Source: https://law.justia.com/cases/federal/appellate-courts/F2/411/812/424308/
Timestamp: 2019-11-11 19:19:36
Document Index: 390717186

Matched Legal Cases: ['§ 1346', '§ 1', '§ 1404', '§ 28', '§ 1314', '§ 224', '§ 1314', '§ 1314', '§ 1314', '§ 1314']

George E. Farrell, As Administrator De Bonis Non of the Estate of Wyand F. Doerner, Jr., Deceased, et al., Plaintiffs-appellants, v. Piedmont Aviation, Inc., the Boeing Company and United States of America, Defendants, Andrapidair, Inc., and Lanseair, Inc., Defendants-appellees, 411 F.2d 812 (2d Cir. 1969) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1969 › George E. Farrell, As Administrator De Bonis Non of the Estate of Wyand F. Doerner, Jr., Deceased, e...
George E. Farrell, As Administrator De Bonis Non of the Estate of Wyand F. Doerner, Jr., Deceased, et al., Plaintiffs-appellants, v. Piedmont Aviation, Inc., the Boeing Company and United States of America, Defendants, Andrapidair, Inc., and Lanseair, Inc., Defendants-appellees, 411 F.2d 812 (2d Cir. 1969)
US Court of Appeals for the Second Circuit - 411 F.2d 812 (2d Cir. 1969) Argued March 25, 1969
Decided April 29, 1969
These appeals are the latest fallout to reach this court from the much criticized decision in Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966), which we have recently declined to declare unconstitutional on the facts presented in Minichiello v. Rosenberg and Stevens v. Tyng, (1968), adhered to by the court en banc, in 410 F.2d 106 (1969).
The action, brought in the District Court for the Southern District of New York, stemmed from the collision of a Boeing jet aircraft operated in commercial service by Piedmont Aviation, Inc., and a Cessna private aircraft owned by Lanseair, Inc. and operated by Rapidair, Inc. The crash occurred over North Carolina. All seventy-four passengers and five crew members of the Piedmont jet and the pilot and both passengers of the Cessna were killed. Plaintiffs are New York citizens who have been appointed as administrators of the estates of 13 passengers of the Piedmont aircraft; eight of these were citizens of Mississippi, one of Texas, two of Tennessee, and two of Maryland.1 The defendants are Lanseair, Rapidair, Piedmont, Boeing and the United States. Lanseair and Rapidair are Missouri corporations not subject to in personam jurisdiction in New York. Piedmont and Boeing, also foreign corporations, apparently were. Since they do not have their principal places of business in New York or in the states of residence of any of the decedents, there was diversity as between the plaintiffs and the corporate defendants even if it be proper to go behind the citizenship of the administrators, as recently held in McSparran v. Weist, 402 F.2d 867 (3 Cir. 1968), cert. denied, 395 U.S. 903, 89 S. Ct. 1739, 23 L. Ed. 2d 217 (1969). Jurisdiction over the claim against the United States was conferred by 28 U.S.C. § 1346(b).
The argument flies in the face of the language of Judge Wyatt's orders. These not only vacated the attachments but, the judge having made the determination required by F.R.Civ.P. 54(b), directed the clerk to enter judgment dismissing the actions against the two defendants "for lack of jurisdiction over the person." The judgments subsequently entered conformed to this direction. The record does not disclose why Lanseair and Rapidair thought it necessary to obtain further orders in the Western District of North Carolina vacating the attempted in personam service, and plaintiffs have scant reason to appeal from these since they can now effect such service on Rapidair and Lanseair under the North Carolina long-arm statute, N.C.Gen.Stat. § 1-107.3. The issue of practical importance is whether in the North Carolina litigation plaintiffs are entitled to a preferred position with respect to Rapidair's and Lanseair's insurance coverage by virtue of the New York attachments. That issue was decided in the Southern District of New York prior to the transfer and this court would be the most appropriate place for review even if Judge Wyatt had merely vacated the attachments and not entered orders of dismissal. Cf. Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 688-689, 70 S. Ct. 861, 94 L. Ed. 1206 (1950). However, in light of the tenor of his orders appellants not only might but had to appeal from them here. We therefore proceed to the merits.
Not reaching the constitutional issue, the district court pointed to statements in the two leading New York cases which it regarded as indicating that the Court of Appeals would limit Seider to suits by residents. Chief Judge Desmond wrote in Seider that there was "no policy reason against requiring the insurer to come in to New York and defend as to an accident which occurred in Vermont injuring New York residents," 17 N.Y.2d at 114, 269 N.Y.S.2d at 102, 216 N.E.2d at 315. In Simpson Chief Judge Fuld said "the State has a substantial and continuing relation with the controversy" in a case "where the plaintiff is a resident of the forum state and the insurer is present in and regulated by it," 21 N.Y.2d at 311, 287 N.Y.S.2d at 637, 234 N.E.2d at 672, and Judge Keating's concurrence rested on the assumed constitutionality of permitting a direct action against the insurer by a New York resident even for an out-of-state accident, 21 N.Y.2d at 312-314, 287 N.Y.S.2d at 638-640, 234 N.E.2d at 673. See also Vaage v. Lewis, 29 A.D.2d 315, 288 N.Y.S.2d 521 (2d Dept. 1968). Appellants respond that these observations were simply descriptive of the cases sub judice and that, when faced with the problem here presented, the Court of Appeals would feel bound to apply the attachment statutes as their letter requires. We doubt this. A court that could perform the "miracle" on CPLR 320(c) that was effected in the opinion denying reargument in Simpson v. Loehmann, 21 N.Y.2d 990, 290 N.Y.S.2d 914, 238 N.E.2d 319 (1968), see Minichiello v. Rosenberg, supra, 410 F.2d at 109-110, 119-120, would scarcely shrink from the easier task of saying that a liability insurance policy was a "debt" only when the plaintiff was a resident or was suing for a New York accident. This would be particularly true if the Court of Appeals considered that such a restrictive construction was needed to save Seider from unconstitutionality or even from serious constitutional doubt. See, e. g., Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 346, 48 S. Ct. 194, 72 L. Ed. 303 (1928); Lucas v. Alexander, 279 U.S. 573, 577, 49 S. Ct. 426, 73 L. Ed. 851 (1929); Crowell v. Benson, 285 U.S. 22, 62, 52 S. Ct. 285, 76 L. Ed. 598 (1932); United States v. Rumely, 345 U.S. 41, 45, 73 S. Ct. 543, 97 L. Ed. 770 (1953); People v. Bell, 306 N.Y. 110, 114, 115 N.E.2d 821 (1954); Courtesy Sandwich Shop, Inc. v. Port of New York Authority, 12 N.Y.2d 379, 389, 240 N.Y.S.2d 1, 190 N.E.2d 402, appeal dismissed, 375 U.S. 78, 84 S. Ct. 194, 11 L. Ed. 2d 141 (1963). For reasons sufficiently indicated in Minichiello v. Rosenberg, supra, 410 F.2d at 109-110, 119-120 (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 nonresidents would be exceedingly serious.5 While that may be an understatement, it would be enough to dispose of this case if the plaintiffs were nonresidents who had suffered injuries or nonresident representatives of nonresidents who had been killed.
Appellants recognize that a New York court could nevertheless dismiss the action on the ground of forum non conveniens. See Bata v. Bata, 304 N.Y. 51, 105 N.E.2d 623, 625 (1952); Vaage v. Lewis, 29 A.D.2d 315, 288 N.Y.S.2d 521 (2d Dept. 1968). Assuming that a similar dismissal would be available to a federal court despite the remedy afforded by 28 U.S.C. § 1404(a), appellants say this would be improper in the instant case. A North Carolina statute, N.C.Gen.Stat. § 28-8(2), 28-173, requires any action for the death of an intestate decedent to be brought by a North Carolina resident appointed as administrator and this would defeat diversity since Piedmont is a North Carolina corporation. On the other hand the United States could not be sued in a North Carolina state court. Hence a New York federal court is the only one in which jurisdiction over all these defendants can be had in an action on behalf of decedents who died intestate. For reasons later indicated, we find it unnecessary to consider this. However, the facts do demonstrate the desirability of legislation that would permit — or, indeed, require — all claims arising out of a major airplane accident to be litigated in a single federal court. See S. 961, 91st Cong. 1st Sess., introduced by Senator Tydings, Feb. 7, 1969.
The parties have not discussed New York's statutory restriction on the maintenance of actions against foreign corporations. Business Corporation Law, McKinney's Consol.Laws c. 4, § 1314 provides that a New York resident or a domestic corporation may sue a foreign corporation in the state courts upon any claim, but a nonresident or a foreign corporation may sue another foreign corporation only when either the claim sued upon or the defendant corporation has specified connections with the state. See also General Corporation Law, McKinney's Consol.Laws, c. 23, §§ 224-25. This limitation, "reflecting this State's policy against lending its courts to the resolution of disputes between nonresident parties," Simonson v. International Bank, 14 N.Y.2d 281, 251 N.Y.S.2d 433, 200 N.E.2d 427 (1962), limits the subject-matter jurisdiction of the courts and cannot be waived by the defendant. Davis v. Julius Kessler & Co., 118 Misc. 292, 194 N.Y.S. 9 (Sup.Ct.1922); Fidan v. Austral American Trading Corp., 8 Misc. 2d 598, 168 N.Y.S.2d 27 (Sup.Ct.1957); Electronic Race Patrol, Inc. v. National Trailer Convoy, Inc., 191 F. Supp. 364 (S.D.N.Y. 1961). The state courts have applied the restriction without regard to whether jurisdiction over the defendant was obtained in personam or by attachment quasi in rem. See Banque de France v. Supreme Court, 287 N.Y. 483, 41 N.E.2d 65, cert. denied, 316 U.S. 646, 62 S. Ct. 1279, 86 L. Ed. 1730 (1942); Gano-Moore Coal Mining Co. v. W. E. Deegans Coal Co., 214 App.Div. 634, 213 N.Y.S. 54 (1st Dept. 1925); Cala v. De Ridder, Ltda., 17 A.D.2d 729, 232 N.Y.S.2d 284 (1st Dept. 1962). The provision has been upheld against constitutional attack as a reasonable limitation on access to the courts, Douglas v. New York, N. H. & H. R.R., 279 U.S. 377, 49 S. Ct. 355, 73 L. Ed. 747 (1929), and see Missouri ex rel. Southern Ry. Co. v. Mayfield, 340 U.S. 1, 71 S. Ct. 1, 95 L. Ed. 3 (1950), and a federal court sitting in a diversity case is bound to give it effect, see Guaranty Trust Co. of New York v. York, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079 (1945); First Nat'l Bank of Chicago v. United Air Lines, 190 F.2d 493 (7 Cir. 1951), rev'd on other grounds, 342 U.S. 396, 72 S. Ct. 421, 96 L. Ed. 441 (1952) — although commentators have questioned both these propositions. See B. Currie & Schreter, Unconstitutional Discrimination in the Conflict of Laws: Privileges and Immunities, 69 Yale L.J. 1323, 1346-49, 1379-91 (1960); Hart & Wechsler, The Federal Courts and the Federal System 668-72 (1953).
If the nonresident accident victims represented by these plaintiffs were alive and were suing on their own behalf, we might thus be forced to conclude that Business Corporation Law § 1314 closed the federal courts' doors to them against appellees. It is a question of state law whether the action stands differently under that section simply because the victims have died and New York residents have been appointed to administer their estates. The state courts have long held, under § 1314 and its predecessors, that a resident to whom a claim has been assigned for the sole purpose of enabling him to bring suit may maintain an action in the state court although the assignor could not. See McCauley v. Georgia R. Bank, 239 N.Y. 514, 147 N.E. 175 (1924); Banque de France v. Supreme Court, supra; Cincis v. Seaboard Air Line Ry., 201 Misc. 887, 113 N.Y.S.2d 29 (Sup.Ct.1952). Apparently this holds true as long as the assignment on its face transfers title, without regard to the consideration paid or the use to be made of the proceeds of the claim. Segal Lock & Hardware Co. v. Markey, 124 N.Y.S.2d 181 (Sup.Ct.1953). We might expect the state courts to be equally willing to countenance avoidance of § 1314 by appointment of a resident administrator, although we have not found a decision that establishes this. Cf. Robinson v. Oceanic Steam Nav. Co., 112 N.Y. 315, 19 N.E. 625, 2 L.R.A. 636 (1889); Silberfeld v. Swiss Bank Corp., 183 Misc. 234, 50 N.Y.S.2d 838 (Sup. Ct.), aff'd, 268 App.Div. 984, 52 N.Y.S.2d 583 (1st Dept. 1944). In the absence of a contrary indication we proceed on the assumption that the state courts would not hold this suit barred by § 1314.