Conn v. ITT Aetna Finance Co.

• Decision Date: 17 April 1969
• Docket Number: No. 455-M,455-M
• Citation: 105 R.I. 397,252 A.2d 184
• Parties: William CONN v. ITT AETNA FINANCE COMPANY et al. P.
• Court: Rhode Island Supreme Court

Page 184

252 A.2d 184

105 R.I. 397

William CONN v. ITT AETNA FINANCE COMPANY et al.

No. 455-M.P.

Supreme Court of Rhode Island.

April 17, 1969.

Beals, Sweeney & Jerue, Richard P. Kearns, Providence, for plaintiff

Sidney Clifford, Jr., Providence, for defendants.

OPINION

JOSLIN, Justice.

William Conn, Rhode Island resident, brought this civil action in the superior court against ITT Aetna Finance Company, a foreign corporation, as well as against three nonresident individuals in their capacities as trustees of the Aetna Profit-Sharing Trust. Conn was formerly employed by Aetna, and he claims that upon retirement he became entitled to a distributive share of its Profit-Sharing Trust. Service upon the defendants was obtained by mail addressed to their out-of-state addresses, and in addition, in the case against Aetna a summons was served upon the director of business regulation. The defendants appeared specially and moved to dismiss for lack of jurisdiction over their respective persons. After considering what activities the various defendants had been engaged in within the state as the same were disclosed in the discovery procedures, the superior court granted the motion as to the trustees and denied it with respect to Aetna. Thereupon, plaintiff appealed in the case against the individual defendants; and Aetna, being in doubt as to the correct procedure, filed a notice of cross-appeal and moved for leave to file a petition for a writ of certiorari. We granted leave to file and directed that the petition for the writ of certiorari be consolidated for hearing with the plaintiff's appeal. R.I., 242 A.2d 694.

When the case was heard before us on oral argument, it appeared that no judgment had been entered in the superior court. In order to avoid having the appeals dismissed because of that deficiency, ¹ all of the parties joined in an oral motion to remand the papers to the superior court so that a nunc pro tunc judgment might be entered. We granted that motion, remanded the papers, and judgment in due course was entered in the superior court denying Aetna's motion to dismiss, but granting that of the trustees. The papers were than returned to this court.

The basic question is whether by reason of their respective contacts with this state the several defendants subjected themselves to the jurisdiction of its courts and became amenable to suit in this jurisdiction. The controlling statute is G.L.1956, § 9-5-33, as amended. Commonly referred to as a 'long-arm statute,' it provides in pertinent part that foreign corporations and nonresident individuals having the necessary 'minimum contacts' with this state shall be subject to its jurisdiction, and that the courts of this state shall hold such persons '* * * amendable to suit in Rhode Island in every case not contrary to the provisions of the constitution or laws of the United States.' It further provides that any person thus made subject to the jurisdiction of our courts shall be served with process '* * * in the manner provided by any applicable procedural rule ² or in the manner prescribed by order of the court in which such action is brought.' (footnote added)

Any consideration of our long-arm statute must be within the perspective of what preceded its enactment. This is so because historically the power to render in personam judgments depended upon service of process having been made within the borders of the adjudicating jurisdiction. Pennoyer v. Neff, 96 U.S. 714, 24 L.Ed. 565. 'The foundation of jurisdiction,' Justice Holmes said, was 'physical power.' McDonald v. Mabee, 243 U.S. 90, 91, 37 S.Ct. 343, 61 L.Ed. 608, 609.

With a changing economy, however, and as our means of communication and transportation improved, and as inter-state commercial transactions became more and more frequent, it became necessary, if the courts were to keep pace, to relax the jurisdictional strictures of Pennoyer v. Neff, supra. What followed with respect to obtaining jurisdiction over foreign corporations-and to some extent similarly as to individuals-was that the United States Supreme Court first '* * * accepted and then abandoned 'consent,' 'doing business,' and 'presence' as the standard for measuring the extent of state judicial power over such corporations.' McGee v. International Life Inc. Co., 355 U.S. 220, 222, 78 S.Ct. 199, 200-201, 2 L.Ed.2d 223, 225. Next came the 'minimum contacts' concept, the essence of which is that:

'* * * due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice. " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102.

Looking back, it is obvious that the successive changes evidenced a clearly discernible trend '* * * toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents.' McGee v. International Life Ins. Co., supra, 355 U.S. at 222, 78 S.Ct. at 201, 2 L.Ed.2d at 226. Notwithstanding, it would be '* * * a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts.' Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 1283, 1296.

It is against the background of this trend that our legislature enacted that long-arm statute in 1960 (P.L.1960, chap. 124). ³ That act made foreign corporations and nonresidents individuals having the necessary 'minimum contacts' with this state amenable to the jurisdiction of our courts subject only to whatever limitations might be imposed by the constitution or laws of the United States; in substance and in effect, it empowers our courts '* * * to exercise jurisdiction over foreign corporations up to the constitutional limitation.' Del Sesto v. Trans World Airlines, Inc., 201 F.Supp. 879, 882 (D.R.I.).

While the statute goes far, but certainly no further than the Supreme Court has gone, neither the statute nor the decisions from which it stems have given us any readily discernible guidelines for determining what are 'minimum contacts,' or for deciding what is encompassed within 'traditional notions of fair play and substantial justice.' At best these are illusive phrases. 'Traditional notions of fair play and substantial justice' as a measuring rod stands on the same footing as 'fundamental fairness;' and 'fundamental fairness' as a test '* * * is one on a par with that of shocking the conscience of the Court.' Black, J., concurring in Duncan v. Louisiana, 391 U.S. 145, 169, 88 S.Ct. 1444, 1457, 20 L.Ed.2d 491, 507. Given such an ambulatory grant of power, the task of determining when an exercise of jurisdiction over a nonresident is permissible and when impermissible.

'* * * will require an evolutionary process rather than a quick definitive statement, as these terms involve subjective judgments that must be based upon a multitude of variant factors as they are presented in a multitude of cases. The existence or non-existence of the necessary 'minimum contacts' to justify the upholding of personal jurisdiction over foreign corporations under the Fourteenth Amendment as interpreted in the International Shoe Company case must obviously be worked out with reference to the facts of a particular case rather than in a statement of dogmatic rules of all-inclusive principles.' Velandra v. Regie Nationale Des Usines Renault, 6 Cir., 336 F.2d 292, 295.

It is within the frame of this process that we inquire whether Aetna and the trustees had sufficient 'minimum contacts' with this state to permit our courts to exercise in personam jurisdiction over them.

THE CASE vs. AETNA

Before ascertaining the sufficiency of Aetna's contacts, there is a threshold question. May Aetna have the validity of its jurisdictional objection determined prior to a final adjudication of the case on its merits? Precedent says no. Under our practice this court does not customarily tolerate interlocutory review. And, except as an incident to a review of a final determination on the merits, it will not pass upon a ruling denying a motion to dismiss based upon an alleged lack of jurisdiction over the person of a defendant. Mc.Mahon v. Edelstein, 75 R.I. 402, 67 A.2d 32. The rationale of that case was that the jurisdictional ruling did not have that degree of finality which the then controlling statute imposed as a precondition to review on a bill of exceptions. Finality in the prescribed sense, we have said, occurs only when there has been a determination upon the merits '* * * which will in due time by operation of law lead to a final judgment in the cause.' Troy v. Providence Journal Co., 43 R.I. 22, 25, 109 A. 705, 706. We see no reason, nor has any been suggested, for departing from these principles. It is of no consequence that the method by which review is now obtained in civil actions is by an appeal, ⁴ rather than by a bill of exceptions as was the case when McMahon was decided. Under the new procedure, just as under the old, piecemeal review is generally impermissible and the requirement of finality still persists. Apollonio v. Kenyon, 101 R.I. 598, 225 A.2d 789. See also, Industrial National Bank v. Colt, 101 R.I. 488, 224 A.2d 900. Aetna's cross-appeal must therefore be dismissed pro forma.

Just as we have refused to entertain a bill of exceptions which, pending final determination on the merits, seeks review of an interlocutory jurisdictional ruling, so, too, have we refused to review such a ruling on certiorari. Chew v. Superior Court, 43 R.I. 194, 110 A. 605. The reason for our refusal was that another adequate remedy was available for reviewing the alleged error, viz., the prosecution of a bill of exceptions after the litigation had finally terminated. If we were to hew strictly to that line, a...