Hilton Intern. Co. v. Arace

• Decision Date: 09 December 1977
• Docket Number: No. 455,455
• Citation: 394 A.2d 739,35 Conn.Supp. 522
• Court: Connecticut Superior Court
• Parties: HILTON INTERNATIONAL COMPANY v. Pasquale ARACE.

Page 739

394 A.2d 739

35 Conn.Supp. 522

HILTON INTERNATIONAL COMPANY v. Pasquale ARACE.

No. 455.

Superior Court of Connecticut, Appellate Session.

Argued Sept. 27, 1977.

Decided Dec. 9, 1977.

Jon S. Berk, Hartford, for appellant (defendant).

Charles J. Donato, New Haven, for appellee (plaintiff).

ARTHUR H. HEALEY, Judge.

This is an action brought to enforce a judgment obtained in Puerto Rico for a gambling debt. The defendant, Pasquale Arace ("Arace"), is a resident of Connecticut. During March of 1971 he visited the gambling casinos of the plaintiff, Hilton International Co. ("Hilton"), in Puerto Rico where he sought and was given gambling credit in the amount of $3300, secured by delivering to Hilton two checks endorsed in blank made payable to himself. The credit was used solely for gambling. Hilton was unable to satisfy the gambling debts accumulated by Arace because he issued a stop payment order on the checks. Thereafter, in the Superior Court in Puerto Rico Hilton brought an in personam action against Arace for the collection of the gambling debt. In that action Arace, through the secretary of state of the Commonwealth of Puerto Rico, was served with process in Connecticut by registered mail with return receipt requested, as provided by rule 4.7 of the Puerto Rico rules of civil procedure. On February 9, 1973, a default judgment was entered against Arace by the Superior Court in Puerto Rico in the sum of $4125 plus costs. On June 3, 1975, Hilton instituted an action against Arace in the Court of Common Pleas in Hartford county to collect the Puerto Rican judgment together with interest and costs on that judgment.

Essentially, two issues are raised by this appeal. The first is whether the exercise of personal jurisdiction over Arace, a Connecticut resident, pursuant to the long-arm statute of Puerto Rico was violative of due process. If it was not, then the second issue is whether Connecticut is obligated to give full faith and credit under that clause of the United States constitution to the Puerto Rican judgment, based as it is on a gambling debt, where a strong state policy exists against such a claim.

The due process claim clearly involves the consideration of the "long-arm" statute of Puerto Rico, i. e., rule 4.7 of the rules of civil procedure of Puerto Rico. The relevant portion of rule 4.7 here is § (a)(1) thereof which provides for personal jurisdiction over nonresidents "if the action or claim arises as a result of the following: (1) Such person or his agent carries out business transactions with Puerto Rico." Arace does not claim that the service was inadequate or that notice was deficient, but rather he claims that the application of the Puerto Rican "long-arm" statute to give in personam jurisdiction over him in the circumstances of this case does not comport with federal constitutional due process requirements. Since Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, the United States Supreme Court has held that the due process clause of the fourteenth amendment places some limits on the power of state courts to enter binding judgments against persons not served with process within their boundaries. Where the limits have been has generated controversy and the United States Supreme Court, in an evolving process, has accepted and abandoned "consent," "doing business," and "presence" for measuring the extent of state judicial power over foreign corporations. McGee v. International Life Ins. Co., 355 U.S. 220, 222, 78 S.Ct. 199, 2 L.Ed.2d 223. The trend over the years toward broadening a state's jurisdiction over nonresidents was greatly advanced by the landmark case of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, which laid down the "minimum contacts" test. That test requires that, to subject a defendant to a judgment in personam, the defendant have certain minimum contacts with the forum so that the maintenance of the action does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, supra, 316, 66 S.Ct. 154. Even after International Shoe, although a single act was held in McGee v. International Life Ins. Co., supra, to sustain state jurisdiction over a foreign corporation, the United States Supreme Court said pointedly in Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 1283, that it is a mistake to assume that this broadening trend "heralds the eventual demise of all restrictions on the personal jurisdiction of state courts." International Shoe, however, with its "minimum contacts" test remains the bellwether case in this area of due process. Rule 4.7 of the rules of civil procedure of Puerto Rico, like corresponding legislation in a number of states, follows the broadening trend of the law subjecting a nonresident to in personam jurisdiction as articulated by the United States Supreme Court and which resulted in International Shoe Co. v. Washington, supra.

The case of San Juan Hotel Corporation v. Lefkowitz, 277 F.Supp. 28, 29 (D.P.R.) presents circumstances strikingly similar to this case. That case arose out of the extension of credit in Puerto Rico to a New York resident by a Puerto Rican corporation. The credit extended there represented unpaid bills for lodging, food, liquor and credit extended to the defendant at the gambling casino in the plaintiff's hotel. That credit was held to constitute "business transactions" within the meaning of rule 4.7(a)(1) of the rules of civil procedure of Puerto Rico, and that statute, as applied against the nonresident New York defendant, was held not to violate due process. International Shoe was heavily relied upon by the New York court in finding no violation of due process.

In Pennoyer v. Neff, supra, 727, the presence of the defendant within the territorial jurisdiction of the court was required for rendition of a judgment personally binding upon him. At the present time, however, "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, supra, 326 U.S. 316, 66 S.Ct. at 158. The federal court for the district of Puerto Rico, in a case where rule 4.7 of the rules of civil procedure of Puerto Rico was directly involved, relying on International Shoe and McGee, and quoting with approval from the San Juan Hotel Corporation v. Lefkowitz case, supra, made the point that the issue is not whether the nonresident upon whom jurisdiction is asserted is "doing business" in the forum but whether that person has the minimum contact with the territory of the forum in the light of International Shoe and McGee. Luce & Co., S. en C. v. Alimentos Borinquenos, S. A., 283 F.Supp. 81, 82 (D.P.R.).

There can be no substance to any claim that the defendant's activities in Puerto Rico which gave rise to this action failed to satisfy the "minimum contacts" test of International Shoe necessary to make rule 4.7 operative as to him. He went to Puerto Rico and he admittedly went there as one of a large group of people on a gambling junket. He visited the Hilton gambling casino. He asked Hilton for and received gambling credit in the amount of $3300. In that context he gave Hilton two checks endorsed in blank payable to himself. The checks appeared to be dated about two weeks apart, one on March 5, 1971, and the other on March 20, 1971. The entire credit extended by Hilton on those checks was utilized by the defendant for gambling in Puerto Rico. As was concluded in Executive Air Services, Inc. v. Beech Aircraft Corporation, 254 F.Supp. 415 (D.P.R.), and in San Juan Hotel Corporation v. Lefkowitz, supra, both cases dealing with rule 4.7, the contacts of Arace with Puerto Rico were more than sufficient to satisfy the requirements of due process under International Shoe and its progeny. In his due process claim Arace asserts that his involvement in a trial in Puerto Rico away from his home in Connecticut contributes, under the circumstances, to the derogation of his federal due process rights. This he does on a theory akin to the doctrine of forum non conveniens. It is true that an "estimate of the inconveniences" which would result to him from a trial away from his home is relevant on his due process claim. International Shoe Co. v. Washington, supra, 326 U.S. 317, 66 S.Ct. 154. Of course, Arace makes no claim that he had inadequate notice of the Puerto Rican suit or that he had insufficient time to prepare his defense or that he could not appear. The fact that the defendants in International Shoe and McGee were corporations and that here the defendant Arace is a natural person is a distinction without a difference. San Juan Hotel Corporation v. Lefkowitz, supra, 277 F.Supp. 30. It can fairly be assumed that there is some inconvenience to Arace but it certainly is not something which avails him on his due process claim under the circumstances of this case. There was a valid federal constitutional predicate for the entry of the Puerto Rican judgment consistent with due process.

The court turns now to Arace's claim that the full faith and credit clause of the United States constitution does not require that Connecticut recognize a Puerto Rican judgment...