Wallace v. Target Store, Inc.
Decision Date | 13 December 1977 |
Parties | Kim WALLACE, an infant, by her father and natural guardian, John Wallace and John Wallace v. The TARGET STORE, INC., Willard M. Hart and Ajay Enterprises, Inc., and five other actions. |
Court | New York Supreme Court |
Aaron J. Broder, New York City, for plaintiffs.
Burke, Curry, Hammill & O'Brien, P. C., Garden City, for defendant Ajay Enterprises, Inc.
Cordes, Purcell, Fritz & Ingrao, P. C., Mineola, for defendant Hart.
Alexander, Ash, Schwartz & Cohen, New York City, for defendant The Target Store.
In this personal injury action defendant Target Store, Inc. moves to dismiss the complaint on the ground that the court lacks jurisdiction. Defendant Hart cross-moves for the same relief. This is another in a series of cases attacking the viability of quasi in rem jurisdiction asserted under Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312, and Simpson v. Loehmann, 21 N.Y.2d 305, 287 N.Y.S.2d 633, 234 N.E.2d 669, by reason of the recent decision of the United States Supreme Court in Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683.
The action arises out of an injury to the infant plaintiff occurring on March 3, 1970 while she was a guest of the defendant Hart in Colorado. Infant plaintiff, in the rear yard of defendant Hart's premises, was struck in the eye by a golf practice device which became dislodged from the ground. Defendant Target Store sold the device. From the evidence presented it does not appear, nor is it claimed, that either defendant had any contact with New York so as to support in personam jurisdiction under CPLR 301 or 302. Pursuant to an order of this court dated July 24, 1972 the liability insurance policies of the defendants were attached, the respective insurance companies being present in New York. The exercise of such jurisdiction was formulated by the Court of Appeals in Seider v. Roth (supra) and Simpson v. Loehmann (supra), predicated upon the longstanding jurisdictional rules set down in Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, and Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023. In a decision rendered on June 24 of this year the Supreme Court overruled the Pennoyer v. Neff rule (Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 2581-2583, 53 L.Ed.2d 683, 699-701) and held that state court exercise of in rem or quasi in rem jurisdiction must be measured by the same minimum contact standard expressed in International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, covering in personam jurisdiction. (Shaffer, 97 S.Ct. at 2581-2582, 2585, 53 L.Ed.2d at 699-700, 703.)
Since that time at least three courts have faced the question now before this court. (Katz v. Umansky, 92 Misc.2d 285, 399 N.Y.S.2d 412 (1977); O'Connor v. Lee-Hy Paving Corp., 437 F.Supp. 994 (EDNY, 1977, Dooling, J.); Torres v. Towmotor Division of Caterpillar, Inc., --- F.Supp. ---- (EDNY, 1977, Bramwell, J.) In the well-reasoned opinions in Katz and Torres the courts concluded that the Seider-Simpson rule is no longer viable, a conclusion with which this court is compelled to agree. (See McLaughlin, N.Y. Trial Prac., N.Y.L.J., Dec. 9, 1977, p. 1, col. 1.)
While Shaffer is factually different from Seider and its progeny, the Shaffer decision cannot be limited to its facts. There, a nonresident brought a stockholder's derivative action in the courts of Delaware based on alleged breaches of fiduciary duties by present and former officers and directors of the Delaware corporation. Concededly, many of these officers and directors had no contact with Delaware and the principal place of business of the corporation was in another state. Jurisdiction was sought over 21 defendants by sequestration of their stock interests.
Unquestionably, the function of the Delaware sequestration statute was to compel the defendants' in personam appearance. (Shaffer, 97 S.Ct., at 2574-2575, 53 L.Ed.2d, at 691.) Such compulsory appearance is no longer possible in New York with the amendment of CPLR 320(c). (Judicial Conference Report to the 1969 Legislature, Amendment No. 1 (McKinney's 1969 Session Laws, p. 2259).) In any event, the Shaffer decision deals with more than those cases. Recognizing that the Delaware statute "presents the clearest illustration of the argument in favor of assessing assertions of jurisdiction by a single standard" (Shaffer, 97 S.Ct., at 2583, 53 L.Ed.2d, at 701), the court concluded that "all assertions of state court jurisdiction must be evaluated according to the standards set forth in International Shoe * * *." (Shaffer, 97 S.Ct., at 2584-85, 53 L.Ed.2d, at 703.)
Shaffer does not result in the abolition of in rem jurisdiction. The test, then, is whether, in addition to the presence of the property, sufficient contacts exist between the forum, the defendant and the litigation. In some instances the presence of the property may demonstrate those contacts. Thus, the court concluded that cases concerning title or interest in property would provide a sufficient jurisdictional basis. Such conclusion was not reached on the Pennoyer-Harris formula of presence, but on the legitimate interest of a state to provide a forum for resolving disputes and maintaining marketability for property within its borders. (Shaffer, 97 S.Ct., at 2582, 2583, fn. 31, 53 L.Ed.2d, at 700, 701, fn. 31.) However, "where the property which now serves as the basis for State court jurisdiction is completely unrelated to the plaintiff's cause of action", other contacts must be established. (Shaffer, 97 S.Ct., at 2582, 53 L.Ed.2d, at 700-701.)
One court in O'Connor v. Lee-Hy Paving Corp. (supra ), resting heavily on the analysis in Simpson (supra ), concludes that Shaffer does not require the rejection of Seider. In considering the constitutional challenge to Seider, Chief Judge Fuld in Simpson stated:
While such rationale may be enticing, it is still clear that the insurance policy is not at the heart of plaintiff's cause of action in...
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