Boit v. Emmco Insurance Company
| Citation | 271 F. Supp. 366 |
| Decision Date | 24 August 1967 |
| Docket Number | Civ. No. 577. |
| Parties | Henry BOIT, Plaintiff, v. EMMCO INSURANCE COMPANY, an Indiana corporation, and Associates Investment Company, an Indiana corporation, Defendants. |
| Court | U.S. District Court — District of Montana |
Charles A. Bradley, Billings, Mont., for plaintiff.
Hibbs, Sweeney & Colberg, Billings, Mont., for defendants.
The defendant Associates Investment Company, an Indiana corporation, has moved to dismiss, or in lieu thereof to quash service of summons, on the ground that the court lacks jurisdiction of the person of the defendant. It is contended (1) that the exercise of in personam jurisdiction would be in violation of the due process clause of the Fourteenth Amendment, and (2) that defendant's activities in Montana were insufficient to fall within the scope of Rule 4, subd. B, Mont.R.Civ.P.1
On February 14, 1963, the plaintiff, Henry Boit, purchased a 1961 Chevrolet truck tractor from Bud Gates, Inc., in Indianapolis, Indiana. The purchase was made under a document entitled "Indiana Motor Vehicle Retail Installment Contract", which was assigned to defendant Associates Investment Company at the time of the purchase.2 Plaintiff gave his address as 1201 E. St. Clair Street, Indianapolis, Indiana. The contract provides, inter alia, that title shall remain in the seller until the contract is fully performed, that the purchaser would not remove the vehicle from the county where he resided, and that both parties "have the rights and privileges with respect to repossession, resale, redemption and to the disposition of sale proceeds as are accorded by the laws of the State of Indiana." The contract required insurance in a company acceptable to seller, and contemporaneous with the execution of the contract Boit obtained a policy of insurance from the defendant Emmco Insurance Company.3 The insurance premium was included in the contract price.
The residence given by plaintiff was that of a hotel in Indianapolis, where plaintiff stayed for approximately four weeks while attending a school for Mayflower truckers. His family remained in Billings, which at all times since September 1, 1955, has been plaintiff's permanent residence.
It was the practice of Mayflower drivers to buy their own trucks. The stipulation of counsel reads in part:
Plaintiff was employed by Mayflower from on or about March 9, 1963, until July 22, 1963, and during that period "traveled all over the United States driving his truck for this firm". Upon the termination of his employment by Mayflower and on or about July 23, 1963, plaintiff moved the truck to Billings, Montana. While he "did not specifically obtain permission" from Associates to move the vehicle to Montana, the company "did learn in July of 1963 that plaintiff had quit Mayflower and at that time changed its records to show his Billings, Montana, address and raised no objection to his operating from Billings, Montana, so long as the payments were made according to schedule". Plaintiff mailed Associates numerous payments from Billings and received correspondence in Billings from Associates regarding the vehicle.
It is alleged that on April 27, 1964, the vehicle, while in use at Rapid City, South Dakota, was damaged by a severe windstorm. Some temporary repairs were made, and the vehicle was taken back to Billings, Montana. Plaintiff contends that this was done at defendant's request. Shortly thereafter, plaintiff apparently became delinquent in his payments on the contract.
On July 16, 1964, C. D. Furnish, the Assistant Collection Manager of Associates Investment Company, called Daniel T. Wheeler, an employee of Associates Discount Corporation in Billings, Montana, and requested him to repossess the vehicle from Boit. Wheeler took possession of the vehicle at a truck stop in Billings, and stored it until approximately August 19, 1964, when the vehicle was picked up by C. O. Minard of Indianapolis, Indiana, and taken back to Indiana.4
In May of 1965, Roger E. Cox, the collection manager of Associates Discount Corporation, received a written request from C. W. Goodnight of Associates Investment Company to apply for a repossession title for that company on the Boit vehicle. Pursuant to that request, Cox prepared and signed an Application for a Certificate of Title for Motor Vehicle and an Affidavit Covering Repossession, both dated May 14, 1965, and mailed them to the Montana Registrar of Motor Vehicles. The Affidavit Covering Repossession recites that Cox is the "Collection Manager of Associates Investment", and the Application for Certificate of Title, executed by Cox on behalf of "Associates Investment", gives the address of the applicant as "2917 Second Avenue North, Billings, Montana".
In an affidavit executed May 16, 1966, Cox states that he was at no time "employed or paid any salary by Associates Investment Company, an Indiana corporation," and that such company never had an office at 2917 Second Avenue North, Billings, Montana, contrary to his statements in the above documents. He states further that this address was the business address of "Associates Discount Corporation of Montana, a Montana corporation, and no other business was located at that address".
The stipulated facts show that Associated Discount Corporation of Montana is a wholly owned subsidiary of defendant Associates Investment Corporation.
From affidavits of J. D. Barnette, President of Associates Investment Company, it appears that this defendant has never been authorized to do business in Montana and does not maintain any office, factory or other facilities in the state; that Emmco Insurance Company, although a wholly owned subsidiary, "controls its own business affairs and conducts its business separate and distinct from that of Associates Investment Company"; and that Associates Discount Corporation, a Montana Corporation, was utilized by Associates Investment Company as "an independent agency in another state for a repossession in the other state".5
In summary, it appears that (1) the conditional sales contract was executed in Indiana covering property located in Indiana, between an Indiana corporation and a Montana resident temporarily in Indiana; (2) it was contemplated by all parties that the vehicle would be used principally outside the State of Indiana, and it was so used continuously from the time of purchase until July, 1963, when it was moved by plaintiff to Montana; (3) while plaintiff did not specifically request permission from Associates to move the vehicle to Montana, Associates knew when the vehicle was moved, changed its records accordingly, and payments on the contract thereafter were mailed from Montana to defendant in Indiana; (4) following default, the seller arranged with one of its wholly owned subsidiaries, to repossess the vehicle; (5) an independent contractor from Indiana took the vehicle from Montana to the defendant in Indiana; (6) defendant arranged with its agent to obtain a new certificate of title in Montana; and (7) defendant has repossessed one other piece of equipment in Montana.
Plaintiff alleges that the repossessing of the vehicle by defendant in Montana was unlawful and seeks damages for its conversion.
Will the exercise of in personam jurisdiction under these facts offend the "traditional notions of fair play and substantial justice" embodied in the "minimum contacts" test of International Shoe Company v. State of Washington, 1943, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95? In that case the Court said that the test of due process is not dependent upon the quantity of the defendant's contacts with the state, but, "Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure." (326 U.S. at 319, 66 S.Ct. at 160).
In McGee v. International Life Ins. Co., 1957, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223, it was held that a single transaction may be sufficient to satisfy the requirements of "minimum contacts". The Court, after reviewing the historical development in this area stated: "Looking back over this long history of litigation a trend is clearly discernible toward...
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...State Improvement Corp., 116 Vt. 569, 80 A.2d 664 (1951); Beck v. Spindler, 256 Minn. 543, 99 N.W.2d 670 (1959); Boit v. Emmco Insurance Company, 271 F.Supp. 366 (D.Mont.1967); E. Wayne Thode, In Personam Jurisdiction, supra, at page 323. As ultimate liability in tort is not a jurisdictiona......
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