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LIVIA VARKONYI v. S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) ET AL. (06/14/68)

COURT OF APPEALS OF NEW YORK 1968.NY.42140 <http://www.versuslaw.com>; 239 N.E.2d 542; 22 N.Y.2d 333 decided: June 14, 1968. LIVIA VARKONYI, INDIVIDUALLY AND AS PARENT OF LASZLO VARKONYI AND ANOTHER, INFANTS, APPELLANT,v.S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) ET AL., RESPONDENTS, ET AL., DEFENDANT; NANCY M. FAULKNER ET AL., AS ADMINISTRATORS OF THE ESTATE OF EDWARD B. FAULKNER, DECEASED, ET AL., APPELLANTS, V. S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) ET AL., RESPONDENTS, ET AL., DEFENDANTS; CHRISTINA ALVAREZ, INDIVIDUALLY AND AS PARENT AND GUARDIAN OF CARLOS G. ALVAREZ AND OTHERS, INFANTS, ET AL., APPELLANTS, V. S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) ET AL., RESPONDENTS, ET AL., DEFENDANT Varkonyi v. S. A. Empresa De Viacao Airea Rio Grandense (Varig), 27 A.D.2d 731, reversed. Faulkner v. S. A. Empresa De Viacao Airea Rio Grandense (Varig), 27 A.D.2d 731, reversed. Alvarez v. S. A. Empresa De Viacao Airea Rio Grandense (Varig), 27 A.D.2d 731, reversed. Counsel Theodore E. Wolcott for appellants. John H. Montgomery, Jr. and William L. Schierberl for S. A. Empresa De Viacao Airea Rio Grandense (Varig), respondent. Counsel James M. FitzSimons for Boeing Company, respondent. Judges Burke, Scileppi, Bergan, Breitel and Jasen concur with Chief Judge Fuld; Judge Keating dissents in part in a separate opinion. Author: Fuld


Varkonyi v. S. A. Empresa De Viacao Airea Rio Grandense (Varig), Judges Burke, Scileppi, Bergan, Breitel and Jasen concur with Chief Judge Fuld; Judge Keating dissents in part in a separate opinion.

Author: Fuld

 A Boeing 707 type aircraft, on a flight from Rio de Janerio, Brazil, to Los Angeles, California, crashed while attempting to land in Lima, Peru, on November 27, 1962. All of the passengers, including the plaintiffs' decedents -- Zoltan Varkonyi, a national of Hungary, residing in Brazil at the time of his death, Edward Faulkner, a British national, and Carlos Alvarez, a Mexican national -- were killed. These actions for wrongful death followed. They were brought in the Supreme Court, New York County, against the airline -- S. A. Varig, a corporation chartered in Brazil but doing business in this State -- and its New York subsidiary, Varig Airlines, Inc., as well as against the manufacturer of the plane -- the Boeing Company, a corporation chartered in Delaware and also doing business in New York. The plaintiffs were, respectively, residents of Hungary, Great Britain and Florida.

Invoking this State's general policy against burdening its courts with foreign-based actions between nonresident parties (see Bata v. Bata, 304 N. Y. 51, 56), the defendants S. A. Varig and Boeing moved to dismiss the complaints on the ground of forum non conveniens. In support of their motions, they also urged that they would be subjected to the hardship of bringing witnesses from far-off places and that the New York courts would be required to interpret and apply foreign law with which they were unfamiliar.

Although recognizing the general policy against entertaining such suits in this forum, the court at Special Term denied the motions on the ground that "special circumstances" were presented which warranted the retention of jurisdiction. The court pointed out that there was no forum other than New York in which suit could be brought against both the airline and the manufacturer of the plane and that "[proof] of the issue of manufacturer's liability may be inseparably connected with proof on the issue of faulty operation and maintenance." It further noted that other actions against these defendants, based on the same plane crash, were pending in the Federal and State courts in New York and that there had already been extensive discovery proceedings in the Federal court actions.

A divided Appellate Division reversed Special Term's order, on the law and facts and in the exercise of discretion, and dismissed the complaints on condition that the defendants stipulate to waive the defense of the Statute of Limitations in any actions thereafter commenced by the plaintiffs in "a proper jurisdiction". The majority held that neither the unavailability of another forum in which both of the moving defendants could be joined nor the "convenience of plaintiffs and their counsel" were sufficient factors to justify burdening our courts with these suits. It ruled in this connection that "'it is the "convenience" of the court, and not that of the parties, which is the primary consideration'".

Since the defendant foreign corporations are doing business in this State, there is no statutory prohibition against the maintenance of these actions here (Business Corporation Law, ยง 1314, subd. [b], par. [5]). Our courts, however, are under no compulsion to add to their heavy burdens by accepting jurisdiction of a suit between nonresident parties on a cause of action having no nexus with this State. The question whether such a suit should be entertained is one which is in general committed to the discretion of the courts below, to be exercised by reviewing and evaluating all the pertinent competing considerations. (See Bata v. Bata, 304 N. Y. 51, 56-57, supra; Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-509.) We will not, ordinarily, interfere with the Appellate Division's exercise of such discretion unless there has been an abuse of discretion as a matter of law.*fn1 Where, however, that court, in exercising its discretion, fails to take into account all the various factors entitled to consideration, it commits error of law reviewable by this court. (See, e.g., Taylor v. Interstate Motor Frgt. System, 309 N. Y. 633; de la Bouillierie v. de Vienne, 300 N. Y. 60; see, also, Cohen and Karger, Powers of the New York Court of Appeals, pp. 607-608.) Among the pertinent factors to be considered and weighed, in applying the doctrine of forum non conveniens, are, on the one hand, the burden on the New York courts and the extent of any hardship to the defendant that prosecution of the suit would entail and, on the other, such matters as the unavailability elsewhere of a forum in which the plaintiff may obtain effective redress and the extent to which the plaintiff's interests may otherwise be properly served by pursuing his claim in this State. (See Bata v. Bata, 304 N. Y. 51, 56-57, supra; Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-509, supra.) We held in the Taylor case (309 N. Y., at p. 636) that, where "there are special and unusual circumstances" favoring acceptance of a suit between nonresident parties based on an out-of-state tort, it is error of law for the Appellate Division to exclude consideration of such circumstances in deciding whether to exercise its discretion in favor of accepting or of rejecting jurisdiction. Similarly, in the cases before us, the special circumstances mentioned by Special Term, particularly the absence of any other forum in which both of the moving defendants could be joined, were factors which the Appellate Division was bound to take into account in exercising its discretion. In view of its disregard of these factors, its order cannot stand and the matter should be remitted to the Appellate Division for further consideration. (See Taylor v. Interstate Motor Frgt. System, 309 N. Y. 633, 636, supra.) Upon such remission, it is hardly necessary to add, that court will be free to make its own judgment on the basis of all the relevant factors.*fn2

The order appealed from should be reversed, with costs, and the cases remitted to the Appellate Division for further proceedings in accordance with this opinion.

Disposition

Order reversed, etc.

Keating, J. (concurring in part and dissenting in part). I agree with the majority that a reversal is required here. I would, however, reinstate the order of Special Term rather than remand the case to the Appellate Division. Since I believe that the majority opinion does not adequately deal with the important questions presented by this case and since I cannot agree with the disposition, I take the liberty of setting forth my views at length.

On November 27, 1962 a Boeing 707 jet airliner en route from Rio de Janerio, Brazil, to Los Angeles, California, crashed while attempting to land for a scheduled stop in Peru. The passenger list of the plane was as international as its itinerary. Among those killed were Zoltan Varkonyi, a national of Hungary, residing in Brazil at the time of his death, Edward Faulkner, a British national and Carlos Alvarez, a Mexican national.

These actions for wrongful death were commenced in the Supreme Court (New York County) against the Boeing Company, a corporation chartered in Delaware but doing business in this State, S. A. Empresa De Viacao Airea Rio Grandense (S. A. Varig), a corporation chartered in Brazil, also doing business in this State, and Varig Airlines, Inc., a New York subsidiary of S. A. Varig.*fn1

The defendants S. A. Varig and Boeing, demonstrating concern for the burden on courts of this State if the cases were tried here, moved to dismiss the causes of action maintained for the benefit of residents of two foreign nations (Hungary and Britain) and a sister State (Florida)*fn2 on the ground of forum non conveniens. The Supreme Court (Special Term) denied the motion. The court held that "special circumstances" were present which, in the interest of justice, required maintenance of the action here. The court noted that the doctrine of forum non conveniens presupposes the existence of a second more convenient forum and that no such forum was available against both defendants. A consequence of the dismissal under the peculiar facts presented here, the court stated, would necessitate the commencement and trial of separate actions in Peru or Brazil against S. A. Varig and in Delaware against Boeing.

Such a result, the court noted, would not only work great hardship and expense upon the widow, children and other survivors of those killed but would also interfere with the orderly adjudication of the actions. The actions here involve complex questions with respect to the construction of the airliner on the part of Boeing and its operation by S. A. Varig. Special Term foresaw the necessity of having all the issues tried and resolved by one court. "Otherwise each defendant may point to the other as being responsible for the accident; and the plaintiff, a widow residing in Europe, with limited means, would have the burden of pursuing her proof against one defendant in North America and against the other defendant in South America. Employees of one defendant who might be essential as witnesses in the trial against the ...


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