Turner v. EversTurner v. Evers
- Reporters:
- , , ,
- Before:
- Goldberg, DeCristoforo, Puglia
OPINION
GOLDBERG, P.J.
This is, apparently, the first case in California in which jurisdiction has been predicated on Seider v. Roth (1966) 17 N.Y.2d 111 [269 N.Y.S.2d 99, 216 N.E.2d 312]. To our knowledge it is the first case outside of New York that accepts, rather than rejects, Seider. Seider and the cases following it hold that jurisdiction quasi in rem may be
The Turners, plaintiffs and appellants, are residents of California. On October 25, 1971, while temporarily in Tacoma, Washington, they took their 1969 Austin America to University Mobil Service, operated by the defendant and respondent Evers to be serviced for their return trip to California. Evers released the car to the Turners on October 26, but they allege that they drove it only three miles before “it became totally inoperative.” The Turners claim that Evers failed to service the car properly and that they sustained $685.16 in damages for repairs and loss of use for 22 days. They have three separate theories of recovery: breach of contract, fraud, and negligence. On the fraud count they seek both their actual damages and punitive damages of $5,000. But they kept the case within the monetary jurisdiction of the municipal court by an express remission in the complaint of their right to recover more than $5,000 total. (Cf. Williams v. Rosinsky Motor Co. (1955) 133 Cal. App.2d Supp. 798, 803 [284 P.2d 979].)
Evers’ motion to quash may pose a paradox. The plaintiffs concede that there is no basis of in personam jurisdiction over Evers. Both the complaint and the summons, which was in the ordinary statutory form approved by the Judicial Council pursuant to
The existence of the paradox depends on the interpretation of the phrase, “lack of jurisdiction over him,” in
The motion here should be treated as the parties have actually treated it, i.e., as a motion to quash the attachment. (Frederickson v. Superior Court (1952) 38 Cal.2d 593, 598 [241 P.2d 541].) It is not a motion to discharge under
The constitutionality of the Seider practice has not been successfully challenged. To paraphrase Judge Friendly, the argument of unconstitutionality is “unpersuasive so long as Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905) stands.” (Minichiello v. Rosenberg, supra, 410 F.2d at p. 118.) The New York cases have referred to the policy obligation as a “debt,” and hold “the presence of that debt in this state... contingent or inchoate though it may be — represents sufficient of a property right in the defendant to furnish the nexus with, and the interest in, New York to empower its courts to exercise an in rem jurisdiction over him.” (Simpson v. Loehmann (1967) 21 N.Y.2d 305 [287 N.Y.S.2d 633, 234 N.E.2d 669, 671].) The United States Supreme Court has at least twice declined to review this proposition. (Victor v. Lyon Associates, Inc. (1967) 21 N.Y.2d 695 [287 N.Y.S.2d 424, 234 N.E.2d 459], appeal dismissed for want of a substantial federal question (1968) 392 U.S. 8 [89 S.Ct. 44, 21 L.Ed.2d 8]; Minichiello v. Rosenberg (2d Cir.1968) 410 F.2d 106, cert. den. (1969) 396 U.S. 844 [90 S.Ct. 69, 24 L.Ed.2d 94].)
In the face of
The respondent argues that Harris v. Balk, supra, 198 U.S. 215 is not in point, because there the existence of the garnishee‘s indebtedness to the defendant was admitted whereas here it is not. As already pointed out, however, the garnishee has not denied its obligations to defend the defendant. And even if it had, such a denial would not defeat jurisdiction. The defendant claims that “he has upon the filing of civil suit a vested right to a defense in the suit.” If the garnishee fails to fulfill this claimed obligation, or if it is unsuccessful in the defense, the plaintiff may then proceed to attempt to collect from the garnishee by a separate action under
Even if Seider is constitutional, it is said to be illogical. In a delicate understatement Judge Friendly says it has “received a poor press from the commentators.” (Minichiello v. Rosenberg, supra, 410 F.2d at p. 108.) The most vociferous and persevering of its critics has been Professor David Siegel, whose comments, now numbering eight, have appeared annually in the supplements to
“The root question is,” as Professor Siegel says elsewhere, “is either the obligation to defend or to indemnify property within the meaning of [the attachment statute]?” (N.Y. Civ. Pract. Law & Rules, § 5201, 1965 com. pt. I, at p. 68 (McKinney Supp. (1972)).) The respondent seeks to by-pass the question of whether the insured‘s rights are “property” by arguing that those rights are not “debts” owed him and that only “debts” can be attached.1 The argument is not in point for several reasons.
A more technical reason for holding that the argument that the obligation to defend is not a debt is not in point is that there has been no effort to attach a “debt” here. There is a distinction between attaching a garnishee as a debtor of the defendant and attaching him as the custodian of other property of the defendant. (Bowie v. Union Bank (1970) 11 Cal. App.3d 807, 815 [90 Cal. Rptr. 103].) It was held long ago that a notice of garnishment of “effects” was not sufficient to garnish a “debt.” (Clyne v. Easton, Eldridge & Co. (1905) 148 Cal. 287, 293-294 [83 P. 36]; Bowie v. Union Bank, supra, 11 Cal. App.3d at p. 816.) Here the direction in the writ was to attach “property” by serving notice of garnishment of the obligation to defend, and that obligation is all that was attached.
“Property” as used in what is presently the third numbered subparagraph of
The Ponsonby definition has been applied in a variety of circumstances, e.g., to the definition of the word “estate” in
The parallelism between the New York and California law does not, however, end with that between Matter of Riggle‘s Estate and Keck v. Superior Court. Both states have declared the rule that “a debt which is uncertain and contingent in the sense that it may never become due and payable is not subject to garnishment.” (Clecak v. Dunn (1928) 95 Cal. App. 537, 540 [272 P. 1104]; Dawson v. Bank of America (1950) 100 Cal. App.2d 305, 309 [223 P.2d 280]; Stein, Jurisdiction by Attachment of Liability Insurance (1968) 43 N.Y.U.L.Rev. 1074, 1078.) Nevertheless, both states have allowed the attachment of proceeds of insurance policies even before the proof of loss has been filed. (Compare Baumgold Bros. v. Schwarzschild Bros. (1949) 276 App.Div. 158 [93 N.Y.S.2d 658], affirmed (1951) 302 N.Y. 628 [97 N.E.2d 357], and Brainard v. Rogers (1925) 74 Cal. App. 247 [239 P. 1095].) The distinction is between the situation where “obligation is uncertain and contingent in the sense that it may never become due and payable,” and that where the contingency relates only to the amount of the garnishee‘s liability. “Where there is no contingency as to the garnishee‘s liability, the only contingency being as to the amount thereof, and where the amount of the liability is capable of definite ascertainment in the future, there is no such contingency as prevents garnishment of the claim, even though, it has been held, it may be that eventually it will be found that nothing is due.” (Brunskill v. Stutman (1960) 186 Cal. App.2d 97, 104, 105 [8 Cal. Rptr. 910]; and see Hustead v. Superior Court (1969) 2 Cal. App.3d 780, 786-787 [83 Cal. Rptr. 26] (future rents not garnishable in either California or New York, because they may never become due).) Here it has been conceded
Our attention has been directed to several cases rejecting 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 obligation 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 [127 P.2d 390] (post-Seider but does not cite it); DeRentiis v. Lewis (1969) 106 R.I. 240 [258 A.2d 464] (not “property” within Rhode Island statute); Howard v. Allen (1970) 254 S.C. 455 [176 S.E.2d 127] (distinguishes New York from South Carolina attachment statutes); Government Employees Insurance Company v. Lashy (Mo. App. 1970) 454 S.W.2d 942 (“contingent” under Missouri statute); Ricker v. Lajoie (D.Vt. 1970) 314 F. Supp. 401 (“contingent” under Vermont statute); Kirchman v. Mikula (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 between their local law and New York law like that between California and New York.
The respondent claims that allowing the garnishment violates
The respondent repeatedly cites the reversed opinion in State Farm Fire & Cas. Co. v. Tashire (9th Cir.1966) 363 F.2d 7, reversed (1967) 386 U.S. 523 [18 L.Ed.2d 270, 87 S.Ct. 1199], for the proposition that the insurer cannot be sued before judgment against the insured and, therefore, cannot be garnished. The Supreme Court held, however, that whether or not the insurer was liable before judgment against the insured, it was even before such judgment sufficiently exposed to liability to invoke the federal interpleader jurisdiction. (386 U.S. at pp. 531-534 [18 L.Ed.2d at pp. 275-277].) Justice Douglas’ dissent is instructive. “Understandably, the insurance company wants the best of two worlds. It does not want an action against it until judgment against its insured. But, at the same time it wants the benefits of the interpleader statute.” (386 U.S. at p. 541 [18 L.Ed.2d at p. 281].) Now that the insurer has the benefit of the interpleader statute, it does not behoove us to implement this “heads I win, tails you lose” proposition, by giving insurers more favorable treatment than other garnishees. Even that dedicated opponent of Seider, Professor Siegel, who was well aware of New York Insurance Law section 167, the counterpart of our section 11580, has not suggested that it was
Both sides argue that policy favors their position. The respondent says that Seider “would totally upset traditional concepts of jurisdiction; and it would then expose defendants to jurisdiction and appeal in locations thousands of miles from their homes for minor contractual claims....” Of course, this is an overstatement in that defendants are “exposed to jurisdiction” only to the extent of the assets attached. As in Minichiello no one here contends that a judgment in this case could be enforced against any other assets. (410 F.2d at pp. 110-111.) The balance of the argument amounts only to an assertion that Harris v. Balk is wrong. (Minichiello v. Rosenberg, supra, 410 F.2d at p. 118.)
The appellants argue that their claim is so small that in effect they would be denied a remedy if they cannot maintain their action here. This, of course, may be true. And the state does have an interest in protecting its residents that is reflected in the “`movement away from the bias favoring the defendant... toward permitting the plaintiff to insist that the defendant come to him.‘” (Minichiello v. Rosenberg, supra, 410 F.2d at p. 110.) This movement in favor of plaintiffs is, of course, apparent here from the adoption of the new act on jurisdiction and service of process.
However, there is no reason to attempt to reconcile the competing policies by now setting up a flat rule on an a priori basis. Of course, there is an obvious and real danger in cases of this sort that there may be an “overly enthusiastic but not unconstitutional assertion of jurisdiction...” (Minichiello v. Rosenberg, supra, 410 F.2d at p. 119.) But in this state the danger has been minimized by the statutory recognition of a flexible form of the doctrine of forum non conveniens. (
We, of course, have no way of knowing whether this suit should be dismissed or stayed on grounds of an inconvenient forum. No motion was ever made. It may now be too late to make such a motion,
The order of July 18, 1972, quashing service of summons and, in effect, quashing the attachment is reversed.
DeCristoforo, J., and Puglia, J., concurred.
NOTES
Notes
1[1] The respondent argues that “the real crux of the case” is whether the insurer‘s obligation under the policy is a debt. “If the policy is indeed a `debt,’ then presumably, it can be garnished and attached like any other debt and quasi in rem jurisdiction exists; if it is not, there is no quasi in rem jurisdiction.” He concludes that the obligation is not a “debt,” and states, “the key to in rem or quasi in rem jurisdiction by attachment is the existence of a `debt’ owing defendant. If the insurance policy herein is not a `debt’ ther