Labruzzo v. State Wide Ins. Co.

• Decision Date: 23 January 1974
• Citation: 353 N.Y.S.2d 98,77 Misc.2d 455
• Parties: John F. LABRUZZO, Plaintiff, v. STATE WIDE INSURANCE COMPANY, Defendant.
• Court: New York Supreme Court

Page 98

353 N.Y.S.2d 98

77 Misc.2d 455

John F. LABRUZZO, Plaintiff, v. STATE WIDE INSURANCE COMPANY, Defendant.

Supreme Court, Special Term, Queens County, Part I.

Jan. 23, 1974.

Arthur M. Greenspan, Jamaica, for plaintiff.

Gordich, Montalbano, Cohen & De Lucia, Great Neck (Paul J. Montalbano, of counsel), for defendant.

CORRECTED MEMORANDUM

LOUIS WALLACH, Justice.

Defendant moves to reargue the decision of this court of November 1, 1973 which granted plaintiff's motion for summary judgment. The basis of that decision was that defendant's opposing affidavit was by an attorney who did not have personal knowledge of the facts and therefore the affidavit was of no probative value and had to be disregarded. (See DiSabato v. Soffes, 9 A.D.2d 297, 193 N.Y.S.2d 184.) Upon reargument, defendant has submitted an affidavit in proper form and, accordingly, the motion to reargue is granted, the decision of November 1, 1973 is withdrawn and the following decision is substituted in its place:

The fundamental question presented on this motion by plaintiff for summary judgment is the constitutionality of that portion of the direct action statute of the State of Louisiana which provides, Inter alia, that the operation by a nonresident of a motor vehicle in Louisiana:

'shall be deemed equivalent to an appointment by such non-resident of the Secretary of state of Louisiana or his successor in office, to be his true and lawful attorney for service of process, As well as the attorney for service of process of the public liability and property damage insurer of the vehicle, if such insurer be a non-resident not authorized to do business in the state * * *.' (Emphasis supplied; LSA-R.S. 13:3474.)

This is an action by plaintiff, a resident of Louisiana, against defendant, an insurance company licensed to do business in New York Connecticut and New Jersey, whose principal office is located in Queens County, New York City. Plaintiff alleges that a judgment was rendered on November 6, 1970 in an action in the 24th Judicial District Court for the Parish of Jefferson, State of Louisiana, in its favor and against the defendant in the sum of $8,282 and that this judgment has not been paid.

Plaintiff has instituted this action in New York to enforce the unpaid Louisiana judgment which arose from an automobile accident which occurred on May 6, 1968 in the State of Louisiana. In that accident, plaintiff suffered personal injuries and thereafter brought an action pursuant to Louisiana's direct action statute against the defendant's insured (a New York domiciliary) and the defendant which had issued a liability insurance policy to the insured in New York. Defendant did not appear in the Louisiana action and in due course a default judgment was entered against it. Defendant alleges as an affirmative defense to this action that the courts of Louisiana lack jurisdiction to render a judgment against it because it was not licensed to do business in Louisiana and did not transact any business in Louisiana and, consequently, the judgment against it violated the due process clause of the United States Constitution.

The full faith and credit clause of the United States Constitution requires the courts of this State to enforce the judgments of sister states, provided that the sister state's judgment was rendered by a court that had jurisdiction over the parties. (See Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Hanna v. Stedman, 230 N.Y. 326, 130 N.E. 566.) Accordingly, it is required that this court determine whether the Louisiana statute which empowered the Louisiana court to assume jurisdiction over the defendant is constitutional. Both parties agree on the general jurisdictional principles which govern the determination of this lawsuit; they strenuously disagree on how these principles should be applied. Historically, the presence of the defendant within the state when the action was commenced was a prerequisite to the exercise of jurisdiction. (Pennoyer v. Neff, Supra.) However, in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, the United States Supreme Court, in response to technological advances and the changing nature of commerce in this country, set forth the groundwork for a new jurisdictional structure. In International Shoe (supra), the court stated (at p. 316, 66 S.Ct. at p. 158):

'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''.

The court also stated (at p. 319, 66 S.Ct. at p. 160) that 'whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. That clause does not contemplate that a state may make binding a judgment In personam against an individual or corporate defendant with which the state has no contacts, ties or relations.'

Pursuant to these principles, many states enacted 'long arm' and other statutes which extended the jurisdiction which their courts could exercise to the limits provided in International Shoe (supra). Finally, in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, the Supreme Court indicated that there were still limits to the jurisdictional powers of states and the court cautioned, with regard to the expanding bases of jurisdiction, that 'it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts.' (Hanson v. Denckla, Supra, at p. 251, 78 S.Ct. at p. 1238.) The court continued (at p. 253, 78 S.Ct. at p. 1240):

'the unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State * * * it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'

Defendant contends that an application of these principles requires a holding that the statute is unconstitutional because the defendant does not do business or transact any business in the State of Louisiana and thus has no 'minimum contacts' with that state.

At the outset, this court does not agree with the defendant's contention that the absence of acts performed by it in Louisiana makes it, as a matter of law, not subject to the jurisdiction of the courts of that state. There are instances in which a person who does not perform an act in a state is, nevertheless, held subject to the jurisdiction of its courts. For example, where a nonresident decedent during his lifetime performs certain acts in New York, the courts of our State have held that his executor may be served outside the State in lawsuits arising from those acts. (See Rosenfeld v. Hotel Corp. of America, 20 N.Y.2d 25, 281 N.Y.S.2d 308, 228 N.E.2d 374; see, also, CPLR 302.) Similarly, where an agent of a foreign corporation performs acts within the State, the principal corporation is subject to suit here for the acts of the agent performed at its behest. (See Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533, 281 N.Y.S.2d 41, 227 N.E.2d 851, cert. den. 389 U.S. 923, 88 S.Ct. 241, 19 L.Ed.2d 266.) Finally, in Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, at p. 17, 308 N.Y.S.2d 337, at p. 340, 256...