Bancorp Leasing and Financial Corp. v. Agusta Aviation Corp., 85-4286

• Decision Date: 11 May 1987
• Docket Number: No. 85-4286,85-4286
• Citation: 813 F.2d 272
• Parties: 3 UCC Rep.Serv.2d 1415, 3 UCC Rep.Serv.2d 627 BANCORP LEASING AND FINANCIAL CORP., and Aircraft At Your Call, Inc., Plaintiffs-Appellants, v. AGUSTA AVIATION CORPORATION, Agusta S.P.A. and Construzione Aeronautiche Giovanni Agusta, S.P.A., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 272

813 F.2d 272

3 UCC Rep.Serv.2d 1415, 3 UCC Rep.Serv.2d 627

BANCORP LEASING AND FINANCIAL CORP., and Aircraft At Your

Call, Inc., Plaintiffs-Appellants, v. AGUSTA AVIATION CORPORATION, Agusta S.P.A. and Construzione

Aeronautiche Giovanni Agusta, S.P.A., Defendants-Appellees.

No. 85-4286.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 6, 1987.

Decided March 25, 1987.

As Amended on Denial of Rehearing May 11, 1987.

James N. Westwood, Steven O. Rosen, Portland, Or., for plaintiffs-appellants.

Jonathan M. Hoffman, Portland, Or., for defendants-appellees.

Appeal from the United States District Court for the District of Oregon.

Before GOODWIN and THOMPSON, Circuit Judges, and INGRAM, ^* District Judge.

DAVID R. THOMPSON, Circuit Judge:

I

FACTS AND PROCEEDINGS

In 1982, Aircraft At Your Call, Inc. ("Aircraft") purchased an Agusta A109II helicopter from the Agusta Aviation Corporation ("Agusta USA"). The helicopter had been designed and manufactured in Italy by Agusta S.P.A. and Costruzione Aeronautiche Giovanni Agusta, S.P.A. (jointly hereafter referred to as "Agusta Italy"). Aircraft sold the purchase rights to Bancorp Leasing and Financial Corp. ("Bancorp"), which leased the helicopter back to Aircraft.

On March 16, 1983, the helicopter was damaged when its landing gear collapsed, allegedly due to a design defect. The accident happened in Oregon. On March 14, 1985, Bancorp and Aircraft filed a complaint in the United States District Court in Oregon seeking money damages in excess of $250,000 for property damage to the helicopter. ¹ "The complaint contained claims based upon strict liability, negligence and breach of warranty." Agusta USA and Agusta Italy moved to dismiss the complaint. They contended that the plaintiffs had failed to comply with Oregon's two-year product liability statute of limitations. Or.Rev.Stat. Sec. 30.905 (1985). The complaint Notwithstanding what appeared to be the expiration of the applicable statute of limitations, Bancorp and Aircraft argued that the statute should be tolled because none of the defendants was present in Oregon at the time of, or after, the accident. Bancorp and Aircraft also contended that the limitation period should not be the two-year period applicable to a products liability claim, but the four-year period applicable to a breach of warranty claim.

                had been filed within two years of the date the helicopter was damaged, but the summons had not been served within sixty days from the date the complaint was filed. 2   Agusta Italy was served with summons and complaint on June 2 and June 7, 1985.  Agusta USA was served with summons and complaint on July 9, 1985
                

The district court granted the motion to dismiss. It concluded that (1) the statute of limitations had not been tolled, and (2) the claims of Bancorp and Aircraft were product liability claims, even though Bancorp and Aircraft pleaded one cause of action as a breach of warranty claim, and were governed by the two-year products liability statute of limitations. Judgment was entered dismissing the action. Bancorp and Aircraft appeal. We have jurisdiction under 28 U.S.C. Sec. 1291 and we affirm.

II

STANDARD OF REVIEW

We review de novo the district court's interpretation of state law. In re McLinn, 739 F.2d 1395, 1397 (9th Cir.1984) (en banc); see Port of Portland v. Water Quality Ins. Syndicate, 796 F.2d 1188, 1195 (9th Cir.1986). In a federal diversity action brought under state law, the state statute of limitations controls. Walker v. Armco Steel Corp., 446 U.S. 740, 751-53, 100 S.Ct. 1978, 1985-86, 64 L.Ed.2d 659 (1980); see Alberding v. Brunzell, 601 F.2d 474, 476 (9th Cir.1979) (statute of limitations procedural matter governed by law of forum). Because our jurisdiction in this case rests on diversity of citizenship, we must decide the issues presented as though we were an Oregon court. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941).

III

ANALYSIS

A. The Tolling Statute

Bancorp and Aircraft argue that the statute of limitations was tolled by Or.Rev.Stat. Sec. 12.150, which provides in pertinent part: "If, when a cause of action accrues against any person, the person is out of the state and service cannot be made within the state ... such action may be commenced within the applicable period of limitation in this chapter after the return of the person into the state...." Agusta USA and Agusta Italy maintain they were amenable to service at all times, and thus the tolling provisions do not apply. All parties agree that Agusta USA and Agusta Italy were amenable to service of process by mail for purposes of long-arm jurisdiction. ³

Although no Oregon court has considered whether the tolling statute should apply when a foreign corporation is amenable to service under the long-arm statute, a majority of jurisdictions addressing this issue in similar circumstances have refused to apply tolling provisions. See, e.g., Schmidt v. Polish People's Republic, 742 F.2d 67, 71 (2nd Cir.1984) (N.Y. law); Industrial Consultants, Inc. v. H.S. Equities, Inc., 646 F.2d 746, 748 (2d Cir.) (Okla. law), cert. denied, 454 U.S. 838, 102 S.Ct. 145, 70 L.Ed.2d 120 (1981); Leggett v. Strickland, 640 F.2d 774, 776 (5th Cir.1981) (Ga. law as applied to individual defendant); Seely v. Illinois-California Exp., Inc., 541 F.Supp. 1307, 1310-11 (D.Nev.1982); Bobbitt v. Tannewitz, 538 F.Supp. 654, 657-58 (M.D.N.C.1982); Fullmer v. Sloan's Sporting Goods Co., Inc., 277 F.Supp. 995, 998 (S.D.N.Y.1967); Selby v. Karman, 110 Ariz. 522, 521 P.2d 609, 611 (1974); Engle Bros., Inc. v. Superior Court, 23 Ariz.App. 406, 533 P.2d 714, 716-17 (1975) (per curiam); Lipe v. Javelin Tire Co., Inc., 96 Id. 723, 536 P.2d 291, 293-94 (1975), after remand, 97 Id. 805, 554 P.2d 1302 (1976); Gulf Nat'l Bank v. King, 362 So.2d 1253, 1254 (Miss.1978); Frazier v. Castellani, 130 Mich.App. 9, 342 N.W.2d 623, 625-26 (1983) (individual defendant); Beedie v. Shelley, 187 Mont. 556, 610 P.2d 713, 715 (Mont.1980) (individual defendant); Benally v. Pigman, 78 N.M. 189, 429 P.2d 648, 651 (N.M.1967) (individual defendant); Yarusso v. Arbotowicz, 41 N.Y.2d 516, 393 N.Y.S.2d 968, 362 N.E.2d 600, 602 (1977) (individual defendant); Burris v. Alexander Manufacturing Co., 51 Misc.2d 543, 273 N.Y.S.2d 542, 544 (1966) (Tenn. law); Russell v. Balcom Chemicals, Inc., 328 N.W.2d 476, 479 (S.D.1983); Reed v. Rosenfield, 115 Vt. 76, 51 A.2d 189, 191 (1947) (individual defendant); Summerrise v. Stephens, 75 Wash.2d 808, 454 P.2d 224, 228 (1969) (individual defendant). See generally Annot., 55 A.L.R.3d 1158, 1208-09 (1974). But see, e.g., Jatco, Inc. v. Charter Air Center, Inc., 527 F.Supp. 314, 321 (S.D.Ohio 1981); Polling v. Moitra, 717 S.W.2d 520, 522 (Mo.1986) (individual defendant); Walsvik v. Brandel, 298 N.W.2d 375, 376-77 (N.D.1980) (individual defendant); Vaughn v. Deitz, 430 S.W.2d 487, 490 (Tex.1968). We believe that the Oregon Supreme Court would follow the majority rule. We conclude that the Oregon statute of limitations is not tolled when a foreign corporation could have been served under the long-arm statute.

Our conclusion is consistent with Oregon decisions interpreting the tolling statute, and is consistent with the intent of the Oregon legislature expressed in a framework of statutes in which out-of-state defendants are amenable to service of process and no tolling of the limitations period is provided. ⁴ In Whittington v. Davis, 221 Or. 209, 350 P.2d 913 (1960), the Oregon Supreme Court refused to apply the tolling statute where the defendant motorist, who was out-of-state during the limitations period, was amenable to substituted service on the Secretary of State. The court stated that the "availability of the right to compel the attendance of the defendant or to obtain and enforce a valid judgment against him is all that a plaintiff is entitled to. When such a right is present there is no cause to apply this tolling statute at all." Id. at 915.

In 1973, the Oregon legislature amended Or.Rev.Stat. Sec. 12.150 to codify the policy expressed in Whittington. See Santos v. Flxible Co., 41 Or.App. 89, 597 P.2d 373, 374 n. 5 (1979). This statute, as amended, suspends the running of the statute of limitations if the defendant is outside the state and "service cannot be made within the state." Or.Rev.Stat. Sec. 12.150. This Oregon tolling statute is intended to protect a plaintiff from the statute of limitations running on his claim while he is unable to locate the defendant or compel the defendant to appear and defend the claim in Oregon. Here, Bancorp and Aircraft do not contend they were unable to locate and serve Agusta USA or Agusta Italy. Service by mail could have been effected at any time within the limitations period.

The legislative history of Or.Rev.Stat. Sec. 12.150 is of little help in determining whether the legislature intended the statute of limitations to toll when the defendant is amenable to service under the long-arm statute. Although the minutes of the Senate Committee on the Judiciary indicate that the amendment's purpose was, in part, "to deal with long-arm statutes," these minutes also incorporate as an exhibit a letter from members of the State Bar Committee on Procedures and Practice opining that the amendment "would prevent the statute of limitations running when the defendant is not within the state but could be served outside the state under the long-arm statute." (emphasis added). See Oregon Senate Committee on the Judiciary, Minutes of March 7, 1973, at 2. We do not accept the letter as expressing legislative intent. See Vance v. Hegstrom, 793 F.2d 1018, 1025 (9th Cir.1986) (staff reports do not reflect legislative intent).

Sound policy reasons also support our conclusion that the statute of limitations is not tolled in this case. When a foreign corporation is amenable to service from the time the cause of action accrues, a...