Howard v. Allen

• Decision Date: 09 July 1970
• Docket Number: No. 19076,19076
• Court: South Carolina Supreme Court
• Parties: Carolyn G. HOWARD, Appellant, v. Donald L. ALLEN, Respondent.

Page 127

176 S.E.2d 127

254 S.C. 455

Carolyn G. HOWARD, Appellant, v. Donald L. ALLEN, Respondent.

No. 19076.

Supreme Court of South Carolina.

July 9, 1970.

H. Carlisle Bean, of Carlisle Bean & Hines, Meredith Johnson Hayes, Spartanburg, for appellant.

Horace L. Bomar and Robert L. Wynn, III, of Holcombe, Bomar & Cureton, Spartanburg, for respondent.

BUSSEY, Justice:

In this action the plaintiff-appellant seeks to recover damages for personal injuries allegedly sustained when plaintiff was struck by the propeller of an aircraft, while upon the ground, at Greenville Municipal Airport. The defendant-respondent, alleged to be the operator of the aircraft, is a resident of Columbus, Ohio.

Being unable to obtain personal service of process upon the defendant in South Carolina, the plaintiff caused to be issued a summons, complaint and warrant of attachment directing the Sheriff of Spartanburg County to attach and seize 'the applicable limits of liability and the duty to defend contained in Policy No. NM6--625, issued by American Motorists Insurance Company, or so much of the property of Donald L. Allen as will make the sum of Three Hundred Thousand and No/100 Dollars.' Such process, including the warrant of attachment, was duly served in Spartanburg County upon one J. C. Brodie, an agent of American Motorists Insurance Company.

The defendant appeared specially for the sole purpose of objecting to the jurisdiction of the court, and moved to quash service of the summons and for vacation of the warrant of attachment. In support of such motion affidavits were filed to the effect that defendant was a lifelong resident of Ohio, never owned any property in South Carolina, and never had any contact with the said J. C. Brodie. The motion to quash and vacate was granted by the lower court and the plaintiff appeals, stating the sole question for decision by this court as follows:

'Does the duty to defend and the limit of liability contained in a policy of liability insurance constitute a 'debt' owed the policyholder which is subject to attachment, thereby conferring jurisdiction upon the Courts of this State?'

If the aforesaid contractual obligations of defendant's liability insurer constitute or amount to a 'debt' owed the defendant by his insurer, it would seem clear that such are subject to attachment. It is settled by our prior decisions that a debt is property subject to attachment in this state. Charles R. Allen, Inc. v. Rhode Island Insurance Company, 217 S.C. 296, 60 S.E.2d 609; Williamson v. Eastern Building and Loan Assoc., 54 S.C. 582, 32 S.E. 765; Charles R. Allen, Inc. v. Island Co-op Services Co-op Ass'n Ltd., 234 S.C. 537, 109 S.E.2d 446.

Plaintiff concedes that there is no South Carolina decision in point with the instant case and, in support of her contention that these contractual obligations constitute a debt subject to attachment, relies solely on the decision of the Court of Appeals of New York in Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312, which decision was subsequently followed by the New York Court in the cases of Simpson v. Loehmann, 21 N.Y.2d 305, 287 N.Y.S.2d 633, 234 N.E.2d 669, and Victor v. Lyon Associates, Inc. et al., 21 N.Y.2d 695, 287 N.Y.S.2d 424, 234 N.E.2d 459. In Seider the injury complained of occurred in Vermont, the plaintiff was a resident of New York, and the defendant was a resident of Canada, but his insurance carrier did business in New York. By a 4--3 decision, the New York Court, against a strong dissent, decided that the contractual obligations of the defendant's liability insurance carrier constituted a 'debt' Under the law of New York, subject to attachment. There are, we think, some important distinctions between the language of the New York attachment statutes and our attachment statutes, but aside therefrom, we are not convinced of the soundness of the majority opinion in Seider.

Apparently no state has followed the New York Court in this respect and it appears from the order of the lower court and the brief of the respondent, without contradiction by the appellant, that the decision in Seider has been much criticized by legal writers on both constitutional and practical grounds. Cited as critical of the Seider rule are the following articles, which we have not had the time and opportunity to fully review. Attachment of Liability Insurance Policies, 53 Cornell Law Rev. 1108 (1968); Quasi in Rem Jurisdiction Based on Insurer's Obligation, 19 Stan.L.Rev. 654 (1967); Reese, The Expanding Scope of Jurisdiction over Non-Residents--New York Goes Wild, 35 Ins. Counsel J. 118 (1968); Attachment of 'Obligations'--A New Chapter in Long Arm Jurisdiction, 16 Buffalo L.Rev. 769 (1967); Garnishment of Intangibles: Contingent Obligations and the Interstate Corporation, 67 Colum.L.Rev. 550 (1967).

Several courts in other jurisdictions have reached results or conclusions contrary to Seider. See Housley v. Anaconda Company, 19 Utah 2d 124, 427 P.2d 390 (1967); De Rentiis v. Lewis, 258 A.2d 464 (R.I.1969); Jardine v. Donnelly, 413 Pa. 474, 198 A.2d 513 (1964). We are not convinced that the contractual obligations of defendant's insurer are a debt subject to attachment under the law of this state, and a review and analysis of decisions from other states would, we think, serve no useful purpose. The insurance policy involved is not before us, but we assume, as argued by counsel without contradiction, that the policy contains the usual or standard clauses in liability policies, including a 'no action' clause, and the usual or standard duty to defend clause. The form of 'no action' clause in common use provides that no action can be brought against the insurer until after the determination of the liability of the insured by a final judgment, or by an agreement entered into between the insurer, the insured and the claimant. It follows that insofar as the 'applicable limits of the policy' are concerned, the insurer owes the insured nothing until the liability of the insured and the amount thereof has been determined. Even after determination of such, whether the insurer owes the insured anything is dependent upon the contingencies of whether or not the insured has complied with the various provisions of the insurance contract, and whether or not the insurer has discharged its obligation to indemnify.

In the recent case of Park v. Safeco Ins. Co. of America, 251 S.C. 410, 162 S.E.2d 709 (1968), a plaintiff brought an action against his liability carrier, which...