RINGERS'DUTCHOCS, INC. v. SSSL 180

• Citation: 494 F.2d 678
• Decision Date: 08 March 1974
• Docket Number: Docket 73-2217.,No. 567,567
• Parties: RINGERS' DUTCHOCS, INC., Plaintiff-Appellant, v. S.S. S.L. 180, her engines, boilers, etc., and Sea-Land Service, Inc., Defendants, and Helvetia Swiss Fire Insurance Company, Limited, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

494 F.2d 678 (1974)

RINGERS' DUTCHOCS, INC., Plaintiff-Appellant, v. S.S. S.L. 180, her engines, boilers, etc., and Sea-Land Service, Inc., Defendants, and Helvetia Swiss Fire Insurance Company, Limited, Defendant-Appellee.

No. 567, Docket 73-2217.

United States Court of Appeals, Second Circuit.

Argued February 27, 1964.

Decided March 8, 1974.

Andrew R. Colmant, New York City (Leo P. Cappelletti, Hill, Rivkins, McGowan & Carey, New York City, of counsel), for plaintiff-appellant.

Joseph Fennelly, Jr., New York City (David L. Maloof, Donovan, Donovan, Maloof & Walsh, New York City, of

Before KAUFMAN, Chief Judge, and FEINBERG and MULLIGAN, Circuit Judges.

IRVING R. KAUFMAN, Chief Judge:

Although many find hot chocolate a delightful treat, appellant Ringers' Dutchocs had rather the opposite reaction when 2,405 cartons of chocolate arrived in New York in an overheated condition. Ringers' had ordered the chocolates from a German shipper, Gebruder Stollwerck AG, terms C.I.F. from Cologne, Germany to a public warehouse in New York. Stollwerck, in turn, had purchased an "All Risk" policy of marine insurance from appellee Helvetia Swiss Fire Insurance which, at Stollwerck's request, was issued to "the bearer." The policy was delivered to Stollwerck by Helvetia in Cologne; Stollwerck paid the premium on the policy and then mailed it to Ringers' in New York.

The chocolates arrived in New York harbor on board the S.S. "S.L. 180" on September 3, 1971. They were then transported to West Side Warehouses, Inc., arriving September 10. Upon discovering their damaged condition, Ringers' immediately notified Helvetia's designated claims survey agent in New York, Bertschmann & Maloy. Bertschmann, in turn, requested Worman & Co., Inc., surveyors, to examine the shipment. A copy of their report was sent to Ringers', which subsequently lodged a claim in the amount of $41,569.39 with Helvetia at its home office in Switzerland. Helvetia promptly rejected the claim, and Ringers' brought suit against Helvetia as well as the vessel, S.S. "S.L. 180," and its owner, Sea-Land Service, Inc.

On December 28, 1972, Helvetia moved to dismiss the complaint on the ground that it was not amenable to service of process in New York, and had committed no act which would support substituted service of process upon the Superintendent of Insurance as agent for Helvetia pursuant to N.Y. Insurance Law § 59-a. Judge Brieant agreed and dismissed the complaint as to Helvetia in an unreported opinion.

Ringers' relies on § 59-a, subd. 2(a)(1) which authorizes substituted service upon a foreign insurer where there is "issuance or delivery of contracts of insurance to residents of this state New York or to corporations authorized to do business therein" by the foreign insurer. Judge Brieant correctly determined that this subsection did not apply, since the policy in this instance was neither "issued" nor "delivered" to Ringers' by Helvetia. Moreover, we are of the view that although the insured "bearer" proved to be a corporation authorized to do business in New York, that fact nevertheless was not sufficient to confer jurisdiction pursuant to § 59-a, subd. 2(a)(1) because it was by no means certain, nor even likely, that the insured purchaser of the goods shipped to a New York warehouse would in fact be a corporation authorized to do business in New York. Thus, Helvetia's conduct did not comport with the conceptual underpinnings of long-arm jurisdiction—an implied consent to the constructive agency through the voluntary and, therefore, knowing act of insuring a corporation authorized to do business in New York. Cf. McLaughlin, Practice Commentary to CPLR 302 (basic longarm statute), McKinney's Consol.Laws of N. Y., c. 8 (1972) at 63.

Nor can Ringers' find comfort in the broader, though not limitless, language of § 59-a, subd. 2(a)(4) which confers jurisdiction over the foreign insurer if he conducts "any other transaction of business" in New York. Although there is a dearth of case law interpreting this phrase in the context of § 59-a, there is analogous precedent interpreting the comparable phrase "transacts any business within the state" under CPLR 302(a)(1). In Kramer v. Vogl, 17 N.Y.2d 27, 267 N.Y.S.2d 900, 215 N.E.2d 159 (1966), the Court of Appeals decided that the "mere shipment" of goods into New York was not sufficient "purposeful activity," Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 457, 261 N.Y.S.2d 8, 18, 209 N.E. 2d 68, cert denied, Estwing Mfg. Co. v. Singer, 382 U.S. 905, 86 S.Ct. 241, 15 L. Ed.2d 158 (1965), by the foreign shipper to subject him to § 302(a)'s extraterritorial reach. Similarly, we believe that the insurance of goods "merely shipped" into the State would not subject the foreign insurer to New York's jurisdiction.

Our decision in Aquascutum of London, Inc. v. S.S. American Champion, 426 F.2d 205 (2d Cir. 1970), strongly urged upon us by appellant, is not to the contrary. In Aquascutum, we carefully distinguished between two types of foreign freight forwarders: those, like carriers, who were responsible for the physical delivery of the goods into New York; and those, like shippers, who were not. We found only the former to be engaged in "the transaction of business within the state" required for long-arm...