Morrison v. Budget Rent A Car Systems, Inc.

Citation230 A.D.2d 253,657 N.Y.S.2d 721
PartiesJeanne H. MORRISON, Appellant, v. BUDGET RENT A CAR SYSTEMS, INC., et al., Respondents.
Decision Date28 April 1997
CourtNew York Supreme Court — Appellate Division

Page 721

657 N.Y.S.2d 721
230 A.D.2d 253
Jeanne H. MORRISON, Appellant,
BUDGET RENT A CAR SYSTEMS, INC., et al., Respondents.
Supreme Court, Appellate Division,
Second Department.
April 28, 1997.

Page 722

Andrew Rosner, Mineola, for appellant.

Gladstein & Isaac, New York City (Harvey Gladstein, Emily Diamond, and Brian J. Isaac, of counsel), for respondents.


ROSENBLATT, Justice Presiding.

The case before us involves threshold questions of jurisdiction and the waiver of jurisdictional defenses. We are also called upon to consider another State's sovereign immunity statute and the issues that it presents in the realms of the Full Faith and Credit clause of the United States Constitution and interstate comity.

The case grew out of a two car accident that occurred in New York State. The plaintiff was driving one car; the other car was occupied by the defendant Mark A. Lucas (the driver), and his coemployee, the defendant Charles S. Whisnant, who had leased the car from the defendant Budget Rent A Car Systems, Inc. 1 The accident occurred in Suffolk County after Lucas and Whisnant travelled into New York State, within the scope of their employment for the defendant University of South Carolina. The plaintiff commenced the action by filing the summons and complaint with the Clerk of the Supreme Court, Suffolk County, following which the plaintiff effectuated service on the defendants in accordance with Vehicle and Traffic Law § 253 (see also, CPLR 302[a][2]; Siegel N.Y. Prac § 97, at 147 [2d ed] ).

In written stipulations, the law firm representing the defendants twice agreed to "waive the affirmative defense of lack of jurisdiction" in exchange for two extensions of their time to answer. In their answer, however, the defendants raised the affirmative

Page 723

defenses of lack of subject matter jurisdiction and lack of personal jurisdiction, notwithstanding the stipulations. After the plaintiff rejected the answer, the defendants moved to compel the plaintiff to accept it and to vacate the stipulations. The plaintiff cross-moved to strike both affirmative defenses on the ground that the defendants had waived them, and on the further ground that the affirmative defenses were insufficient as a matter of law. The Supreme Court denied the plaintiff's motion in its entirety, and granted the defendants' motion to compel the plaintiff to accept the answer, thus keeping the affirmative defenses alive. As limited by her brief, 2 the plaintiff has appealed from so much of the order as denied that branch of her cross motion which was to strike the affirmative defenses and granted the defendants' motion to compel her to accept the defendants' answer, which included the challenged affirmative defenses.

The defendants acknowledge that their attorneys entered into two written stipulations by which they agreed to "hereby waive the affirmative defense of lack of jurisdiction" in exchange for extensions of time to answer the complaint. They claim, however, that their attorneys--the same attorneys who represented them in the stipulations, on the motion, the cross motion, the answer, and on this appeal--had no authority to stipulate as they did. They also claim that these attorneys improvidently stipulated away what the defendants now assert to be complete defenses under the South Carolina Tort Claims Act (see, Code of Laws of South Carolina § 15-78-10 et seq.) by which, they assert, "South Carolina University [sic], its agents, servants, and employees, cannot be sued outside of the bounds of South Carolina". In essence, they contend that the defendants may not be sued in New York, that they are protected by sovereign immunity, and that their stipulations should be undone. For reasons that follow we hold that the affirmative defenses must fail.


The plaintiff's primary argument is that the stipulations are enforceable while the defendants seek to be relieved of the stipulations, claiming that they were entered into improvidently.

Stipulations are favored by the courts and are not lightly cast aside (see, Matter of Galasso, 35 N.Y.2d 319, 321, 361 N.Y.S.2d 871, 320 N.E.2d 618; see also, Perrino v. Bimasco, Inc., 234 A.D.2d 281, 651 N.Y.S.2d 53). In Hallock v. State of New York, 64 N.Y.2d 224, 485 N.Y.S.2d 510, 474 N.E.2d 1178, the Court of Appeals held that a stipulation was binding on a client even though it exceeded the attorney's actual authority. The court recognized that strict enforcement of stipulations "not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and integrity of the litigation process" (Hallock v. State of New York, supra, at 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178). Thus, the court concluded that "[o]nly where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation" (Hallock v. State of New York, supra, at 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178). The courts therefore have vacated stipulations when the stipulating attorney lacked both actual and apparent authority (see, Matter of Dayho Motel v. Assessor of the Town of Orangetown, 229 A.D.2d 435, 645 N.Y.S.2d 87), but will, however, enforce written stipulations when the attorney has apparent authority to enter into a stipulation (see, Javarone v. Pallone, 234 A.D.2d 814, 651 N.Y.S.2d 664; Ryerson v. Ryerson, 208 A.D.2d 914, 618 N.Y.S.2d 81).

The range of issues to which parties may stipulate is broad--"it lies within the power of the litigants to stipulate to virtually anything concerning their litigation" (McLaughlin, Practice Commentaries, McKinney's Cons. Laws of N.Y., Book 7B, CPLR C2104:1, at 559-560). Hallock v. State of New York, supra has been applied to enforce written stipulations in a wide variety of circumstances

Page 724

(see, e.g., Matter of Stark, 233 A.D.2d 450, 650 N.Y.S.2d 608 [stipulation waiving party's interest in an estate]; Meyer v. Meyer, 228 A.D.2d 955, 645 N.Y.S.2d 105 [stipulation agreeing to submit all further disputes to an arbitrator]; McAllan v. 124-128 West 134th St. Tenants Assoc., 227 A.D.2d 352, 643 N.Y.S.2d 70 [plaintiff's stipulation to dismiss a cause of action]; Matter of Lois F., 209 A.D.2d 856, 618 N.Y.S.2d 920 [stipulation agreeing that individual was incompetent and appointing committee for her]; Ryerson v. Ryerson, 208 A.D.2d 914, 618 N.Y.S.2d 81, supra [stipulation providing for judicial sale of property]; Matter of Infosino v. Infosino, 204 A.D.2d 324, 611 N.Y.S.2d 598 [stipulation to limit husband's obligation to provide medical insurance coverage for wife]; Henry v. Gutenplan, 197 A.D.2d 608, 604 N.Y.S.2d 757 [stipulation discontinuing action]; Dousmanis v. Joe Hornstein, Inc., 181 A.D.2d 592, 581 N.Y.S.2d 327 [stipulation waiving Statute of Limitations defense]; Greenberg v. Greenberg, 150 A.D.2d 429, 540 N.Y.S.2d 736 [stipulation regarding payment of a money judgment] ).

We are satisfied that the stipulations before us were both bargained for and properly based on the apparent authority of the defendants' attorneys. Their enforceability turns on the extent to which a party, through its attorney, may waive jurisdictional defenses.


The defendants stipulated to waive the affirmative defense of lack of "jurisdiction", but later interposed affirmative defenses as to both personal jurisdiction and subject matter jurisdiction. Thus, at the outset it is important to distinguish between subject matter jurisdiction and personal jurisdiction, particularly with regard to the question of waivability.

As the late Chief Judge Breitel noted in Lacks v. Lacks, 41 N.Y.2d 71, 74, 390 N.Y.S.2d 875, 359 N.E.2d 384, "[j]urisdiction is a word of elastic, diverse, and disparate meanings" that may have caused its share of confusion (see also, Nuernberger v. State of New York, 41 N.Y.2d 111, 117-118, 390 N.Y.S.2d 904, 359 N.E.2d 412). In its most basic sense, the term has long been applied as evincing the power to adjudge (see, Hunt v. Hunt, 72 N.Y. 217, 228) which bespeaks subject matter jurisdiction (see, Thrasher v. United States Liab. Ins. Co., 19 N.Y.2d 159, 166, 278 N.Y.S.2d 793, 225 N.E.2d 503; Matter of Fry v. Village of Tarrytown, 89 N.Y.2d 714, 658 N.Y.S.2d 205, 680 N.E.2d 578). It has also long been used to describe the judicial power to enforce a judgment and to bind a party over whom it has a legal hold (see, Reed v. Chilson, 142 N.Y. 152, 36 N.E. 884), a concept that relates to personal jurisdiction (see, Masten v. Olcott, 101 N.Y. 152, 4 N.E. 274).

As with members of an extended family, these two types of jurisdiction will appear at many of the same functions, and have, on occasion, been mistaken for one another. They are different, however, in their availability and their character. The United States Supreme Court has described personal jurisdiction as going to a court's power to exercise control over the parties, as opposed to subject matter jurisdiction, which is an "absolute [stricture] on the court", in terms of its statutory or constitutional capacity to adjudicate particular types of suits (Leroy v. Great Western United Corp., 443 U.S. 173, 180, 99 S.Ct. 2710, 2715, 61 L.Ed.2d 464; see also, Reynolds v. Stockton, 140 U.S. 254, 268, 11 S.Ct. 773, 777, 35 L.Ed. 464; 1 Casid, Jurisdiction in Civil Actions § 1.01[1] et seq. [2d ed]; Restatement of the Law [Second], Conflict of Laws, § 105, at 316).

In New York, the authority of the courts to adjudicate classes of cases derives ultimately from article VI of the New York Constitution. The constitutional limits that are placed upon particular courts define their authority and, hence, their subject matter jurisdiction, so that no New York court may exercise powers beyond those granted by the New York Constitution and the...

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