Gordon v. Granstedt

• Decision Date: 15 August 1973
• Docket Number: No. 5312,5312
• Citation: 54 Haw. 597,513 P.2d 165
• Parties: Bernice Marjorie Granstedt GORDON, Plaintiff-Appellee, v. Theodore GRANSTEDT, Jr., Defendant-Appellant, and American Security Bank et al., Garnishees.
• Court: Hawaii Supreme Court

Page 165

513 P.2d 165

54 Haw. 597

Bernice Marjorie Granstedt GORDON, Plaintiff-Appellee, v. Theodore GRANSTEDT, Jr., Defendant-Appellant and American Security Bank et al., Garnishees.

No. 5312.

Supreme Court of Hawai'i.

Aug. 15, 1973.

As Amended on Denial of Rehearing Sept. 5, 1973.

Syllabus by the Court

1. Retroactivity provision in a procedural statute, which does not affect substantive rights of obligations, is constitutional.

2. The trend toward expanding the permissible scope of state jurisdiction over nonresidents has not reduced all restrictions on the exercise by a state court of personal jurisdiction over nonresidents to total insignificance.

3. In order to serve as a basis for the exercise by a state court of personal jurisdiction over a nonresident served outside of the state, the contacts of the nonresident with the forum state must be contacts which gave rise to or were causally connected with the obligation sought to be enforced.

Richard D. Welsh, Honolulu, for defendant-appellant.

Henry I. Kuba, Honolulu (Michael F. O'Connor, on the brief, Chuck & Fujiyama, Honolulu, of counsel), for plaintiff-appellee.

Before RICHARDSON, C. J., and MARUMOTO, ABE, LEVINSON and KOBAYASHI, JJ.

MARUMOTO, Justice.

This is an appeal by defendant from a judgment for $7,728.24, plus interest and costs, entered by the first circuit court in favor of plaintiff in an action brought by plaintiff upon a judgment for the same principal amount entered by the Superior Court of the State of California, Santa Clara County, hereafter referred to as the Santa Clara court.

The circuit court entered the judgment appealed from pursuant to its order granting plaintiff's motion for summary judgment. The record shows the following undisputed facts:

1. Plaintiff is the sole surviving child of Frank Granstedt, brother of Theodore Granstedt, Sr., and residuary legatee under his will. As such, she is the distributee of the residuary estate of Theodore Granstedt, Sr.

2. Defendant is one of the four children of Theodore Granstedt, Sr. He has been a resident of Hawaii at all times.

3. Theodore Granstedt, Sr., died in Santa Clara County, California, on July 21, 1965. Upon his death, proceedings were undertaken in the Santa Clara court, to administer his estate as an intestate estate. Defendant participated in the proceedings by nominating an administrator. The proceedings were completed in august 1966, at which time the estate was distributed equally to the four children of the deceased. The distributive share of each child was $7,144.24. Defendant accepted the distribution of his share, and filed a receipt for the same in court. The distribution was made in accordance with a decree entered in the proceedings.

4. Subsequently, a will of Theodore Granstedt, Sr., was discovered. In the will, Theodore Granstedt, Sr., bequeathed $1.00 to each of his four children, and named Frank Granstedt as the residuary legatee. The will was presented to the Santa Clara court for proate on March 28, 1968. Defendant filed a contest to the probate of the will, and, in connection with the contest, took depositions and answered interrogatories. However, he withdrew the contest on July 17, 1969. The will was admitted to probate on August 6, 1969. On November 28, 1969, the court entered an order determining the rights of the beneficiaries under the will.

5. Thereafter, plaintiff commenced an action in the Santa Clara court against the four children of Theodore Granstedt, Sr., to recover the amounts distributed to them in the earlier administration proceedings. In the action, defendant was served by mail in Hawaii on December 14 and 17, 1970. Upon the failure of defendant to file any pleading after the servide, the court adjudged defendant to be in default, and entered a judgment against him in the sum of $7,728.24, on October 20, 1971. The amount of the judgment represented the sum of $7,144.24 received by defendant in the earlier administration proceedings, plus interest thereon to the date of the judgment.

The first circuit court entered the judgment appealed from by according full faith and credit to the judgment of the Santa Clara court.

The question for decision on this appeal is whether the judgment of the Santa Clara court, as against defendant, is entitled to full faith and credit in this State under Article IV, section 1 of the United States Constitution. The answer depends on whether the Santa Clara court had personal jurisdiction over defendant at the time it entered the judgment.

The Santa Clara court prefaced the judgment with the following statement regarding its jurisdiction over defendant:

'That THEODORE GRANSTEDT, JR., was validly served by mail on both December 14 and December 17, 1970, and has filed no pleading in this proceeding, and his default has been validly entered. The Court further specifically finds that although THEODORE GRANSTEDT, JR., has at all times been a resident of the State of Hawaii, that because of his contacts with this state in connection with the issues raised in this proceeding, the State of California can exercise personal jurisdiction over the said THEODORE GRANSTEDT, JR.'

The court referred to the facts set forth in italics in paragraphs 3 and 4 of the recital of facts in the early portion of this opinion as defendant's contacts with California which authorized it to subject him to its personal jurisdiction upon the service made in the action.

In the quoted statement, the court made no mention of the California statute on which it based its jurisdiction. However, there is no question that the court relied on California Codes, Code of Civil Procedure § 410.10 (West 1954), which reads:

'A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.'

That statute was added to the California Codes by Stats.1969, c. 1610, § 3. By Stats.1969, c. 1610, § 30, it was made operative on July 1, 1970, and retroactively applicable to any action commenced prior to the operative date in which summons was issued but not served before that date.

The pertinent California jurisdictional statute in effect before July 1, 1970, was California Codes, Code of Civil Procedure, § 417, which read:

'Where jurisdiction is acquired over a person who is outside of this State by publication of summons * * *, the court shall have the power to render a personal judgment against such person only if he was personally served with a copy of the summons and complaint, and was a resident of this State at the time the cause of action arose, at the time of the commencement of the action or at the time of service.'

Under that statute, the Santa Clara court would not have acquired personal jurisdiction over defendant upon service made on him in Hawaii, for, according to its finding, defendant was not a resident of California but a resident of Hawaii at all times.

The provision of the California statutes making § 410.10 retroactive to actions commenced prior to July 1, 1970, in which summons was issued but not served before that date, would have posed a question regarding the constitutional validity of such retroactivity provision before McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). See Gillioz v. Kincannon, 213 Ark. 1010, 214 S.W.2d 212 (1948); Restatement (Second) of Conflict of Laws § 84, Comment e (Tent. Draft No. 3, 1956).

In McGee v. International Insurance Co., the United States Supreme Court held with regard to retroactive application of another California long-arm statute: 'The statute was remedial, in the purest sense of that term, and neither enlarged nor impaired respondent's substantive rights or obligations under the contract.' (355 U.S. 224, 78 S.Ct. 201)

We think that there can be no question at the present time regarding the constitutional validity of the retroactive application of § 410.10, in the light of the foregoing holding, although it was made with reference to a contention based on impairment of obligation of contract and not on violation of due process. See Restatement (Second) of Conflict of Laws § 29, Comment c (1971).

However, this does not end our inquiry. We must consider the further question whether the Santa Clara court subjected defendant to its personal jurisdiction on any basis consistent with the United States Constitution.

Defendant contends that the question should be answered in the negative, principally on the basis of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878).

Pennoyer v. Neff was decided almost a century ago. In the meantime, International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and other cases of similar tenor have been decided.

The United States Supreme Court stated in International Shoe Co. v. Washington 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.'' (326 U.S. 316, 66 S.Ct. 158)

In McGee v. International Life Insurance Co., supra, 355 U.S. at page 222, 78 S.Ct. at page 201, the court recognized 'a trend * * * toward expanding the permissible scope of state jurisdiction over * * * nonresidents.'

However, Pennoyer v. Neff has not been reduced to total insignificance by subsequent cases. The expanding trend mentioned in McGee v. International Life Insurance Co. met a wall in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958).

In Hanson v. Denckla, the court stated at page 251, 78 S.Ct. at page 1238:

'(T)he requirements for personal jurisdiction over nonresidents have evolved from the rigid rule of Pennoyer v. Neff, * * *, to the flexible standard of International Shoe Co. v. Washington, * * *. But it is a mistake to assume that this trend...