Harvard Trust Company v. Bray
1980 Vt. LEXIS 1130, 138 Vt. 199, 413 A.2d 1213 (1980)
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Rule of Law:
When a court's jurisdiction is based solely on a non-resident defendant's property within the state (quasi in rem), the defendant's appearance to contest the attachment or defend the property does not, by itself, constitute consent to full personal (in personam) jurisdiction. Any resulting judgment is limited to the value of the attached property unless the defendant explicitly consents to personal jurisdiction or seeks affirmative relief.
Facts:
- In 1959, as part of a Florida divorce decree, Dana Bray agreed to pay alimony to his ex-wife, Anne Bray.
- To secure this alimony obligation, Dana Bray placed shares of three Vermont corporations into an escrow account in Vermont, managed by Louis Lisman.
- Dana Bray, a resident of Florida, was a member of a partnership that defaulted on a $50,000 promissory note he had guaranteed to Harvard Trust Company.
- Harvard Trust's principal place of business is in Massachusetts.
- The underlying promissory note was not executed or guaranteed in Vermont, nor did the partnership operate there.
Procedural Posture:
- Harvard Trust sued Dana and Germaine Bray in Vermont superior court (trial court).
- Harvard Trust moved for a possessory attachment of Dana Bray's stock held in Vermont.
- Process was served on the Brays at their home in Florida.
- The Brays' attorney filed a letter with the court entering an appearance on their behalf.
- The trial court entered a writ of attachment against the stock, explicitly noting that it was based on the court's lack of in personam jurisdiction over the defendants.
- A default judgment was entered against Dana Bray, which was later amended.
- The Brays moved to join Anne Bray and Louis Lisman as parties, which the court granted.
- On a motion by Anne Bray, the trial court struck the amended judgment.
- Harvard Trust then sought a new judgment, arguing for the first time that the Brays' initial appearance conferred in personam jurisdiction.
- The superior court agreed with Harvard Trust, concluding that the general appearance conferred in personam jurisdiction.
- The superior court then granted the Brays' motion for an interlocutory appeal to the Supreme Court of Vermont to review the jurisdictional question.
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Issue:
Does a non-resident defendant's general appearance to defend their property in a quasi in rem action automatically subject them to the court's full in personam jurisdiction for a judgment exceeding the value of the attached property?
Opinions:
Majority - Barney, C.J.
No. A defendant's appearance to defend property in a quasi in rem action does not automatically confer full in personam jurisdiction. The court reasoned that forcing a defendant to choose between defaulting on the action and losing their property, or appearing and submitting to full personal jurisdiction, poses a serious constitutional problem. To avoid this dilemma, the court adopted the principle of a 'limited appearance.' Citing the then-effective Vermont Rule of Civil Procedure 4(e), the court held that when jurisdiction is based on attaching a non-resident's property, any judgment is limited to the value of that property. Such an appearance does not become a submission to full personal jurisdiction unless the defendant gives explicit consent, pursues affirmative relief like a permissive counterclaim, or is properly served in a new action establishing personal jurisdiction.
Analysis:
This case establishes the 'limited appearance' doctrine in Vermont for quasi in rem actions commenced before the rule changes following Shaffer v. Heitner. It protects non-resident defendants by allowing them to appear and defend their in-state property without risking a personal judgment enforceable against their worldwide assets. The decision aligns Vermont with jurisdictions that sought to mitigate the constitutional dilemma of forcing defendants to choose between surrendering property by default or surrendering their defense against personal jurisdiction. It clarifies that merely participating to protect the attached property (the 'res') is a defensive act, not an affirmative submission to the court's broader power.
