Ewing v. Lockheed Aircraft Corporation

• Decision Date: 13 February 1962
• Docket Number: No. 4-61 Civ. 221.,4-61 Civ. 221.
• Citation: 202 F. Supp. 216
• Parties: Vere R. EWING, Administrator of the Estate of Florence E. Ewing, Deceased, Plaintiff, v. LOCKHEED AIRCRAFT CORPORATION, a corporation, General Motors Corporation, a corporation, and Northwest Airlines, Inc., a corporation, Defendants.
• Court: U.S. District Court — District of Minnesota

202 F. Supp. 216

Vere R. EWING, Administrator of the Estate of Florence E. Ewing, Deceased, Plaintiff, v. LOCKHEED AIRCRAFT CORPORATION, a corporation, General Motors Corporation, a corporation, and Northwest Airlines, Inc., a corporation, Defendants.

No. 4-61 Civ. 221.

United States District Court D. Minnesota, Fourth Division.

February 13, 1962.

Charles T. Hvass, Minneapolis, Minn., for plaintiff.

Nathan A. Cobb and Charles A. Bassford, Minneapolis, Minn., for defendant Lockheed Aircraft Corp.

NORDBYE, District Judge.

This cause comes before the Court on plaintiff's motion for an order denying the special appearance of defendant Lockheed Aircraft Corporation herein and for an order determining that this defendant is subject to the jurisdiction of this Court. Defendant Lockheed countered with a motion for dismissal as to it upon the grounds of lack of jurisdiction over its person. Jurisdiction purportedly was obtained over this defendant by service on the Secretary of State of the State of Minnesota pursuant to M.S.A. § 303.13, subd. 1(3), and by personal service on Lockheed's field representative residing within this State.

This cause of action arises out of the Northwest Airline "Electra" crash near Tell City, Indiana, on March 17, 1960. The decedent was a citizen of South Dakota. Defendant Lockheed Aircraft Corporation is a California corporation. Defendant General Motors Corporation is a Delaware corporation and defendant Northwest Airlines, Inc., is a Minnesota corporation. The aircraft involved in the crash was manufactured and assembled by Lockheed, with the engines having been built by General Motors, and it had been sold to and was being operated by Northwest at the time of the crash.

The complaint is brought under the Indiana Wrongful Death Act, Ind. Burns' Ann.Stat. § 2-404, and asserts three causes of action. The first and second causes of action are directed against Lockheed on a breach of warranty theory of liability. The plaintiff alleges that at the time of the sale to Northwest, Lockheed expressly and impliedly warranted and guaranteed to Northwest and through Northwest to its fare-paying passengers, inter alia, that the aircraft was suitable and fit for use as a commercial airplane, and that the aircraft, by reason of the breach of such warranties, crashed. The third cause of action is directed against all of the defendants and alleges negligence in the design, manufacture, assembly and maintenance of the aircraft.

Lockheed has appeared specially and moves the Court to dismiss the action against it upon the ground of lack of jurisdiction over its person. Specifically, the grounds for the motion can be stated as follows: (1) that Section 303.13, subd. 1(3) does not apply to the factual situation present here; (2) that Lockheed does not "do business" in Minnesota so as to subject it to personal jurisdiction; and (3) that if Section 303.13, subd. 1(3) is applied so as to uphold jurisdiction over it, the statute would be a denial of due process and would impose an undue burden on interstate commerce in violation of the Constitution of the United States.

The pertinent portion of M.S.A. § 303.13 is as follows:

"A foreign corporation shall be subject to service of process, as follows:

"(3) If a foreign corporation makes a contract with a resident of Minnesota to be performed in whole or in part by either party in Minnesota, * * * such acts shall be deemed to be doing business in Minnesota by the foreign corporation and shall be deemed equivalent to the appointment by the foreign corporation of the secretary of the State of Minnesota * * * to be its true and lawful attorney upon whom may be served all lawful process in any actions or proceedings against the foreign corporation arising from or growing out of such contract * * *."

Under the contract of sale for the Electras between Lockheed and Northwest, Lockheed agreed to provide and did provide a "field service representative" to be stationed at the Northwest offices in Minneapolis to aid Northwest in the problems arising from the operation, repair and maintenance of the aircraft. Plaintiff contends that since part of the contract was performed in Minnesota, Section 303.13, subd. 1(3) is operative and Lockheed's activities within the State are sufficient to satisfy the "doing business" requirement of "due process".

Lockheed's contacts within the State, so far as the record indicates, were those which arose in connection with the sale, maintenance and repair of the Electras. One of the attorneys for the plaintiff has filed an affidavit herein wherein he states:

"`On or about May 26, 1958, a contract was entered into by and between Northwest Airlines, Inc. and Lockheed Aircraft Corporation, whereby Lockheed sold to Northwest ten aircraft, designated as Lockheed Electras. Prior to that time, Mr. Frank F. Davis, Domestic Sales Manager of Lockheed Aircraft Corporation, had called on Mr. Donald W. Nyrop, President of Northwest Airlines in the Twin Cities, for the purpose of interesting Northwest in certain Lockheed Electras.

"`Northwest Airlines, Inc. paid $2,269,650.00 for each of the Lockheed Electra aircraft. All in all, Lockheed has sold to Northwest approximately eighteen Lockheed Electras.'"

Counsel states that this information was obtained from Mr. A. E. Floan, Vice-President and Secretary of Northwest, and the precise wording was verified by Mr. Floan. The factual situation as set forth in this affidavit is not controverted. However, it is to be gathered from the showing herein that the sale of the Electras constituted a California contract.

Counsel for Lockheed has filed an affidavit with the Court wherein he states:

"Lockheed Aircraft Corporation is a corporation organized and existing under the laws of the state of California. It is not admitted to do business in the state of Minnesota as a foreign corporation. It maintains no bank account in the state of Minnesota. It maintains no stock of goods or parts within the state of Minnesota. Its name is not listed in the telephone directory in Minneapolis or anywhere in the state of Minnesota. It has no office or place of business within the state of Minnesota and no property therein, other than the space occupied by Mr. Thomas P. Sapa and the manuals, office furniture, stationery, and forms of minimal value, which Mr. Sapa uses for his purposes * * *.

"The business of Lockheed Aircraft Corporation is the manufacturing of aircraft at its factory in the state of California. Its practice is to negotiate contracts with airline companies for aircraft to be manufactured in California. It has no distributors or dealers within the state of Minnesota."

This showing is not contradicted.

The deposition of Mr. Thomas P. Sapa, the field service representative for Lockheed stationed in Minneapolis, reveals the following facts: He is stationed in Minneapolis pursuant to the sales contract for the Electras to Northwest, involving, among others, the airplane in question, and although he regards his being here as temporary, at the time of the service of process herein he had been here two years and four months. His family consisting of his wife and children came...