Torres v. Towmotor Division of Caterpillar, Inc.
| Decision Date | 18 November 1977 |
| Docket Number | No. 77 C 1810.,77 C 1810. |
| Citation | 457 F. Supp. 460 |
| Parties | Bernardino TORRES and Irma Torres, Plaintiffs, v. TOWMOTOR DIVISION OF CATERPILLAR, INC. and Foley Towlift Inc., Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Robert David Becker, New York City, for plaintiffs.
Francis R. O'Brien, Kirk, O'Connell & Cassara, Brooklyn, N. Y., for defendant Foley Towlift Inc.; Marie Vlahakis, Brooklyn, N. Y., of counsel.
The within matter comes before this Court by way of plaintiffs' contested motion seeking an order of attachment pursuant to section 6201 of the Civil Practice Laws and Rules.1 In requesting the attachment of defendant Foley Towlift Inc.'s insurance policy for the sole purpose of obtaining quasi in rem jurisdiction under Rule 4(e) of the Federal Rules of Civil Procedure,2 plaintiffs rely on Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966), and its progeny.
An attachment order granted pursuant to Seider permits a New York plaintiff to assert quasi in rem jurisdiction over a nonresident defendant by attaching the defendant's insurer's contractual obligation to defend him against the resident plaintiff's claim. In Seider, such an obligation was deemed an attachable debt which is present in New York if the insurer does business in New York. The Seider procedure is usually employed when the nonresident defendant is not otherwise amenable to jurisdiction. Since it was recently held by the Supreme Court in the landmark decision of Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977) that the assertion of any jurisdiction, irrespective of its form, must comport with the minimum contacts test pronounced in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the question of the continued vitality of Seider based jurisdiction is thus squarely confronted. For the reasons to follow, the Court concludes that Shaffer mandates a denial of the attachment order requested herein and marks the demise of the jurisdictional attachment procedure condoned in Seider absent an additional showing that a nonresident defendant had minimum contacts with New York.
The plaintiffs in this action are residents of New York. On June 15, 1977, plaintiff Bernardino Torres was pursuing his regular employment for Republic Container Corporation in Jersey City, New Jersey. On that day, he was operating a fork lift truck manufactured by defendant Towmotor Division of Caterpillar, Inc. This truck had been purchased by plaintiff's employer from defendant Foley Towlift, Inc. (hereinafter "Foley") on August 18, 1976 and was later delivered to Republic in New Jersey on February 25, 1977. On the morning of June 15th, Foley had allegedly serviced this truck.
After completing his work assignment, plaintiff claims that he first placed the truck in neutral gear and then alighted from it. It is plaintiff's contention that while he was standing beside the unattended truck, it began to move and proceeded to roll over his foot causing him injuries which initially required hospital treatment in New Jersey and later required additional medical attention in New York. Plaintiff maintains that when an operator alights from the seat of this type of truck after it has been placed in neutral gear, the truck's ignition should automatically disconnect and its brakes should self-engage. Plaintiff claims that his injuries are a direct consequence of the failure of the truck in issue to function in this manner.
Mr. Torres subsequently commenced this diversity action seeking damages resulting from these injuries. Irma Torres, his wife, joined him as co-plaintiff in a claim for loss of his services. The claims against Towmotor Division of Caterpillar Inc. sound in negligence in manufacture, sale, design and failure to warn of a dangerous condition as well as in breach of express and implied warranties and strict liability in tort. The gravamen of plaintiffs' complaint against defendant Foley are negligence in sale, maintenance and service of the truck in issue, breach of express and implied warranties and strict liability in tort.
Defendant Towmotor Division of Caterpillar, Inc. is an Ohio Corporation that is authorized to do business in New York. Thus, there exists no jurisdictional problem as to them. Defendant Foley, however, is a New Jersey Corporation which is not authorized to do business in New York. Foley contends that not only does it not transact or do business in New York, it asserts that it has had no contacts with New York whatsoever. Nowhere have the plaintiffs asserted the existence of a relationship between defendant Towmotor Division of Caterpillar and Foley that would make Foley amenable to jurisdiction through the New York actions of Towmotor Division of Caterpillar, Inc. Plaintiffs base their request for an attachment order for jurisdictional purposes solely on the ground that Foley was issued a liability insurance policy by Liberty Mutual Insurance Company which maintains a business office in New York.
Since jurisdiction in this matter is based on diversity of citizenship, a federal court will normally follow the decisions of the highest court of the state in which it sits. Erie R. R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). However, where a state court decision on the issue of jurisdiction is challenged as constitutionally infirm, the Court must be guided by the relevant decisions of the Supreme Court. Aftanase v. Economy Baler Co., 343 F.2d 187, 192 (8th Cir. 1965) (Blackmun, J.); see Arrowsmith v. United Press International, 320 F.2d 219, 223 (2d Cir. 1963); cf. Smayda v. United States, 352 F.2d 251, 253 (9th Cir. 1965), cert. denied, 382 U.S. 981, 86 S.Ct. 555, 15 L.Ed.2d 471 (1966).
In order to decide the issue of the applicability of the Supreme Court's holding in Shaffer to the case at bar, it is necessary to examine the judicial development of the use of an order attaching the insurer's contractual obligations to defend and indemnify as a means of obtaining quasi in rem jurisdiction. The legal storm created by such a use of the attachment procedure3 first appeared on the New York horizon in the 1966 Court of Appeals' decision in Seider v. Roth. Over eleven years and numerous federal and state decisions later, Seider's dark clouds of confusion continue to loom large over New York law.
The Seider case entailed the propriety of the attachment of a Canadian motorist's liability insurance policy as a mechanism to obtain quasi in rem jurisdiction. The attached policy was issued by an insurer who did business in New York. The cause of action arose from injuries sustained by a New York resident in a Vermont automobile accident. In a four to three decision, the Court of Appeals held that in a personal injury action against a nonresident defendant, the defendant's insurer's contractual obligation to defend and indemnify was a "debt" owing to the defendant within the purview of C.P.L.R. §§ 5201 and 6202,4 and, as such, was subject to attachment under C.P.L.R. § 6201. Seider, supra at 112, 216 N.E.2d at 313, 269 N.Y.S.2d at 100.
The constitutional issues circumvented in Seider were squarely presented to the Court of Appeals in Simpson v. Loehmann, 21 N.Y.2d 305, 234 N.E.2d 669, 287 N.Y.S.2d 633, (1967). There, plaintiff was unable to obtain personal jurisdiction over a Connecticut resident in an action for injuries sustained by a New York infant while boating in Connecticut waters. Therefore, the plaintiff obtained an ex parte order of attachment of defendant's insurance policy which was held with an insurance company doing business in New York. The Connecticut defendant strenuously objected to the contention that quasi in rem jurisdiction had thereby been properly required, urging, inter alia, that this procedure offended due process. In rejecting this contention, the Court of Appeals relied on the then settled authority of Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905):
It was our opinion when we decided Seider, and it still is, that jurisdiction in rem was acquired by the attachment in view of the fact that the policy obligation was a debt to the defendant. And we perceive no denial of due process since the presence of that debt in this State (see, e. g., Harris v. Balk) — contingent or inchoate though it may be — represents sufficient of a property right in the defendant to furnish the nexus with, and the interest in, New York to empower its courts to exercise an in rem jurisdiction over him. It is, of course, hardly necessary to add that neither the Seider decision nor the present one purports to expand the basis for in personam jurisdiction in view of the fact that the recovery is necessarily limited to the value of the asset attached, that is, the liability insurance policy.
Simpson, supra at 310, 234 N.E.2d at 671, 287 N.Y.S.2d at 636 (emphasis added and citations omitted).
The decision of Harris v. Balk, supra marked the birth of the strain of quasi in rem jurisdiction employed in Seider. In Harris, supra at 227, 25 S.Ct. 625, the Supreme Court held that the situs of a debt follows the debtor and is subject to garnishment wherever the debtor may be found.5 Prior to Shaffer, it was uncontroverted that this was the test for the assertion of this class of quasi in rem jurisdiction and, accordingly, no assertion of the defendant's minimum contacts with the forum was necessary. Adhering to Seider's conclusion that jurisdiction could be properly based on the presence of the insured's debt in New York, the Simpson Court relied on the continued constitutional validity of Harris.
It is to be noted, however, that the Court's affirmance of Seider was not without an awareness that future legal developments might compel an antithetic determination to the one then reached in Simpson. In concluding its opinion, the Simpson Court stated:
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Savchuk v. Rush
...Roth-type jurisdiction. Several trial courts have held such jurisdiction to be precluded by Shaffer: Torres v. Towmotor Division of Caterpillar, Inc., D.C., 457 F.Supp. 460 (E.D.N.Y.1977) (cited in Alford v. McGaw, 61 A.D.2d 504, 402 N.Y.S.2d 499 (1978); Rodriguez v. Wolfe, 401 N.Y.S.2d 442......