New York Law Review

Tag: Non-Domiciliary

  • Matter of Heller-Baghero, 26 N.Y.2d 337 (1970): Surrogate Court’s Discretion in Original Probate for Non-Domiciliaries

    Matter of Heller-Baghero, 26 N.Y.2d 337 (1970)

    A Surrogate Court possesses discretion to entertain original probate of a non-domiciliary’s will when the bulk of the estate’s assets are in New York and prior proceedings in the domiciliary jurisdiction have not conclusively determined the validity of a later will.

    Summary

    The New York Court of Appeals addressed whether a Surrogate Court properly exercised jurisdiction over the original probate of a 1964 will of a non-domiciliary (Austrian resident) when an estate proceeding based on a prior 1962 will was pending in Austria. The Court affirmed the lower court’s decision to strike objections to the New York probate, holding that the Surrogate Court had discretion to assert jurisdiction. Key factors influencing the decision included the fact that 90% of the estate’s assets were in New York, the Austrian proceedings had not conclusively determined the validity of the 1964 will, and requiring probate in Austria would be unduly burdensome.

    Facts

    Eudolph Heller-Baghero, an American citizen, executed a will in New York City in 1964, revoking all prior wills and leaving his estate to his divorced wife and another woman. A prior will from 1962 existed, which was the subject of estate proceedings in Austria. The 1962 will left the bulk of his property to his divorced wife, or his daughters if she predeceased him. Approximately 90% of the testator’s assets were located in New York. The Austrian court was aware of the 1964 will, but no certified copy was ever formally presented to them. The daughters were granted administration of the Austrian estate, but the Austrian court indicated that the 1964 will, if valid, would invalidate the prior will, potentially leading to a legacy suit.

    Procedural History

    The 1964 will was presented for probate in the Surrogate’s Court, New York County. The testator’s daughters filed objections, arguing that the testator was domiciled in Austria and a prior will was the subject of proceedings there. The Surrogate struck the objections. The Appellate Division affirmed, granting leave to appeal to the New York Court of Appeals on a certified question, indicating the determination was a matter of law, not discretion.

    Issue(s)

    Whether the Surrogate Court had discretion to entertain jurisdiction for original probate of the 1964 will, and if so, whether the exercise of that discretion was exceeded as a matter of law.

    Holding

    Yes, the Surrogate Court had discretion to entertain jurisdiction because the statute authorizes probate, the 1964 will had not been probated or denied in the domiciliary jurisdiction, and the bulk of the assets were in New York.

    Court’s Reasoning

    The Court relied on Section 1605 of the Surrogate’s Court Procedure Act, which allows original probate of a non-domiciliary’s will if it affects property in New York and is validly executed under New York law. The statute restricts original probate only when the will has already been probated or denied probate in the testator’s domicile. Since the 1964 will was not considered in the Austrian proceeding, the statute permitted the Surrogate Court to exercise discretion. The Court reviewed prior cases, including Matter of Leonori, Matter of Wolf, and Matter of McCullough, which established that the Surrogate Court’s decision is discretionary, based on factors like comity and the location of assets. The Court found the Surrogate Court’s decision justified by the substantial assets in New York, the executor and a legatee being New York residents, and the potential for extensive litigation in Austria. The court noted, “the facts of the particular case justify the entertainment of original jurisdiction, although they certainly would not compel it.” The court emphasized that the law of Austria would govern the intrinsic validity of the will and devolution of property not disposed of by will, stating, “the only issue is of the validity of the 1962 and 1964 wills, and not whether the law of New York or Austria governs the intrinsic validity, or effect, of the will or devolution of the property when not disposed by will.”

  • Ferrante Equip. Co. v. Lasker-Goldman Corp., 26 N.Y.2d 280 (1970): Long-Arm Jurisdiction and Transaction of Business

    Ferrante Equip. Co. v. Lasker-Goldman Corp., 26 N.Y.2d 280 (1970)

    Under New York’s long-arm statute, CPLR 302(a)(1), a non-domiciliary is subject to personal jurisdiction in New York only if they transact business within the state, and the cause of action arises from that transaction; actions taken outside New York that merely affect business or performance within the state are insufficient to establish jurisdiction under this provision.

    Summary

    Ferrante Equipment Company sued Lasker-Goldman in New York. Lasker impleaded Hanover Insurance, who then impleaded Ferrante (individually), a New Jersey resident, based on an indemnity agreement executed in New Jersey. The New York Court of Appeals held that New York courts lacked personal jurisdiction over Ferrante because his business activities related to the cause of action occurred entirely in New Jersey, not New York. The court emphasized that the mere effect of Ferrante’s out-of-state actions on New York business was insufficient to establish jurisdiction under CPLR 302(a)(1). This case underscores the requirement of a direct transaction of business within New York for long-arm jurisdiction.

    Facts

    Lasker-Goldman Corporation was the general contractor for construction at New Paltz State College. Anchor Construction was a subcontractor. Ferrante Equipment Company leased equipment to Anchor for work on the New Paltz project. Anchor failed to provide a performance bond initially. Ferrante (individually), a substantial shareholder in Ferrante Equipment Company, approached Hanover Insurance in New Jersey to secure a performance bond for Anchor. As an inducement, Ferrante and Anchor’s president agreed in New Jersey to indemnify Hanover for any losses related to the bond. All negotiations and the execution of the indemnity agreement occurred in New Jersey. Ferrante was a New Jersey domiciliary and never entered New York in connection with these transactions.

    Procedural History

    Ferrante Equipment Company sued Lasker-Goldman in New York when Anchor defaulted on rental payments. Lasker impleaded Hanover Insurance. Hanover then impleaded Anchor, its president, and Ferrante (individually) based on the indemnity agreement. Ferrante, served in New Jersey, moved to dismiss the fourth-party complaint for lack of personal jurisdiction. Special Term denied the motion. The Appellate Division reversed, holding that Ferrante’s contacts with New York were insufficient for jurisdiction.

    Issue(s)

    Whether New York courts have personal jurisdiction under CPLR 302(a)(1) over a non-domiciliary who transacted business outside of New York, but whose actions affected the performance of work within New York.

    Holding

    No, because CPLR 302(a)(1) requires that the non-domiciliary transact business within New York, and the cause of action must arise from that in-state transaction. Actions taken outside New York, even if they impact work within the state, are insufficient to establish jurisdiction under this provision.

    Court’s Reasoning

    The Court of Appeals emphasized that CPLR 302(a)(1) requires the non-domiciliary to transact business within the state. Citing Parke-Bernet Galleries v. Franklyn, the court reiterated that the purpose of CPLR 302 is to extend jurisdiction only to non-residents who have engaged in some purposeful activity in New York in connection with the matter in suit. The court found no evidence of Ferrante transacting any business in New York. His activities, including negotiating and executing the indemnity agreement, occurred entirely in New Jersey. The court rejected the argument that Ferrante’s actions had a substantial effect on the New York job, stating that this argument attempted to improperly apply the reasoning of CPLR 302(a)(3)(ii) (tortious act outside the state causing injury within) to CPLR 302(a)(1). The court quoted the Appellate Division: “The mere receipt by a nonresident of benefit or profit from a contract performed by others in New York is clearly not an act by the recipient in this State sufficient to confer jurisdiction under our long-arm statute.” To extend jurisdiction based solely on the effects of out-of-state actions would be an unwarranted expansion of 302(a)(1) and a function belonging to the Legislature.