Forbes v. Boynton

• Decision Date: 30 November 1973
• Docket Number: No. 6521,6521
• Citation: 113 N.H. 617,313 A.2d 129
• Parties: Elsie FORBES v. Brenda Lee BOYNTON et al.
• Court: New Hampshire Supreme Court

Page 129

313 A.2d 129

113 N.H. 617

Elsie FORBES v. Brenda Lee BOYNTON et al.

No. 6521.

Supreme Court of New Hampshire.

Nov. 30, 1973.

James J. Kalled, Wolfeboro, by brief and orally, for plaintiff.

Wadleigh, Starr, Peters, Dunn & Kohls, and James C. Wheat, Manchester, for defendant McChesney.

Sulloway, Hollis, Godfrey & Soden, Concord, for defendant Boynton, filed no brief.

LAMPRON, Justice.

The issue to be decided is whether, in an action brought by Elsie Forbes of New Hampshire against Donald S. McChesney of New York to recover for personal injuries sustained in an automobile accident in Maine involving also a car operated by the defendant Brenda Lee Boynton of New Hampshire, quasi-in-rem jurisdiction will be exercised over defendant McChesney as a result of an attachment by trustee process in New Hampshire of the contractual obligations under taken by his insurer under a liability insurance policy covering this accident.

Defendant McChesney who was served with process in New York filed a motion to dismiss the action as to him for lack of proper service and also moved to vacate the attachment made on his insurer at its office in New Hampshire wherein it is authorized to do business. The parties filed with the Trial Court (Johnson, J.) an agreed statement of facts and memoranda of law. The court made certain findings and rulings, denied McChesney's motion to dismiss, and reserved and transferred his exception thereto.

The trial court found that 'to duplicate the trial of this accident in two States places an unnecessary burden upon the plaintiff under the facts of this case. Two of the three key participants in this accident in Maine are residents of New Hampshire and, for all practical purposes, the real party in interest in the McChesney case is the Liberty Mutual Insurance Company, and they too are subject to New Hampshire service . . .. It is clear . . . that . . . (the insurer) will control the defense of this case.' The court further found that to require two trials is costly to the plaintiff and to the States and counties involved and creates 'the very real possibility of a gross injustice to the plaintiff. . . . A much more practical and equitable solution from the point of view of the plaintiff, the defendants, and the court system, will be to have this case tried on but one occasion.' The court ruled that it had jurisdiction over McChesney 'by virtue of quasi-in-rem jurisdiction created by the attachment of the rights of McChesney against Liberty Mutual Insurance Company' his insurer.

The plaintiff maintains that the trial court properly denied the motion of defendant McChesney to dismiss plaintiff's action against him by adopting the rule which prevails in his State of residence to govern actions of this nature formulated in Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966); accord, Simpson v. Loehmann, 21 N.Y.2d 305, 287 N.Y.S.2d 633, 234 N.E.2d 669 (1967); Turner v. Evers, 31 Cal.App.3d Supp. 11, 107 Cal.Rptr. 390 (1973); see Minichiello v. Rosenberg, 410 F.2d 106 (2d Cir. 1968); Beja v. Jahangiri, 453 F.2d 959 (2d Cir. 1972). In Seider, a New York plaintiff sued a Quebec defendant on a cause of action arising out of an accident in Vermont. Unable to secure personal service on the defendant in New York, the plaintiff attached an insurance policy issued to the defendant in Quebec by an insurer doing business in New York and served the defendant personally in Quebec. The court upheld the validity of plaintiff's attachment and sustained the exercise of quasi-in-rem jurisdiction over the defendant. The issue presented for decision in this case is of first impression in this State.

The defendant recognizes the well established principle of law that a State can exercise quasi-in-rem jurisdiction to affect interests in an intangible thing which is subject to trustee process in that State. Walsh v. Boulanger, 107 N.H. 458, 225 A.2d 185 (1966); Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905); Restatement (Second) of Conflict of Laws §§ 56, 68 (1971); R. Leflar, American Conflicts Law § 19 (1968). However, the defendant takes the position that the contractual obligations of the insurance company to its insured under a liability policy are not attachable property under RSA 511:1 until liability has been adjudicated and damages determined. He relies on Palmer v. Company, 79 N.H. 28, 103 A. 943 (1918) which followed the earlier cases such as Haven v. Wentworth, 2 N.H. 93 (1819); Swamscot Machine Co. v. Partridge, 25 N.H. 369 (1852); Bucklin v. Powell, 60 N.H. 119 (1880) holding that an insurer is not chargeable as a trustee of the insured while the amount due under the policy is unliquidated. The defendant also argues that adoption of the Seider rule by several States could result in significant and unnecessary interstate conflicts and create constitutional problems. See Minichiello v. Rosenberg, 410 F.2d 106, 117 (2d Cir. 1968); Simpson v. Loehmann, 21 N.Y.2d 305, 287 N.Y.S.2d 633, 234 N.E.2d 669 (1967); Note, Attachment of Liability Insurance Policies,53 Cornell L.Rev. 1108 (1968).

The plaintiff urges this court to adopt and apply the Seider rule in this case on the ground that the historical limitations on quasi-in-rem jurisdiction with their rigid tests are giving way to a more realistic and reasonable evaluation of the respective rights of plaintiffs, defendants, and the States. 'Such an evaluation requires a practical appraisal of the situation of the various parties rather than an emphasis upon somewhat magical and medieval concepts of presence and power.' Simpson v. Loehmann, 21 N.Y.2d 305, 311, 287 N.Y.S.2d 633, 637, 234 N.E.2d 669, 672 (1967). Plaintiff also points out that there is "a movement away from the bias favoring the defendant,' in matters of personal jurisdiction 'toward permitting the plaintiff to insist that the defendant come to him' when there is a sufficient basis for doing so.' Minichiello v. Rosenberg, 410 F.2d 106, 110 (2d Cir. 1968); see RSA 264:1, 264:2; Bolduc v. Richards, 101 N.H. 303, 142 A.2d 156 (1958). See also RSA 407:17. Plaintiff argues that this court has already adopted such an approach of assessing and giving effect to changing considerations when it departed from the former rigidity which characterized the law of torts when residents of different States were involved. Clark v. Clark, 107 N.H. 351, 222 A.2d 205 (1966).

We are of the opinion that the basis for exercising quasi-in-rem jurisdiction over the rights of defendant McChesney which arises from his liability insurance policy can be found in Robinson v. Carroll, 87 N.H. 114, 174 A. 772 (1934). In that case the plaintiff was seeking the appointment of an administrator of the estate of the driver of an automobile whose negligence, while operating the car with the consent of the owner, was alleged to have caused the death of plaintiff's intestate. The only estate of the deceased driver of this State was a liability insurance policy covering him for the accident. In ordering the appointment of an administrator the court said (p. 117, 174 A.p. 775): 'Although performance of the promise claimed as estate is not yet due and will not be until its conditions are fulfilled, it is an obligation of a contractual nature. It is estate . . . owned by the decedent when he died. The event had taken place on account of which he was entitled to protection if certain things were done. The claim which was then his is no different, to constitute estate, than an unmatured note . . .. A debt may have value before it becomes due, although it may eventually prove to be a loss. The conditions to which the promise is subject and which bar action on it until their fulfillment do not make it any less an existing obligation.' See Clark v. Insurance Co., 87 N.H. 353, 356, 179 A. 352, 354 (1935).

It is well established that the liability of the insurer to indemnify becomes fixed on the happening of an accident within the coverage of the policy, subject to defenses which may arise thereafter. Milwaukee Ins. Co. v. Morrill, 100 N.H. 239, 241, 123 A.2d 163, 165 (1956); Stonborough v. Preferred Accident Ins. Co., 292 N.Y. 154, 54 N.E.2d 342 (1944); see RSA ch. 268. Furthermore there also arises at that time an obligation on the part of the insurer to defend the insured against claims made against him which persists until the claim is disposed of. Sutton Mut. Ins. Co. v. Rolph, 109 N.H. 142, 244 A.2d 186 (1968); Goldberg v. Lumber Mut. Cas. Ins. Co., 297 N.Y. 148, 77 N.E.2d 131 (1948). We hold that these present and definite obligations under the defendant's policy constitute a sufficient property right within the broad terms of RSA 511:1 to be attachable by trustee process in the hands of the insurer. If such rights against the insurer are substantial enough to constitute estate to support probate jurisdiction they are sufficient to support their attachment by trustee process. Robinson v. Carroll, 87 N.H. 114, 174 A. 772 (1934); Turner v. Evers, 31 Cal.App.3d Supp. 11, 107 Cal.Rptr. 390 (1973). When the attachment is accompanied by personal service on the defendant in New York and an opportunity for him to be heard, New Hampshire possesses jurisdiction to adjudicate in rem the rights arising from his policy. Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905); Rintala v. Shoemaker, 362 F.Supp. 1044 (D.C.1973); Restatem...