V & V Corp. v. American Policyholders' Ins. Co.

• Decision Date: 30 October 1985
• Docket Number: No. 84-447,84-447
• Citation: 127 N.H. 372,500 A.2d 695
• Parties: V & V CORPORATION et al. v. AMERICAN POLICYHOLDERS' INSURANCE CO.
• Court: New Hampshire Supreme Court

Page 695

500 A.2d 695

127 N.H. 372

V & V CORPORATION et al. v. AMERICAN POLICYHOLDERS' INSURANCE CO.

No. 84-447.

Supreme Court of New Hampshire.

Oct. 30, 1985.

Wadleigh, Starr, Peters, Dunn & Chiesa, Manchester, and Winer, Pillsbury and Bennett P.A., Nashua (James C. Wheat (orally), and J. Bradford Westgate, on brief), for plaintiffs.

Ouellette, Hallisey, Dibble & Tanguay P.A., Dover (Stephen J. Dibble, on brief and orally), for defendant.

KING, Chief Justice.

This case comes before us on appeal from an order of the Superior Court (Bean, J.) denying full faith and credit to a summary judgment of the Massachusetts Superior Court for Worcester County and, in response to a petition for declaratory judgment (RSA 491:22), finding coverage as between both V & V Corporation and Denis Vaillancourt, its officer, and the defendant insurer. We affirm.

The factual background of this appeal is as follows. On August 25, 1976, vehicles operated by Denis Vaillancourt and William Sage collided in Windham, injuring seriously not only the drivers but also Hazel Sage and Charles Corkum, passengers in the Sage vehicle. Mr. Vaillancourt is a resident of New Hampshire and his company, V & V Corporation (V & V), owner of the vehicle that Mr. Vaillancourt was operating, is a New Hampshire corporation with its principal place of business in this State. The Sages and Corkum are residents of Massachusetts.

In November, 1977, the Sages and Corkum sued both Vaillancourt and V & V, by complaint filed in the Superior Court for Worcester County, Massachusetts, to recover damages for personal injuries suffered in the accident. Service was made in New Hampshire upon both Vaillancourt and V & V in January, 1978. Neither Vaillancourt nor V & V appeared or answered the complaint, although they did forward it to their insurer, American Policyholders' Insurance Co. (API), which refused coverage. Defaults were entered against Vaillancourt and V & V in the Massachusetts court, but it is agreed that the Sages and Corkum did not seek entry of a default judgment as allowed under Massachusetts procedure.

The Sages and Corkum filed an amended complaint in February, 1974, in the same Worcester County court, reiterating their causes of action against Vaillancourt and V & V and adding six further counts alleging causes of action against API and another insurer, Norfolk & Dedham Mutual Fire Insurance Co., in order to bring the insurers into the action and determine issues of coverage. No service of this amended complaint was made upon Vaillancourt and V & V.

Counsel for both insurers appeared and filed answers to the amended complaint. Copies of these responsive pleadings were not sent to Vaillancourt and V & V, although certain other pleadings were copied and sent to them, namely both API's motion for summary judgment in March, 1979, and its affidavit of notice of motion for summary judgment to be heard by the Massachusetts court on February 26, 1980. The next day, February 27, 1980, that court, having received no response to the pending motion, granted it in favor of API against the Sages and Corkum on the issue of whether the insurance policy of Vaillancourt and V & V with API provided coverage to either of them. The judgment, entered that day, recited no action in respect to the claims against either Vaillancourt or V & V.

Subsequent to this determination of the Massachusetts court but prior to the resolution of all aspects of the Massachusetts action, the Sages and the estate of Charles Corkum (who had died in the interim) brought a duplicate suit in New Hampshire against Vaillancourt and V & V, seeking damages for personal injuries and, in the case of Corkum, wrongful death. The defendants in that action also tendered these writs to API, but the insurer again declined coverage, relying on the summary judgment granted in its favor by the Massachusetts court.

Vaillancourt and V & V, and the Reliance Insurance Co., which had made payments to the Sages to the extent of their uninsured motorist coverage and thus had a lien interest in the matter, thereupon petitioned the superior court for declaratory judgment, seeking to determine, inter alia, API's coverage obligations in this instance. A hearing on the merits was held, but in March of that year the trial court stayed further proceedings pending the outcome of any suit by the Massachusetts plaintiffs to enforce any judgment that might be rendered by the court there, stating that the question of the jurisdiction of the Massachusetts court and that of insurance coverage were not properly before it.

Vaillancourt and V & V appealed the stay order to this court which, in September, 1983, remanded the case to the superior court, ordering, inter alia, that the trial court decide whether the Massachusetts summary judgment in favor of API was entitled to full faith and credit in the courts of New Hampshire.

By order dated March 22, 1984, the superior court found that the Massachusetts summary judgment was not entitled to full faith and credit, on the ground that the Superior Court for Worcester County had not obtained in personam jurisdiction over either Vaillancourt or V & V. It also found that the API policy by its terms did afford coverage to Vaillancourt and V & V. API then moved to set aside the verdict and made other requests, all of which were denied. The insurer has appealed.

We must first consider the claim by the insurer that the summary judgment it received in the Superior Court for Worcester County against the Massachusetts plaintiffs on the issue of its obligation to provide coverage is valid and is, as to that issue, res judicata. Generally, a judgment rendered in this country by a court of competent jurisdiction is entitled under the United States Constitution to full faith and credit; that is, to both recognition and enforcement in sister States. U.S. CONST. art. 4, § 1. The effect of the judgment of a court depends in the first instance upon the local law of the State wherein it is rendered. Only if the judgment is valid under the law of the rendering State is it entitled to recognition and enforcement in other States; if the judgment is under local law void and subject to collateral attack, it will be so treated in all other jurisdictions. See Restatement (Second) of Conflict of Laws § 93 (1971).

API contends that the Superior Court for Worcester County had acquired valid in personam jurisdiction over Vaillancourt and V & V. Vaillancourt and V & V deny this allegation and collaterally attack the judgment upon which API now relies. Therefore, we begin our analysis by reviewing our superior court's decision that the Massachusetts default was not entitled to full faith and credit. To do so requires us to construe the Massachusetts long-arm statute, upon which jurisdiction over Vaillancourt and V & V purportedly was grounded.

The provision of the Massachusetts long-arm statute with which we are concerned is Mass.Gen.Laws Ann. ch. 223A, § 3(a) (West 1985), which allows the court to exercise jurisdiction over a person "who acts directly or by an agent, as to a cause of action ... arising from the person's (a) transacting any business in this commonwealth." We are required first to examine whether by its terms section 3(a) authorized the assertion of jurisdiction over Vaillancourt and V & V and then, if such authority is found, to consider whether the assertion of jurisdiction comported with due process as mandated by the United States Constitution.

Section 3(a) requires a court to undertake two inquiries, those being whether the defendant "transact[ed] ... business" in Massachusetts, and whether the cause of action arose by virtue of that business. The record supports the contention that Vaillancourt and V & V did transact some business in the Commonwealth. V & V did undertake construction work in Massachusetts. Vaillancourt did negotiate a loan from one of that State's banks, and he did register some of the company's trucks in the Commonwealth. Given the Massachusetts courts' broad construction of this statute, see, e.g., Ross v. Ross, 371 Mass. 439, 358 N.E.2d 437 (1976); Droukas v. Divers Training Academy, Inc., 375 Mass. 149, 376 N.E.2d 548 (1978); Nova Biomedical Corp. v. Moller, 629 F.2d 190, 193-94 (1st Cir.1980) (construing § 3(a) in light of Massachusetts case law), the activities of Vaillancourt and V & V arguably fell within the literal embrace of the "transacting ... business" portion of the statute.

We have greater difficulty concluding that the cause of action asserted by the Sages and Corkum "arose" from these business activities in the Commonwealth. The Massachusetts courts have yet to put a gloss on this aspect of the long-arm statute. The Court of Appeals for the First Circuit has construed the statutory requirement expansively, see Hahn v. Vermont Law School, 698 F.2d 48, 51 (1st Cir.1983); Nova Biomedical Corp. v. Moller, supra at 195, but we note that the causes of action alleged in those cases--breach of contract and patent infringement--were closely related to the business transacted. That is not the situation here, where the cause of action sounds in tort for personal injuries, and the business transacted does not appear to have been implicated. See, e.g., Mulhern v. Holland America Cruises, 393 F.Supp. 1298, 1304 (D.N.H.1975); but see Maiocca v. Walt Disney World Co., No. 80-958-S slip op. at 6 (D.Mass.Apr. 22, 1983) ("arising from" construed to mean "in any way related to").

In the instant case, Vaillancourt on the day of the accident had driven to Methuen, Massachusetts, in order to procure parts for some of his vehicles. On his return, and after he had crossed into New Hampshire, his vehicle collided with that of the Sages. For all that appears, the accident had no connection with Vaillancourt's business activities in Massachusetts. Cf. Cornelison v. Chaney, 16 Cal.3d 143, 127 Cal.Rptr. 352, 545 P.2d 264 (1976) (jurisdiction predicated on fact...