Applied Technologies Associates, Inc. v. Schmidt
| Decision Date | 13 August 1973 |
| Docket Number | Civ. No. 9971. |
| Citation | 362 F. Supp. 1103 |
| Parties | APPLIED TECHNOLOGIES ASSOCIATES, INC., Plaintiff, v. Charles H. SCHMIDT and Larry K. Johnson, d/b/a Technology Marketing Associates, Defendants. |
| Court | U.S. District Court — District of New Mexico |
Juan G. Burciaga, Ussery, Burciaga & Parrish, Albuquerque, N. M., for plaintiff.
Orville C. McCallister, McCallister, Messersmith & Wiseman, Albuquerque, N. M., for defendants.
Plaintiff, Applied Technologies Associates hereinafter ATA, brought suit for breach of contract against Charles H. Schmidt and Larry K. Johnson, d/b/a Technology Marketing Associates. Jurisdiction is based on diversity, 28 U. S.C. § 1332.
Defendants filed a motion to dismiss on the ground that ATA is a foreign corporation without a certificate of authority to do business in New Mexico and thereby is barred from maintaining any action in any court in this state pursuant to N.M.S.A. § 51-30-19(A).1
It is admitted that ATA is without a certificate of authority from the Corporation Commission of the State of New Mexico. ATA contends, however, that its activities may not be characterized as "transacting business" in New Mexico and therefore it is not required to register with the State Corporation Commission.
The facts pertaining to the business activities of ATA are contained in the deposition of Donald Van Steenwyk, president of ATA. With concurrence of counsel for plaintiff and defendants the Court has read this deposition. The relevant facts contained therein may be summarized as follows:
ATA provides consulting services in the field of engineering in order to promote a demand for manufacturers' products among potential customers. ATA clients are those with whom ATA has a contract to represent their products or do engineering work. The engineering work includes engineering studies which are performed for a fee.
ATA maintained a branch office in Albuquerque, New Mexico, staffed with a consultant and two employees.
As an example of the type of work performed by ATA, Mr. Steenwyk explained that assuming a company was developing a new weapons system, and within it they needed guidance and control equipment, ATA would help the company "define" the kind of equipment needed for the system and would thereafter work with one of its clients (a manufacturer) to "evolve" these products. Such a project might take as long as one and one-half or two years.
All orders are placed with the manufacturer, not with ATA, and no money is paid ATA except in the form of commissions from the manufacturer on sales resulting from ATA's efforts.
A further duty of Larry Johnson, the ATA employee in Albuquerque, was to identify potential clients that would have products salable in the Albuquerque area and to look for customers for current as well as potential ATA clients.
The question is whether the above detailed activities constitute doing business under N.M.S.A. § 51-30-1 so as to disallow the maintenance of this action.
There have been no cases to date in New Mexico in which a foreign corporation has been barred from bringing suit. Abner Manufacturing Co. v. McLaughlin, 41 N.M. 97, 64 P.2d 387 (1937); J. H. Silversmith, Inc. v. Keeter, 72 N.M. 246, 382 P.2d 720 (1963); Cessna Finance Corp. v. Mesilla Flying Service, 81 N.M. 10, 462 P.2d 144 (1969); Riblet Tramway Co. v. Monte Verde Corp., 453 F.2d 313 (D.C.N.M. 1972). The Supreme Court of New Mexico has said that a statute, such as the one in the instant case, must be "strictly construed and their application should be made to clear cases only." Transradio Press Service v. Whitmore, 47 N.M. 95, 137 P.2d 309 (1943).
In Abner Manufacturing a New Mexico agent solicited orders for 50 to 75 lighting systems for an Ohio corporation. The orders were accepted by the corporation in Ohio. The same agent took possession of the purchaser's promissory note in New Mexico. These acts were not considered enough to bar the Ohio corporation from maintaining suit.
Silversmith involved a Colorado corporation which was general agent for several insurance companies. The Colorado corporation appointed a special agent in New Mexico to receive and accept proposals for insurance and to collect premiums. The insurance companies and the New Mexico agent were duly regulated by New Mexico insurance licensing and regulating statutes. The Colorado corporation was found not to be doing business in New Mexico within the meaning of N.M.S.A. § 51-30-1.
Access to the courts was also allowed in Cessna Finance where a foreign subsidiary of the Cessna Corporation had as its only business the financing of airplanes sold by Cessna dealers in New Mexico.
Judge Bratton, in Riblet, held the interstate sale of ski lifts and efforts to secure and collect debts resulting from a conditional sales device insufficient to bar maintenance of a suit. After reviewing New Mexico case law and case law in other jurisdictions with similar statutes, Judge Bratton said, ". . . it appears that the matter turns on the nature and quantity of the...
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Wagner Equip. Co. v. Wood
...New Mexico, their previous unregistered status is not a bar to the maintenance of their Counterclaim. See Applied Tech. Assocs., Inc. v. Schmidt, 362 F.Supp. 1103, 1105–06 (D.N.M.1973).II. Effect of the Settlement Agreement Plaintiff argues that because all of Defendants' claims, save the a......