Ranz v. Sposato

77 A.D.2d 408, 435 N.Y.S.2d 723, 1980 N.Y. App. Div. LEXIS 13358
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 9, 1980
StatusPublished
Cited by4 cases

This text of 77 A.D.2d 408 (Ranz v. Sposato) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ranz v. Sposato, 77 A.D.2d 408, 435 N.Y.S.2d 723, 1980 N.Y. App. Div. LEXIS 13358 (N.Y. Ct. App. 1980).

Opinions

OPINION OF THE COURT

Bloom, J.

This appeal confronts us with another facet of the unfinished business precipitated by Rush v Savchuk (444 US 320). Rush held that a Minnesota garnishment statute which embodied the rule laid down in Seider v Roth (17 NY2d 111), was unconstitutional because it permitted the exercise of State jurisdiction without the necessity of establishing that the defendant had such minimal contacts with [409]*409the forum State so as to insure that traditional notions of substantial justice and fair play were not infringed by the assumption of State jurisdiction (International Shoe Co. v Washington, 326 US 310).

The facts are comparatively simple. Arthur Ranz, plaintiff’s intestate, was a resident of the State of New York. The Sposatos are residents of Pennsylvania. On August 29,1975, Arthur Ranz was the occupant of a vehicle owned by Robert Ranz. The Ranz vehicle, while in Pennsylvania, collided with a vehicle owned by Louis Sposato, Sr., and operated by Louis Sposato, Jr., with the consent and permission of his father. By consequence of the accident Arthur Ranz died.

Sposato was insured by Allstate Insurance Company. On December 12, 1975, somewhat less than four months after the happening of the accident, and well within the statutory period of limitations both in New York and Pennsylvania, plaintiffs obtained an order in this State attaching the contractual obligation of Allstate to appear, defend and to pay any judgment procured by plaintiffs against the Sposatos to the limits of the policy issued by it under the authority of Seider v Roth (17 NY2d 111, supra). Service of the summons and complaint in this action was then effected upon the Sposatos in Pennsylvania.

Issue was joined later the same month. No motion was made by defendants to dismiss for lack of jurisdiction nor was the jurisdictional issue preserved by the responsive pleading as permitted by CPLR 3211 (subds [a], [e]).

After the Supreme Court of the United States decided Rush (supra), defendants, for the first time, raised the issue of jurisdiction by the instant motion to dismiss. Recognizing that CPLR 3211 (subd [e]) provides that a motion to dismiss upon the ground that the court does not have jurisdiction over the person of the defendant “is waived if a party moves on any of the grounds set forth in subdivision (a) without raising such objection or if, having made no objection under subdivision (a), he does not raise such objection in the responsive pleading” (emphasis supplied), defendants, in the endeavor to avoid the consequences of this provision, argued, most energetically, that the jurisdiction here contested is subject matter jurisdiction which may not [410]*410be conferred upon the court even by consent or stipulation and which is subject to attack at any time (Robinson v Oceanic Steam Nav. Co., 112 NY 315; Eckert v Eckert, 34 AD2d 684; Revona Realty Corp. v Wasserman, 4 AD2d 444; 4 Weinstein-Korn-Miller, NY Civ Prac, par 3211.10).

Special Term denied the motion to dismiss. We affirm. In so doing we do not reach any of the constitutional problems posed by Rush (supra).

Prior to the adoption of the CPLR, it was axiomatic that where service of process was made on a nondomiciliary under authority of a warrant of attachment the defendant was confronted with three options. He could default. In that event, the jurisdiction of the court was limited to the property seized (Heilbrunn v Kellogg, 253 App Div 753, affd 279 NY 773; Schwinger v Hickok, 53 NY 280). He could, by motion where that practice was permitted (Civ Prac Act, § 237-a, subd 1) or by answer (Hassler v Shaw, 271 US 195) in the event that no such motion was permitted, raise the question. However raised, the issue was preserved if seasonably presented (Cheshire Nat. Bank v Jaynes, 224 Mass 14). In this State it was expressly preserved by subdivision 4 of section 237-a of the Civil Practice Act. Where, however, defendant appeared without reservation and sought to defend upon the merits, his appearance was general and subjected him to in personam jurisdiction (4 Carmody-Wait 2d, NY Civ Prac § 26:42). In so doing, he rendered himself potentially liable for the full amount in suit. The CPLR altered the law only to the extent that it abolished the special appearance, permitting the objection to jurisdiction to be taken either by motion or by reservation contained in the answer. If a defendant availed himself of neither alternative, his appearance was a general or unconditional appearance.

Seider (supra) created tensions between the insurer and insured where the amount in suit exceeded the amount of the policy. Since an insurer’s potential liability was fixed by the face amount of the policy, it could not be damaged by undertaking defense of the litigation, regardless of the result. Hence, it was always intent upon appearing and defending. However, an insured in such a situation, by his [411]*411general appearance, risked a recovery in excess of the face amount of the policy—a recovery for which he might be personally liable. Hence, in such case he might be loath to appear. Not until Simpson v Loehmann (21 NY2d 305, mot for rearg den 21 NY2d 990), was this area of conflict set to rest. In that case reconsideration of the Seider doctrine was sought. In its original holding (reaffd on rearg), the Court of Appeals noted (p 310), almost in passing, that “It is, of course, hardly necessary to add that neither the Seider decision nor the present one purports to expand the basis for in personam jurisdiction in view of the fact that the recovery is necessarily limited to the value of the asset attached, that is, the liability insurance policy” (emphasis supplied).

The limitation imposed by the court in Simpson (supra) impelled the Judicial Conference to take another look at CPLR 320, which governs appearances. In its Sixth Annual Report to the Legislature (Fifteenth Ann Report of NY Judicial Conference, 1970, p A109) it noted that, under the Civil Practice Act and its successor, the Civil Practice Law and Rules, limited appearances were prohibited, with certain special Judge-created exceptions. To bring the law into conformity with the decision in Simpson (supra), it suggested that Seider (supra) and Simpson, read together, required the adoption of a limited appearance rule to overcome,

“the possible conflict of interest between the insurer and the insured in view of the provisions of Rule 320 (c). The insurer justifiably might wish to proceed With the defense on the merits in order to protect its economic interest in the litigation—yet, also justifiably, the insured may wish to avoid an appearance in New York which would expose him to an in personam jurisdiction and possibly to liability in excess of policy limits if he should proceed with the defense.

“The urgency of the appearance problem-was further accentuated when a federal district court in February 1968 refused to follow the Seider rule principally on the ground of defendant’s apparent inability to make a limited appearance. (Podolsky v. Devinney, 281 F. Supp. 488 (1968)). In the federal court’s view the compulsion of submitting to personal jurisdiction or risking a default amounted to deprivation of property without due process of law.

[412]

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Bluebook (online)
77 A.D.2d 408, 435 N.Y.S.2d 723, 1980 N.Y. App. Div. LEXIS 13358, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ranz-v-sposato-nyappdiv-1980.