Turner v. Evers

• Decision Date: 03 January 1973
• Citation: 107 Cal.Rptr. 390,31 Cal.App.3d Supp. 11
• Court: California Superior Court
• Parties: 31 Cal.App.3d Supp. 11 Lisa R. TURNER et al., Plaintiffs and Appellants, v. Robert L. EVERS, Defendant and Respondent. Civ. A. 226117. Appellate Department, Superior Court, Sacramento County, California

Page 390

107 Cal.Rptr. 390

31 Cal.App.3d Supp. 11

Lisa R. TURNER et al., Plaintiffs and Appellants, v. Robert L. EVERS, Defendant and Respondent.

Civ. A. 226117.

Appellate Department, Superior Court, Sacramento County, California.

Jan. 3, 1973.

[31 Cal.App.3d Supp. 12] Sidney Paule, Sacramento, for plaintiffs and appellants.

Hardy, Erich & Brown and Leo H. Schuering Jr., Sacramento, for defendant and respondent.

OPINION

GOLDBERG, Presiding Judge.

This is, apparently, the first case in California in which jurisdiction has been predicated on Seider v. Roth (1966) 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312. To our knowledge it is the first case outside of New York that accepts, rather than rejects, Seider. Seider and the cases following it held that jurisdiction quasi in rem may be obtained by attaching as property of a nonresident defendant, over whom jurisdiction in personam cannot be obtained, his right under a liability insurance policy to have an insurer defend and indemnify him on the claim out of which the suit arises. In other words, the plaintiff may sue not only in any state where he may obtain jurisdiction over the insured defendant, but also in any state where he may obtain jurisdiction over the defendant's insurer. It is convenient to think of the problem in two parts: (1) does the state have jurisdiction? and (2) if it does, has it provided a mode of exercising it? We answer both questions in the affirmative. For the answer to the first we rely primarily on Code of Civil Procedure section 410.10 and Minichiello v. Rosenberg (2d Cir. 1968) 410 F.2d 106, the most complete discussion of Seider we have found. For the answer to the second we rely primarily on Code of Civil Procedure sections 537, 542 and 544; Ponsonby v. Suburban Fruit Lands Co. (1950) 210 Cal. 229, 291 P. 167; Brainard v. Rogers (1925) 74 Cal.App. 247, 239 P. 1095, and its New York counterpart, Baumgold Bros. v. Schwarzschild Bros. (1949) 276 App.Div. 158, 93 N.Y.S.2d 658; and Keck v. Superior Court (1972) 3 Civ. 13521, an unpublished opinion of the Court of Appeal, and its New York counterpart, Matter of Riggle (1962) 11 N.Y.2d 73, 226 N.Y.S. 416, 181 N.E.2d 436. We do not hold that the court below must exercise this jurisdiction, because a motion to stay or dismiss on the grounds of an inconvenient forum either could have been made, Code of Civil Procedure section 410.30, or may possibly be made hereafter, Id. section 410.30, subdivision (b) as added by California Statutes 1972, chapter 601 section 1. Since this case 'involves a legal issue of continuing public interest' within the meaning of California Rules of Court, rule 976(b)(2), we have certified it for publication.

The Turners, plaintiffs and appellants, are residents of California. On October 25, 1971, while temporarily in Tacoma, Washington, they took their 1969 Austin America to University Mobil Service, operated by the defendant and respondent Evers to be serviced for their return trip to California. Evers released the car to the Turners on October 26, but they allege that they drove it only three miles before 'it became totally inoperative.' The Turners claim that Evers failed to service the car properly and that they sustained $685.16 in damages for repairs and loss of use for 22 days. They have three separate theories of recovery: breach of contract, fraud, and negligence. On the fraud count they seek both their actual damages and punitive damages of $5,000. But they kept the case within the monetary jurisdiction of the municipal court by an express remission in the complaint of their right to recover more than $5,000 total. (Cf. Williams v. Rosinsky Motor Co. (1955) 133 Cal.App.2d Supp. 798, 803, 284 P.2d 979).

A summons was served on the Mobil Oil Corporation, and it has appeared generally by answering on the merits. (Code Civ.Proc., § 1014.) A summons was served on Evers by mail in Tacoma, Washington. (Id. § 415.40.) The plaintiffs obtained a writ of attachment pursuant to Id., § 537, subd. 2 (action against a nonresident on a contract), directing the attachment of 'property of defendant,' and specifically, the garnishment in the hands of the Travelers Indemnity Company (Travelers) of 'said liability insurer's contractual obligation to defend and indemnify defendant's (Evers) debt owing (to the plaintiffs).' The marshal of Los Angeles County filed a garnishment return stating he had so attached the 'obligation to defend and indemnify the within named defendant Robert L. Evers. . . .' The marshal states that he 'demanded a statement in writing from the garnishee which, if received, is attached.' (Code Civ.Proc., § 547.) None, however, is attached, and on the record it thus appears that Travelers made no answer to the marshal at the time of service. (Cf. Clyne v. Easton, Eldridge & Co. (1905) 148 Cal. 287, 295, 83 P. 36.) Nor. as far as the record shows, did it deny its liability thereafter as permitted by section 547. (Compare Dawson v. Bank of America (1950) 100 Cal.App.2d 305, 306, 223 P. 280 and Takahashi v. Kunishima (1939) 34 Cal.App.2d 367, 373--374, 93 P.2d 645.) Thus for the purposes of the case up to this point Traveler's liability to Evers is not disputed. Evers, however, made a motion to quash by which he callenged both personal jurisdiction over him and jurisdiction quasi in rem, relying on his declaration that he neither did business nor had property in this state. This motion was granted and the Turners appealed. (Code Civ.Proc., § 904.2, subd. (d).)

Evers' motion to quash may pose a paradox. The plaintiffs concede that there is no basis of in personam jurisdiction over Evers. Both the complaint and the summons, which was in the ordinary statutory form approved by the Judicial Council pursuant to Code of Civil Procedure section 412.20, seem to contemplate the exercise of in personam jurisdiction. Therefore, it might seem that Evers' motion to quash should have been granted 'on the ground of lack of jurisdiction of the court over him.' (Code Civ.Proc., § 418.10, subd. (a)(1).) But if Evers were thus dismissed from the action, the court would also lose jurisdiction quasi in rem. In this state an action quasi in rem is personal in form, although it is not personal in the sense that it can result in a judgment that may be satisfied out of any property of the defendant other than that attached. (First National Bank v. Eastman (1904) 144 Cal. 487, 491--492, 77 P. 1043.) The garnishee is not a party to the action. 'Under our attachment law a garnishee is not required and has no right to appear in the action.' (Clyne v. Easton, Eldridge & Co., Supra, 148 Cal. at p. 295, 83 P. at 39.) As in New York the defendant must be named as a party 'as a conduit . . . to provide a conceptual basis for getting at the insurer.' (Minichiello v. Rosenberg, Supra, 410 F.2d at p. 109.) Thus by dismissing the defendant, without more, the court would, in effect, discharge the attachment.

The existence of the paradox depends on the interpretation of the phrase, 'lack of jurisdiction over him,' in Code of Civil Procedure section 418.10, subdivision (a)(1). Does it mean 'lack of jurisdiction over him personally?' or 'lack of jurisdiction over him personally or over his property?' We believe that the proper construction is the latter, because it eliminates the paradox and is supported by the Judicial Council's comments on the section, I.e., 'The ground for granting a motion to quash process on a defendant . . . is that the court lacks jurisdiction over him because . . . there is no basis of judicial jurisdiction existing between such defendant and this state. . . .' (Li, Attorney's Guide to California Jurisdiction and Process (Cont.Ed.Bar 1970) § 1.38 at p. 95.) The presence of the defendant's property here is, of course, a basis of judicial jurisdiction. Indeed some courts in similar cases have used such apparently incongruous but actually descriptive phrases as: 'the obligation of the insurer . . . enables the New York courts to exercise jurisdiction In rem over him (the defendant),' Simpson v. Loehmann (1967) 21 N.Y.2d 305, 287 N.Y.S.2d 633, 635, 234 N.E.2d 669, 670; and 'if jurisdiction is acquired over the insurer . . . there is Quasi in rem jurisdiction over out-of-state residents.' (Beja v. Jahangiri (2d Cir. 1972) 453 F.2d 959, 961.) Mr. Witkin says that the defendant cannot defeat quasi in rem jurisdiction by a special appearance to quash service on him, 'because the court does in fact have jurisdiction of his property as a result of the attachment or other seizure and can render a valid judgment enforceable against the property.' (1 Witkin, Cal.Procedure (2nd ed. 1970) Jurisdiction, § 167 at pp. 696--697.) He cites no California cases, but the proposition is supported by cases elsewhere, Avery v. Bender (1964) 124 Vt. 309, 204 A.2d 314; State v. District Court (1968) 79 N.M. 33, 439 P.2d 551. It is also supported by the actual results in Minichiello v. Rosenberg (410 F.2d 106) and Beja v. Jahangiri (453 F.2d 959) both Supra, the one being a motion to dismiss and the other a motion to vacate the attachment. The courts found no occasion to distinguish the two procedures.

The motion here should be treated as the parties have actually treated, it, I.e., as a motion to quash the attachment. (Frederickson v. Superior Court (1952) 38 Cal.2d 593, 598, 241 P.2d 541.) It is not a motion to discharge under Code of Civil Procedure section 556, because there is no charge that the writ was irregularly or improperly issued or that this is a case in which an attachment could not be issued. A motion to quash the attachment, as distinguished from a motion to discharge it under section 556, lies to assert that the property is not subject to attachment. (Property Research Financial Corp. v. Superior Court (1972) 23 Cal.App.3d 413, 416, 100 Cal.Rptr. 233; Burke v. Superior Court (1969) 71 Cal.2d 276, 279, fn. 3, 78 Cal.Rptr. 481, 455 P.2d 409; Cf. Hustead v. Superior...