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Carolina Casualty Insurance Co. v. Belford Trucking Co.

Decided: July 29, 1971.

CAROLINA CASUALTY INSURANCE COMPANY, PLAINTIFF,
v.
BELFORD TRUCKING COMPANY, INC., A CORPORATION AND JAMES T. NEIGHBORS AND JAMES G. MITCHELL, DEFENDANTS



Wick, J.s.c.

Wick

Plaintiff has brought this declaratory judgment action to determine whether plaintiff or Belford Trucking Company, Inc., as insurers, must defend the owner and driver of a tractor-trailer in a negligence suit now pending in the Law Division. Belford, a foreign corporation, has moved to set aside service of process made under R. 4:4-4(c)(1) and for dismissal of the complaint because venue was improperly laid under R. 4:3-2; the place of business of plaintiff is not stated in the complaint under R. 1:4-1(a), and the court does not have subject matter jurisdiction.

The question of subject matter jurisdiction of this court under the Declaratory Judgment Act in suits to determine the liability of an insurer is hardly open to dispute. Condenser Service v. American Ins. Co. , 45 N.J. Super. 31 (App. Div. 1957), certif. den. 24 N.J. 547 (1957); Ohio Casualty Ins. Co. v. Flanagin , 44 N.J. 504 (1965).

R. 1:4-1(a) provides that the first pleading by each party must state the residence of the party pleading. The court understands that plaintiff is a foreign corporation and the correct residence can be supplied in an amended complaint, which plaintiff should file forthwith. The body of the complaint, however, will not be stricken.

R. 4:4-4(c)(1) provides that if personal service cannot be made on a foreign corporation by serving various persons

described, substituted service by certified mail, return receipt requested, is permitted. Plaintiff's attorney must show by affidavit that defendant could not be served by the usual methods of service. After the motion was brought by defendant Belford Trucking Company, Inc., that affidavit was filed with the court along with an affidavit of service by certified mail to Belford in Florida. The clear purpose of the rule is to vest our courts with personal jurisdiction over foreign corporations through extraterritorial service, subject only to the due process limitations of the United States Constitution. Those limitations have not yet been fully delineated by the United States Supreme Court "by concrete criteria readily applicable to all cases, whether in terms of the relationships and contacts of the foreign corporation to the forum state, of the connection of the cause of action involved with any of those relationships, or otherwise." Corporate Dev. Specialists Inc. v. Warren-Teed Pharm., Inc. , 102 N.J. Super. 143, 148 (App. Div. 1968), certif. den. 52 N.J. 535 (1968).

Belford does not claim that the certified mail service was insufficient. The summons and complaint were received. Belford knew of the pending action and now responds by moving to dismiss the complaint because this court does not have in personam jurisdiction. This is the major issue before the court.

"Traditionally, the acquisition of jurisdiction over a foreign corporation has involved (1) the power to subject it to the jurisdiction of the court, and (2) bringing it before the court by proper notice." Higgins v. Am. Soc. of Clinical Pathologists , 94 N.J. Super. 243, 248 (App. Div. 1967) rev'd 51 N.J. 191 (1968), appeal after remand aff'd, 53 N.J. 547 (1969). N.J.S.A. 2A:16-56 provides: "When declaratory relief is sought, all persons having or claiming any interest which would be affected by the declaration shall be made parties to the proceeding." The Declaratory Judgment Act cannot be construed so as to adjudicate the rights of parties who are not before the court or over whom the

court does not have personal jurisdiction. Thus, an indispensable requisite to the exercise of jurisdiction in a declaratory judgment action is the service of process or notice upon all of those whom it is sought to bind by the judgment. Johnston v. Bd. of Adjustment, etc. Westfield , 15 N.J. Misc. 283, 190 A. 782 (Sup. Ct. 1937).

R. 4:3-2(a) requires that venue be laid in the county where the parties are residents or where the cause of action arose , or in the county where the summons was served upon a nonresident defendant. While the Declaratory Judgment Act is silent on the question of venue, it still designates certain necessary parties, but such designation cannot be used to gain jurisdiction where jurisdiction cannot otherwise be gained by the court. R. 4:3-2(b) provides that for purposes of this rule a corporation is a resident in the county where the office of its registered agent is located or in any county where it does business. Belford then argues that since none of the parties to this declaratory judgment action are residents of New Jersey, the State has no jurisdiction over them. Belford misinterprets the rule. The comment to paragraph (b) of that rule states that it includes an alternate place of residence for venue purposes -- any county in which a corporate party is actually doing business, whereas, previously venue could only be laid in such a county only if the corporation had no registered office in this State. The rule gives criteria for designating the county within the State where the action should be brought. That rule does not control whether the State has personal jurisdiction over the parties. Under R. 4:4-4(c)(1) that question is a constitutional issue of due process.

It would serve no useful purpose to trace the evolution of the requirements of personal jurisdiction over nonresident corporations from the rigid rule of Pennoyer v. Neff , 95 U.S. 714, 24 L. Ed. 565 (1877), to the more flexible standards of International Shoe Co. v. Washington , 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945) and ...


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