Attanasio v. Ferre

• Decision Date: 28 October 1977
• Citation: 93 Misc.2d 661,401 N.Y.S.2d 685
• Parties: Michael ATTANASIO, Individually and as the natural parent of Michael P. Attanasio, an infant, Plaintiffs, v. George A. FERRE and Munroe Hospital, Defendants.
• Court: New York Supreme Court

Page 685

401 N.Y.S.2d 685

93 Misc.2d 661

Michael ATTANASIO, Individually and as the natural parent of Michael P. Attanasio, an infant, Plaintiffs, v. George A. FERRE and Munroe Hospital, Defendants.

Supreme Court, Special Term, Schenectady County.

Oct. 28, 1977.

Nicholas J. Grasso, Schenectady, for plaintiffs.

Friedman, Maksail & Hirschen, Schenectady, for defendant George A. ferre.

Coulter, Fraser, Ames, Bolton, Bird & Ventre, Syracuse, for defendant Monroe Hospital.

HAROLD R. SODEN, Justice.

The principal issue in this case is whether the attachment of a non-resident defendant's liability insurance policy to obtain jurisdiction as sanctioned in Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966) and progeny has been overruled by the recent U.S. Supreme Court case, Shaffer v. Heitner, --- U.S. ----, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977).

In April, 1972, plaintiff Michael P. Attanasio was injured in an automobile accident in Florida. He and his father sued an owner/driver in the Florida courts and recovered judgments of $9500.00 and $40,000.00, respectively. These judgments have been satisfied. Following the accident, plaintiff Michael P. Attanasio was hospitalized in defendant hospital and treated by defendant, Dr. Ferre. He was discharged from Monroe Hospital on June 6, 1972.

On or about February 11, 1975 and June 9, 1975, plaintiff obtained orders of attachment directing levies against each defendant's respective liability policies. Both policies were issued and delivered in Florida. Defendants' respective insurance carriers have offices and do business in New York State. These insurers were timely served with copies of the order of attachment and the complaint in the State of New York. Both defendants were personally served with a summons and complaint in the State of Florida within 60 days of the granting of the order of attachment. Plaintiffs have sued to recover for injuries, medical expenses, and loss of services allegedly sustained as a result of defendants' negligence, malpractice, and breach of contract.

Both defendants move for dismissal, summary judgment, and vacation of the order of attachment, claiming that the court lacks jurisdiction over their persons and property. Both defendants had previously interposed these affirmative defenses in their amended answers. While defendant Ferre's objection to in rem or quasi-in-rem jurisdiction (CPLR § 3211(a)(9), see defendant Ferre's Answer, paragraphs 5-7) is somewhat inartfully pleaded, the court construes the objection as not waived.

In Shaffer v. Heitner, supra, plaintiff, a non-resident of Delaware, commenced a shareholder's derivative action in Delaware. Simultaneously, he moved for an order of sequestration of the Delaware property of the individual defendants. This motion was granted, and the sequestors seized approximately 82,000 shares of Greyhound common stock belonging to 19 of the defendants and options belonging to another two defendants. The stock was considered to be in Delaware, and so subject to seizure, by virtue of 8 Delaware C, Section 169, which made Delaware the situs of ownership of all stock in Delaware corporations. Defendants Shaffer and the other defendants asserted that under the rule of International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), they did not have sufficient contact with Delaware to sustain the jurisdiction of that State's courts.

The court held (Shaffer v. Heitner, supra, --- U.S. ----, 97 S.Ct. 2585, 53 L.Ed.2d 703) that the sequestered shares were not the subject matter of the litigation and that the underlying causes of action were not related to the property. Thus, the presence of the property in the State (the court had previously noted that none of the certificates representing the seized property were physically present in Delaware) did not provide sufficient contact among the foreign state, the defendants, and the litigation.

The plaintiff, in Shaffer v. Heitner, did not allege that any of the defendants were ever physically present in Delaware and did not identify any act related to the shareholders' derivative cause of action as having taken place in Delaware. Plaintiff Heitner contended that defendants' positions as directors and officers of a corporation chartered in Delaware provided sufficient contacts, ties and relations to give the Delaware courts jurisdiction. The court rejected this argument and similarly rejected the argument that defendants' entitlement to the benefits provided by Delaware law for corporate officers and directors were sufficient contacts to support jurisdiction. The court held that Delaware's assertion of jurisdiction over appellants in this case was inconsistent with the constitutional limitation on state power as expressed in International Shoe v. Washington, supra, 326 U.S. at 319, 66 S.Ct. 154, 90 L.Ed. 95 ("due process clause does not contemplate that a state may make a binding judgment . . . against an individual or corporate defendant with which the state has no contacts, ties or relations") Shaffer v. Heitner, supra, --- U.S. ----, 97 S.Ct. 2587, 53 L.Ed.2d 705.

The principal lesson from Shaffer v. Heitner is that "all assertions of state court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny". Shaffer v. Heitner, supra, at ----, 97 S.Ct. 2584, 53 L.Ed.2d 703.

The constitutional issue presents itself as follows: May a State, which has in personam jurisdiction over insurers and is the residence of the injured plaintiffs, exercise jurisdiction in a tort case involving incidents which took place in a foreign jurisdiction and which were allegedly caused by residents of that jurisdiction, to secure the proceeds of a liability policy issued in that foreign jurisdiction? (see Minichiello v. Rosenberg, 410 F.2d 106, 113 (C.A.2d, 1968) (dissenting opinion), Siegel, Supp.Prac.Com. to NYCPLR § 3201, McKinney's Book 7-B at 41-42 (1968 Cum.Supp.))

Preliminarily, this court holds that the existence of a limited appearance statute in New York (CPLR § 320(c)), while there was no such statute in Shaffer v. Heitner, (supra, --- U.S. ----, 97 S.Ct. 2576, 53 L.Ed.2d 692, footnote # 12), does not change the analysis required by the holding in Shaffer v. Heitner, supra (see at ----, ----, 97 S.Ct. 2582, 2583, 53 L.Ed.2d 700, footnote 23 and pg. 701, footnotes 32 and 33). The court will first consider whether the presence of the property or the debt within the state alone provides sufficient contacts with the defendants and New York and then proceed to analyze whether there are other ties or contacts sufficient to justify jurisdiction.

Allegations of negligence, malpractice, and breach of contract are the source of the controversy between these parties. The property or debt attached here is "completely unrelated" to the operative facts of plaintiffs' causes of action (Shaffer v. Heitner, supra, at ----, 97 S.Ct. 2583, 53 L.Ed.2d 701). Whatever obligations to defendants each insurance policy represents, these plaintiffs concede to be the property or debts of the defendant and seek to apply them to the satisfaction of their claims against these defendants (see Shaffer v. Heitner, supra, at ----, 97 S.Ct. 2577, 53 L.Ed.2d 694-695, footnote 17). As in Shaffer v. Heitner and Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1904), the main role played by the property is to provide the basis for bringing the defendant into court (Shaffer v. Heitner, --- U.S. ----, 97 S.Ct. 2583, 53 L.Ed.2d 701).

The "presence" of defendants' property or debt in this state is purely fortuitous and does not indicate that the defendants have purposefully availed themselves of the privilege of conducting activities within New York, thus...