The opinion of the court was delivered by: PIERCE
Garnishee Steamship Mutual Underwriting Association, Limited, moves before this Court for an order vacating an order of attachment granted by this Court on November 18, 1974, and for an order vacating and setting aside the service of said order and dismissing the complaint.
The Public Administrator of the State of New York commenced this $3,500,000 damage action for wrongful death on the high seas on behalf of the estates of nine Greek seamen who were lost en route from Norway to Spain while serving aboard the steamship Theodore AS, a merchant vessel flying the flag of the Republic of Cyprus. The Theodore AS was owned and operated by defendant Unimar Shipping, Ltd., a corporation established under the laws of Cyprus. The vessel was insured against certain liability by the garnishee, Steamship Mutual, a marine insurance company established under the laws of the United Kingdom. Steamship Mutual's correspondent in the United States is Lamorte Burns & Co., Inc., a New York corporation with an office and place of business in the City of New York.
The Public Administrator asserts that this Court has jurisdiction under the Jones Act, 46 U.S.C. § 688, the Death on the High Seas Act, 46 U.S.C. § 761 et seq. and general Maritime Law (28 U.S.C. § 1333). It is asserted that this is a case of maritime jurisdiction within the meaning of Rule 9(f) Fed.R.Civ.P.
Personal jurisdiction over the defendant was sought pursuant to an attachment under § 6201 N.Y. C.P.L.R. (McKinney 1972). Specifically, this Court ordered said attachment upon Steamship Mutual's obligation to defend Unimar, in the manner allowed by Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966). The order of attachment was served on Lamorte Burns, alleged by plaintiff to be the general or managing agent for Steamship Mutual. A copy of the summons and complaint was served upon Mr. Sigalas, an officer of defendant Unimar, in Pireaus, Greece.
In their moving papers, counsel for Steamship Mutual assert numerous grounds upon which this Court should decide to vacate the attachment order. The garnishee asserts that (1) no personal jurisdiction is present because Seider -style attachments may be had only on behalf of plaintiffs who are residents of the State of New York; (2) N.Y.Insur.L. § 167 excludes direct action suits against maritime insurers; and (3) there is here no attachable obligation of Steamship Mutual within the meaning of Seider. The Public Administrator's memorandum in opposition invokes the maritime jurisdiction of this Court, urges that the defendant is substantially present in this state, and argues that the obligation of Steamship Mutual is attachable here.
This Court has subject matter jurisdiction over actions such as this one by reason of the Acts of Congress cited by plaintiff. Thus, plaintiff urges federal question jurisdiction upon this Court, the amount in controversy being in excess of $10,000 (28 U.S.C. § 1331). However, in this case personal jurisdiction was sought pursuant to New York Law, through the troublesome mechanism of Seider v. Roth.
In Seider, the New York Court of Appeals held that the obligation of an insurance carrier to investigate and defend the insured constituted an attachable obligation through which to obtain personal jurisdiction over the insured. The concept of jurisdiction by attachment of obligation is bottomed in the doctrine of Harris v. Balk, 198 U.S. 215, 25 S. Ct. 625, 49 L. Ed. 1023 (1905). Seider, however, evoked much criticism, see, e. g., Stein, Jurisdiction by Attachment of Liability Insurance, 43 N.Y.U.L.Rev. 1075 (1968), and was upheld as constitutional by the Second Circuit under limited circumstances in Minichiello v. Rosenberg, 410 F.2d 106 (2d Cir. 1968), aff'd en banc, 410 F.2d 117 (2d Cir.), cert. denied, 396 U.S. 844, 90 S. Ct. 69, 24 L. Ed. 2d 94 (1969). In Minichiello, the court strongly intimated that a Seider attachment would unconstitutionally offend due process if the State was neither the place of injury nor the plaintiff's residence.
Subsequently, in Farrell v. Piedmont Aviation, Inc., 411 F.2d 812 (2d Cir.), cert. denied, 396 U.S. 840, 90 S. Ct. 103, 24 L. Ed. 2d 91 (1969), the same court held that a Seider attachment could not lie where a New York administrator sued on behalf of out-of-state beneficiaries, attaching a liability policy in this state covering nonresident corporate defendants. The court wrote that "we are convinced that the constitutional doubt with respect to applying Seider v. Roth in favor of nonresidents would be exceedingly serious." 411 F.2d at 817.
The Public Administrator attempts to distinguish the authority of Farrell on two grounds. First, it is urged that Farrell should not control because that decision was rendered in a diversity case. Second, it is argued that in this case the defendant has more contacts with New York than was the situation in Farrell. Specifically, the Administrator alleges that two corporate officers and shareholders of Unimar are residents of New York. However, this argument must fall; it is the plaintiff's residence, not the defendant's agent's residence, which determines whether plaintiff may be granted a Seider attachment. Farrell, supra. Further, the Administrator's argument that his own residence is sufficient for an attachment order was specifically rejected in Farrell :
"The only remaining argument, that the plaintiffs here are New York citizens, requires little discussion. There would be no basis in reason for different treatment of an action by a nonresident who suffered serious injuries or by a nonresident executor of a nonresident who was killed, on the one hand, and one by a New York citizen who had been appointed administrator of a nonresident decedent on the other. The constitutional ...