Brabeau v. SMB CORP.

• Decision Date: 12 May 1992
• Docket Number: No. 91-75443.,91-75443.
• Parties: Juanita BRABEAU and Mark Brabeau, Plaintiffs, and Zurich Insurance Company, Intervening Plaintiff, v. SMB CORPORATION, a/k/a Sondermaschinenbau GMBH, Defendant.
• Court: U.S. District Court — Western District of Michigan

789 F. Supp. 873

Juanita BRABEAU and Mark Brabeau, Plaintiffs and Zurich Insurance Company, Intervening Plaintiff, v. SMB CORPORATION, a/k/a Sondermaschinenbau GMBH, Defendant.

No. 91-75443.

United States District Court, E.D. Michigan, S.D.

March 20, 1992.

Opinion on Denial of Reconsideration May 12, 1992.

James H. Finney, Mt. Clemens, Mich., for plaintiffs.

William E. Clark, Southfield, Mich., for intervening plaintiff.

Richard H. Schliem, III, Christine E. Moore, Southfield, Mich., for defendant.

OPINION AND ORDER GRANTING DEFENDANT SMB CORPORATION'S MOTION TO DISMISS

GADOLA, District Judge.

Plaintiff Juanita Brabeau was allegedly injured at work by a printing press manufactured by defendant SMB Corporation "SMB". Ms. Brabeau's employer, Brechteen, owned and operated the printing press manufactured by SMB. Plaintiffs filed their complaint in Macomb County Circuit Court. Defendant removed the case to this court October 21, 1991. Defendant then filed the instant motion to dismiss December 18, 1991, pursuant to Fed. R.Civ.P. 12(b)(2). Plaintiffs responded December 23, 1991; and defendant replied December 27, 1991. Subsequently, Zurich Insurance Company "Zurich" was allowed to intervene as a party-plaintiff by order of this court February 21, 1992.¹ Zurich filed its response to defendant's motion March 3, 1992. Defendant filed its reply to Zurich's response March 9, 1992.

FACTS

Ms. Brabeau was injured while operating a printing press owned and maintained by Brechteen and manufactured by defendant. Brechteen is in the business of printing. The printing press in question is used by Brechteen to print labels on sausage casing.

As alleged by defendant and not disputed by plaintiffs, SMB has its principal place of business in Braunschweig, Germany. It manufactures specialized printing presses used by the food industry.

As alleged by defendant and not refuted by plaintiffs, the first contact between SMB and Brechteen occurred in 1976 when Brechteen personnel telephoned SMB in Braunschweig, Germany. Brechteen is a wholly-owned subsidiary of Naturin, a European entity, and was referred to SMB by a European company related to Brechteen. Regarding that first contact, Brechteen eventually purchased a machine manufactured by one of SMB's competitors.

SMB maintains North American contacts through a man named Werner Sattler. Plaintiffs characterize Mr. Sattler as an SMB employee while defendant and Mr. Sattler himself assert that Mr. Sattler is an independent sales representative. Whatever his employment status, Mr. Sattler is a Canadian citizen who maintains offices in Montreal, Quebec, and has either an office or a message service in Cincinnati, Ohio. Mr. Sattler was asked to, and did, maintain occasional contact with Brechteen over the next ten years between 1977 and 1987.

As alleged by defendant and not disputed by plaintiffs, in 1989 Brechteen contacted SMB in Braunschweig. After negotiations, Brechteen placed an order for a printing press. The order was verbally given to Wolfgang Specht, SMB's general manager, in Helsinki, Finland. The confirming order was sent by Brechteen to Mr. Sattler in Montreal.

As alleged by defendant and not disputed by plaintiffs, the printing press was manufactured by SMB and inspected, tested and accepted by Brechteen personnel in Braunschweig. Payment was made directly from Brechteen's parent in Weinheim, Germany, to SMB in Braunschweig. Shipment was made to the United States at Brechteen's expense.

SMB provided a technician who visited Brechteen's Mt. Clemens, Michigan plant after the printing press had been installed. Prior to Ms. Brabeau's injury, Brechteen ordered another printing press from SMB. The second printing press was installed at the Mt. Clemens plant after Ms. Brabeau's injury.

As alleged by defendant, and not disputed by plaintiffs, Brechteen elected to locate the press in Michigan; it could have located the machine anywhere in the world. SMB had no control over where Brechteen located the printing press. Further, SMB has given a blanket warranty stating that the printing press "fully complies with all applicable Federal, State and State Subdivision laws and regulations...."

STANDARD OF REVIEW

It is plaintiffs' burden to establish the existence of personal jurisdiction over defendant. Serras v. First Tennessee Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989); Welsh v. Gibbs, 631 F.2d 436, 438 (6th Cir.1980). A court must interpret the pleadings and affidavits in the light most favorable to plaintiffs. Id. Where the court finds that there are no issues of credibility or disputed issues of fact, it may decide the motion on the basis of written materials. Andrews Univ. v. Robert Bell Indus., 685 F.Supp. 1015, 1017 (W.D.Mich. 1988).

APPLICABLE LAW

Michigan's corporate general personal jurisdiction statute, Mich.Comp.Laws Ann. § 600.711 (West 1981), reads in relevant part:

The existence of any of the following relationships between a corporation and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise general personal jurisdiction over the corporation and to enable such courts to render personal judgments against the corporation.

* * * * * *

(3) The carrying on of a continuous and systematic part of its general business within the state.

Michigan's corporate limited personal jurisdiction statute, Mich.Comp.Laws Ann. § 600.715 (West 1981), reads in relevant part:

The existence of any of the following relationships between a corporation or its agent and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise limited personal jurisdiction over such corporation and to enable such courts to render personal judgments against such corporation arising out of the act or acts which create any of the following relationships:

(1) The transaction of any business within the state.

(2) The doing or causing any act to be done, or consequences to occur, in the state resulting in an action for tort.

* * * * * *

(5) Entering into a contract for services to be performed or for materials to be furnished in the state by the defendant.

ANALYSIS

The basis for any challenge to personal jurisdiction must begin with an examination of the state's long-arm statutes. In the instant case, it is quite obvious that this court does not have general personal jurisdiction over SMB. SMB does not conduct any business within the state of Michigan. Therefore, section 600.711(3) does not apply.

The more complicated question is whether this court has limited personal jurisdiction over SMB under Section 600.715(1), (2) or (5). Once again, because SMB does not conduct any business within the state of Michigan, Section 600.715(1) will also not apply. However, this court finds that SMB may have caused "consequences to occur in the state resulting in an action for tort." Michigan and federal case law is replete with examples of business transactions that have occurred outside the state of Michigan which have "resulted" in an action for tort. Most cases similar to the instant case have held that the word "any" is to be read liberally. Thus, any nexus between transaction and tort shall allow limited personal jurisdiction to operate.

In Cliffs Forest Prods. Co. v. Al Disdero Lumber Co., 144 Mich.App. 215, 225, 375 N.W.2d 397 (1985), leave denied, 424 Mich. 896, 384 N.W.2d 8 (1986), the Michigan Court of Appeals held that an architectural firm, which supplied defective roofing plans resulting in the collapse of a Michigan building, could be haled into a Michigan court under limited personal jurisdiction. The Michigan Court of Appeals also has held that the business successor to the seller of a defective and tortious gantry, where the sale took place outside Michigan, could be called into a Michigan court under limited personal jurisdiction. Wiles v. B.E. Wallace Prods. Corp., 25 Mich.App. 300, 303, 181 N.W.2d 323 (1970); see also J. Henrijean & Sons v. M.V. Bulk Enter., 311 F.Supp. 417 (W.D.Mich.1970); cf. Frazier v. Castellani, 130 Mich.App. 9, 342 N.W.2d 623 (1983) (decided under individual limited personal jurisdiction statute, Mich. Comp.Laws Ann. § 600.705(2) (West 1981)), leave denied, 419 Mich. 935, 355 N.W.2d 112 (1984); Black v. Rasile, 113 Mich.App. 601, 318 N.W.2d 475 (1980) (same). It is therefore apparent that Section 600.715(2) applies to the transaction and alleged injury in the instant case.

Further, section 600.715(5) also applies because an SMB technician was sent to help in the installation of the printing press. This was either expressly provided for in the contract for sale or was read into the contract by the parties. In either case, a service was performed by an SMB employee in the state of Michigan. Therefore, section 600.715(5) also applies to the transaction and alleged injury.

After establishing that the state allows for personal jurisdiction to attach through its long-arm statute, this court must decide whether the exercise of personal jurisdiction comports with the "traditional notions of fair play and substantial justice." Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940). After close examination of the case law on point, this court holds that the exercise of personal jurisdiction over defendant SMB would offend defendant's due process rights under the fourteenth amendment.

The United States Court of Appeals for the Sixth Circuit has set out three criteria that must be met in order for personal jurisdiction to comport with due process:

(1) defendant must purposefully avail itself of the privilege of acting in the forum state or causing a consequence in the foreign state;

(2) the cause of action must arise from defendant's activities in the forum state; and

(3) the acts of defendant or consequences must have a substantial enough connection with the forum state to make the exercise of jurisdiction over defenda

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