Seider v. Roth, 17 N.Y.2d 111 (1966)
An insurance company’s obligation to defend and indemnify a nonresident defendant constitutes a debt subject to attachment, providing a basis for quasi in rem jurisdiction in the state where the insurer does business.
Summary
This case addresses whether a New York court can exercise quasi in rem jurisdiction over a nonresident defendant by attaching the contractual obligation of the defendant’s insurance company to defend and indemnify him. The New York Court of Appeals held that the insurer’s obligation is a debt subject to attachment under CPLR 6202, allowing the New York resident plaintiffs to sue the nonresident defendant in New York. This decision established a novel jurisdictional basis, allowing plaintiffs to pursue claims against out-of-state defendants when the insurance company has a presence within the state.
Facts
Two New York residents, husband and wife, were injured in an automobile accident in Vermont, allegedly due to the negligence of Lemiux, a resident of Quebec. Lemiux was insured by Hartford Accident and Indemnity Company, which does business in New York. The plaintiffs sought to establish jurisdiction over Lemiux in New York by attaching Hartford’s contractual obligation to defend and indemnify Lemiux under the insurance policy.
Procedural History
The plaintiffs obtained an order of attachment directing the Sheriff to levy upon Hartford’s contractual obligation to defend and indemnify Lemiux. Lemiux moved to vacate the attachment and service of the summons and complaint. Special Term denied the motion, relying on a similar case, Fishman v. Sanders. The Appellate Division affirmed, and Lemiux appealed to the New York Court of Appeals.
Issue(s)
Whether, in a personal injury action against a nonresident defendant, the defendant’s liability insurer’s contractual obligation to defend and indemnify the defendant is a “debt” owing to the defendant and subject to attachment under CPLR 6202, thereby providing a basis for quasi in rem jurisdiction.
Holding
Yes, because Hartford’s contractual obligation to defend and indemnify Lemiux is a debt that can be attached, establishing jurisdiction in New York.
Court’s Reasoning
The Court of Appeals relied on CPLR 5201 and 6202, which define what constitutes a debt subject to attachment. The court reasoned that Hartford’s policy imposed contractual obligations as soon as the accident occurred, including the duty to investigate, negotiate, and defend Lemiux in any negligence action. Quoting the case, “as soon as the accident occurred there was imposed on Hartford a contractual obligation which should be considered a ‘debt’ within the meaning of CPLR 5201 and 6202.” The court cited Matter of Riggle, 11 N.Y.2d 73, where a similar insurance obligation was deemed a debt for jurisdictional purposes. The court dismissed concerns about creating a “direct action” against the insurer, clarifying that jurisdiction was acquired because the policy obligation was a debt owed to the defendant by the insurer, which was considered a resident of New York. The court further reasoned that requiring the insurer to defend in New York for an accident injuring New York residents was reasonable, similar to allowing direct actions against insurers when New York residents were injured outside the state, as in Oltarsh v. Aetna Ins. Co. 15 N.Y.2d 111. Ultimately, the decision rests on the principle that the insurer’s promise to defend and indemnify constitutes a valuable right of the insured, which can be treated as property for jurisdictional purposes.