inappropriate and inconvenient that it is better to stop the litigation in the place where brought and let it start all over again somewhere else . . . is quite naturally subject to careful limitation for it not only denies the plaintiff the generally accorded privilege of bringing action where he chooses, but makes it possible for him to lose out completely, through the running of the statute of limitations in the forum finally deemed appropriate." All States Freight, Inc. v. Modarelli,