Biener v. Hystron Fibers, Inc.

• Decision Date: 23 December 1980
• Citation: 78 A.D.2d 162,434 N.Y.S.2d 343
• Parties: Hans BIENER, as Administrator of the Estate of Hedwig Biener, Deceased, Susanne Biener, Ulrike Biener, Karin Biener, Martin Biener, all individuals under the age of 14 years, by their father and natural guardian Hans Biener and Hans Biener, individually, Plaintiffs, v. HYSTRON FIBERS, INC., Defendant-Respondent. HYSTRON FIBERS, INC., Third-Party Plaintiff-Respondent, v. SECURITY FORCES, INCORPORATED, Third-Party Defendant-Appellant. SECURITY FORCES, INCORPORATED, Fourth-Party Plaintiff-Appellant, v. The PUBLIC ADMINISTRATOR OF NEW YORK COUNTY, as Administrator of the Goods, Chattels and Credits of Charles Furman Greer, Deceased, Fourth-Party Defendant.
• Court: New York Supreme Court — Appellate Division

Page 343

434 N.Y.S.2d 343

78 A.D.2d 162

Hans BIENER, as Administrator of the Estate of Hedwig

Biener, Deceased, Susanne Biener, Ulrike Biener, Karin

Biener, Martin Biener, all individuals under the age of 14

years, by their father and natural guardian Hans Biener and Hans Biener, individually, Plaintiffs, v. HYSTRON FIBERS, INC., Defendant-Respondent.

HYSTRON FIBERS, INC., Third-Party Plaintiff-Respondent, v. SECURITY FORCES, INCORPORATED, Third-Party Defendant-Appellant.

SECURITY FORCES, INCORPORATED, Fourth-Party Plaintiff-Appellant, v. The PUBLIC ADMINISTRATOR OF NEW YORK COUNTY, as

Administrator of the Goods, Chattels and Credits

of Charles Furman Greer, Deceased,

Fourth-Party Defendant.

Supreme Court, Appellate Division, First Department.

Dec. 23, 1980.

Robert L. Horkitz, New York City, of counsel (Rein, Mound & Cotton, New York City), for appellant.

Benjamin Vinar, New York City, of counsel (Thomas R. Newman, New York City, with him on the brief; J. Robert Morris and Siff & Newman, P. C., New York City), for defendant and third-party plaintiff-respondent.

Before FEIN, J. P., and SANDLER, ROSS, MARKEWICH and LUPIANO, JJ.

FEIN, Justice.

In this action for personal injuries and wrongful death, Security Forces, Incorporated (Security) was impleaded as a third party defendant by defendant Hystron Fibers, Inc. (Hystron). It is undisputed that jurisdiction over Security was obtained by a Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312, attachment. Challenging the constitutionality of the Seider attachment, the third party defendant, in its answer, asserted the affirmative defense of lack of subject matter and personal jurisdiction as well as in rem or quasi in rem jurisdiction. It also purported to implead, as fourth party defendant by virtue of attachment the Public Administrator of New York County as Administrator of the Goods, Chattels and Credits of Charles Furman Greer, the deceased driver of the vehicle involved in the accident.

On April 14, 1977, prior to the United States Supreme Court decision in Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516, plaintiff, Hystron and Security entered into a stipulation in which it was agreed that the plaintiff's action should be settled for the sum of $450,000 to be paid by Hystron or its insurance carrier, Aetna Life and Casualty Co. (Aetna), or Security and/or its insurance carrier, Security Insurance Co. of Hartford (Security Insurance), or by such other persons, firms or carriers as directed by the court. It was further stipulated that on July 27, 1970, on Interstate Highway 85, Spartanburg, South Carolina, in a vehicle owned by Hystron and operated by one Charles F. Greer who was at the time an employee of Security and in the course of his duties as security guard at the Hystron premises, an accident occurred in which the individual infant plaintiffs were injured and their mother was killed.

To assist the court in determining liability as between the defendant and the impleaded defendants, there were submitted to the court insurance policies and other documents. The stipulation was spread upon the record in a series of statements by counsel for the respective parties. It was never embodied in a writing, other than the transcript of the court's minutes. Nowhere in the minutes or in the stipulation is there any reference to Security's affirmative defenses of lack of jurisdiction, personal or otherwise, including in rem or quasi in rem jurisdiction premised upon the Seider attachment. No motion was made by Security to dismiss for lack of jurisdiction. However, it is plain that at the time the stipulation was entered into, and at the time of Justice Greenfield's decision and entry of judgment thereon, the state of the law was that such motion would have had to be denied.

On the basis of the stipulation and the various documents submitted to him, Justice Greenfield properly determined that Security was liable to indemnify Hystron for the $450,000 to be paid in settlement of the action. He further proceeded to consider the fourth party action and a stipulated fifth party action. ^* We are agreed that they were properly dismissed because no jurisdiction had been obtained over the fourth or fifth party defendants. At best, the fourth party action was based upon a Seider attachment to which Security, as a non-resident, was not entitled (Donawitz v. Danek, 42 N.Y.2d 138, 397 N.Y.S.2d 592, 366 N.E.2d 253). Hence the fifth party action must also fail for lack of jurisdiction. However, in dismissing those complaints without prejudice to the institution of actions in another appropriate jurisdiction, the court purported to limit the possible liability of Aetna under its policy with Hystron. Such purported limitation was incorporated in the judgment appealed from. We do not reach or pass upon the merits of such limitation. Since the actions were properly dismissed for lack of jurisdiction, the purported attempt to circumscribe the liability of Aetna or anyone else was legally without foundation.

The court could not find that it had no jurisdiction over the defendants in these actions and at the same time circumscribe their liability.

The judgment was entered on August 7, 1979. On January 21, 1980, while the appeal was pending, the United States Supreme Court decided Rush v. Savchuk, supra. Hence, on this appeal Security urges that the judgment against it must be reversed because the Seider attachment did not confer jurisdiction over Security, the non-resident third party defendant "with which the state has no contacts, ties, or relations." (International Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 160, 90 L.Ed. 95.)

We have held that where in its answer the defendant affirmatively asserted the defense of lack of jurisdiction because it was obtained solely on the basis of a Seider attachment, and the action was pending at the time of the decision in Rush v. Savchuk, the action must be dismissed for lack of jurisdiction (Gager v. White, App.Div., 432 N.Y.S.2d 338 (1980)).

The issue for our determination is whether Security waived the jurisdictional defense by virtue of the stipulation settling the action with the plaintiff, and by submitting to the court the determination as to whether the liability to pay such settlement was to be imposed upon Security by reason of its alleged obligation to indemnify Hystron. We have concluded that under the circumstances of this case there was such a waiver.

The law is well settled that where jurisdiction over the subject matter exists and jurisdiction over the person of the defendant was not constitutionally or otherwise properly obtained, the defendant may waive the defense by appearance, by failure to plead such defense, by failure to move to dismiss upon such basis, or by stipulation. There was no expense stipulation of waiver here. However, the form of the stipulation plainly indicated that there was no intent to preserve the jurisdictional issue. It is urged that an attempt to preserve the issue would have been futile because the state of the law at the time was such that the court would be required to hold that jurisdiction had attached (Baden v. Staples, 45 N.Y.2d 889, 410 N.Y.S.2d 808, 383 N.E.2d 110). This is beside the point. It is manifest that the parties wished to settle the case and were waiving any challenge to the court's jurisdiction.

The parties stipulated to the entry of judgment upon the court's determination based on contract, certificate of insurance and...