Hardy v. Rekab, Inc.

• Decision Date: 31 March 1967
• Docket Number: Civ. No. 17408.
• Citation: 266 F. Supp. 508
• Parties: Delores HARDY, an infant, by Louise Hardy and James Hardy, her parents and next friends, and Louise Hardy and James Hardy v. REKAB, INC., a corporation trading and doing business as Glen Echo Amusement Park, and Frank Hrubetz & Company, Inc., a corporation. REKAB, INC., a corporation trading and doing business as Glen Echo Amusement Park, Cross-Claimant, v. FRANK HRUBETZ & CO., Inc., a corporation, Cross-Defendant.
• Court: U.S. District Court — District of Maryland

266 F. Supp. 508

Delores HARDY, an infant, by Louise Hardy and James Hardy, her parents and next friends, and Louise Hardy and James Hardy v. REKAB, INC., a corporation trading and doing business as Glen Echo Amusement Park, and Frank Hrubetz & Company, Inc., a corporation.

REKAB, INC., a corporation trading and doing business as Glen Echo Amusement Park, Cross-Claimant, v. FRANK HRUBETZ & CO., Inc., a corporation, Cross-Defendant.

Civ. No. 17408.

United States District Court D. Maryland.

March 31, 1967.

Jacob A. Stein, Silver Spring, Md., for plaintiffs.

Albert E. Brault, Rockville, Md., and Manuel J. Davis, Washington, D.C., for Rekab, Inc.

J. Joseph Barse, Rockville, Md., for Frank Hrubetz & Co., Inc.

FRANK A. KAUFMAN, District Judge.

Plaintiffs, a minor child who brings this action by her parents and next friends, and her parents who are suing individually, seek monetary damages for and damages related to and growing out of, injuries sustained by the minor plaintiff on July 27, 1964, as a result of a ride on a "Paratrooper," an amusement concession operated at Glen Echo Amusement Park in Maryland.¹ Joined as defendants in this action are Rekab, Inc. (Rekab), a Maryland corporation which owned and operated Glen Echo Amusement Park on the date of the alleged injury, and Frank Hrubetz & Co., Inc. (Hrubetz), an Oregon corporation which manufactured and sold the Paratrooper to Kebar, Inc. (Kebar), Rekab's predecessor in interest.²

Plaintiffs' complaint states the following causes of action against Hrubetz in six³ separate counts: (1) breach of an implied warranty that the Paratrooper was fit for use for its intended purpose; (2) breach of a warranty of merchantable quality; (3) breach of an express warranty by Hrubetz to Rekab and others that the device was safe for those who chose to ride it; (4) negligence of Hrubetz in assembling, operating, repairing, servicing and inspecting the device and in failing to warn the minor plaintiff of a defective and dangerous condition which was known or should have been known to both defendants; (6) negligence of Hrubetz in designing, constructing, manufacturing and assembling the device and in failing to replace a defective part; and (7) strict liability because of the hazardous nature of the device.

The jurisdiction of this Court is asserted on the basis of diversity of citizenship. Rekab was served in Maryland and has filed an answer denying liability. Personal service of a summons and a copy of plaintiffs' complaint was made on Hrubetz at its offices in Salem, Oregon. Hrubetz has moved to quash this service of process. Hrubetz' motion to quash is the subject of this opinion.

Rule 4(e) of the Federal Rules of Civil Procedure provides, in part, as follows:

Whenever a statute or rule of court of the state in which the district court is held provides (1) for service of a summons, or of a notice, or of an order in lieu of summons upon a party not an inhabitant of or found within the state * * * service may * * * be made under the circumstances and in the manner prescribed in the statute or rule.

Under the authority provided by this rule, plaintiffs in their amended complaint⁴ rely upon subsections (a) (1), (3) and (4) of Article 75, Section 96 of the Maryland Code (the Maryland "long arm" statute), which became effective June 1, 1964.⁵ That statute reads, in part, as follows:

(a) A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action arising from the person's

(1) transacting any business in this State;

* * * * * *

(3) causing tortious injury in this State by an act or omission in this State;

(4) causing tortious injury in this State by an act or omission outside the State if he regularly does or solicits business, engages in any other persistent course of conduct in this State or derives substantial revenue from food or services used or consumed in this State;⁶

* * * * * *

Defendant Hrubetz contends that the Maryland long-arm statute is not applicable to it, and that if the act is so applicable, it should not be retroactively applied as herein allegedly sought.

I. APPLICABILITY

From the affidavits which have been filed in this case the following appear to be uncontroverted facts. In late 1962 Hrubetz negotiated with Kebar for the sale of a Paratrooper manufactured by Hrubetz. The negotiation was conducted either in Illinois or Florida but not in Maryland. Hrubetz did not then maintain, and never has maintained, an office in Maryland or in any state other than Oregon. On December 26, 1962, a sales contract with Kebar was accepted by Hrubetz in Oregon. The Paratrooper was shipped from Oregon to Maryland in February or March of 1963 and delivered to the Glen Echo Amusement Park either (a) by common carrier, or (b) partly on a truck owned and operated by Hrubetz and partly by Merchant Transport & Storage Company, or (c) by a combination of (a) and (b). At the time of delivery a representative of Hrubetz arrived at Glen Echo Amusement Park, supervised and actively participated in installation of the ride by the Rockville Crane and Rental Company, and supervised the starting (and checked operations) of the device preparatory to the Park's March 28 opening date for the 1963 season. Kebar paid Hrubetz in full for the Paratrooper shortly after its shipment or delivery.

It also appears from the affidavits that in addition to the Paratrooper sold to Kebar in 1963, Hrubetz had in 1957 sold Kebar a "Round-Up" amusement ride which was delivered to the Glen Echo Amusement Park on a Hrubetz truck by a Hrubetz employee. The affidavits also disclose that Hrubetz sold a Model #30 Round-Up in 1959 to Marilyn Amusements, 6000 Gwynn Oaks, Baltimore, Maryland; a Paratrooper in 1959 to Mr. Buster Gordon of Rockville, Maryland; a Portable Paratrooper in 1960 to Mr. Norman Shapiro who had a mailing address in Baltimore; and a Meteor Ride in 1962 to Mr. Jake Shapiro in Baltimore, which ride was to be used in Canada. With regard to the sales to Marilyn Amusements, Norman Shapiro and Jake Shapiro, the affidavits disclose that Hrubetz was contacted by the vendees outside of Maryland and that the sales and shipments were made from Hrubetz' Oregon office and plant. The affidavits disclose no such details in connection with the sale to Buster Gordon of a Paratrooper in 1959; nor do the affidavits disclose whether delivery or installation of the devices sold to Marilyn Amusements, either of the Messrs. Shapiro or Mr. Gordon were made by, or under the supervision of, Hrubetz. Counsel for defendant Hrubetz, in his memorandum dated December 16, 1966, filed in support of the motion to quash, has stated that all of the five aforesaid amusement park rides sold in 1957, 1959, 1960 and 1963 were "delivered" in or to Maryland. There were no other sales made by Hrubetz "to the State of Maryland in years."⁷

Plaintiffs allege tortious injury in Maryland by Hrubetz' negligence in assembling (fourth and sixth counts) and in repairing and servicing (fourth count). Section 96(a) (3) of Article 75 is therefore clearly applicable with regard to those two counts. Moreover, the application of section 96(a) (3) to Hrubetz on the basis of the facts alleged in this case is clearly constitutional. See Smyth v. Twin State Improvement Corp., 116 Vt. 569, 80 A.2d 664, 25 A.L.R.2d 1193 (1951), cited with approval in McGee v. International Life Ins. Co., 355 U.S. 220 at 223 n. 2, 78 S.Ct. 199, 2 L.Ed. 2d 223 (1957); and see the discussion in Auerbach, The "Long Arm" Comes to Maryland, 26 Md.L.Rev. 13, 39-40 (1966).

In connection with the first, second, third and seventh counts, it is relevant to note that during the period 1957 to 1963 Hrubetz sold five amusement devices for use in Maryland⁸ and that while all negotiations and contract acceptances took place largely or solely outside of Maryland, in at least two instances delivery was made in Maryland, at least partially by Hrubetz; and also that in at least one instance a Hrubetz representative or employee supervised the installation in Maryland. The Maryland Court of Appeals in Gilliam v. Moog Industries, Inc., 239 Md. 107, 111, 210 A.2d 390, 392 (1965), stated:

It seems clear that the purpose of the Legislature in enacting these new provisions the long arm statute was to give the courts of the State personal jurisdiction over all out of state persons and corporations which constitutionally could be reached as having had sufficient Maryland contacts, under the jurisdictional yardstick established by the Supreme Court in cases such as International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 1945; McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; and Hanson v Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 1958.

The primary jurisdictional yardstick established by the United States Supreme Court in the cases cited by the Maryland Court of Appeals is that a defendant be found to "have certain minimum contacts with it the forum state such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). The Maryland Court of Appeals has specifically applied the International Shoe test in interpreting the New York counterpart to section 96(a) (1) of the Maryland statute.⁹ Van Wagenberg v. Van Wagenberg, 241 Md. 154, 164, 170, 215 A.2d 812, 817, 820 (1966).

In McClung v. Kebar, Law No. 19,141, Cir. Ct. for Montgomery County, Maryland, Sept. 28, 1966, a minor by his mother and next friend brought suit against the same defendants sued herein. That suit was for injuries sustained on the Paratrooper ride at Glen Echo Amusement Park on or about July 27, 1964 and apparently arises out of the same occurrence which forms the factual basis of this case. In denying Hrubetz' motion to quash service of process...