Appendix — Rush v. Savchuk
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APPENDIX \\
IN THE
Supreme Court of the Anited Staies
October Term, 1978
No. 78-952
RANDAL RUSH, et al.,
Appellants,
VS.
JEFFREY D. SAVCHUK,
Appellee.
APPEAL FROM THE SUPREME COURT OF THE
STATE OF MINNESOTA
JURISDICTIONAL STATEMENT FILED DECEMBER 13, 1978
PROBABLE JURISDICTION NOTED FEBRUARY 20, 1979
1979—Northwest Brief Printing Co., 316 Chicago Avenue, Minneapolis 55415—338-5078
TABLE OF CONTENTS
Page
Chronological List of Important Dates ............ A-1
Garnishment Summons, Notice to Defendant (Judg-
ment Debtor), and Affidavit of Service .......... A-2
EE A-4
Summons, Complaint, and Affidavit of Service ...... A-5
Notice of Motion and Motion [for Leave to File Sup-
plemental Complaint], and Supporting Affidavit ..A-8
Notice of Motion and Motion [for a Dismissal on the
Ground of Lack of Jurisdiction], and Supporting
GC La aie Wr 'eie bisin's a ood Oye A-10
a Linea e's lo'e's bi 050 60 4:0 A-16
Order and Memorandum Opinion ............... A-17
Summons, Supplemental Complaint, and Affidavit of
EE EEE AD rr A-22
Notice of Appeal [to Minnesota Supreme Court] ... .A-28
Opinion Minnesota Supreme Court of September 27,
1976 [Savchuk v. Rush, — Minn. —, 245 N.W.
GR Day's o's bi sede acne se ses A-30
EE A-47
Notice of Appeal to the Supreme Court of the United
eM NG Se aie S'S evn c ale be ay 6 0: A-48
Order of Supreme Court of the United States ...... A-49
Opinion of Minnesota Supreme Court of October 20,
1978 [Savchuk v. Rush, — Minn. —, 272 N.W.
es ok ce ces a pula A-52
eae hube'sccccecccece A-69
Notice of Appeal to the Supreme Court of the United
DC AK ds weiss cick wonsdeas A-70
A-1
CHRONOLOGICAL LIST OF IMPORTANT DATES
July 19, 1974: Garnishment Summons and Motion to File
Supplemental Complaint filed
July 23, 1974: Garnishment Disclosure and Motion to
Dismiss filed
August 28, 1974: Order and Memorandum Opinion filed
November 8, 1974: Supplemental Complaint filed
November 18, 1974: Notice of Appeal to Minnesota Su-
preme Court filed |
September 10, 1976: Opinion of Minnesota Supreme
Court filed
September 27, 1976: Judgment of Minnesota Supreme
Court entered
November 11, 1976: Notice of Appeal to United States
Supreme Court filed
July 27, 1977: Order of United States Supreme Court
October 20, 1978: Opinion of Minnesota Supreme Court
filed
November 3, 1978: Judgment of Minnesota Supreme
Court entered
November 20, 1978: Notice of Appeal to United States
Supreme Court filed
December 13, 1978: Jurisdictional Statement filed
February 20, 1979: Probable Jurisdiction noted
A-2
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District
JEFFREY D. SAVCHUK,
Plaintiff,
Vs.
RANDAL RUSH,
Defendant,
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE
COMPANY,
Garnishee.
GARNISHMENT SUMMONS
THE STATE OF MINNESOTA, To the above named Gar-
nishee:
You are hereby summoned and required, to serve upon
the plaintiff or his attorney, within 20 days after the ser-
vice of this Summons upon you, a written disclosure un-
der oath, touching your indebtedness to the defendant,
Randal Rush, Route 8, Meadowbrook Lane, Elkhart, Indi-
ana 46514, above named, and any property money, or
effects of said defendant in your possession or under your
control, which disclosure need not exceed 110 percent of
the amount of the plaintiff's prayer for damages in the
main action herein, which prayer for damages is in the
sum of One Hundred Twenty-five Thousand and no/100
($125,000.00) Dollars: and you are hereby required to re-
tain in your possession such property, money, and ef-
A-3
fects in an amount not exceeding 110 percent of the amount
of such prayer.
Dated: May 28, 1974.
SCHERMER, SCHWAPPACH, BORKON &
RAMSTEAD, LTD.
By /s/ IRVIN E. SCHERMER
Attorneys for Plaintiff
1010 Midwest Plaza Building
801 Nicollet Mall
Minneapolis, Minnesota 55402
333-7155
NOTICE TO DEFENDANT (JUDGMENT DEBTOR)
TO: RANDAL RUSH, Judgment Debtor:
SIR: Take notice that a Garnishment Summons, of which
the foregoing is a true copy, and vhich is herewith served
upon you, was personally served upon State Farm Mutual
Automobile Insurance Company, the Garnishee named
therein, by delivering a copy thereof to the Commissioner
of Insurance for the State of Minnesoi., as the attorney for
said Garnishee, at St. Paul, Minnesota, County of Ramsey,
on the 28th day of May, 1974.
SCHERMER, SCHWAPPACH, BORKON &
RAMSTEAD, LTD.
By /s/ IRVIN E. SCHERMER
Attorneys for Plaintiff
1010 Midwest Plaza Building
801 Nicollet Mall
Minneapolis, Minnesota 55402
333-7144
A-4
AFFIDAVIT OF SERVICE
STATE OF INDIANA
SS
ELKHART COUNTY
The undersigned being duly sworn, deposes and says that:
he is a duly appointed and acting officer of the Elkhart
County Sheriff’s Department in and for the County of Elk-
hart, State of Indiana and that on June 6, 1974 at 6:15
P.M. he did in the City of Elkhart State of Indiana trans-
mit the contents of Garnishment Summons to Randal Rush
at Rt. 8 Meadowbrook Lane, by reading to him and deliver-
ing copy of same to him.
This officer is over 21 years of age and not interested in
this controversy.
/s/ SGT. BOB WILLIAMS
[Jurat omitted in printing]
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District
[Title omitted in printing]
GARNISHMENT DISCLOSURE
I am the —--—— of the garnishee herein, and duly
authorized to disclose for said garnishee.
On ————, 19—,, the time of the service of the gar-
nishee summons herein on said garnishee:
(1) There was due and owing the judgment debtor
above named from said garnishee, the sum of $0.00.
* * * * *®
A-5
STATE FARM MUTUAL AUTOMOBILE CO.
By /s/ JOHN CARRUTH
[Jurat and affidavit of service omitted in printing]
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District —
[Title omitted in printing]
SUMMONS
THE STATE OF MINNESOTA TO THE ABOVE
NAMED DEFENDANT:
You, the above named defendant, are hereby sum-
moned and required to answer the Complaint of the plain-
tiff in the above-entitled action, a copy of which Com-
plaint is hereto attached and herewith served upon you,
and to serve a copy of your Answer thereto upon the sub-
scribers at their offices at 1010 Midwest Plaza Building,
801 Nicollet Mall, in the City of Minneapolis, County of
Hennepin, State of Minnesota, within twenty (20) days af-
ter the service of this Summons upon you, exclusive of the
day of such service, and, if you fail to answer the said
Complaint within the time aforesaid, the plaintiff in this
action will apply to the Court for the relief demanded in
said Complaint.
A-6
Dated: July 12, 1974.
SCHERMER, SCHWAPPACH, BORKON &
RAMSTEAD, LTD.
By /s/ JOHN D. MARIANI
Attorneys for plaintiff
1010 Midwest Plaza Building
801 Nicollet Mall
Minneapolis, Minnesota 55402
333-7155
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District
[Title omitted in printing]
CCMPLAINT
Plaintiff for his complaint and cause of action against
the defendant, herein states and alleges: |
I.
On January 13, 1972, defendant so carelessly and negli-
gently operated a motor vehicle on Elkhart County Road
No. 6 in Indiana as to cause the same to be involved in an
accident, thereby causing plaintiff, who was there and
then a passenger in said automobile, to maintain the in-
juries and damages hereinafter described.
Il.
As a direct and proximate result of the negligent and
careless conduct of the defendant, as above described,
plaintiff sustained bodily injvries, some of which may be
A-7
permanent; was caused to incur medical expense to treat
such injuries, and may be required to incur such expenses
in the future; was caused to become disabled and may
have sustained a permanent impairment of his ability to
work
Ill.
That as a result of the foregoing allegations, plaintiff
has been damaged in the sum of One Hundred Twenty-
tive Thousand and no/100 ($125,000.00) Dollars.
WHEREFORE, plaintiff prays for judgment against the
defendant in the sum of One Hundred Twenty-five Thou-
sand and no/100 ($125,000.00) Dollars. together with his
costs and disbursements herein.
Dated: July 12, 1974.
SCHERMER, SCHWAPPACH, BORKON &
RAMSTEAD, LTD.
By /s/ JOHN D. MARIANI
Attorneys for Plaintiff
1010 Midwest Plaza Building
801 Nicollet Mall
Minneapolis, Minnesota 55402
333-7155
AFFIDAVIT OF SERVICE
STATE OF INDIANA
SS
ELKHART COUNTY
The undersigned being duly sworn, deposes and says that:
he is a duly appointed and acting officer of the Elkhart
A-8
County Sheriff's Department in and for the County of Elk-
hart, State of Indiana; and that on July 19, 1974 he did
in the County of Elkhart, State of Indiana transmit the
contents of a Summons and Complaint issued from the 4th
Judicial District Court, of Hennepin County, Minnesota,
in Cause entitled Jeffrey D. Savchuk vs Randal Rush by
leaving a copy at Route # 6 Box 282 Elkhart, (Meadow-
brook Lane). Then by mailing a true copy of Summons and
Complaint to same on July 19, 1974.
This officer is over 21 years of age and not interested in
this controversy.
/s/ SGT. JOHN DOWNING
[Title omitted in printing]
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District
[Title omitted in printing]
NOTICE OF MOTION AND MOTION
TO: Defendant above-named and James Roegge, attorney
for defendant and State Farm Mutual Automobile In-
surance Company, garnishee.
Please take notice that on the 24th day of July, 1974 at
9:30 a.m., or as soon thereafter as counsel can be heard,
the Courthouse in the City of Minneapolis, County of Hen-
nepin, State of Minnesota, plaintiff will move the above-
named Court, at a Special Term thereof, pursuant to the
Minnesota Statute Section 571.51 for leave to serve and
file a supplemental Complaint making State Farm Mutual
Automobile Insurance Company a party to the above-en-
A-9
titled action. Said Motion shall be based on the records and
proceedings herein, plus the Affidavit herein.
Dated this 18th day of July, 1974.
SCHERMER, SCHWAPPACH, BORKON &
RAMSTEAD, LTD.
By /s/ JOHN D. MARIANI
Attorney for Plaintiff
1010 Midwest Plaza Building
Minneapolis, Minnesota 55402
AFFIDAVIT
STATE OF MINNESOTA
SS:
COUNTY OF HENNEPIN
JOHN D. MARIANI deposes and says that he is one of
the attorneys for the plaintiff. This affiant states that on
May 29, 1974 service of the Garnishment Summons was
made upon State Farm Mutual Automobile Insurance Com-
pany through the Department of Commerce, Insurance Di-
vision of the State of Minnesota, St. Paul, Minnesota. This
affiant further states that a copy of said Garnishment
Summons and the Summons and Complaint were served up-
on defendant personally through the Elkhart County sher-
iff’s office, Goshen, Indiana, on June 6, 1974 upon Randal
Rush the defendant. This affiant further states that on July
10, 1974, he received a Garnishment Disclosure dated July
3, 1974 from James F. Roegge, attorney at law, 2250
IDS Center, Minneapolis, Minnesota, stating that there
were no monies due and owing to said defendant from
A-10
said garnishee. The remainder of said Garnishment Dis-
closure questions were unanswered and the Garnishment
Disclosure was unsigned and not notarized. This affiant
further states that said Garnishment Disclosure was defec-
tive and does not intend to waive any rights with regard
to such defective Garnishment Disclosure.
This affiant sayeth not further except that this Affidavit
is made in support of plaintiff's Motion to file a Supple-
mental Complaint.
/s/ JOHN D. MARIANI
[Jurat and affidavit of service omitted in printing]
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District
[Title omitted in printing] |
NOTICE OF MOTION AND MOTION
TO: PLAINTIFF ABOVE NAMED and JOHN D.
MARIANI, HIS ATTORNEY
YOU WILL PLEASE TAKE NOTICE that the above
named defendant, through his undersigned attorney, will
bring the attached Motion on for hearing at a Special
Term of the above named court to be held at the Court-
house in the City of Minneapolis, State of Minnesota on
A-11
the 31st day of July, 1974 at 9:30 A.M. or as soon there-
after as counsel can be heard.
MEAGHER, GEER, MARKHAM, ANDERSON,
ADAMSON, FLASKAMP & BRENNAN
By /s/ JAMES F. ROEGGE
Attorneys for Defendant
2250 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
338-0661
MOTION
Defendant, above named, through his undersigned at-
torney hereby moves the court for an Order dismissing the
plaintiff's pretended cause of action on the grounds that
this court lacks jurisdiction over the subject matter and
the court lacks jurisdiction over the defendant; that there is
insufficiency of process; that there is insufficiency of ser-
vice of process.
Defendant further moves the court for an Order dis-
missing the plaintiff's pretended cause of action on the
ground that the defendant is entitled to judgment of dis-
missal on the pleadings pursuant to Rule 12.03 of the
Minnesota Rules of Civil Procedure.
The above motions are made on the grounds that the
Complaint avers that the motor vehicle accident and al-
leged negligence occurred in Elkhart County Indiana and
no part of the alleged tort occurred in the State of Minne-
sota. The defendant is a resident of the State of Indiana.
The plaintiff attempted service of process by personal ser-
A-12
vice upon the defendant in the State of Indiana; therefore,
this court lacks jurisdiction over the subject matter and
over the defendant in regard to the plaintiff's action.
Said motion is based upon the Minnesota Rules of Civil
Procedure and in particular Rule 12 thereof.
MEAGHER, GEER, MARKHAM, ANDERSON,
ADAMSON, FLASKAMP & BRENNAN
By /s/ JAMES F. ROEGGE
Attorneys for Defendant
2250 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
338-0661
AFFIDAVIT
STATE OF INDIANA
SS:
COUNTY OF ELKHART
Randall K. Rush, being first duly sworn, deposes and
says:
1. That he is the defendant in the above lawsuit.
2. That this lawsuit arises out-of an automobile acci-
dent which occurred on January 13, 1972 in the City of
Elkhart. County of Elkhart, State of Indiana.
3. That your affiant is presently twenty (20) years of
age, date of birth, October 5, 1953.
4. That at all times material herein, including at the
time of said automobile accident and at the present time,
a NS lle aia acta lle
A-13
your affiant, the defendant in the above lawsuit, has con-
tinuously been a resident of the State of Indiana.
Further your affiant sayeth not save that this affidavit is
made in support of his motion to dismiss.
/s/ RANDALL K. RUSH
[Jurat omitted in printing]
AFFIDAVIT
STATE OF MINNESOTA
SS
COUNTY OF HENNEPIN
James F. Roegge being first duly sworn deposes and
says:
1. That he is one of the attorneys representing the de-
fendant and also the garnishee in the above captioned
matter.
2. That this lawsuit as and between the plaintiff
and defendant arises out of an automobile accident which
occurred on January 13, 1972 in the City of Elkhart,
County of Elkhart, State of Indiana.
3. That on information and belief and as the affidavit
of the Elkhart County Sheriff’s Office so indicates, the de-
fendant Randal Rush was at the time of said accident
and at all times material herein a resident of the State of
Indiana.
4. That the plaintiff has elected to prosecute an ac-
tion for personal injuries within the State of Minnesota;
that plaintiff alleges or holds himself out to be a resident
A-14
of the State of Minnesota; that plaintiff apparently is at-
tempting to obtain jurisdiction over the out of state defend-
ant by means of a garnishment summons served upon the
garnishee above named.
5. That on June 17, 1974 Arthur B. Geer of your
affiant’s office corresponded with Mr. Irvin E. Schermer,
counsel for plaintiff, indicating that your affiant’s office
had received the file from the garnishee and that your
affiant intended to raise a motion pertaining to the juris-
dictional question and that the office of plaintiff's covn-
sel would be contacted within a short time thereafter.
6. That within a few days following June 17, 1974
your affiant did call the offices of plaintiff's counsel and re-
quested to speak with Mr. Schermer; that Mr. Schermer was
absent from the office and that your affiant then asked to
speak with Mr. Schermer’s secretary to determine if a
Summons and Complaint or Garnishment Summons had
been served upon the Indiana defendant, Randal Rush;
that your affiant was informed that their file did not show
any return of service and therefore your affiant concluded
that the defendant Randal Rush had not been served with
process.
7. That from a review of the court file. your affiant
is now informed that ‘n fact a Garnishment Summons was
served upon the defendant Randal Rush on June 6, 1974.
8. That in response to the Garnishment Summons your
affiant’s office did prepare a Garnishment Disclosure exe-
cuted by John Carruth of the garnishee insurance company;
that said Garnishment Disclosure indicates that zero dol-
lars is due and owing to the defendant Randal Rush.
PUP TBE On TION
A-15
9. That on information and belief the defendant
Randal Rush is an insured under a policy of insurance,
policy number 3198142F2314 naming Lewis C. Rush, fa-
ther of the defendant Randal Rush, with liability limits of
$50/100,000.
10. That the above policy of insurance is a standard
automobile liability policy providing that the garnishee
will pay on behalf of the insured any sums which the in-
sured shall become legally obligated to pay as a result of
injuries, etc. arising out of the use of the owned automo-
bile, etc.
11. That your affiant is now advised that the defend-
ant Randal Rush was served with process, to wit, a Gar-
nishment Summons and a Summons and Complaint in an
action captioned as the above pleadings on July 19, 1974.
12. That your affiart’s office has served upon plain-
tiff’s counsel and filed with this court a Motion to dis-
miss the above action in its entirety to be heard at a Spe-
ciz] Term of this court on the 31st day of July, 1974.
Further your affiant sayeth not save that this affidavit
is made in opposition to the plaintiff's Motion for leave of
this court to file a Supplemental Complaint against the
above garnishee.
/s/ JAMES F. ROEGGE
[Jurat omitted in printing]
[Affidavits of service omitted in printing]
A-16
STATE OF MINNESOTA
County of Hennepin
DISTRICT COURT
Fourth Judicial District
[Title omitted in printing]
AFFIDAVIT
Jeffrey D. Savchuk, being first duly sworn, deposes and
states:
That he is the plaintiff in the above-entitled action,
which action arises out of an automobile accident occur-
ring on January 13, 1972 in Elkhart, Indiana, and makes
this Affidavit of his own personal knowledge in support
of plaintiff's Motion to serve and file a Supplemental
Complaint to include State Farm Mutual Automobile Insur-
ance Company as garnishee in the above-entitled proceed-
ings; and
That your affiant was born on October 21, 1953 and
is presently Twenty (20) years of age; and
That on the date of said accident and for approximate-
ly two (2) years prior thereto your affiant lived with his
parents at 18 Lantern Lane, Elkhart, Indiana and attended
Elkhart Senior High School; and |
That in June of 1972, your affiant graduated from Elk-
hart Senior High School and worked in Elkhart, Indiana
until June of 1973; and
That in June of 1973 your affiant’s father was trans-
ferred to Minneapolis, Minnesota and your affiant thus
moved to Minnesota with his parents at that time; and
That upon moving to Minnesota your affiant obtained
a job with Commercial! Steel and worked and continues to
work for said company; and
That your affiant was married on September 15. 1973
OOO REE ea Sa eae:
A-17
and since that time has lived and continues to live with his
wife at 8447 Regent Avenue North, Apartment 305,
Brooklyn Park, Minnesota; and
That your afiiant considers Minnesota to be his state
of permanent residence and has no intention of leaving
said state: and
That your affiant has substantial connections with the
State of Minnesota, including the purchase of a truck in
the State of Minnesota in March of 1974, bank account
and checking account in the State of Minnesota and pay-
ment of Minnesota State income taxes in 1973 and will
continue to have significant and continuing contact with
the State of Minnesota.
Further affiant sayeth not.
Dated this 11 day of August, 1974.
/s/ JEFFREY D. SAVCHUK
[Jurat and affidavit of service omitted in printing]
DISTRICT COURT
Fourth Judicial District
STATE OF MINNESOTA
County of Hennepin
[Title omitted in printing]
ORDER
File No. 706126
The above-entitled matter came regularly on for hear-
ing before the undersigned, sitting as Judge of Special
Term, on motion of the plaintiff on July 24, 1974 and the
Court took said motion under advisement to give defend-
ant and garnishee an opportunity to prepare, serve and
A-18
file additional motions which were heard on August 15,
1974.
Richard Diamond, Esq., appeared as counsel for and
on behalf of plaintiff, and James A. Roegge, Esq., ap-
peared as counsel for and on behalf of defendant and
garnishee.
Upon all the files, records and proceedings herein, and
upon the arguments of counsel, IT IS ORDERED:
That plaintiff be, and hereby is, granted leave to serve
and file a Suppiemental Complaint making State Farm
Mutual Automobile Insurance Company, the garnishee
herein, a party to the above-entitled action.
That the motions of defendant and garnishee be, and
hereby are, denied.
Dated: August 28, 1974.
BY THE COURT:
/s/ DOUGLAS K. AMDAHL
Chief Judge
MEMORANDUM
FACTS
On January 13, 1972 an automobile accident occurred
in Elkhart, Indiana. The plaintiff, Jeffrey D. Savchuk, and
defendant, Randal Rush, were involved in that accident
and the present action arose out of such accident. At the
time of the accident plaintiff and defendant were each resi-
dents of the State of Indiana. Defendant is still a resident
of such state. Plaintiff, who was born October 21, 1953,
was living with his parents at the time of the accident. He
A-19
graduated from Elkhart (Indiana) Senior High School in
June of 1972 and worked in Elkhart until June of 1973
when his parents moved to Minnesota and plaintiff moved
with them. Plaintiff became emp’oyed with Commercial
Steel shertly after his arrival in Minnesota and still works
for that company. He was married on September 15, 1973
and since that time lives with his wife at 8447 Regent
Avenue North, Brooklyn Park, Minnesota. His affidavit
filed herein states that he considers Minnesota to be his
home of permanent residence and that he has no inten-
tion of leaving such state.
Defendant was insured for automobile liability through
a policy issued by State Farm Mutual Automobile Insur-
ance Company, which company is licensed to do business
in Minnesota. A garnishment summons was served on said
insurance company by delivering a copy thereof to the
Commissioner of Insurance of the State of Minnesota pur-
suant to statute. A copy of the garnishment summons and
the Summons and Complaint were personally served on de-
fendant in E!khart County, Indiana.
A form garnishment disclosure was served by mail up-
on plaintiff's attorney, and said disclosure stated that there
was no amount due and owing the judgment debtor by
the garnishee and that said garnishee had no property of
defendant in its possession.
On July 24, 1974 the undersigned, sitting as Judge of
Special Term, heard plaintiff's motion, pursuant to Minne-
sota Statute 571.51 for leave to file and serve a Supple-
mental Complaint making the garnishee a party to the ac-
tion. On the date of such motion, the Court was informed
that it was the intention of the attorney for defendant and
A-20
garnishee to move the Court ior other relief and plaintiff's
motion was taken under advisement pending the further
motions of the defendant and the garnishee. On August
15, 1974 the counsel for defendant and garnishee argued
their motion moving the Court “for an Order dimissing the
plaintiff's pretended cause of action on the grounds that
this Court lacks jurisdiction over the subject matter and
the Court lacks jurisdiction over the defendant; that there
is insufficiency of process; that there is insufficiency of
service of process,” and further moved the Court “for an
Order dismissing the plaintiff's pretended cause of action
on the ground that the defendant is entitled to judgment
of dismissal on the pleadings pursuant to Rule 12.03 of
the Minnesota Rules of Civil Procedure.”
ISSUE
Is the obligation of an insurance company to defend a
non-resident insured under an automobile liability insur-
ance policy a garnishable res in Minnesota for the purpose
of obtaining quasi in rem jurisdiction in circumstances
where the occurrence giving rise to an action occurs out of
the State of Minnesota and the plaintiff is a resident of the
State of Minnesota?
ARGUMENT
The Supreme Court of the State of Minnesota has not
passed upon the question presented by the issue here. How-
ever, the United States District speaking through the late
Judge Neville in Rintala v. Shoemaker, 362 F.Supp. 1044
D.C. Minn. (1973) considered the identical question, and
in a thorough opinion determined the question in the affir-
A-71
mative and held that quasi in rem jurisdiction was valid
under like circumstances. Judge Neville’s analysis of the
issue begins with a discussion of Seider v. Roth, 17 N.Y.
(2d) 111, 269 N.Y.S. (2d) 99, 216 N.E. (2d) 312 (1966)
the first reported case determining that the obligation to
defend was a garnishable res and continues through a dis-
cussion of cases pro and con, and the Minnesota garnish-
ment law which was amended in 1969 by adding subdivi-
sion 2 to M.S. 57.41 so that it now reads:
“Subd. 2. Garnishment shall be permitted before
judgment in the following instances only:
“(1) For the purpose of establishing quasi in rem
jurisdiction...
“(c) the defendant is a nonresident individual
“(2) When the garnishee and the debtor are par-
ties to a contract of suretyship, guarantee, or insur-
ance, because of which the garnishee may be held
to respond to any person for the claim asserted against
the debtor in the main action.”
This Court is persuaded by Judge Neville’s logic and
feels that it could add little, if anything, to his opinion
and adopts such opinion as the basis for its determination
and adds only the following observation.
In Turner v. Evers, 31 Cal. App. 3d Supp. 11, 107
Cal. Rptr. 390 (supra 1973) Judge Goldberg made the fol-
lowing observation which points up the necessity of basic
garnishment law consideration:
A-22
“Our attention has been directed to several cases re-
jecting Seider, and we have found several more. These
cases do not hold that there is no jurisdiction in the
constitutional sense. Rather they hold that the obli-
gation due from the insurer to the defendant cannot
be attached. (Jardine v. Donnelly (1964) 413 Pa.
474, 198 A.2d 513 (pre-Seider perfunctory opinion);
Housley v. Anaconda Company (1967) 19 Utah 2d
124, 425 P.2d 390 (post-Seider but does not cite it);
DeRentiis v. Lewis (1969) (R.I.) 258 A2d 464 (not
‘property’ within Rhode Island statute); Howard v.
Allen (1970) 254 S.C. 455, 176 S.E.2d 127; (dis-
tinguishes New York from South Carolina attachment
statutes); Government Employees Insurance Compa-
ny v. Lashy (Mo. App. 1970) 454 S.W. 2d 942 (‘con-
tingent’ under Vermont statute); Kirchman v, Miku-
la (La. App. 1972) 258 So.2d 701 (interpretation of
Louisiana ‘direct action’ statute.) None of these cases
discloses statutes as broad as that in California or a
course of interpretation similar to that here. Nor do
they reveal the sort of independent parallelism be-
tween their local law and New York law like that
between California and New York.”
Since our garnishment law does now provide for pre-
judginent garnishment when the garnishee and the debt-
or aré parties to a contract of insurance, the foregoing
statement adds much weight to the determination by Judge
Neville.
A further issue was raised in the arguments before this
Court. Such issue arose by reason of language in Rule 4.04
of the Rules of Civil Procedure for the District Courts,
which provides:
A-23
“When quasi in rem jurisdiction has been obtained,
a party defending such acts thereby submits person-
ally to the jurisdiction of the court...”
The problem is, of course, that if the defendant does
not come to the State of Minnesota to defend the action he
is not cooperating with the insurance company and may be
determined to have no coverage. If he does come to the
state to defend the action, he submits, by reason of the
foregoing rule, personally to the jurisdiction of the Court
and may be subject to an in personam judgment in an
amount over and above the limits of his insurance pol-
icy. While this Court feels that the rule would not be effec-
tive in this type of situation, it does not have to decide
such issue for the reason that the plaintiffs have stipulated
that they seek no judgment in an amount larger than that
of the policy limits.
D.K.A.
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District
[Title omitted in printing]
SUMMONS
THE STATE OF MINNESOTA TO THE ABOVE
NAMED DEFENDANT:
You, the above named defendant, are hereby summoned
and required to answer the Complaint of the plaintiff in
the above-entitled action, a copy of which Complaint is
hereto attached and herewith served upon you, and to
serve a copy of your Answer thereto upon the subscribers
A-24
at their offices at 1010 Midwest Plaza Building, 801 Ni-
collet Mall, in the City of Minneapolis, County of Henne-
pin, State of Minnesota, within Twenty (20) days after the
service of this Summons upon you, exclusive of the day
of such service, and, if you fail to answer the said Com-
plaint within the time aforesaid, the plaintiff in this ac-
tion will apply to the Court for the relief demanded in
said Complaint.
Dated: September 4, 1974.
SCHERMER, SCHWAPPACH, BORKON &
RAMSTEAD, LTD.
By /s/ JOHN D. MARIANI
Attorneys for plaintiff
1010 Midwest Plaza Building
801 Nicollet Mall
Minneapolis, Minnesota 55402
333-7155
SUPPLEMENTAL COMPLAINT
Plaintiff, Jeffrey D. Savchuk, for his Supplemental
Complaint and cause of action against defendant and gar-
nishee states and alleges:
I.
That on January 13, 1972, defendant so carelessly and
negligently operated a motor vehicle on Elkhart County
Road No. 6 in Indiana as to cause the same to be involved
in an accident, thereby causing plaintiff, who was there
and then a passenger in said automobile, to maintain the
injuries and damages hereinafter described.
A-25
Il.
That as a direct and proximate result of the negligent
and careless conduct of the defendant, as above described,
plaintiff sustained bodily injuries, some of which may be
permanent; was caused to incur medics] expense to treat
such injuries, and may be required te incur such expenses
in the future; was caused to become disabled and may
have sustained a permanent impairment of his ability to
work.
III.
That as a result of the foregoing allegations, plaintiff
has been damaged in the sum of Fifty Thousand ($50,-
000.00) Dollars.
IV.
That State Farm Mutual Automobile Insurance Compa-
ny is an insurance company duly authorized to do business
in the State of Minnesota and does in fact do business in
the State of Minnesota.
V.
That said State Farm Mutual .\utomobile Insurance
Company was the carrier of automobile liability insurance
for defendant Randal Rush at the time of said accident
and is obligated by the terms of its policy of automobile
liability insurance to defend lawsuits against said defend-
ant Randal Rush arising out of accidents involving vehicles
owned by him and specifically the accident and vehicle in-
volved herein and to indemnify said defendant for dam-
ages arising therefrom.
A-26
VI.
That pursuant to Minnesota law, on the 29th day of
May, 1974, plaintiff caused to be served upon State Farm
Mutual Automobile Insurance Company, through the of-
fices of the State of Minnesota Insurance Commissioner,
a Garnishment Summons on file herein seeking to attach
said obligation under said policy of automobile liability
insurance covering defendant herein.
VII.
That on or about July 10, 1974, State Farm Mutual Au-
tomobile Insurance Company returned to plaintiff a Gar-
nishment Disclosure on file herein revealing nothing ow-
ing.
VIII.
That by reason of said Garnishment Disclosure, and on
plaintiff's Motion pusuant to Minnesota Statutes 571.51,
the above named Court entered its Order dated August
28, 1974 permitting plaintiff to serve and file this Supple-
mental Complaint making said State Farm Mutual Auto-
mobile Insurance Company a party to the above-entitled
action, a copy of which Order is attached hereto, labeled
Exhibit “A” and made a part hereof by reference as if set
forth in full and detail herein.
WHEREFORE, plaintiff prays for judgment against
defendant in the sum of Fifty Thousand ($50,000.00)
Dollars, together with his costs and disbursements herein.
A-27
Dated this 4th day of September, 1974.
SCHERMER, SCHWAPPACH, BORKON &
RAMSTEAD, LTD.
By /s/ JOHN D. MARIANI
Attorneys for plaintiff
1010 Midwest Plaza Building
801 Nicollet Mall
Minneapolis, Minnesota 55402
333-7155
AFFIDAVIT OF SERVICE
STATE OF INDIANA
SS:
ELKHART COUNTY
The undersigned being duly sworn, deposes and says that:
he is a duly appointed and acting officer of the Elkhart
County Sheriff's Department in and for the County of Elk-
hart, State of Indiana; and that on September 24, 1974 at
11:10 A.M. he did in the County of Elkhart, State of Indi-
ana, transmit the contents of a Summons and Complaint is-
sued from Hennepin County Fourth Judicial District Court,
in cause entitled Jeffrey D. Savchuk vs Randal Rush, Cause
# 706126 by leaving a true copy with his father at 1
North South Meadowbrook Lane, and by mailing a true
copy to same address.
This officer is over 21 years of age and not interested in
this controversy.
/s/ SGT. BOB WILLIAMS
[Jurat omitted in printing]
A-28
STATE OF MINNESOTA DISTRICT COURT
County of Hennepin Fourth Judicial District
[Title omitted in printing]
NOTICE OF APPEAL
File No. 706126
TO: PLAINTIFF ABOVE NAMED and RICHARD L.
DIAMOND, HIS ATTORNEY
PLEASE TAKE NOTICE that the defendant and gar-
nishee above named appeal to the Supreme Court of the
State of Minnesota from the Order dated August 28, 1974
denying the defendant’s Motion for dismissal and granting
plaintiff's Motion to serve and file a Supplemental Com-
plaint.
MEAGHER, GEER, MARKHAM, ANDERSON,
ADAMSON, FLASKAMP & BRENNAN
By /s/ JAMES F. ROEGGE
Attorneys for Defendant and Garnishee
2250 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
338-0661
[Affidavit of service omitted in printing]
A-29
STATE OF MINNESOTA
IN SUPREME COURT
NO. 268 (1975)
Hennepin County
45556
JEFFREY D. SAVCHUK,
Respondent,
vs.
RANDAL RUSH and STATE FARM MUTUAL AUTO-
MOBILE INSURANCE COMPANY, garnishee,
Appellants.
SHERAN, C. J.
Dissenting, Otis, J.
Endorsed
Filed September 10, 1976
John McCarthy, Clerk
Minnesota Supreme Court
SYLLABUS
1. Minn. St. 571.41, subd. 2, was enacted by the leg-
islature to permit garnishment of an insurer’s obligation to
an insured, even though not due absolutely and without
contingency.
2. Rule 4.04(2), Rules of Civil Procedure, which pro-
vides in part, “When quasi in rem jurisdiction [is] ob-
tained, a party defending such action thereby submits per-
A-30
sonally to the jurisdiction of the court,” applies in cases
where jurisdiction is obtained pursuant to § 571.41, subd.
2, only to the extent of the defendant’s policy limits.
3. Possible injustice to the defendant in situations
where jurisdiction is obtained pursuant to § 571.41, subd.
2, can be controlled by application of the doctrine of forum
non conveniens.
Affirmed.
Heard before Sheran, C. J., and Otis, Todd, MacLaugh-
lin, and Scott, JJ., and considered and decided by the
court en banc.
OPINION
SHERAN, Chief Justice.
Appeal by defendant, Randal Rush, and garnishee,
State Farm Mutual Automobile Insurance Company (State
Farm), from an order by the district court: granting plain-
tiff's motion to file and serve a supplemental complaint
and denying appellants’ motion to dismiss the complaint.
We affirm the decision of the trial court.for these reasons:
(1) Minn. St. 571.41, subd. 2, was enacted by the
legislature to permit garnishment of an insurer’s obligation
to an insured, even though not due absolutely and without
contingency.
(2) Rule 4.04(2), Rules of Civil Procedure, which pro-
vides in part, “When quasi in rem jurisdiction [is] ob-
tained, a party defending such action thereby submits per-
' sonally to the jurisdiction of the court,” applies in cases
where jurisdiction is obtained pursuant to §571.41,
subd. 2, only to the extent of the defendant’s policy limits.
(3) Possible injustice to the defendart in situations
A-31
where jurisdiction is obtained pursuant to § 571.41, subd.
2, can be controiled by application of the doctrine of forum
non conveniens.
The case arose out of a single-car accident which oc-
curred January 13, 1972, in Elkhart, Indiana. The acci-
dent involved a car driven by Rush and owned by his
father, in which Jeffrey D. Savchuk was passenger. The
Rush car was insured by State Farm. Rush and Savchuk
were both residents of Indiana at the time of the accident.
Savchuk, a senior in high school when the accident oc-
curred, moved to Minnesota with his parents in June 1973
and is now an employed and married resident of this state.
The instant action was commenced May 28, 1974, when
Savchuk served a garnishment summons on State Farm.
Service was made by delivery of a copy of the summons to
the commissioner of insurance for the state of Minnesota,
pursuant to Minn. St. 60A.19. A copy of the garnishment
summons, along with copies of the summons and com-
plaint, was also served personally on Rush in Indiana. The
complaint alleged negligence and sought $125,000 in
damages.
In response to the garnishment summons, State Farm dis-
closed pursuant to § 571.49 that nothing was due and
owing Rush as judgment debtor, Savchuk then moved the
trial court for permission to file a supplemental complaint
making the garnishee, State Farm, a party to the action
pursuant to § 571.51. Rush and State Farm responded by
moving for dismissal on the following grounds: Lack of
subject-matter jurisdiction, lack of jurisdiction over the
defendant, insufficiency of process, and insufficiency of
service of process. Since the jurisdictional challenge raised
by the motion to dismiss also raised a question as to the
constitutionality of the application on these facts of
A-32
§ 571.41, the attorney general was invited to intervene.
That invitation was declined. The respective motions were
then heard by the court. His order granting Savchuk’s mo-
tion for leave to file a supplemental complaint and de-
nying the motion of Rush and State Farm to dismiss pre-
cipitated this appeal.
Two main issues are presented: (1) Is the obligation of
an insurance company to defend and indemnify a nonresi-
dent insured under an automobile liability insurance policy
a garnishable res in Minnesota for the purpose of obtain-
ing quasi-in-rem jurisdiction when the incident giving rise
to the action occurs outside Minnesota but the plaintiff in
the action is a resident of Minnesota? (2) If the obligation
of an insurance company to defend and indemnify its in-
sured is a garnishable res, does it seizure and the resultant
quasi-in-rem jurisdiction conform with constitutional re-
quirements of due process?
1. Appellants contend that an insurance company’s
obligation to defend and indemnify its insured cannot con-
stitute a res garnishable under Minn. St, 571.41, subd. 2.
because such an obligation is not “due absolutely, and
without depending on any contingency,” as required by
§ 571.43(1)." In effect, appellants argue that the prejudg-
?Minn, St. 571.41, subd, 2, reads in part: “Garnishment shall be permit-
ted before judgment iu the following instances only:
“(1) For the purpose of establishing quasi in rem jurisdiction
“(a) when the defendant is a resident individual having de-
parted from the state with intent to defraud his credi-
tors, or to avoid service, or keeps himself concealed
therein with like intent; or
“(b) the defendant is a resident individual who has departed
from the state, or cannot be found therein, or
“(c) the defendant is a nonresident individual, or a foreign
corporation, partnership or association.”
Minn, St. 571.43(1) reads: “(1) [No person or corporation shall be ad-
judged a garnishee by reason of:] (1) Any money or other thing due
to the judgment debtor, unless at the time of the service of the sum-
mons the same is due absolutely, and without depending on any con-
tingency.”
A-33
ment garnishment sanctioned by subd. 2 of Minn. St.
571.41 can be obtained only when the “due absolutely,
and without * * * any contingency” language of § 571.43
(1) is first satisfied.
It seems to us that the intent of the legislature in enact-
ing § 571.41, subd. 2, was to specify a limited number of
instances in which garnishment (and quasi-in-rem jurisdic-
tion) would be available before judgment, regardless of
whether the debt on which the garnishment was predicated
was due absolutely.
Several reasons support this conclusion. First, the lan-
guage of § 571.41, subd. 2, itself indicates that the test
for determining the validity of prejudgment garnishment
when the garnishee and debtor are parties to a contract of
insurance is not whether the debt is due absolutely but
rather whether the garnishee “may be held to respond” for
the claim asserted against the debtor. State Farm’s poten-
tial liability is conceded here, and potential liability is all
that subd. 2 requires.”
Second, § 571.41, subd. 2, is both more recent in origin
and more specific in language than § 571.43.° Because
“In construing a Statute less explicit than the one here in question, the
court in Turner v. Evers. 31 Cal. App. Supp. 3d 11, 18, 107 Cal. Rptr.
390, 395 (1973), stated: “* * * We disagree with the proposition that
the ‘obligation to indemnify requires a valid in personam judgment
against the insured,’ and hold the obligation to indemnify requires only
the possibility of a valid judgment either against the insured personally
or depriving him of his property.” (Italics supplied.)
See, also, Rintala v. Shoemaker, 362 F. Supp. 1044 (D. Minn. 1973).
“Section 571.43 has remained substantially unchanged since 1957; subd.
2 of § 571.41 was added in 1969, Subd. 2 refers specifically to insur-
ance contracts and seems to contemplate precisely the situation pre-
sented here. The fact that § 571.43 speaks of “judgment debtor,” while
§ 571.41, subd. 2, applies in a prejudgment context also suggests a
reason for being guided by the latter provision. Note, however, that
§ 571.41, subd. 3, does indicate that § 571.41, subd. 2, parties are
properly to be referred to as judgment debtor and judgment creditor,
even though no judgment has yet been obtained.
A-34
we perceive an irreconcilable conflict between these two
statutory provisions, § 571.41, subd. 2, controls.* Minn.
St. 645.26.
Third, our interpretation of § 571.41, subd. 2, as per-
mitting prejudgment garnishment and the establishment
of quasi-in-rem jurisdiction in the circumstances here pre-
sented is consistent with two often-stated positions of this
court—namely, our interest in providing a forum to resi-
dents of this state and our determination in long-arm cases
to extend the jurisdiction of our courts to the maximum
limits consistent with due process.°
We therefore hold that under § 571.41, subd. 2, an
automobile insurance company’s obligation to defend and
indemnify its insured is a res subject to prejudgment gar-
nishment for the purpose of obtaining quasi-in-rem juris-
diction when the incident giving rise to the action occurs
Outside the state of Minnesota but the plaintiff in the ac-
tion is a resident of Minnesota.
2. The test for determining the constitutionality of the
prejudgment garnishment procedure authorized by Minn.
St. 571.41, subd. 2, is threefold: (1) Proper notice must be
given to the defendant-insured, affording him adequate op-
portunity to defend his property; (2) the defendant can-
*See, Comment, 1 Wm. Mitchell L. Rev. 161, 176, for an analysis of
the statute which reconciles the insurance provision of § 571.41 with
the contingency provisions of § 571.43. Our view of the two enact-
ments as irreconcilably in conflict was the view taken by the late
Judge Philip Neville in Rintala v. Shoemaker, supra.
*See, B & J Mfg. Co. v. Solar Industries, Inc., 483 F. 2d 594 (8 Cir.
1973) (applying Minnesota law); State ex rel. Nelson v. Nelson, 298
Minn. 438, 216 N.W. 2d 140 (1974); Franklin Mfg. Co. v. Union
Pacific R. Co., 297 Minn. 181, 210 NW. 2d 227 (1973); Mid-Conti-
nent Freight Lines, Inc. v. Highway Trailer Industries, Inc., 291 Minn.
251, 190 N.W. 2d 670 (1971); Hunt v. Nevada State Bank, 285 Minn.
77, 172 N.W. 2d 292 (1969), certiorari denied sub. nom. Burke v.
Hunt, 397 U.S. 1010, 90 S. Ct. 1239, 25 L. ed. 2d 423 (1970).
es
A-35
not be exposed to liability greater than the amount of his
insurance policy; (3) the procedure may be utilized only
by residents of the forum state. Minichiello v. Rosenberg,
410 F, 2d 106, 117 (2 Cir. 1968, 1969); Rintala v. Shoe-
maker, 362 F.Supp. 1044 (D. Minn. 1973).
Plaintiff was a resident of the state at the time this ac-
tion was commenced,° and proper notice was given.’ The
constitutional issue therefore reduces to a question of de-
fendant’s potential liability if the procedure authorized by
subd. 2 of § 571.41 is permitted. Appellants argue that
Rule, 4.04(2), Rules of Civil Procedure, which states in
part that “[w]Jhen quasi in rem jurisdiction [is] obtained,
a party defending such action thereby submits personally
to the jurisdiction of the court,” means that a defendant
in Rush’s position® would find himself exposed to poten-
tially unlimited personal liability in an action in which the
plaintiff originally could have obtained only quasi-in-rem
jurisdiction. Because of Rule 4.04(2), appellants argue,
quasi-in-rem jurisdiction, with liability limited to the pol-
icy amount, is transformed into personal jurisdiction with
potential liability extended beyond the policy limits.
If appellants correctly state the effect of Rule 4.04(2) in
these circumstances, it is obvious that due process would
SApplication of Minn. St. 571.41, subd. 2, must be limited to plaintiffs
who are residents of the forum state, since without this connection
the state would lack sufficient meaningful contact with the suit to
justify the exercise of jurisdiction. Farrell v. Piedmont Aviation, Inc.,
411 F. 2d 812 (2 Cir. 1969).
TMullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 70 S. Ct.
652, 94 L. ed. 865 (1950), established the notice requirement.
SMost automobile insurance policies, including, apparently, the one here,
contain a Clause which requires the insured to cooperate with the in-
surer in the defense of any claim. If the insured fails to cooperate, the
insurer need not indemnify. The practical effect of the clause means
that defendants like Rush must defend in Minnesota or risk losing the
right to be indemnified. Ritnala v. Shoemaker, 362 F. Supp. 1044,
1054; Comment, | Wm. Mitchell L. Rev. 161, 180.
A-36
be violated. Rintala v. Shoemaker, 362 F. Supp. 1044,
1054; Podolsky v. Devinney, 281 F. Supp. 488 (S. D.
N. Y. 1968). The underlying question here, however, is not
the effect of Rule 4.04(2), but whether in fact the rule
applies to a case of this kind.
New York was the first state to permit a procedure for
obtaining jurisdiction similar to the procedure invoked
here. Seider v. Roth, 17 N. Y. 2d 111, 216 N. E. 2d 312
(1966). New York also had a rule similar to Rule 4.04
(2), but when theissue of the rule’s applicability was raised,
the New York Court of Appeals simply held that it did not
apply in Seider-type cases. Simpson v. Loehmann, 21 N. Y.
2d 990, 290 N. Y. S. 2d 914, 238 N. E. 2d 319 (1968)
(per curiam opinion denying reargument). Thus, in New
York, even though the defendant proceeds with the de-
fense on the merits, he does not become personally ex-
posed. New Hampshire has reached a similar conclusion.
Forbes v. Boynton, 113 N.H. 617, 313 A.:2d 129 (1973).
Today we do likewise.
Basic considerations of fairness underlie our decision.
The United States Supreme Court has indicated that a de-
fendant must act to purposefully avail himself of the privi-
lege of conducting activities in the forum state before per-
sonal jurisdiction over him may be properly asserted. Han-
son v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. ed. 2d
1283 (1958). Defendant Rush had engaged in no such
voluntary activity; personal jurisdiction over him could
not be justified. Plaintiff's reduction of his claim to $50,-
000, the policy limits, is an implicit recognition of this fact.
But to say that personal jurisdiction would not be justi-
fied, and to hold, as we do, that Rule 4.04(2) has no ap-
plication in cases where jurisdiction is obtained pursuant
A-37
to Minn. St. 571.41, subd. 2, is not to say that no jurisdic-
tion over the defendant can be maintained. On the con-
trary, considerations of fairness suggest the need for quasi-
in-rem jurisdiction obtainable via a prejudgment garnish-
ment procedure like that permitted by § 571.41, subd. 2.
In cases of this kind, the insurer controls the defense of
the case. Simpson v. Loehmann, 2: N. Y. 2d 305, 287
N. Y. S. 2d 633, 234 N. W. 2d 669 (1967). Minimum
contacts sufficient to provide a constitutional basis for the
attachment and quasi-in-rem (as distinguished from per-
sonal) jurisdiction can be found in the fact that the in-
surer is present in the state, registered to do business and
doing business here, and in the state’s legitimate interest in
protecting its residents and providing them with a forum
in which to litigate their clams.’ Rintala v. Shoemaker,
362 F. Supp. 1044, 1057; Forbes v. Boynton, 113 N.H.
617, 623, 313 A. 2d 129, 132.
We therefore hold that due process is not violated when
jurisdiction is obtained pursuant to § 571.41, subd. 2,
provided that (1) proper notice is given to the defendant
insured, adequate to give him opportunity to defend his
property; (2) that the defendant-insured’s liability is lim-
ited to che applicable policy limits of his insurance con-
tract; and (3) that the plaintiff in the action is a resident
of the state at the time the action is commenced.
3. Appellants’ argument that the procedure authorized
by § 571.41, subd. 2, constitutes a direct action against
°If a forum is not provided, and the plaintiff is thus denied an oppor-
tunity to recover, the state may wind up as the “insurer,” paying
through its welfare and social assistance programs for the care of an
individual injured by the insured. As was stated in Rintala v. Shoe-
maker, 362 F. Supp. 1044, 1052, the plaintiff in this case is a Minne-
sOta resident, and “{iJt is this state which must protect and care for the
plaintiff in the event of indigency [and] this state’s services which
plaintiff uses.”
A-38
the insurer was not raised below. The defendant, not the
insurer, is the party sued. There is nothing in the statute
which suggests that the insurer should be named as a de-
fendant. Rintala v. Shoemaker, 362 F. Supp. 1044, 1951.
We recognize that other states have rejected the proce-
dure we approve.’° We further recognize that some critics
view Seider-type jurisdiction as a solution which creates
more problems than it solves."' We limit our discussion
of these problems to the following observations:
The potential hardship on defendants who may be re-
quired to come long distances to defend claims legitimate-
ly brought by Minnesota plaintiffs is reduced by the avail-
ability of convenient transportation and by the fact that
in many cases the defendant’s testimony can be obtained
by deposition. Where this is not possible, the hardship and
expense of travel will ordinarily be no greater for the de-
fendant than it would be for the injured party should juris-
diction be refused.
Ricker v. Lajoie, 314 F. Supp. 401 (D. Vt. 1970); Howard v. Allen,
254 S. Ct. 455, 176 S.E. 2d 127 (1970); State ex rel. Government Em-
ployees Ins. Co. v. Lasky, 454 S.W. 2d 942 (Mo. App. 1970); Housley
v. Aanconda Co., 19 Utah 2d 124, 427 P. 2d 390 (1967); Tessier v.
State Farm Mutual Ins. Co., 458 F. 2d 1299 (1 Cir. 1972) (interpret-
ing Massachusetts law); Johnson v. Farmers Alliance Mutual Ins. Co.,
499 P. 2d 1387 (Okla. 1972); De Rentiis v. Lewis, 106 R. I. 240, 258
A. 2d 464 (1969); Kirchman v. Mikula, 258 So. 2d 701 (La. App.
1972); Sykes v. Beal, 392 F. Supp. 1089 (D. Conn. 1975) (interpreting
Connecticut law); Robinson v. O. F. Shearer & Sons, Inc., 429 F. 2d
83 (3 Cir. 1970) (interpreting Federal maritime and Pennsylvania law).
"The most persistent and prolific is Professor David D. Siegel,
who, since 1966, has written on Seider in annual supplementary com-
mentaries to N.Y. Civ. Prac, § 5201 (McKinney Supp. 1975). Other
critical commentary has appeared in Rosenberg, One Procedural Genie
- Too Many or Putting Seider Back Into Its Bottle, 71 Col. L. Rev. 660;
Stein, Jurisdiction by Attachment of Liability Insurance, 43 N. Y. U. L.
Rev. 1075; Note, 8 B. C. Ind. & Com. L. Rev. 147; Comment, 16 Buf-
falo L, Rev. 769; Comment, 67 Col. L. Rev. 550; Note, 71 Dickinson
L, Rev. 653: Note, 65 Nw. U. L. Rev. 407; Note, 43 St. John’s L.
Rev. 58; Comment, 11 San Diego L. Rev. 504; Note, 19 Stanford L.
+ ae 5 Sw. U. L. Rev. 417; Comment, | Wm. Mitchell
. Rev. ;
A-39
A quasi-in-rem judgment against the defendant would
apparentiy not work an estoppel against the defendant if
the plaintiff attempts to sue again outside the state of
Minnesota to recover amounts beyond the policy limits.
Minichiello v. Rosenberg, 410 F.2d 106, 112; Note, 65
Harv. L. Rev. 818, 834. Any hardship to the defendant aris-
ing out of a potential second suit against him is no more
than has always existed in quasi-in-rem actions. Often, as
here, a second suit will be impossible because the statute of
limitations has run in the only available alternate forum.
Ordinarily, a second suit against a remote defendant whose
liability insurance has been exhausted would seem unlikely.
Finally, and most significantly, if jurisdiction is techni-
cally proper under § 571.41, subd, 2, but it nonetheless
involves inconvenience for the defendant which outweighs
the plaintiff's interest in a Minnesota forum and other
relevant factors, then the trial court in its discretion can
always grant a motion to dismiss on the grounds of forum
non conveniens. Willoughby v. Hawkeye-Security Ins. Co.
291 Minn. 509, 189 N. W. 2d 165 (1971). In consider-
ing such a motion to dismiss, the trial judge would be justi-
fied in conditioning his ruling upon the willingness of the
plaintiff to satisfy his claims against the defendant upon ex-
haustion of the policy limits.”
For the reasons stated, we conclude that it was not un-
fair on these facts to require defendant and State Farm
to defend this action in Minnesota, and the decision of the
trial court is therefore affirmed.
Afiirmed.
OTIS, Justice (dissenting).
Imposition of such a condition would be consistent with the policy
expressed in Rintala v. Shoemaker, supra, and consistent with our
view that this type of jurisdiction shou'd be limited so as to make
its exercise fair to both the insurer and the insured.
A-40
This is a case wherein two residents of Indiana were
involved in an automobile accident in Indiana. One of the
drivers (Rush) had purchased an automobile liability pol-
icy from State Farm Mutual Automobile Insurance Com-
pany. A year and a half after the accident the other Indiana
res.dent (Savchuk) left that state and moved to Minnesota,
whereupon he commenced this lawsuit against Rush for
injuries suffered in the accident. As Minnesota court could
not constitutionally assert personal jurisdiction over Rush,
Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L.
2d. 2d 1283 (1958),’ Savchuk sought to acquire quasi-in-
rem jurisdiction.* However, Rush has no property in Min-
nesota. Consequently, Savchuk served a garnishment sum-
mons upon State Farm in an attempt to garnish any debt
due and owing Rush by State Farm. In support of his
action, Savchuk relies upon Minn. St. 571.41, subd. 2,
relevant portions of which read:
“Subd. 2. Garnishment shall be permitted before
judgment in the following instances only:
“(1) For the purpose of establishing quasi in rem
jurisdiction.
* * * * *
“(c) the defendant is a nonresident individual, or
a foreign corporation, partnership or association.
“(2) When the garnishee and the debtor are par-
ties to a contract of suretyship, guarantee, or insur-
*Rush did not commit any “act by which [he] purposefully avail[ed]
himself of the privilege of conducting activities within [Minnesota],
thus invoking the benefits and protections of [our] laws.” Hanson v.
Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. ed. 2d 1283,
__ 1298 (1958).
“See, Pennoyer v. Neff, 95 U.S. 714, 24 L. ed. 565 (1877).
A-41
ance, because of which the garnishee may be held
to respond to any person for the claim asserted against
the debtor in the main action.”
It is not disputed that Rush is a nonresident individual;
thus, subd. 2(1)(c) is satisfied and this case is a proper
case for the exercise of quasi in rem jurisdiction.® It is also
not disputed that State Farm and Rush are parties to a
contract of insurance within the meaning of subd. 2(2).
The question is whether, and to what extent, any obliga-
tion owed by State Farm can provide a means by which
Savchuk can obtain quasi-in-rem jurisdiction over Rush.
Quasi-in-rem jurisdiction over a nonresident by the ser-
vice of a garnishment summons on the defendant’s nation-
wide insurer is a creature of Seider v. Roth, 17 N. Y. 2d
111, 269 N. Y. S. 2d 99, 216 N.E. 2d 312 (1966). As
the majority notes, the Seider procedure has been held im-
proper as a matter of Federal maritime law‘ as well as
of the law of almost all the states which have considered
it. Only an inferior court in one other state has adopted
3Subd. 2(1) is merely procedural, defining the types of defendants over
which the exercise of quasi-in-rem jurisdiction is proper. Thus, a court
must assert personal jurisdiction over a resident defendant who can
be found within the state, and cannot proceed quasi in rem. Of course,
subd. 2(1) does not say that quasi-in-rem jurisdiction can be asserted
over defendant there listed in all cases, for an additional element
is needed—something to garnish, i.e., property located within this state.
“If the non-resident have no property in the State, there is nothing
upon which the tribunals can adjudicate.” Pennoyer v. Neff, 95 U.S.
714, 723, 24 L. ed. 565, 569.
*Robinson v. O. F. Shearer & Sons, Inc., 429 F. 2d 83 (3 Cir. 1970).
5Kirchman v. Mikula, 258 So. 2d 701 (La. App. 1972); State ex rel.
Government Employees Ins. Co. v. Lasky, 454 S.W. 2d 942 (Mo.
App. 1970): Johnson v. Farmers Alliance Mutual Ins. Co., 499 P.
1387 (Okla. 1972); Jardine v. Donnelly, 413 Pa. 474, 198 A. 2d 513
(1964); De Rentiis v. Lewis, 106 R. I. 240, 258 A. 2d 464 (1969);
Howard v. Allen, 254 S. C. 455, 176 S. E. 2d 127 (1970); Housley v.
Anaconda Co., 19 Utah 2d 124, 427 P. 2d 390 (1967). See, also, Tes-
sier v. State Farm Mutual Ins. Co., 458 F. 2d 1299 (1 Cir. 1972):
Kirchman v. Mikula, 443 F. 2d 816 (5 Cir. 1971); Sykes v. Beal, 392
F. Supp. 1089 (D. Conn. 1975); Ricker v. Lajoie, 314 F. Supp. 401
(D. Vt. 1970).
A-42
it.” Commentary has been highly critical.’ Even in the
state of its birth, the procedure remains only because of
the opinion of Judge Charles D. Breitel, in which Judge
Bergan concurred, in Simpson v. Loehmann, 21 N. Y. 2d
305, 287 N. Y. S. 2d 633, 234 N.E. 2d 669 (1967), the
case which reaffirmed Seider. Judge Breitel, appointed to
the New York Court of Appeals after Seider, and replacing
one of the judges who was in the 4-3 majority in that case,
and Judge Bergan, who had dissented in Seider, cast the
deciding votes in Simpson for the following reasons:
“* * * Only a major reappraisal by the court,
rather than the accident of a change in its composi-
tion, would justify the overruling of that precedent.
Yet the theoretical unsoundness of the Seider case and
the undesirable practical consequences of its rule re-
quire some comment if only, perhaps, to hasten the
day of its overruling or its annulment by legislation.
“It is the most tenuous of nominalist thinking that
accords the status of an asset, leviable and attachable,
to a contingent liability to defend and indemnify un-
der a public liability insurance policy.
o* * * * *
“Accordingly, I concur to affirm but only because
the institutional stability of a court is more important
than any single tolerable error which I may believe
it has committed.” 21 N. Y. 2d 314, 287 N. Y. S. 2d
640, 234.N.E. 2d 674.
Some of the undesirable practical consequences have al-
ready arisen. Thus, New Hampshire has adopted the rule
“Turner v. Evers, 31 Cal. App. 3d Supp. 11, 107 Cal. Rptr. 390 (1973).
The decision cited in the majority opinion, Forbes v. Boynton, 113
N.H. 617, 313 A.2d 129 (1973), is discussed infra.
"See footnote 11 in the majority opinion.
ee
A-43
that if the nonresident defendant lives in a state which has
adopted Seider—i.e., New York—then that defendant’s in-
surer can be garnished in New Hampshire if the insurer
does business there. Forbes v. Boynton, 113 N. H. 617,
313 A. 2d 129 (1973).° On the other hand, if the defend-
ant lives in a state which has rejected Seider—e.g. Con-
necticut—then his insurer cannot be garnished. Robitaille
v. Orciuch. 382 F. Supp. 977 (D. N. H. 1974). In Vaage
v. Lewis, 29 App. Div. 2d 315, 288 N. Y. S. 2d 521
(1968), New York was presented with a case in which a
Norwegian resident attempted to garnish in New York the
insurer of a North Carolina defendant with respect to an
accident which took place in North Carolina. It was held
that allowing garnishment in that case would violate the
principles of forum non conveniens and due process.’ In
light of the fact that most of our sister states which have
considered Seider have rejected it, that the commentary
is uniformly critical, that a majority of the court which
spawned Seider now believes it to be in error, and mindful
of its potentially undesirable consequences, I would decline
to adopt it in Minnesota. Whether or not it is authorized by
§ 571.41, subd. 2(2), in my opinion it is unconstitutional
as applied to the defendant in this case.
The majority opinion limits the use of the Seider proce-
dure to residents of Minnesota. This is probably constitu-
8In Forbes the New Hampshire Supreme Court stated: “We are not hold-
ing that the Seider rule is to be applied generally to all cases of for-
eign motorists insured by a company with an office in this State and
licensed to do business in New Hampshire. We are merely holding
that under the circumstances of this case in a suit by a resident of
New Hampshire against a resident of New York where the Seider rule
prevails the trial court properly denied the defendant's motion to dis-
miss plaintiff's action.” 113 N. H. 624, 313 A. 2d 133.
%See, also, Nationwide Mutual Ins. Co. v. Vaage, 265 F. Supp. 556 (S. D.
N. Y. 1967).
A-<4
tionally required.” As Judge Earl Larson said in Adkins
v. Northfield Foundry & Machine Co., 393 F. Supp. 1079,
1081 (D. Minn. 1974):
“One of the principal reasons to limit Seider type
jurisdictions is that without such limitations, blatant
forum shopping would be possible. * * * Further,
this limitation is required to give the forum State a
recognizable and protectable interest and to prevent
an unfair burden that might be placed upon both the
nonresident defendant and its insurance company.”
In Rintala v. Shoemaker, 362 F. Supp. 1044, 1956 (D.
Minn. 1973), the late Judge Philip Neville expressed the
reasons behind this limitation:
“The fear is that unless this limit is placed on
Seider type jurisdiction blatant forum shopping would
be possible since many insurance companies, includ-
ing Aetna, do business in all fifty states. Further, the
essential connection between the forum state and the
accident at all, the connection which provides the
forum state with a recognizable and protectable in-
terest, is that the forum is the residence of the plaintiff.
This limit on Seider jurisdiction is not only reason-
able but it limits any inconvenience which the insur-
ance company might suffer. The only additional state
in which garnishment might be had is the resident of
the plaintiff. * * *
Farrell v. Piedmont Aviation, Inc., 411 F. 2d 812 (2 Cir. 1969), af-
firming 295 F. Supp. 228 (S. D. N. Y 1968); Vaage v. Lewis, 29 App.
Div. 2d 315, 288 N. Y. S. 2d 521 (1968); Varady vy. Margolis, 303 F.
Supp. 23 (S. D. N. Y. 1968); Public Admr. of County of New York
v. Unimar Shipping Co., Ltd., 401 F. Supp. 313 (S. D. N. Y 1975);
Rintala v. Shoemaker, 362 F Supp. 1044 (D. Minn. 1973); Adkins v.
Northfield Foundry & Machine Co., 393 Supp. 1079 (D. Minn. 1974).
A-45
“* * * On the facts of this case Aetna is simply
exposed to an action in one more jurisdiction than
it would be otherwise. This certainly is no intolerable
burden On it or a similarly situated garnishee.”
In the case at bar, plaintiff and defendant were both
residents of Indiana when this accident occurred.” At that
time, under the limitation on Seider, Rush and State Farm
were amenable to suit in only one jurisdiction—Indiana.
If Savchuk had been a Minnesota resident at that time
suit could have been brought in only two states—Indiana
and Minnesota. However, if jurisdiction is permissible in
this case Rush and State Farm are amenable to suit in
all 50 states.
If a motorist in another state drives negligently and in-
jures a Minnesotan, a strong case can be made that this
state’s interests are sufficiently great to allow our courts to
use the Seider procedure for obtaining jurisdiction over
the case. As Judge Neville put it, such a motorist “is simply
exposed to an action in one more jurisdiction that [he]
would be otherwise.” 362 F. Supp. 1056. However, allow-
ing a potential plaintiff to move to this state after his cause
of action has arisen and to invoke Seider to bring the case
to Minnesota means that a plaintiff has a choice of 50
iurisdictions in which to sue. Such a result in my opinion
violates due process.” Rush did not injure one who was
a Minnesota resident on the day of the accident. He should
not be forced to defend himself in a Minnesota court.
Plaintiffs statement of the case indicates that all of the witnesses and
records, as well as a treating physician, are located in Indiana, except
for plaintiff's family and two Minnesota physicians who, presumably,
treated him after he moved to Minnesota.
12In the Only reported case where this issue was presented, Robitaille v.
Orciuch, 382 F Supp. 977 (D. N. H. 1974), jurisdiction was denied on
other grounds. See this discussion of Robitaille and Forbes v. Boynton,
113 N. H. 617, 313 A. 2d 129 (1973), supra.
A-46
Under the policies of Schwartz v. Consolidated Freight-
ways Corp., 300 Minn. 487, 491, 221 N. W. 2d 665, 668
(1974)—-advancement of Minnesota’s governmental inter-
ests and application of the better rule of law—Minne-
sota’s comparative negligence law, and not Indiana’s con-
tributory negligence law, will apply. Thus, if Rush injures
another Indiana resident in Indiana, and that person is
able to establish residence in a new jurisdiction, he may
use Seider to bring the defendant in and defend, and avoid
Indiana’s contributory negligence law. Under the majority
opinion, if my next-door neighbor is negligently injured on
my property he is free to move to any other state where
my homeowners insurer transacts business and force me to
defend there.
The majority opinion’s answer is that the defendant is
free to move to dismiss on grounds of forum non con-
veniens. However, that presupposes jurisdiction, which I
cannot accept.”
Accordingly, I would reverse and hold that Minn. St.
571.41, subd, 2(2), is unconstitutional as applied to this
case. It would not then be necessary to reach the issue of
whether Seider is to become the rule of this state.
8“The district courts of this state may fairly exercise their discretion in
declining to accept jurisdiction of transitory causes of acion brought
here by citizens or noncitizens of this state who are nonresident when
it fairly appears that it would be more equitable that the cause of
action be tried in some other available court of competent jurisdic-
tion.” Johnson v. Chicago B. & Q. R. Co., 243 Minn. 58, 79, 66 N.W.
2d 763, 776 (1954).
A-47
STATE OF MINNESOTA
IN SUPREME COURT
JEFFREY D. SAVCHUK,
Respondent,
VS.
RANDAL RUSH and STATE FARM MUTUAL AUTO-
MOBILE INSURANCE COMPANY, garnishee,
Appellants.
45556
Pursuant to an order of Court heretofore duly made
and entered in this cause it is determined and adjudged
that the order of the Court below. herein appealed from,
to-wit, of the District Court within and for the County of
Hennepin be and the same hereby is in all things affirmed.
And it is further determined and adjudged that respond-
ent herein, do have and recover of appellants herein the
sum and amount of Three Hundred Twenty-Five and 99/
100 DOLLARS, ($325.99) costs and disbursements in this
cause in this Court, and that execution may be issued for
the enforcement thereof.
Dated and signed September 27, 1976.
BY THE COURT:
Attest: JOHN McCARTHY
Clerk
4
Z
7
A-48
STATE OF MINNESOTA
IN SUPREME COURT
[Title omitted in printing]
NOTICE OF APPEAL TO THE SUPREME COURT
OF THE UNITED STATES
Notice is hereby given that defendant Randal Rush and
the garnishee State Farm Mutual Automobile Insurance
Company, the appellants above named, hereby appeal to
the Supreme Court of the United States from the final judg-
ment of the Supreme Court of Minnesota affirming the
previous order of the Hennepin County District Court for
the State of Minnesota conferring jurisdiction of the Min-
nesota courts herein and which judgment was entered by
the Supreme Court of the State of Minnesota in this action
on September 27, 1976.
This appeal is taken pursuant to 28 U.S.C. §1257(2)
and, alternately, 28 U.S.C. §2103. )
MEAGHER, GEER, MARKHAM, ANDERSON,
ADAMSON, FLASKAMP & BRENNAN
By /s/ O. C. ADAMSON II
By /s/ JAMES F. ROEGGE
2250 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
Telephone: (612) 338-0661
Attorneys for Appellants
[Affidavit of service omitted in printing]
A-49
UNITED STATES OF AMERICA, SS:
THE PRESIDENT OF THE UNITED STATES
OF AMERICA
To the Honorable the Judges of the Supreme Court of
the State of Minnesota,
GREETINGS:
WHEREAS, lately in the Supreme Court of the State of
Minnesota, there came before you a cause between Jef-
frey D. Savchuk, respondent, and Randal Rush and State
Farm Mutual Automobile Insurance Company, garnishee,
appellants, No. 45556, wherein the judgment of the said
Supreme Court was duly entered on the twenty-seventh
day of September A. D. 1976, as appears by an inspection
of the jurisdictional statement from the Supreme Court of
Minnesota and motion to dismiss or affirm.
AND WHEREAS in the 1976 Term, the said cause
having been submitted to the SUPREME COURT OF
THE UNITED STATES on the said jurisdictional state-
ment and motion to dismiss or affirm:
ON CONSIDERATION WHEREOF, it was ordered
and adjudged on June 27, 1977, by this Court that the
judgment of the Supreme Court of Minnesota in this cause
be vacated, and that this cause be remanded to the Su-
preme Court of the State of Minnesota for further consider-
ation in light of Shaffer v. Heitner, 433 U.S. — (1977).
NOW, THEREFORE, THE CAUSE, IS REMAND-
ED to you in order that such proceedings may be had in
the said cause, in conformity with the judgment of this
Court above stated, as accord with right and justice and
the Constitution and laws of the United States. the said
appeal notwithstanding.
A-50
Witness the Honorable WARREN E. BURGER, Chief
Justice of the United States, the twenty-ninth day of July
in the year of our Lord one thousand nine hundred and
seventy-seven.
MICHAEL RODAK, SR.
Clerk of the Supreme Court of the
United States
By /s/ FRANCES J. LARSON
Deputy Clerk
we ep te es a a ee
A-51
STATE OF MINNESOTA
IN SUPREME COURT
No. 268 (1975)
Hennepin County
45556
Jeffrey D. Savchuk,
Respondent,
VS.
Randal Rush and State Farm Mutual Automobile Insur-
ance Company, garnishee,
Appellants.
Wahl, J. Dissenting. Otis, Rogosheske, and Peterson, JJ.
Endorsed
Filed October 20, 1978, John McCarthy, Clerk Minnesota
Supreme Court
SYLLABUS
The assertion of quasi-in-rem jurisdiction through gar-
nishment of an insurer’s obligation to an insured, pursuant
to Minn. St. 571.41, subd. 2, as limited by Savchuk v.
Rush, — Minn. —, 245 N.W. 2d 624 (1976), is consis-
tent with the due process standards of Shaffer v. Heitner,
433 US. 186, 97 S. Ct. 2569, 53 L. ed. 2d 683 (1977).
Affirmed.
Considered and decided by the court en banc.
A-52
OPINION
WAHL, Justice.
On remand from the United States Supreme Court for
further consideration in light of Shaffer v. Heitner, 433
U.S. 186, 97 S. Ct. 2569, 53 L. ed. 2d 683 (1977). For
the reasons below, we distinguish Shaffer v. Heitner, su-
pra, and hold that the assertion of jurisdiction pursuant to
Minn. St. 571.41, subd. 2, as limited by our earlier deci-
sion in Savchuk v. Rush, — Minn. —, 245 N.W. 2d 624
(1976), vacated and remanded, 433 U.S. 902, 97 S. Ct.
2964, 53 L. ed. 2d 1086 (1977), is consistent with the
standards established by International Shoe Co. v. Wash-
ington, 326 U.S. 310, 66 S. Ct. 154, 90 L. ed. 2d 95
(1945), and its progeny.
The facts are as stated in the earlier decision. Plaintiff,
Jeffrey Savchuk, was injured in a single-car accident in
Elkhart, Indiana, on January 13, 1973. At the time of the
accident, both Savchuk, a senior in high’ school, and the
driver of the car, defendant Randal Rush, were Indiana
residents. In June 1973, Savchuk moved with his parents
to Minnesota, where he became employed, was married
and continues to reside. The personal injury action was
commenced in district court, Hennepin County, on May 28,
1974. Savchuk served a garnishment summons on garnishee
State Farm Insurance pursuant to Minn. St. 571.41, subd.
2' and Minn. St. 60A.19, subd. 1(3). Defendant Rush,
*Minn. St. 571.41, subd, 2, states: Notwithstanding anything to the con-
trary herein contained, a plaintiff in any action in a court of record
for the recovery of money may issue a garnishee summons before
judgment therein in the following instances only:
* + * * *
(b) If the court shall order the issuance of such summons, if a
summons and complaint is filed with the appropriate court and either
served on the defendant or delivered to a sheriff for service on the
oa nam
ed
A-53
still an Indiana resident, was personally served with a copy
of the garnishment summons and copies of the summons
and personai injury complaint.
By order, the district court denied the motion of Rush
and State Farm to dismiss for lack of jurisdiction and in-
sufficient process. They appealed to this court and the
order was affirmed. Savchuk v. Rush, — Minn. —, 245
N.W. 2d 624 (1976).
Upholding the constitutionality of Minnesota’s garnish-
ment provision, Minn. St. 571.41, subd. 2, this court found
that procedure “consistent with two often-stated positions
of this court—namely, our interest in providing a forum
to residents of this state and our determination in long-
arm cases to extend the jurisdiction of our courts to the
maximum limits consistent with due process.” 245 N.W.
2d 628. The statute was interpreted to satisfy three due
process requirements: the provision of adequate notice to
defendant-insured; a limitation of liability to insurance pol-
icy amounts; and restriction of use to plaintiffs who reside
in the forum state, 245 N.W. 2d 628.
On June 24, 1977, the United States Supreme Court va-
cated that judgment and remanded the case for further
defendant not more than 30 days after the order is signed, and if,
upon application to the court it shall appear that:
* * * . .
(2) The purpose of the garnishment is to establish quasi in rem
jurisdiction and that
* * * - -
(b) defendant is a nonresident individual, or a foreign corporation,
partnership or association.
(3) The garnishee and the debtor are parties to a contract of sure-
tyship, guarantee, or insurance, because of which the garnishee may be
held to respond to any person for the claim asserted against the debtor
in the main action.
(4) The creditor has been unable to serve upon the debtor the
summons and complaint in the main action because the debtor has
been inaccessible due to residence and employment in buildings where
access is restricted.
ll
A-54
consideration in light of Shaffer v. Heitner, 433 U.S. 186,
97 S. Ct. 2569, 53 L. ed. 2d 683 (1977), which requires,
in particular, that “all assertions of state court jurisdiction
must be evaluated according to the standards set forth in
International Shoe Co. and its progeny” 97 S. Ct. 2584-
85.
The issue now before this court is whether Minnesota’s
assertion of jurisdiction over out-of-state defendants pur-
suant to Minn St. 571.41, subd. 2, as limited by this court
in Savchuk, supra, satisfies the due process standards set
forth in International Shoe Co. and Shaffer.
In Shaffer, supra, a nonresident plaintiff filed a share-
holder’s derivative suit in Delaware state court, naming
as defendants Greyhound (a Delaware corporation), Grey-
hound Lines (its wholly-owned subsidiary incorporated in
California), and 28 present or former officers or directors
of one or both of the corporations, none of the last being
Delaware residents. The complaint alleged that the indi-
vidual defendants had violated their duties to the corpo-
ration and its subsidiary by permitting activities in Oregon
which made the company liable for substantial antitrust
litigation, damages, and criminal contempt fines. The Del-
aware court obtained jurisdiction by sequestering, via stop-
transfer orders. Greyhound stock owned by the individual-
defendants.’
On appeal to the Delaware Supreme Court, one constitu-
78 Del. Code Ann. § 169 makes Delaware the situs of ownership of
stock in Delaware corporations; the rule in the other 49 states places
that situs in the state of the owner’s residence. 97 S. Ct. 2588 (Stevens,
concurring).
Sequestration is a seizure of property used to compel the personal
appearance of the nonresident defendant. See, 10 Del. Code Ann. §
366, Although liability is limited to the value of the property seized,
potenial liability here was $1.2 Million. 97 S. Ct. 2574 n 7.
j
A-55
tional challenge to the jurisdiction-by-sequestration proce-
dure was side-stepped:
“There are significant constitutional questions at
issue here but we say at once that we do not deem
the rule of /nternational Shoe to be one of them, * * *
The reason, of course, is that jurisdiction under § 366
remains, as it was in 1963, guasi in rem founded
On the presence of capital stock here, not on prior
contact by defendants with this forum * * *.” Grey-
hound Corporation v. Heitner, 361 A. 2d 225 (Del.
1976), reversed sub nom, Shaffer v. Heitner, 433 US.
186, 97 S. Ct. 2569.
The United States Supreme Court overruled this categori-
cal in rem/in personam jurisdiction analysis:
“* * * in order to justify an exercise of jurisdiction
in rem, the basis for jurisdiction must be sufficient to
justify exercising ‘jurisdiction over the interests of per-
sons in a thing.’ The standard for determining wheth-
er an exercise of jurisdiction over the interests of per-
sons is consistent with the Due Process Clause is the
minimum contacts standard elucidated in Internation-
al Shoe [Co. v. Washington, 326 U.S. 310, 66 S.
Ct. 154, 90 L. ed. 2d 95 (1945)]. 433 U.S. 207, 97
S.Ct. 2582, 53 L. ed. 2d 699.
“* * * For in cases such as Harris [v Balk, 198
U.S. 215 (1905)] and this one, the only role played
by the property is to provide the basis for bringing
the defendant into court. Indeed, the express purpose
of the Delaware sequestration procedure is to com-
pel the defendant to enter a personal appearance. In
|
A-56
such cases, if a direct assertion of personal jurisdic-
tion over the defendant would violate the Constitu-
tion, it would seem that an indirect assertion of that
jurisdiction would be equally impermissible.” 433 U.
S. 209, 97 S. Ct. 2583, 53 L. ed. 2d 701.
Evaluating the sequestration procedure by that stand-
ard, the court held Delaware’s assertion of jurisdiction to
be inconsistent with the due process “minimum contacts”
limitation on state power. It found the asserted state in-
terest in supervising the management of local operations
to be imperfectly served by the sequestration procedure,
which is not expressly limited to corporate fiduciaries and
does not even guarantee jurisdiction over all such figures.*
433 U.S. 214, 97 S. Ct. 2585-86, 53 L. ed. 2d 704. Though
such an interest might support the application of Delaware
law to the controversy, choice of law does not necessarily
establish jurisdiction over the parties, 433 U.S. 215,
97 S. Ct. 2586, 53 L. ed. 2d 704. Accordingly, judgment
was reversed. ;
Shaffer generally directs the application of Internation-
Shoe Co. standards to all assertions of state court juris-
diction, 433 U.S. 212, 97 S. Ct. 2584, 53 L. ed. 2d 703,
but the necessary consequences for jurisdiction under
Minn. St. 571.41, subd. 2, are not clear. That statute em-
bodies the rule of Seider v. Roth, 17 N. Y. 2d 111, 269
N. Y. S. 2d 99, 216 N. E, 2d 312 (1966). It provides
jurisdiction over a nonresident defendant via garnishment
of a contractual obligation, the obligation of the insurance
company (doing business in this state) to defend and in-
’Heitner failed to secure jurisdiction over seven of the individual defen-
dants since Delaware law does not require directors to own stock.
8 Del. C. § 141 (6).
A-57
demnify the nonresident, insured defendant. Under the
statute, as interpreted in our earlier opinion, the non-resi-
dent defendant is guaranteed notice, his liability is lim-
ited to the policy’s face amount and he procedure may be
utilized only by residents of the forum state. Savchuk v.
Rush, supra.
Although Seider v. Roth-type jurisdiction is undoubted-
ly the most highly controversial and significant contempo-
rary application of the doctrine of quasi-in-rem jurisdic-
tion, it does not appear in the historical discussion in
Shaffer.*
Since Shaffer, New York courts have split over its impli-
cations for Seider v. Roth-type jurisdiction. Several trial
courts have held such jurisdiction to be precluded by Shaf-
fer: Torres v. Towmotor Division of Caterpillar, Inc. D.
C. — F. Supp. — (E.D. N.Y. 1977) (cited in Alford v.
McGaw, 402 N.Y.S. 2d 499 (N.Y. App. Div. 1978);
Rodriguez v. Wolfe, 401 N.Y.S. 2d 442 (N.Y. Sup. 1978):
Attanasio v. Ferre, 401 N.Y.S.2d 685 (N.Y. Sup. 1977):
Datz v. Umansky, 399 N.Y.S. 2d 412 (N.Y. Sup. 177);
Kennedy v. Deroker, 398 N.Y.S. 2d 628 (N.Y. Sup. 1977).
Other trial courts have held that such jurisdiction does not
offend due process: O’Connor v. Lee-Hy Paving Corp., 437
F. Supp. 994 (E.D.N.Y. 1977), affirmed. 579 F. 2d 194
(2 Cir. 1978); Wallace v. Target Store, Inc., 400 N.Y.S.
2d 478 (N.Y. Sup. 1977). Most recently, a New York ap-
*The United States Supreme Court has never considered the constitution-
ality of the procedure, twice declining to review appellate decisions
sustaining the exercise of Seider v. Roth jurisdiction: Minichiello v.
Rosenberg, 410 F. 2d 106 (2 Cir. 1968) affirmed on rehearing en
banc, 410 F. 2d 117, certiorari denied, 396 U. S. 844, 90 S. Ct. 69,
29 L. ed. 2d 94 (1969), Victor v. Lyon Assoc. Inc., 2! N.Y. 695,
287 N.Y.S. 2d 424, 234 N. E. 2d 459 (1967), appeal dismissed for
want of a substantial Federal question, sub nom, Hanover Ins. Co. v.
Victor, 393 U. S. 7, 88 S. Ct. 44, 21 L. ed. 94 (1968).
.
4
AT CON MENTE RT eT oe tne en ae
A-58
pellate court upheld the exercise of Seider-type jurisdiction
in light of Shaffer v. Heitner. Alford v. McGaw, 402 N.Y.S.
2d 499 (N.Y. App. Div. 1978).
This exercise of jurisdiction differs in many important
respects from the Delaware sequestration procedure invali-
dated in Shaffer: First, sequestration did not parallel the
asserted state interest in the management of state-chartered
corporations—sequestration could be used in any suit
against a nonresident, and in fact did not guarantee juris-
diction over corporate fiduciaries. By contrast, Minnesota’s
garnishment procedure specifically premises jurisdiction on
attachment of the obligation to respond to claims in the
underlying action. Minn. St. 571.41, subd. 2(3). Delaware’s
interest in supervising its corporations’ fiduciaries estab-
lished only the propriety of Delaware /aw, not necessarily a
Delaware forum, 433 U.S. 214-15, 97 S. Ct. 2586, 53 L. ed.
2d 704-05. Minnesota’s legitimate interest in facilitiating
recoveries for resident plaintiffs’ not only requires provi-
sion of a local forum, but may override traditional choice
5Cf. Minichiello v. Rosenberg, 410 F. 2d 106 (2 Cir. 1968); McGee v.
International Life Ins. Co., 355 U. S. 220, 78 S. Ct. 199, 2 L. ed. 2d
222 (1957); Hess v. Pawloski, 274 U. S, 352, 47 S. Ct. 632, 71 L. ed.
1091 (1927).
A state’s interest in providing a forum for its residents is particular-
ly strong where an alternative forum would not have permitted recov-
ery. In the instant case, Indiana’s guest statute would have cut off Sav-
chuk’s claim. Ind. Stat. § 9-3-3-1. A plaintiff's lack of access to an al-
ternative forum might be a legitimate consideration in justifying exer-
clse of jurisdiction. Shaffer v. Heitner, 433 U. S. 211, 97 S. Ct. 2584,
53 L. ed. 2d 702, n. 37. We also note, in this regard, that by the
time the trial court ruled on Savchuk’s motion to amend the complaint
by making State Farm Mutual a party, the Indiana two-year statute of
limitations had run.
One commentator states that a plaintiff's residence “may be deemed
an overriding minimum contact” sufficient to justify the exercise of
jurisdiction, where no alternative forum exists. Zammit, Quasi-in-Rem
Jurisdiction: Outmoded & Unconstitutional? 49 St. John’s L. Rev.
668, 682 (1975).
ee ——
;
A-59
of law analysis. See, Schwartz v. Consolidated Freightways
Corp. of Delaware, 300 Minn. 487, 221 N.W. 2d 665
(1974), appeal after remand, 306 Minn. 564, 237 N.W.
2d 385 (1975) (applying Minnesota comparative negli-
gence law where plaintiff was a Minnesota resident, al-
though accident occurred in contributory-negligence state.)
The stock sequestered in Delaware was completely unre-
lated to the plaintiff's cause of action, constituting only an
attachable asset used to compel the defendants’ personal
appearance. 433 U.S. 208-09, 97 S. Ct. 2585, 53 L. ed.
2d 700-01. In the instant case, the insurer’s obligation to
defend and indemnify, while theoretically separable from
the tort action, has no independent value or significance
«part from accident litigation. In the accident litigation,
however, it is inevitably the focus, determining the rights
and obligation of the insurer, the insured, and practically
speaking, the victim. |
More importantly, because this assertiun of state court
jurisdiction is, as has long been acknowledged, a “hybrid,”
its jurisdiction does not rest exclusively on Harris v. Balk.*
®Most recently in O'Connor v, Lee-Hy Paving Corp., 579 F. 2d 194 (2
Cir. 1978), the Second Circuit Court of Appeals by Judge Friendly
distinguished Seider from Harris in light of Shaffer.
_ “What sharply differentiates these cases from those just hypothe-
sized is that a judgment for the plaintiff will not deprive a defendant
of anything substantis! that would have been otherwise useful to him.
He could not recover, sell or hypothecate the covenant to indemnify:
its utility is solely to protect him from liability and in an appropriate
case to allow the plaintiff to recover from the insurer * * *. What we
said in Minichiello, supra, nine years ago apropos of Harris v. Balk
remains just as true today: ‘* * * a Seider judgment would mean
simply that liability policies, on which appellants could not have rea-
lized for any purpose other than to protect themselves against losses
to others, will be applied to the very objective for which they were
procured.’ 410 F. 2d 118 (emphasis supplied). Moreover, since the
insurance policy was purchased to protect against the type of liability
which is the subject of the lawsuit and since the obligation to defend
clearly encompasses the litigation, Seider does not sanction ‘the type
ENN
A-60
This court and other courts have evaluated due process
challenges to such an assertion of jurisdiction in terms of
minimum contacts and fairness. Savchuk v. Rush, —
Minn. —, 245 N.W. 2d 624, 629 (1976); Simpson v.
Loehmann, 21 N.Y. 2d 305, 311, 287 N.Y.S. 2d 633,
637, 234 N.E. 2d 669, 672 (1967); Rintala v. Shoemaker,
362 F. Supp. 1044, 1053 (D. Minn. 1973). See, Alford v.
McGaw, 402 N. Y. S. 2d 499, 502 (N. Y. App. Div. 1978).
Just as Shaffer compels perforation of the in rem fiction
as a jurisdictional base, we are obligated to consider the
practical relationship between the insurer and the nominal
defendant here. The insurer’s garnished obligation to re-
spond is complemented by the insured’s obligation to co-
operate. Our limitation of liability to policy limits protects
the named defendant from personal exposure. The result
is often labeled a procedural alternative to a direct action
statute, a preferred alternative which permits insurer anony-
mity. See, Alford v. McGaw, 402 N. Y. S. 2d 499, 503
(N. Y. App. Div. 1978); See, also, Mehren & Traut-
man, “Jurisdiction to Adjudicate: A Suggested Analysis,”
79 Harv. L. Rev. 1121, 1168. This label does not obviate
the due process scrutiny. Cf., Watson v. Employers Li-
ability Assurance Corp., 348 U.S. 66, 75 S. Ct. 166, 99
L. ed. 74 (1954); it does, however, serve to minimize the
of quasi in rem action typified by Harris v. Balk and the present case
{sequestration of shares in a Delaware corporation]’, where the prop-
erty which ‘serves as the basis for * * * jurisdiction is completely un-
related to the plaintiff's cause of action,’ Shaffer v. Heitner, supra,
433 U. S. 208-09, 97 S. Ct. 2582, 53 L. ed. 700-01 (emphasis sup-
plied.) The fall of Harris v. Balk therefore does not necessarily topple
Seliger, ¢ °°”
See, also, Smit, “The Enduring Utility of In Rem Rules: A Lasting
Legacy of Pennoyer v. Neff,” 43 Brooklyn L. Rev. 600, 603-24
(1977), cited in Shaffer, 433 U. S. 208, 97 S. Ct. 2582, 53 L. ed. 2d
700, n. 30 and, Jonnet v. Dollar Sav. Bank of New York, 530 F. 2d
1123, 1138-39 (3 Cir. 1976) (Gibbons, J., concurring), cited in Shaf-
fer, 433 U.S. 205, 97 S. Ct. 2581, 53 L. ed. 2d 698.
tins sna creer
A-61
traditional “jurisdictional bias” in favor of the nominal de-
fendant.
Similarly, limiting the availability of this type of quasi
in rem jurisdiction to residents of the forum, Savchuk v.
Rush, — Minn. —, 245 N.W. 2d 628 (1976), minimizes
the potential for abuse and forum shopping.’ See, Rintala
v. Shoemaker, 362 F. Supp. 1044, 1956 (D. Minn. 1973).
Again, we note that the trial court in its discretion can
always grant a motion to dismiss on the grounds of forum
non-conveniens, should the defendant’s burden outweigh
the plaintiff's interest in a Minnesota forum and other rel-
evant factors. 245 N.W. 2d 630.
We view as relevant the relationship between the de-
fending parties, the litigation, and the forum state. It can-
not be said that Minnesota lacks such minimally-requisite
“contacts, ties or relations” to those defending parties as
to offend the requirements of due process. In view of our
consistent policies of providing a forum to residents of this
state and extending our jurisdiction to the maximum limits
consistent with due process, we decline to reverse our prior
decision.
Accordingly, the order of the district court is affirmed.
OTIS, Justice (dissenting).
The inference to be drawn from this remand is not, in
my opinion, that we are free to distingush Shaffer and re-
instate the judgment vacated by the Supreme Court. As I
construe it, we are simply afforded an opportunity to re-
vise our decision to conform to Shaffer on the assumption
7Although yee Savchuk was a resident of Indiana at the time of the
accident, Savchuk, then 19 years old, accompanied his parents in their
move to Minnesota six months later. He has established and continued
residency; we find no suggestion of forum-shopping in the record.
A-62
we would have reached a different conclusion had Shaffer
been decided when we wrote Savchuk. Any other infer-
ence would lead to the unlikely conclusion that the Su-
preme Court was merely delegating to us its responsibility
to resolve a difficult constitutional question.
Three specific rules recognized in Shaffer dispose of the
jurisdictional issue here presented.
First. A forum state acquires no jurisdiction either in
rem or in personam merely by the location in that state of
property owned by defendant, unless such property is the
subject of the litigation. Otherwise it is available only
to satisfy a judgment. 433 U.S. 210-13, 97 S. Ct. 2583-
84, 53 L. ed. 2d 701-03.
Second. In order to obtain either in rem or in per-
sonam jurisdiction the defendant must have certain mini-
mum contacts with the forum state “such that the main-
tenance of the suit does not offend ‘traditional notions of
fair play and substantial justice.’ ” 433 U.S. 203, 97 S.
Ct. 2580, 53 L. ed. 2d 697.
Third. It is the relationship among the defendant, the
forum, and the, litigation which is the basis for jurisdiction
over a nonresident, not their relationship with the plaintiff.
433 U.S. 208-09, 97 S. Ct. 2582-83, 53 L. ed. 2d 700-01.
1. The majority holds that while the stock sequestered
in Shaffer “was completely unrelated to plaintiff's cause of
action” the State Farm’s obligation to defend and indem-
nify is “inevitably the focus” in this litigation and deter-
mines “the rights and obligations of the insurer, the in-
sured, and practically speaking, the victim.” However, this
is not the test of jurisdiction. I submit.
ee
Ee en eee ee
A-63
Under the explicit holding of Shaffer, whether or not
State Farm’s contingent liability is a property right is whol-
ly immaterial unless it is the subject matter of the litiga-
tion, There is no dispute as to the amount or scope of cov-
erage under the policy. It is no more the subject of the
litigation than would be a bank account available in Min-
nesota to satisfy the judgment. Absent a controversy in-
volving the policy which is justiciable in Minnesota, the
mere happenstance of an asset such an insurance being
available to satisfy a judgment no longer confers in rem
jurisdiction. In other words, the fact defendant is finan-
cially responsible in Minnesota is not enough without some
other “contacts, ties, or relations” with the state as defined
in International Shoe v. Washington.
2. A policy of providing a forum to residents of this
state, extending our jurisdiction to the maximum limits
consistent with due process is relied on by the majority.
This is certainly the legislative intent and one with which
I have no quarrel. The problem is that the majority stresses
the forum’s relationship with the plaintiff, whereas the con-
Stitutional test is the contact of the defendant with the
forum.
The majority leans on note 37 in Shaffer for the propo-
sition that the unavailability to plaintiff of any other forum
is an important factor in acquiring jurisdiction over a non-
resident defendant. That note, however, gives no support
for such a.rule. It merely states “This case does not raise,
and we therefore do not consider, the question whether the
presence of a defendant’s property in a State is a sufficient
basis for jurisdiction when no other forum is available to
the plaintiff.” 433 U.S. 211, 97 S. Ct. 2584, 53 L. ed. 2d
A-64
702, n. 37. Nor can I agree that “Minnesota’s legitimate
interest in facilitating recoveries for resident plaintiffs not
only requires provision of a local forum but may override
traditional choice of law analysis.” The Schwartz case, cit-
ed in reliance for that rule, must be read in the context
of Shaffer, now the governing law. No mention is made in
Shaffer of the relevance of “minimum contacts” between
plaintiff and the forum as modifying the rules wet forth in
International Shoe.”
3. This is an action for personal injuries and not a
declaratory judgment suit to construe a liability policy. As
in Shaffer the plaintiff did not allege and does not now
claim that defendant ever set foot in Minnesota. He does
not identify any act related to his cause of action as having
taken place in Minnesota. The issue of in personam juris-
diction was extensively discussed in Hanson v, Denckla,
357 U.S. 235, 250-55, 78 S. Ct. 1228, 1238-40, 2 L. ed. 2d
1283, 1296-98 (1958). In that case the United States Su-
preme Court affirmed the decision of a Delaware court re-
fusing to give full faith and credit to a Florida probate
proceeding on the ground the Florida court failed to have
jurisdiction over a Delaware trustee holding property
which was the subject of the Florida probate proceedings.
In affirming the decision of the Delaware court the Su-
preme Court made these observations:
“As technological progress has increased the flow
of commerce between States, the need for jurisdiction
over nonresidents has undergone a similar increase.
At the same time, progress in communications and
1In Shaffer both the plaintiff and the defendants were nonresidents of
the forum.
ee eee ee
Chie ean ere Lie SE
A-65
transportation has made the defense of a suit in a
foreign tribunal less burdensome. In response to these
changes, the requirements for personal jurisdiction
over nonresidents have evolved from the rigid rule of
Pennoyer v. Neff, 95 U.S. 714 to the flexible stan-
dard of International Shoe Co. v. Washington, 326
U.S. 310. But it is a mistake to assume that this trend
heralds the eventual demise of all restrictions on the
personal jurisdiction of state courts. * * * Those re-
strictions are more than a guarantee of immunity
from inconvenient or distant litigation. They are a
consequence of territorial limitations on the power of
the respective States. However minimal the burden
of defending in a foreign tribunal, a defendant may
not be called upon to do so unless he has had the
‘minimal contacts’ with that State that are a pre-
requisite to its exercise of power over him.” 357 U.S.
250-51, 78 S. Ct. 1238, 2 L. 3d. 2d 1296.
The court stressed the fact that the trust agreement was
executed in Delaware and the settlor was domiciled at that
time in Pennsylvania and did not become domiciled in
Florida until some years later. The court reached the fol-
lowing conclusion:
“* * * The unilateral activity of those who claim
some relationship with a nonresident defendant can-
not satisfy the requirement of contact with the forum
State. The application of that rule will vary with the
quality and nature of the defendant’s activity, but it
is essential in each case that there be some act by
which the defendant purposefully avails itself of the
privilege of conducting activities within the forum
A-66
State, thus invoking the benefits and protections of
its laws.” 357 U.S. 253, 78 S. Ct. 1239-40, 2 L. ed.
2d 1298.
* * * * *
“It is urged that because the settlor and most of
the appointees and beneficiaries were domiciled in
Florida the courts of that State should be able to ex-
ercise personal jurisdiction over the nonresident trust-
ees. This is a non sequitur.” 357 U.S. 254, 78 S. Ct.
1240, 2 L. ed. 2d 1298.
* * * * *
“#* * * Tt does not acquire that jurisdiction by being
the ‘center of gravity’ of the controversy, or the most
convenient location for litigation. The issue is person-
al jurisdiction, not choice of law. It is resolved in this
case by considering the acts of the trustee. As we
have indicated, they are insufficient to sustain the
jurisdiction.” 357 U.S. 254, 78 S. Ct. 1240, 2 L. ed.
2d 1298.
4. When plaintiff was injured, he and defendant were
both Indiana residents, driving on an Indiana highway in
a car registered in Indiana and insured in Indiana by a
policy written in that state. The record discloses no rela-
tionship between defendant and the State of Minnesota.
The fact that his insurer also does business in Minnesota
is not, of course, attributable to any activity on the part of
defendant. To paraphrase the words of Mr. Justice Mar-
shall in Shaffer, defendant has simply had nothing to do
with the State of Minnesota and had no reason to expect
to be haled before a Minnesota court. By acquiring an in-
surance policy with State Farm he did not surrender his
2 ee
A-67
right to be brought to judgment only in a state with which
he had minimum contacts. Mr. Justice Stevens’ comments
in his concurring opinion apply with equal force to the
role of defendants liability insurance in this case:
“One who purchases shares of stock on the open
market can hardly be expected to know that he has
thereby become subject to suit in a forum remote from
his residence and unrelated to the transaction.
* * * * * Tf its procedure were upheld, Delaware
would, in effect, impose a duty of inquiry on every
purchaser of securities in the national market. For
unless the purchaser ascertains both the state of in-
corporation of the company whose shares he is buy-
ing, and also the idiosyncrasies of its law, he may be
assuming an unknown risk of litigation.” 433 USS.
218-19, 97 S. Ct. 2587-88, 53 L. 3d. 2d 706-97.
Shaffer reiterates the rule laid down in International
Shoe and applies it to in rem jurisdiction:
“Whether due process is satisfied must depend ra-
ther upon the quality and nature of the activity in
relation to the fair and orderly administration of the
laws which it was the purpose of the due process
Clause to ‘insure. That clause does not contemplate
that a state may make binding a judgment in per-
sonam against an individual or corporate defendant
with which the state has no contacts, ties, or rela-
tions.” 326 U.S. 319, 66 S. Ct. 1160, 90 L. ed. 2d
104.
Defendant himself, it is conceded, has not simply had
minimum contacts with Minnesota. He has had no con-
tacts with Minnesota. Under such circumstances it is not
A-68
my notion of fair and orderly administration of justice to
require a citizen of Indiana, because he carried liability
insurance, to come to Minnesota to defend himself against
the claims of another Indiana citizen who has had no con-
tact with this state until his parents elected for undisclosed
reasons to make Minnesota his residence. As was noted in
the prior dissent:
“Plaintiff's statement of the case indicates that all
of the witnesses and records, as well as a treating
physician, are located in Indiana, except for plain-
tiff’s family and two Minnesota phvsicians who, ‘pre-
sumably, treated him after he moved to Minnesota.”
— Minn. —, 245 N.W. 2d 644, 633 n. 11 (1976).
Our long-arm statute is designed essentially to give re-
dress to bona fide citizens of Minnesota who have suffered
a wrong by the harmful intrusion of a nonresident into
this jurisdiction. It is reasonable to expect nonresidents
who do business here or who otherwise enjoy the privileges
and protection of our laws to respond in our courts for
injury caused citizens of this state by virtue of their ac-
tivities. However, where, as here, the injury occurred in a
foreign state at a time when Minnesota had no connection
with either the parties or the cause of action, I fail to see
the logic or the beneficial public policy of encouraging
after-the-fact forum shopping to secure retroactive juris-
diction in this state.
Accordingly I would reverse.
ROGOSHESKE, Justice (dissenting).
I join in the dissent of Mr. Justice Otis.
PETERSON, J ustice (dissenting).
I join in the dissent of Mr. Justice Otis.
a
PEARED IRN
A-69
STATE OF MINNESOTA, IN SUPREME COURT
JEFFREY D. SAVCHUK,
Respondent,
Vs.
RANDAL RUSH and STATE FARM MUTUAL AUTO-
MOBILE INSURANCE COMPANY, garnishee,
Appellants.
Pursuant to the Mandate of the U.S. Supreme Court dated
July 29, 1977, the judgment of this Court dated and en-
tered on September 27, 1976, be and hereby is vacated.
Pursuant to an order of this Court heretofore duly made
and entered in this cause on October 20. 1978, it is deter-
mined and adjudged that the order of the Court below,
herein appealed from, to-wit, of the District Court within
and for the County of Hennepin be and the same hereby is
in all things affirmed.
And it is further determined and adjudged that respond-
ent herein, do have and recover of appellants herein the
sum and amount of Two Hundred Sixty-Nine and 78/100
DOLLARS, ($269.78) costs and disbursements in this
cause in this Court, and that execution may be issued for
the enforcement thereof.
Dated and signed November 3, 1978.
BY THE COURT:
Attest: JOHN McCARTHY
Clerk
A-70
State of Minnesota
In Supreme Court
[Title omitted in printing]
NOTICE OF APPEAL TO THE SUPREME COURT
OF THE UNITED STATES
NOTICE IS HEREBY GIVEN that defendant Randal
Rush and the garnishee State Farm Mutual Automobile In-
surance Company, the appellants above named, hereby ap-
peal to the Supreme Court. of the United States from the
final judgment of the Minnesota Supreme Court, which
judgment was entered on November 3, 1978, and which
judgment reaffirmed a previous judgment of the Minnesota
Supreme Court of September 27, 1976, and which judg-
ment was vacated and remanded by the United States Su-
preme Court pursuant to the Order of the United States
Supreme Court of June 27, 1977.
This appeal is taken pursuant to 28 U. S. C. §1257
(2) and, alternately, 28 U. S.C. §2103.
MEAGHER, GEER, MARKHAM, ANDERSON,
ADAMSON, FLASKAMP & BRENNAN
By O. C. ADAMSON, II
JAMES F. ROEGGE
2250 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
Attorneys for Appellants
(612) 338-0661
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