Brief for the Respondent in Opposition — Farrell v. Piedmont Aviation, Inc.

Supreme Court brief1969

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Supreme Court of the United Staite

y at} October Term, 1969 AUC 19 1969

SE a eee eee 7 Roe a bok ee ree eRe 2 ged,

COURT ts. &

GEORGE E. FARRELL, as Administrator de bonis non of the

Estate of WYAND F. DOERNER, :JR., deceased, —>

DIANE SOKOLOWSKI, as Administratrix of the Estate of

GEORGINA LOPEZ BURDEN, deceased,

JULES BRODY, as Administrator with will annexed of the Estate of

WASHINGTON LAFAYETTE BLACKMON, JR., deceased, a *

- DANIEL DONNELLY, ‘as Administrator: de bonis non, cum testamento

annexo of the Estate of J. DUDLEY HUTCHINSON; deceaséd,

® DANIEL’ DONNELLY, as Administrator de Sonis non, cum testamento

annexo of the Estate of J. DUDLEY HUTCHINSON, JR., deceased,

ANDREW P. O’ROURKE, as Administrator of the Estate of

¢. L. HUTCHERSON, JR., deceased,

GERALD. A. ROBBIE, as Administrator de bonis non with will

annexed of the Estate’ of JOSEPH EMILE BERMAN, deceased,

PAUL S. EDELMAN, as Administrator de bonis non with will

annexed of the Estate of ELLEN S. LOVE, deceased,

PAUL S. ming as Administratot of the Estate of

LUCY ANN LOVE, deceased,

PAUL S. EDELMAN, as Administrator of the Estate of

ELLEN CABOT LOVE, deceased,

PAUL S. EDELMAN, as Administrator of the Estate of

WILLIAM D. LOVE, V, deceased,

AMERICAN BANK & TRUST COMPANY as Administrator cum testa-

mento annexo of the Estate of JAMES HENRY STUART, deceased, and

AMERICAN BANK & TRUST COMPANY, as Administrator cum

testamento annexo of the Estate of THOMAS C. enor deceased,

: —

agamst

PIEDMONT AVIATION, INC., THE BOEING vege sitebe: and

UNITED STATES OF AMERICA;

"Defendants,

and

RAPIDAIR, INC., and LANSEAIR, INC.,

o Respondents.

BRIEF OF RESPONDENT RAPIDAIR, INC. AND GARN-

ISHEE ST. PAUL FIRE AND’MARINE INSURANCE COM-

PANY IN OPPOSITION TO PETITION FOR WRIT OF

CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR PHE SECOND CIRCUIT

DOUGLAS B. BOWRING

80 Broad Street

8s New York, New York 10004

Counsel for Resp

Rapidair, Inc., and Garnishee

St. Paul Fire and Marine

Insurance*C ompany

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TABLE OF CONTENTS

Crrations To Opinions BELow .......... end eae lM arene au

REE SEALY ALARM EE IG STI EEE

QUESTIONS PRESENTED ...0.0.0.0000.000!0:ceceueeeeee pid cee

SPM TI ea lease rcdevinastnstass) caterers rue

STATEMENT ..............06.......---. PR Sad nie me See etree see

ARGUMENT |... ee eee

Point I—Inter prétation of Local Law is ordinarily

- not reviewed by the Supreme Court .:..’............... 9

Poker 11—The decisions below. are clearly correct 9

Poi II—If the attachment is allowed it would be

unconstitutional as a violation of due process

- and as an impairment of contract ...2..000..00.000.0.0. 150

~Av. The attachment violates due po mee ae

B. The attachment impairs fhe obligation of aap

the insurance nee SO IE eee era es

CéncLusION Pe MGa ce ral ba Pe See : Cade aie: ce Ske 24

—~ TABLE OF AUTHORITIES:

Cases: : Ss

Atkinson v. Superior Court, 49 Cal. 2d 338, 316 P. 2d

.960 (1957), appeals dismissed and cert. denied °

sub nom. Columbia Broadcasting System, Ine. v.

Atkinson, S67 Tz B. GOD ...s.0. cc ies jeeesenseeonsn’ ini

Bernhardt v. Polygraphic Co., 350 U.S. 198, 6 S. Ct.

273; 100 L. _— 199 (1955) Pages anieniaecben Nan veteadp

POT ee oe

PME MERTEN L Sy

n .

Columbia Railway Gas & Electric Co. v. State of

South ages 261 U..S. 236, 43°S. Ct. 306, 67

387 U. S. 456, 87 S. Ct. 1776,. 18 L.-Ed, 2d 886

1s Be ineire rhe ecenomian aay ince 3

‘Davenport v. Patrick, 227 N. C. 686, 44 S. E.-2d 203

NR ee ee

Douglas v. New Haven R. Co, 279 U. S. 377, 49 S. Ct.

399, 73 L. Kd. ia (1929) ictus cease epeeoy se

Farrell V.. Wyatt, 408 F. 2d 662 (2d Cir. 1969) . ey oer

- Fidelity Union Trust of v. Field, 311 U. S. 169, 61

S.Ct. 176, 85 L. Ed. 109 (1940) oo... cn.

Hanson v. Denckla, 357 U. S. 235, 78 S. Ct. 1228, 2 L.

0 We YN = ee

_ Harris v. Balk, 198 U. S. 215, 25 S. Ct. 625, 49 L. Ed.

EE 6 IE ik laa ee ee

. Hartford Accident & iidonniey Ga, v. Delta &'Pine

| Land Co., 292 U. S. 143, ‘548. Ct: 634, 78 L. Hid.

1178 (1934) ich sia see tactecEs Aaa ae Pa eie ite:

*“Home Insurance Co. v. Dick, 281 U.S. 397, 50 S. Ct.

338 74 L. Ed. 926 (1930) ............. Laren PCr

Houston & Texas R. R. Co. v. Texas, 177 U. 8. 66, 20

8. Ct. 545, 44 L. Ed. 673 (1900) ; DacpiciScaseeaaes

- —7

_ In re Ives Estate, "248 N. C. 176, 102 S. K. od 807

er.) Wee: Fee ee a ne :

International Shoe Co. v. . Wankdanton: 326 U: S. 310,

: 66 S. Ct. 154, 90 L. Hd. 95 (1945) .......... “e TRAN ;

Mac Gregor v. State Mutual Life harass Co., 315

U..S. 280, 62.8. Ct. 607, 86 L. Ed. 846 (1942) . ai

ee . f ad

PAGE .

14, 18

16-

ame

McGee v. Tnternational Life Insurance Co., 355 U. S.

220, 78'S. Ct. 199, 2 L. Ed. 2d 223 (1957) eae 19

Minichiello v. Rosenberg, 410 F. 2d 106 (2nd: Cir.

ae ee i 11,12, 14, 16, 19

Missouri ex rel. Southern Railway Co. v. Mayfield,

340 U.S. 1, 718. Ct.1, 95 L. Ed. 3 (1950) bets oe “14

Pierson v. Ray, 386 U.S. 547, 87 S. Ct. 1213, 18 L. Ed.

2d 288 . (1967) a ats oes A Gc et Meg ee ee —g9

Seider v. Roth, 17 N. Y. 2d 111 (1968) eres ...10, 11, 13, 14,....

, 15, 16,21 .

} ‘Sitapece v. Loehmann, 21 N. Y. 2d 305 (1967), motion

for reargument denied 21 N. Y. 2d 990 (1968) ..10, 13, 17

Six Companies of California v. Joint Highway Dist.

No. 13, 311 U. 8S. 180, 61 S: Ct: 186, 85 L. Ed. 114

SM aa aca Cast aps a ve votes swore nem 13

Steele v. General Mills, Inc., 329 U. S. 433, 67 S. Ct. |

439, 91 L. Ed. 402 (1947) acd pe REET eae CAR Rg at - @

Stoner v. New York Lifé Insurance omar, 311

~ U.S. 464 61S. Ct. 336, siete Kd. 284 — ae

Vaage v. Lewis, 29 A. D. 315, 288 N. Y. S. 2d 521”

(Second Dept. 1968) Sie See pevegioger-o O51, 13, 14

; | a)

‘Watson v. Employers Liability Corp., 348 U. S. 66, — |

75 8. Ct. 166, 99 L. Ed. 74 (1954) .............. Spee 18.

West v. American Telephone & Telegraph, 311 U. 5.

223, 61 S. — 85 L. Ed. 139 avian: penis: 138

Statutes and Other Authorities:. oe

N. WC. P. L. Be 6214 (b) ooesceccceccsssseeccne a

U.S. Constitution, Article I, Section 10 ............. owns ta 4 |

28 U.S. C. §1254(1) ° Root dusvsptantestenecsnetassPbasvesearsbdivennsst hone a ae

mA | No. 370

- AMERICAN BANK & TRUST COMPANY, as Administrator cum .testa-

_ BRIEF OF RESPONDENT RAPIDAIR, INC. AND GARN-

PANY IN OPPOSITION TO PETITION FOR WRIT OF

IN THE

+ Supreme Court of the Hnited States

- October. bie 1969

- —

“GEORGE E. FARRELL, as Administrator de bonis non of the

” ' Estate of WYAND F. DOERNER, JR., deceased, .

a DIANE SOKOLOWSKI, as Administratrix of the Estate of

GEORGINA .LOPEZ BURDEN, deceased,

JULES BRODY, as Administrator with will annexed of the Estate of

WASHINGTON LAFAYETTE BLACKMON, JR., deceased, .

DANIEL DONNELLY, as Admini inigeratat de bonis non, cum testamento

-annexo of the’Estate of J. DUDLEY HUTCHINSON, deceased, .

. DANIEL DONNELLY, as Administrator de bonis non, cum testamento

. annexo of the Estate of J. DUDLEY HUTCHINSON, JR., deceased,

ANDREW R. be ath as Administrator of the Estate of

CNL *HUTCHERSON, JR., deceased,

GERALD A. ROBBIE, as Administrator de bonis non with will Pome ee

annexed of the Estate of JOSEPH EMILE BERMAN, deceased,, : :

PAUL S. EDELMAN, as Admingstrator de bonis non with will a

:° annexed of the Estate of ELLEN = LOVE, deceased, ’ ;

PAUL S. EDELMAN, as Administfator of the Estate of a ae,

UCY ANN LOVE, deceased,

PAUL S. EDELMAN) as A istrator of the Estate of

ELLEN CABOT LOVE, deceased,

PAUL S. EDELMAN, as Administrator of the Estate of

WILLIAM D. LOVE, V, deceased, -

“haat

mento annexo of the Estate of JAMES HENRY . STUART, deceased; and .

. AMERICAN BANK & TRUST: COMPANY, as Administrator cum ~

testamento annexo of the Estate of THOMAS C. WHITE, deceased, : ;

Petitioners,

> against

PIEDMONT AVIATION, INC., THE BOEING COMPANY, and

UN ITED STATES OF AMERICA, ,

mn eee Defendants,

. and ‘- :

RAPIDAIR, INC, and LANSEATR, INC,. =

- Respondents. ;

Bat ais in a ia

ISHEE ST. PAUL FIRE AND MARINE INSURANCE COM-

CERTIORARI TO THE. UNITED STATES COURT OF ;

APPEALS FOR THE SECOND CIRCUIT

Respondent Rapidair, Inc., and garnishee St. Paul Fire

_ and Marine Insurance Company (hereinafter referred to as

St. Paul) submit this brief in opposition to the petition filed

by petitioners for a writ of certiorari to the United States

Conrt of Appeals for the Second Cireuit. 7

Citations to Opinions Below °

The opinion of the United States Court of Appeals (Pet.

App. B) has not as yet been reported. The opinion of the

United States District Court for the Southern District of

New York is reported at 295 F. Supp. 228.

"The pores of this Court has been invoked under

28 US.C. seaseit), po -

Questions Prevented

1. ‘Under Néew York law may quasi in rem jurisdiction

over anon-resident defendant be obtained hy attachment of

said defendant's liability insurance policy in an action

brought by a nominal New York plaintiff for the benefit of

‘a non-resident to recover damages for an out-of-state tort! ~

-2. If the answer to Question No. 1 is in the negntive,

~ does the refusal.of New York to entertain a lawsuit based

; upon ‘such an attachment contravene the. privileges and im-

‘munities and. equal protection provisions of the United

States Constitution? —

* .

. s

. ’ *

3. If the answer to Question No, 1 is in the affirmative,

does such an attachment violate due process or constitute

an impairment of the insurance contract in_ violation of the

United States Constitution? 7

Statutes Involved

The pertinent provisions of the New York Civil Practice

Law, and Rules are s@ forth in Appendix A of the petition.

‘ ° ~ =

~s —

Statement

> carr

This is an action to recover for the alleged wrongful

deaths of thirteen decedents (non-residents of the State

of New York) who were killed on July 19, 1967, as a result

of a mid-air collision between a Piedmont Aviation Boeing «

727 aircraft and a Lanseair Cessna 310 aircraft near

Hendersonville, North Carolina. Quasi in rem jurisdiction

over Rapidair, who is alleged to have been operating the

Lanseair aircraft at the time of the collision, and Lanseair

was attempted by attachment of their respective aircraft

liability insurance policies. On November 27, 1968, the

Honorable Inzer B. Wyatt vacated said attachments on

_ the ground that the quasi in rem attachment procedure

was not available in an action for the benefit of non-

residents of the State of New York, set aside the service

of process, and directed that judgments be immediately

entered’ in favor of defendants Rapidair and Lanseair.

The Court of Appeals for the Second Circuit, in a unan-

_imous opinion, affirmed the District Court.

" :

* On July 19, 1967, a Boeing 727 aircraft being operated

as Flight 22 by Piedmont Aviation, Inc., departed the

en Yr —_

a -*

4 ~

Asheville, North Carolina, airport en route to Roanoke,

Virginia. Shortly after takeoff from Asheville, Flight 22 ~

collided near Hendersonville, North Carolina, with a

Cessna 310 aircraft that was inbound to Asheville from

Charlotte, North Carolina. At the time of the collision the

Cessna 310 was owned by Lanseair, Inc., and was being

operated by Lanseair on company business. It is alleged

that at the time of said collision, the pilot operating the

Lanseair aircraft was in the employ of Rapidair.

As a result of said collision, Wyand F. Doerner, Jr.,

Georgina Lopez Burden, Washington Lafayette Blackmon,

Jr., J. Dudley Hutchinson, J. Dudley Hutchinson, Jr., C. L.

Hutcherson, Jr., Joseph Emile Berman, Ellen 8S. Love,

_Luey Ann Love, Ellen Cabot Love, William D. Love, V,

James Henry Stuart, and Thomas C. White, all of whom

were passengers on the Piedmont aircraft, were killed. ~

At the time of their demise, decedents Doerner and Burden

were residents and citizens of Maryland; decedent Black-

"mon was a resident and citizen of Texas; decedents

Hutchinson, Hutchinson, Jr., Hutcherson, Berman, Ellen

S. Love,-Lucy A. “Love, Ellen C. Love and William D.

Love, V, were residents and citjzens of Mississipi and dece-

dents Stuart and White were residents and citizens of

Tennessee.

_ Respondents Lanseair and Rapidair are Missouri cor-

porations with their principal-places of business jn Mis-

souri. Defendant Piedmont Aviation is a North Carolina

corporation with its principal place of business in North .

Carolina. Defendant Boeing is a Delaware corporation

with its principal place of business in the State of Wash-

ington. At the time of the accident, Rapidair was :asured

by St. Paul Fire and Marine Insurance Company, a Minne-

sota corporation with its_principal place of business in

Minnesota. The St. Paul policy was issued by its agent

in Illinois and delivered.to Rapidair in Missouri.

= , 95

Decedents Blackmon, Hutchinson, Hutchinson, Jr., Ber-

man, Ellen S. Love, Stuart and White died testate and

executors for their estates were duly appointed by the

appropriate. probate courts. Prior to the institution of

this lawsuit, all of the orginal executors of the aforemen-

tioned estates resigned their positions and requested the

appointments of the present plaintiff-administrators.

Decedents Doerner, Burdeh, Hutcherson, Lucy A. Love,

Ellen C. Love and William D. Love, V, all died intestate.

Prior to the institution of this lawsuit, the original admin-

istratix of the Doerner estate resigned her position and

requested the appointment of the present plaintiff-admin- :

istrator. All of the other plaintiff-administrators were

nominated by the decedents’ next-of-kin.

All of the petitioners in this case, except for the Amer-

ican Bank & Trust Company, are employees, former ®n-

ployees or members, of the firm of Kreindler & Kreindler,

attorneys for petitioners. All of the petitioners are res-

idents and citizens of the State of New York.

The instant action was commenced on or about June 21,

1968, when petitioners obtained an order of attachment

_which directed the U. S. Marshal for the Southern Dis-

trict of New York to levy upon the contractual obligation

oF ~-

i A aes died

of United States Aviation Underwriters, Inc., and/or

Arited States Aircraft Insurance Group ‘‘to defend and

indemnify defendant Rapidair, Inc. under a-policy of air-

craft liability insurance issued by it to said Rapidair,

Ine.’’ After the levy had been made by the U. S. Marshal,

United States Aviation Underwriters, Inc., and United

States Aircraft Insurance Group filed a Garnishee’s State- |

~ment-in- which they stated that neither insured ‘Rapidair,

Inc., and that St. Paul Fire and Marine Insurance Com-

pany was Rapidair’s aircraft liability insurer. .

Petitioners thereupon obtained ex parte on July 9, 1968,

a supplemental order of attachment directing the U. 8S.

Marshal to levy upon the-contractual obligation of St. Paul |

Fire and Marine Insurance Company ‘‘to defend and in-

demnify defendant Rapidair, Inc. under a policy. of air-

craft liability insurance issued by it to said Rapidair, Inc.” . __ 8

The U. 8S. Marshal subsequently levied upon the St. Paul |

policy on or about July 10, 1968. Service of process was

then perfected.on Rapidair, Inc., in Springfield, Missouri,

on or about July 17, 1968.

Jurisdiction as ‘to the corporate defendants is based.

upon diversity of citizenship, and as to defendant United ~

States of America jurisdiction i is based upon the Federal

Tort Claims Act. : :

On September 5, 1968, Rapidair’. and garnishee St. Paul

Fire and Marine Insurance Company moved to vacate the ~

attachment, to set aside the service of process and to dis-

_ miss the complaint as to defendant Rapidair. -

4 7

. : j

On November 27, 1968, Judge Wyatt rendered his opin-

ion vacating the attachment of Rapidair’s aircraft liability

insurance policy, setting aside the service of process on

Rapidair, and directing that judgment be immediately en- .

tered in favor of Rapidair. On November 27, 1968, Judge

Wyatt also rendered an opinion transferring this case to

the United States District Court for the Western. District

of North. Carolina, pursuant to Title 28, United States

Code, Section 1404 (a). : |

On December 2, 1968, a judgment was entered in favor |

of*Rapidair, . Inc., and. orf December 5, 1968, the file herein

was mailed to the Clerk of the United States District ¢

for the Western District of North Carolina somes & <2

On December 27, 1968, petitioners filed their notice of

appeal appealing from Judge Wyatt’s order of November

27, 1968, which vacated the attachment of Rapidair’s liabil-

ity insurance policy, and from the judgment entered in

favor-of Rapidair pursuant to said order. |

On or about February 6, 1969, petitioners also filed a

‘petition for a writ of mandamus and/or prohibition chal-

lenging Judge Wyatt’s order of November 27, 1968, trans-

.ferring this action to the United States District Court for.

the bit District of North Carolina,

On Match 18, 1969, the Court of Appeals for the Second

‘Circuit denied the petifion for a writ of mandamus (Far-

rell.v. Wyatt, 408 F. 2d 662), and on April 29, 1969, af-

firmed the orders and judgments of the District Court

vacating the attachments as to respondents Rapidair and =

Lanseair.

On or about June 9, 1969, petitioners filed a motion and -

petition in this Court for a writ of mandamus and/or

prohibition to the United States “District Court for the

‘ Séuthern District of New York and the Honorable Inzer

B. Wyatt, to vacate the order of November 27, 1968, which

® transferred this action to the United States District Court.

| for the Western District of ‘North’ Carolina (No. 2300

Mise. Oct. Term, 1969)..-

On or about July 23, 1969, the petitioners filed in this

Court a petition for’a writ of certiorari. to review «the

opinion of .the United States, Court of Appeals. for the ©

Second Circuit, entered on April 29, 1969, affirming judg-

ments of the United States District Court for the Soythern

‘es District of New — :

erat 3

The alle for writ of certiorari should be dented

besibsinn the issue presented by. the petitioners herein seeks

only an interpretation of local New York law «which is,

ordinarily not reviewable by this Court; the law of New — -

- ° York was properly applied .by the District Court and the -

Court of Appeals; and if the attachment herein should .

- - be’ reinstated as petit?oners contend, it would violate due

process and impair the obligations of the insurance con-

tract between Rapidair, Inc., and St: Paul Fire and Marine

Insurance Company. | ce ie at

POINT 1

‘Interpretation of Local Law. is ordinarily not re-

_ viewed by the Supreme Court.

An examination of the petition reveals that petitioners’

basic argument herein is that the District Court and the

Court of Appeals misinterpreted the New York attachment

- statute. It has‘been. well established that this Court does

not ordinarily review the holdings of lower courts on mat-

ters of interpretation of ‘state law. Commissioner of In- ,

ternal Revenue v. Estate of Bosch, 387 U. 8. 456, 462, 87

S. Ct. 1776, 18 L. Ed. 2d 886 (1967); Pierson v. Ray, 386

_ U.S. 547, 558 fn. 12, 87 S. Ct 1213, 18 L. Ed. 2d: 288

(1967) ; Bernhardt v. Polygraphic Co., 350 U. S. 198, 204-5,

76 S. Ct. 273, 100 L. Ed. 199 (1955) ; “Steele v. General

Mills, “Inc., 329 U. 8. 433, 438-9, 67 S. Cf. 439, 91 L. Ed. 402

. (1947) ; MacGregor v. State Mutual Life Assurance Co., 315-:

U. S. 280, 62'S. Ct. 607, 86 L. Ed. 846 (1942). The decisions

- of ‘the lower courts, sitting in New Wri, were baséd upor

| their interpretation of the local New York law and involved

no constitutional * issues. ‘.

° ° ws ~

a. POINT 11

The decisions below are clearly correct.

Both the District’ Court and the art of Appeals held

that the attachment of a non- resident defendant’s insur-_

ance policy in order to confer quasi im rem jurisdiction on

a New York court in an action brought to recover damages

on behalf of non-residents injured as a result of an out-of-

s DIRE MIEN RET

Pa Taat gna ES es SBN RAAF DRT tp Peat Su

state tort was not permissible a th w York case

decisions interpreting the New York attachment statute.

This interpretation of New York law is clearly correct.

> The applicable New York lass may be found in three

decisions : Seider v. Roth, 17 N.Y.-2d 111 (1966) ; Simpson

v. Loehmann, 21 N.Y. 2d 305 (1967), motion for rearg. den.

21 N.Y. 2d 990 (1968), and Vaage v. Lewis, 29 A. D. 2d »

315, 288 N-Y.S. 2d 521 (Second Dept. 1968). .It-is clear _

. from ari aijalysis of Seider, Simpson, and Vaage that the

jin —— of Bdatorcasirncd quasi m rem jurisdiction

insurance policy is for the purpose of protecting New York

State residents injured in out-of-state accidénts and is not?

" available to =e |

‘i doing sai in the Stéte of New York, but Aine injured

' “plaintiff was not a New York regident..’In a unanimous

opinion, the Appellate Division for the Second: Department,

in vacating the attachment and dismissing the complaint,

-held: : :

- A close reading of Seidéer and Simpson and the --

__ commentaries on those cases shows that the New York

residency i is-a-crucial consideration ; ee

* e; Le

_. “The plaintiff in‘ nonresident, The solitary nexus

for the New-York courts is the fact that: the defend-

_\ « ants’ insurance carrier is a foreign corporation au-

thorized to do, business in New York. Under no cir-

cumstances could these facts: support an exercise of

jurisdiction by the New York courts without adversely

gg ©

affecting the administration of justice in this State by

- an influx here of unwanted and unnecessary: lawsuits |

(Piet;aroia v. New Jersey & Hudson Riv. Ry. & Ferry -

Co., 197 N.Y. 434). We are obliged ‘under the cirtum- E

stances af this case, where no special considerations s

» are advanced, to dwell on = aptness of the forum +

non. conveniens -doctrine. Esgentially, it is the con-

venience of our courts, not that of the 4itigants, and

“the praetical ramifications which determine the -accept-

ance or rejection of the doctrine in a particular case

(Williams v..Seaboard Air Line R. R. Co., 9 A Da2d

268; see, also, Gilchrist v.. Trans-Canada Air Lines,

27 A D 2d 524). For this compelling reason, and also

because we believe that an exercise of jur isdiction in

this case would deprive the defendants of basic Aue

_process (Hanson v. Denckla, 357 U. S, 235; -see Lef-

court v. Sea Crest Hotel & Motor Inn, 54 Mise. 2d

376), the order shold be reversed, on the law, without

costs, and the defendants’ motion granted.’’ 29 A. D.

2d at 316, 318.

The Vaage case, SO far as appears, was never appealed,

to the New, York Court of Appeals, so that the Opinion of

the Appellate. Division stands as the law of New York. .

The unavailability of the Seider attachment procedure

to non-residents of ,the State-of New York was recognized :

by the Court of Appeals for the Second Cireuit in Mini- |

. chiello v. Rosenberg, 410 F, 2d 106, — J fudge Friendly F

wrote: ‘ ae ee

Supreme Court would sustain the validity of a state

statute permitting direct actions against insurers do-

ing business in the state in favor of residents as well

as on behalf of persons injured withm it. *.* *

Since, on the other. hand, we doubt that the Court

‘“We thus believe that, all things considered, the J

> ye F ; d .

é a R TA

12 ae ;

would sanetion a direct, actiori statute where the state

eed was neither the place of injury nor the plaintiff’s ,

residence, we equally ‘doubt whether Sider could

And in a concurring opinion to the én banc decision,

Judge Hays stated: / :

‘* Although " read Sdaee’ = Friendly’ S opinion as

plaintiffs are residents of New York, I believe that it

is worthwhile to- put additional tees on this point

and to make. it completely clear that our opinion refers

‘ only to the situationAvhere iguana are. New York

residents. ”? 410 F. 2d at 120.

While it is: ten that the present plaintiff-administrators

are residents and citizens of the State of New York, their

presence | hereir is contrieved and is a subterfuge. - The

' ‘decedents and their’ next-of-kin were all non- residents.

The original personal representatives were non- residents.

validly be applied in such acase.”? 410F.2dat110. *

’ finding the Seider procedure: acceptable only when ;

New York State residency was deliberately created i in this ©

~Tawsuit. Furthermore, the petitioners herein are only

nominal parties. They have no interest in the: -qutcome

of this litigation. As personal representatives they prose-

fr cute this action as mere statutory trustees,’ suing for the

benefit of each decederit’s next-of-kth. Davenport. v.

Patrick, 227 N.C. 686, 44 S.Ev 2d 203 (1947); én re Ives

, » acre 248 N.C. 176, 102 SE 2d 807 (1958)... .

In an attempt to inject some constitutional argument.

“in order to justify the filing of the ‘petition: for a‘writ of

_ eertiorari, petitioners - have argued (1) that the lower

: _ courts did not follow their. constitutional ’ “Qbligation in

: * 8 &

’ ; ‘ a 4 2

divérsity cases and apply the New York law as it exists),

which in the. opinion of petitioners does not differentiate

between: residericy and non-residency in the attachment of .

' liability insurance policies in order to confer- quasi in rem

jurisdiction, and (2) that-if the attachment procedure is

unavailable because’ of non-residency, the. constitutional

rights of the petitioners under the: Privileges and Inmuni-

ties and Equal Protection clauses of the United States Con-

stitution have been violated: © ©. | .

. x «

Petitioners’ argument that the lower courts did. not

follow the decisions of the New York courts is siniply er-

roneous. The emphasis in both the Seider and’ Simpson

decisions was on the protection to be afforded New York

residents. If Seid& and Simpson were unclear, Vaage v.

Lewis, 29 “A. D: 2d 315, 288 N.Y:S. 2d 521 (Second Dep’t

1968), was explicit: a non-resident injured in an out-of-

state accident could not avail himself of a Seider attach-

ment in order to confer ona New York court: quasi in rem

jarisdiction over a non-resident defendant.. Where the ~~

staté law is clear, even though: it-may-have been declared -

~ by an intermediate appellate court, the federal courts gre

obligated to follow and apply that, law in diversity cases.

Fidelity Union Trust Co. v-Field, 311 U. S. 169, 61 S. Ct.

176, 85 L. Ed: 109 (1940) ; Stoner v. New York Life Ins. Co:,

311 U.S. 464, 61 S. Ct. 336, 85 L-lid. 284 (1940) ; Six Dia

panies of California v. Joint Highway Dist. No. 13, 311

U. S. 180, 61 S...Ct. ‘186, 85 L. Ed. 1J4 @1940); West v.

American Telephone & Telegraph Co., 311 U.S. 223, 61

S. Ct. 179, 85 L. Ed. 139 (1940) ; Comuiialloniee of Internal

Revenue v. Estate of Bosch, 387 U.S. 456, 87 S. Ct. 1776, 18

L. Kd. 2d 886 ( 1967). The New siaices law as to attachment

er cane NO iene dita tg a a Abst tg npindeists lig.“

2 74

of liability insurance policies to confer quasi qn rem juris-

diction has obviously been correctly applied by the lowér

federal courts i in this case.

ca .@ is J

R Petitioners’ — constitutional argument under the

Privileges and Immunities and Equal Protection. clauses

.of the Constitution is equally unténable. In Vaage v.

Lewis, 29 A.D. 2d 315, 288 N.Y.S.°2d 521 (Second Dep't

1968) the New York Court held that a Seider type aitach-

ment was not available to,a non-resident on the ground of . ~~

forum non tonveniens ‘‘and also because we believe-that -

an exercise of jurisdiction in this case would deprive. the.

defendants of basic due process. (Hanson v. Denckla, ~

U. S. 235,78 S.Ct. 1228, 2 L.Ed. 2d 1283; see Lefcourt

Sea Crest Hotel ¢ Motor Inn, 54 Misc. 2d 376, 282 N.Y.S.

2d 896).”’ 29 A.D. 2d at 318, 288 N.Y.S. 2d at 525.

It is well established that a state may’deny non-resi-

dents seneee to its Courts on the ground of forum non con-

veniens, and that such a denial does yot impinge on the’

non-resident’s constitutional rights. j-Douglas. vr New

Haven R: Co., 279 U. S. 377, 49 S.Ct. 355, 73-L.Ed, 747

; (1929) ; Missouri ex. rel. guthern . Railway Co. v. May-

field, 340 U. S. 1, 71 S. Ct. 1; 95 L.Ed. 3 (1950); Minichiello -

_v. Rosenberg, 410 F.2d 106, 110 fn. 6 (2d Cir. 1968).

Based upon the foregoing, Rapidair and St. Paul sub-

mit that the petitioners herein are not entitled to arf attach-

ment of Rapidair’s aircraft liability insurance polity and -

that the District Court, was correct in vacating said attach-

ment and the Court of Appeals was correct in affirming.

ocr ae

’ 15 Ne ee

POINT III

If the attachment is allowed it would be unconsti-_

.tutional as a violation of due process and as an impair-

~ ment of-contract. . _. . \ :

In his opinion for the Court of Appeals for the Second

‘Circuit, Judge Friendly left no doubt that if the New York

Courts were to allow a Seider v. Roth attachment in favor s,

of non-residents, the constitutional objections to the entire <

Seider procedure would be insuperable: — -

“““ * * where. there are absolutely no New York -

contacts except for the doing of business by the insur-

ers, we have the gravest difficulty in understanding

how New York could constitutionally call upon the in-

sureds to‘ respond or could impair by attachment

rights the insurers would otherwise have to settle with

other claimants.”’. “(Pet. App. B, p. 21) ies

* *. *

“For reasons sufficiently indicated in Minichiello v.

Rosenberg, supra, —~— F. 2d at . , slip opin-

ions at 581-83, and 1757-58 (concurring opinion - of

Judge Hays), and in this Opinion, we are convinced

that the constitutional doubt with respect to applying

Seider v. Roth in favor of non-residents would be ex- °

ceedingly serious. While that may be an understate-

ment, it would be: enough to Tisai of this case if the

ire Bly ie nonresidents who had suffered in-

juries or nonresident: representatives of nonresidents

who had been killed.”” (Ibid. p. 22) |

ee 8: 18

-**The constitutional doubt arise# from N ew York’s

_ lack of meaningful contact with the claim; a court of

another state cannot supply this by picking a New

Yorker as administrator of the estate of a noyresident

who suffered fatal injury.”’ (7bid., p. 23)

CR eT I eR

y 16

In the present posture of the -case, this constitutional

' issue is not raised, since the Courts below held only that

und® existing New York law a Seider v. Roth attachment.

is not available for the benefit of non-residents. However,

if this Court should review this case, and if it should decide’

that the interpretation | of New. York law was incorrect and:

that a 'Seider v. Roth attachment i is available for the benefit

of these petitioners, then the question of the constitutional-

ity of the Seider v. Roth procedffre is squarely raised;

We submit that J udge Friendly’s dictum is fully jus-. :

tified, “and that if a Seider v. Roth attachment is granted se

in favor of non-residents where there are no New York

‘ contacts except the residenee of the insurers, the Seider v.

Roth /procedure as applied in this case violates the provi-

sioris of the United States Constitution:

a hp 4

‘A. The attachment visintes due process.

In determining whether or not the attachment herein

violates Five due process clause of the United States Con-

stitution,’ the Court must determine whether or not the "

State of k may require a non-resident not doing

busines re\to defend himself in New York against a

claim by a resident for damages. resulting from an ry

occurring in a state other than New York. In seh

not an attachable debt exists in New York owed to the

-non-resident defendant, 1 but whether New York has. suffi-

1. The coficept that -the obligations of the insurance contract con-

a ctitute a debt located in the State of New York is at-best a strained

concé t is apparently. justified only by the rule of Harris v. Balk,

198 U. S. 215; Ct. 625, 49 L. Ed®1023 (1905), a case con-

sidered by. many to be an ronism in determining the situs of an

intangible obligation owed by a corporation. Mimichiello v. Rosen-

berg, 410 F. 2d 106, 120 (dissenting opinion Seat ttai J.). |

ing »

this issue we submit that the proper test is not whether or x

« with the instant lawsuit are the residency of the nominal >

v | . . “27 / Rie.

‘ cient contacts with the parties and issues so that requiring

the non-resident to defend in New York would meet the

basic. requirements of fairness and justice. Simpson Vv.

Loehmann, 21 N.Y. 2d 305, 311. (1967) ; Atkinson v. Supe-

rior. Court, 49 Cal. 2d 338, 345-7, 316 P. 2d .960 (1957), ap-;

peals dismissed and cert. denied sub nom Columbia Broad-

casting System, Inc. v. Atkinson, 357 U. Ss. 569. BB. Chief

J euage Fuld stated in Simpson, supra:

“The historical limitations, on both in personam:

and in rem™Yurisdiction, with their rigid tests, are

giving way to a more realistic and reasonable evalu-

ation of the’ respective rights of plaintiffs, defend-

ants and the State in terms of fairness. (See, e.g.,

International Shoe Co. v. Washington, 326 U. S. 310;

McGee v. International Life Insurance Co., 355. U. S.

220; Longines-Wittnauer Watch ‘Qo. v. Benes & -

Reinecke, 15 N.Y. 2d 443). Sueli an evaluation re-

quires a practical appraisal: of the situation of the

various parties rather than an emphasis\upon some-

what magical and medieval concepts of pregence and

power.’’ 21 N.Y. 2d at 311. \

Approaching the problem from a practical appraisa of

the facts we find that the only contacts that N ew York has.

plaintiffs and the fact that defendant’s insurer has an of- | <

fice in the s te through which it transacts business. On the

other handy the decedents . .were all non-residents; any

recovery in the lawsuit will be for the benefit of non-resi-

dent next-of-kin; the defendant Rapidair is a Missouri

corporation with its principal place of business in Mis-

souri; St. Paul Fire and Marine Insurance Company i is'a

Minnesota corporation with its: principal place of business

~~.

me se

Rowe X Saleh Siigplbaal aaNet pak:

tect de tar nwd WN

in Minnesota; Rapidair’ s insurance policy Was issued by a

St. Paul agent in THinois and delivered i in Missouri; all of

. the other defendants are non-residents of the State of New:

York; the accidents voccurred: in the State of “North

Carolina; the -decédents were passengers aboard an air-

is: craft: that originated its flight jn Georgia, had scheduled

>. intermediate stops in North Carolina and Virginia, and

was to terminate its flight it Washington, D.C. the travel

in states-other than New York; ‘and, as far as.we are aware,

- nee of the damage or liability. witnesses reside. in New

York or are’ subject to subpoena by a New York court. °

‘ With ‘these facts it is difficult to see what interest New

“York has in. this icine ;

‘ vg

Undoubtedly, bios key case in determining whether the 4

attachment sherein violates due proéess i is Watson v. ‘ Ren

ployers Liability Corp., 348 U. S. 66,'75 S. Ct. 166, 99, L.

_ Ed. 74 (1954). In Watson the Supreme Court upheld the

constitutionality -of the Louisiana direct-action statute in -

an. action brought by a Louisiana resident i in a Louisiana

court. against a non- -resident’s insurer to recover for per- .~

sonal injuries sustained in Louisiana. Both the residency -

of the plaintiff and. the place of of the. accident- were in Louisi-

ana. These two factors obviously formed a sufficient basis

for the imposition of the. Louisiana direct-action statute.

However, when the sole contact is merely the residency of

the nominal plaintiff; then a state has insufficient contacts

| with the event to constitutionally compel a-non-resident —

| to defend itself in ‘that state. H angon V. Denckla, 357 U. 8.

935, 253-54, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958) ; Home

| Insurance Co. v. pi 281 U. S. 397, 50 S. Ct. 338, 74 L. Ed.

| “\\

UJ |

926 (1980) ; International Shoe Co. v. Washington, 326

U. 8. 310, 66 S. Ct, 154, 90 L. Ed. 95 (1945) ; McGee v. In-

ternational Life Insurance Co., 355 U. S. 220, 78 8. Ct. 199,

2.L. Ed. 2d 223 (1957),; Minichiello v. Rosenberg, 410 F. 2d

106 (2d Cir. 1968,,dissenting opinion of ‘Anderson, J.).

B. ‘The attachment impairs the obligation __

of tlhe insurance contract. |

The supplemental order of attachmenf~herein ordéred

| _ thie United States Marshal to levy upon the contractual

obligation of St. Paul Fire and Marine Insurance Com-

‘pany ‘‘to defend and indemnify defendant Rapidair, Inc.

under a policy of aircraft liability i insuragee issued by it to

“said Rapidair, Ine. ’» The. United States Marshal subse-

quently levied ‘on Rapidair’ s aircraft liability insurance.

policy pursuant to said: supplemental order of attachment.

~The notice of said levy -previded, in part, that the: property

attached could not be lawfully released except by the direc-

tion of the Unjted States Marshal, and specific reference

was made to’ CPLR 6214(b). This attachment of St. Paul’s

duty to defend and indemnify Rapidair creates certain

problems that clearly impair the obligations of St. Paul ‘to

~~. under the insurance contract. 8 :

@ Condition acid ot the insurance iiss obligates St.

Paul a

‘defend’ any suit’ against the: Ingured ‘alleging such -

injury. to person or property and seeking damages on

account, thereof, even if such suit is groundless, false

or fraudulent; but the Company shall have the right

to ‘make stieh: investigation, negotiation and settle-- aes

; ment of any claim or suit as it deems expodiont; "gg

“ Sa i ty IE ARS RCM es Le ada’ Sha pach

20:

At the time the attachment‘ herein was filed, St. Paul

was defending, on behalf of Rapidair, six in personam ac-

tions brought against Rapidair in North Carolina as a re-

sult of the Piedmont-Lanseair mid-air collision over Hen-

dersonville, North Carolina, on J uly 19, 1967. The total

damages sought in these six actions exceeded the coverage

of the St. Paul policy.

Aa a result of the attachment herein, it is eeicitile

-elear that St, Paul cannot pay any sums‘in settlement of

the North Carolina cases pending against Rapidair. CPLR

6214(b). This prohibition can be extremely prejudicial to

Rapidair if settlements in these six cases could be con-

cluded on behalf of Rapidair for sums not. in excess of the .

policy limits., eRe eee | wie Y Be

Since the siits in North Carolina aré in personam ac-

tions against Rapidair, any. judgments over and above the

insurance, policy coverage could be enforced against the

personal assets of Rapidair, Inc. It is‘clear that Rapidair

has a very definite interest In seeing the North Carolina

actions settled prior fo trial for amounts = of

the — limits. ° /” yee

whatever suits may be. pending for reasonable amounts ,

prior td trial not only in the hope of saving a portion of —

their coverage but: also in | avoiding the expenses of trial.

However,*no: settlements ‘of the North Carolina cases can

be concluded while the present. attachment is outstanding.

Clearly, then, the attachment: herein does impair the obliga-”

_tions of the insurance contract to the detriment of Rapid-

21 |

~— - et , * 2 :

air, Ine., and St. Paul Fire and Marine Insurance Com-

pany. a

cee "The basis for the impairment herein is the construction

given to Section 5201 of the NewY ork Civil Practice Law

and Rules by the New York Court éf Appeals in Seider v.

Roth, 17 N.Y. 2d 111 (1966), wherein the Court held that

', a liability insurance policy is a “‘debt’’ and subject-to_at-

tachment under CPLR 6202. This construction of the stat-

ute is reviewable under Article I, Section 10, of the United

States Constitution, which states that no Staté shall pass

any law impairing the obligation of contracts. Columbia.

Railway Gas & Electric ‘Company v. State of South Caro-.

lina, 261 U. 8. 236, 43 S. Ct. 306, 67 L. Ed. 629 (1923);

_ Houston ¢ Texas R.R. Co. v. Texas, 177 U. 8. 66, 20 S. Ct.

+ 545, 44 L. Ed. 673 (190 ae

Ussing what constitutes an impairment of con-

ct in Columbia Railway, supra, the Court stated:

‘“‘The impairment of a contract may consist in in-

creasing its burdens ‘as well as in diminishing its

efficiency. ‘Any deviation from its terms, by postpon-

ing or accelerating the period of performance which

it prescribes, imposing conditions not expressed i

the contract, or dispensing with the performance of

those which are, however minute, or apparently im-

material, in their effect upon the contract of the par-—

ties, impairs its obligation.’ ’’ 261 U.S. at 236.

“In so far as the present attachment prevents St. Paul from

settling ary cases. other than. the instant one, the attach-

* ment obviously impairs the contractual obligations of the

insurance contract to the prejudice of Rapidair and St.

~ Paul. ae

SN ~

‘

bn ofom

aon

}

;

Although we have stated our objection in terms of im- °

pairment of contract, the validity of the attachment herdin

may also be viewed in due process terms. Hartford Acct-

dent & Indemnity Co. v. Delta & Pine Land. Co., 292 U.'S.

143, 54 S. Ct: 634, 78 L. Ed. 1178 (1934) ; Home Insurance

Company v. Dick, 281 U.S. 397, 50 = Ct. 338, 74 L. Ed.

926 (1930).

te the Hartfordcase, supra, the. Supreme. Court held

that the State of Mississippi could not extend its own law-

to effect-the rights of an insurance contract validly made

in Tennessee. In holding such an extension unconstitu-

tional as a violation of due process, the Court stated:

‘‘The, Mississippi statutes, so contrued,. deprive

the appellant of due process of law. ‘*X state may

‘within its own territory (Hooper v. California, 155

U. S. 648; Orient. Insurance Coz v. Daggs, 172 U. S.

557, 565-6 ; New York Life Ins: Co. v.’ ‘Cravens, 178

U. S. 389, 398-9) ; but it cannot extend the effect of its

laws beyond its borders so as to destroy or impair the

right of citizens of other states to make a contrgct not

operative within its jurisdiction, and lawful where -

made. New York Life Ins. Co. v. Head, 234 U.S. 149;.

Aetna Life Ins. Co. v. Dunken, 266 U. S. 389, 399. Nor

may it in an action based upon such a contract enlarge

the obligations of the parties to accord with every local ~

- statutory policy solely upon the ground that one of the

parties is its own citizen. Home Insurance Co. v. Dick,

281 U.S. is 407-8.

| * * = :

«é “* * * The contract being a Tennessee contract

and lawful in that state, could Mississippi, without

deprivation of due process, enlarge the appellant’s

SMa JOtnTe or athn eee Gar eR ey

7”

obligations by réason of the state’s alleged interest in

the transaction? “We think not. | Conceding that or-

dinarily a state may prohibit performance within its

borders -even of a contract validly made elsewhere,

if the performance would violate its laws (Home In-

‘surance Co. v. Dick, supra, p. 408), if..may not, on

grounds of policy, ignore a right which has lawfully

vested elsewhere, if, as here, the interest of the forum

has but slight connection with the substance of the

contract obligations. Here performance -at most in-

- volved only the casual payment of money in Missis-

-sippi. -In such a case the question ought to be

regarded as a domestic one to be settled by the law

of the state where the contract was made. A legis-

__ lative policy which attempts to‘ draw to the state of

the ferum control ,over the, obligations of contracts

- elséwhere validly consummated and to convert them

for all purposes into contracts of the forum regardless "

“\ of. the relative importance of the interests of the forum

as contrasted ‘with those created at he place of the

contract, conflicts. with the guaranties of the Four-

teenth Amendment.’’ 292 U. S. at’ 149-150.

In light of the foregoing, it is submitted that the obliga-

tions of the insurance contract issued by St. Paul to Rapid- .

air have been impaired-by the attachment herein,. and that

- said attachment is unconstitutional under Article I, Section

10, of the United States Constitution. |

7” ° . é

CONCLUSION 4

For the foregoing reasons it is respectfully wil

mitted that this petition for a writ of certiorari should

be denied. | |

Respectfully supmitted,

Doveias B. Bowgine

Counsel for Respondent

Rapidair, Inc. an® Garnisheeé

St. Paul Fire and Marine

Insurante Company

Water BE. RutTHerrorD

Of Counsel

“>

Por e-0!

«<

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