Gager v. White

• Citation: 442 N.Y.S.2d 463,53 N.Y.2d 475,425 N.E.2d 851
• Parties: , 425 N.E.2d 851 Lucille GAGER, as Administratrix of the Estate of Linda Gager, Deceased, Appellant, v. Ronald L. WHITE, Respondent. MEI YUET CHIN, as Administratrix of the Estate of Yu Chin, Deceased, et al., Appellants, v. Peter W. CRAY, Respondent, et al., Defendant. Adrea CACHAT, an Infant by Her Father and Natural Guardian Marc Cachat, et al., Respondents, v. J. E. GUERTIN CO., et al., Appellants; John Scheuer et al., Respondents. Debra CARBONE, Appellant, v. Gail W. ERICSON, Respondent, et al., Defendants. Sallie HILL, Appellant v. Clarence ELLIOTT, Respondent.
• Decision Date: 07 July 1981
• Court: New York Court of Appeals

Page 463

442 N.Y.S.2d 463

53 N.Y.2d 475, 425 N.E.2d 851

Lucille GAGER, as Administratrix of the Estate of Linda

Gager, Deceased, Appellant, v. Ronald L. WHITE, Respondent.

MEI YUET CHIN, as Administratrix of the Estate of Yu Chin, Deceased, et al., Appellants, v. Peter W. CRAY, Respondent, et al., Defendant.

Adrea CACHAT, an Infant by Her Father and Natural Guardian Marc Cachat, et al., Respondents, v. J. E. GUERTIN CO., et al., Appellants; John Scheuer et al.,

Respondents.

Debra CARBONE, Appellant, v. Gail W. ERICSON, Respondent, et al., Defendants.

Sallie HILL, Appellant v. Clarence ELLIOTT, Respondent.

Court of Appeals of New York.

July 7, 1981.

Stanley Bryer, New York City, for appellant in the first above-entitled action

Louis G. Adolfsen, Thomas R. Newman and L. Kevin Sheridan, New York City, for respondent in the first above-entitled action.

Emilio Nunez, Pamela Anagnos Liapakis, New York City, and Cheryl R. Eisberg, Bayside, for appellants in the second above-entitled action

William Paul Last and Joseph Arthur Cohen, New York City, for respondent in the second above-entitled action.

James A. Magee, New York City, for appellants in the third above-entitled action.

Norman Bard, Garden City, for respondents in the third above-entitled action.

Mark J. Roberts, Brooklyn, for appellant in the fourth above-entitled action.

Joseph W. Conklin and Raymond J. Pezzoli, New York City, for respondent in the fourth above-entitled action.

Donald B. Knight, New York City, for appellant in the fifth above-entitled action.

Louis G. Adolfsen, Thomas R. Newman and L. Kevin Shieridan, New York City, for respondent in the fifth above-entitled action.

OPINION OF THE COURT

FUCHSBERG, Judge.

These five appeals, 78 A.D.2d 617, 432 N.Y.S.2d 388, App.Div., 434 N.Y.S.2d 650, App.Div., 437 N.Y.S.2d 915, 79 A.D.2d 551, 433 N.Y.S.2d 806, App.Div., 437 N.Y.S.2d 916, are part of the aftermath of the Supreme Court's recent decision in Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516, the effect of which was to vitiate the predicate for quasi in rem jurisdiction pioneered in 1966 by Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312. In essence, Seider held that a liability insurance contract issued by a carrier authorized to do business in this State, contingent as its obligations may be, partakes of the character of a "debt" which by its attachment may be made to serve as the foundation for jurisdiction over its nonresident insured defendants. After this holding had survived 14 years of doctrinal dispute, Rush was to declare it violative of due process. The issue now is whether this ruling is to be applied prospectively alone or retrospectively as well.

The cases on which we are to act present typical Seider fact patterns. In each, a New York domiciliary seeks damages for injuries or death sustained in an automobile accident outside the State as a result of the alleged negligence of a nonresident operator or owner of a motor vehicle. Save for the plaintiff's residence, in all, for all practical purposes, the sole connection with this State was the policy's availability for attachment.

Because in every instance the cases before us were pendente lite when the Supreme Court administered its coup de grace, they all became the subject of motions to dismiss. These initially were all denied, nisi prius declining to apply Rush to ongoing cases whose plaintiffs, in choosing this forum and foregoing others, had, as these courts saw it, placed justifiable reliance on New York's previously consistent, if vigorously contested, course of decisional support for Seider's jurisdictional analysis (see Baden v. Staples, 45 N.Y.2d 889, 410 N.Y.S.2d 808, 383 N.E.2d 110; Donawitz v. Danek, 42 N.Y.2d 138, 397 N.Y.S.2d 592, 366 N.E.2d 253; Neuman v. Dunham, 39 N.Y.2d 999, 387 N.Y.S.2d 240, 355 N.E.2d 294; Simpson v. Loehmann, 21 N.Y.2d 305, 287 N.Y.S.2d 633, 234 N.E.2d 669; mot. for rearg. den. 21 N.Y.2d 990, 290 N.Y.S.2d 914, 238 N.E.2d 319; see, also, O'Connor v. Lee-Hy Paving Corp., 2nd Cir., 579 F.2d 194, cert. den. 439 U.S. 1034, 99 S.Ct. 639, 58 L.Ed.2d 696; Minichiello v. Rosenberg, 2nd Cir., 410 F.2d 106, affd. en. banc. 2nd Cir., 410 F.2d 117, cert. den. 396 U.S. 844, 90 S.Ct. 69, 24 L.Ed.2d 94; reh. den. 396 U.S. 949, 90 S.Ct. 370, 24 L.Ed.2d 254).

The story in the intermediate appellate courts, however, was different. In Cachat v. Guertin Co., there was an affirmance, but only because no jurisdictional defense had been interposed. On the other hand, because some type of jurisdictional objection had been raised in the other four, each brought a reversal and dismissal. For the reasons that follow, we now hold that Rush must be applied only when a specific objection to the assertion of jurisdiction founded on the attachment of the out-of-State defendant's liability insurance policy was preserved by appropriate motion or affirmative defense (CPLR 3211, subd. [e]).

Especially since almost every party touches on the matter, our discussion may well start with the reminder that, consonant with the common law's policy-laden assumptions, a change in decisional law usually will be applied retrospectively to all cases still in the normal litigating process (People v. Pepper, 53 N.Y.2d 213, 440 N.Y.S.2d 889, 423 N.E.2d 366, citing People v. Morales, 37 N.Y.2d 262, 267-268, 372 N.Y.S.2d 25, 333 N.E.2d 339; Kelly v. Long Is. Light. Co., 31 N.Y.2d 25, 29 n. 3, 334 N.Y.S.2d 851 n. 3, 286 N.E.2d 241 n. 3). By way of departure from this generality, however, where there has been such a sharp break in the continuity of law that its impact will "wreak more havoc in society than society's interest in stability will tolerate" (Fairchild, Limitation of New Judge-Made Law to Prospective Effect Only: "Prospective Overruling" or "Sunbursting", 51 Marq.L.Rev. 254), it is now recognized that, when adherence to the traditional course is strongly contraindicated by powerful factors, including strong elements of reliance on law superseded by the new pronouncement, a court may direct that it operate prospectively alone (Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296; Great Northern Ry. v. Sunburst Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360). ¹

All the plaintiffs, stressing that the Statute of Limitations now may have foreclosed an action in a forum where jurisdiction would be constitutionally unassailable, argue that theirs are precisely the kind of cases in which retroactive application should be eschewed. But this is by no means a one-sided argument. As the defendants contend, that Seider might turn out to have not been the only possible "true rule" was not without forewarning (see, e. g., Siegel, New York Practice § 105, p. 127; Stein, Jurisdiction by Attachment of Liability Insurance, 43 N.Y.U.L.Rev. 1075; Reese, Expanding Scope of Jurisdiction Over Non-Residents--New York Goes Wild, 35 Ins. Counsel J. 118). Moreover, even if the balance on the issue of prejudice had to be struck in favor of those who preferred to rely on the authoritative pronouncements of the New York courts rather than those of its now clairvoyant critics, the fundamental nature of the jurisdictional determinations in Rush renders conventional criteria for fixing an appropriate line of demarcation for overruling academic. For, a constitutional due process limitation on the power of a State's exercise of its jurisdiction under our Federal system of government, as distinguished, for instance, from one founded in due process considerations bearing on less fundamental substantive and procedural concerns, is an absolute abnegation of the offending State's ability to continue to act beyond the boundaries the determination defines.

This observation almost inevitably flows from a review of the conceptual building blocks on which Rush stands. They reflect deviation from what for long had come to be the accepted standards for identifying the bounds of State court basis jurisdiction. ²

Epitomized by Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, these were readily divisible into in personam, in which the fulcrum was the person; in rem, which, applicable to designated property, was designed to affect the interests of all persons; or quasi in rem which bore on the interests of particular persons in designated property. The last was of two types. One, like actions to partition land or foreclose a mortgage, was invocable to establish or extinguish claims to or in particular property. The second, the kind involved in the present cases, provided a basis for obtaining a judgment to the satisfaction of which the property on which the jurisdiction was based could be applied though it was not related to the controversy between the parties. (See Restatement, Judgments, §§ 5-9; Silberman, Shaffer v. Heitner: The End of an Era, 53 N.Y.U.L.Rev. 33, 39.)

Background too was the requirement for "minimum contacts", integral to "fair play and substantial justice" (see International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95), which, at the time Seider came on the legal horizon, had been established as essential to in personam jurisdiction, yet was not requisite for quasi in rem jurisdiction, for which the presence of property alone sufficed (Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023; Pennoyer v. Neff, supra).

But Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 was to eliminate this dichotomy. Noting that "the law of state-court jurisdiction no longer stands securely on the foundation established in Pennoyer" and that " ' "judicial jurisdiction over a thing," is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing' Restatement (Second) of Conflict of Laws § 56, Introductory Note (1971)", it held that "although the presence of the defendant's property in a State might suggest the existence of other ties among the defendant, the State, and the litigation, the...