Budde v. Kentron Hawaii, Ltd., 76-1347

• Decision Date: 31 October 1977
• Docket Number: No. 76-1347,76-1347
• Citation: 565 F.2d 1145
• Parties: James Allen BUDDE, Plaintiff-Appellant, v. KENTRON HAWAII, LTD., Jessie B. Francis and Insurance Company of North America, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1145

565 F.2d 1145

James Allen BUDDE, Plaintiff-Appellant, v. KENTRON HAWAII, LTD., Jessie B. Francis and Insurance Company of North America, Defendants-Appellees.

No. 76-1347.

United States Court of Appeals Tenth Circuit.

Submitted May 20, 1977.

Decided Oct. 31, 1977.

Edmond R. Eberle, New Orleans, La., for plaintiff-appellant.

Thomas N. Alfrey of Yegge, Hall & Evans, Denver, Colo., for defendants-appellees.

Before SETH, BREITENSTEIN and McWILLIAMS, Circuit Judges.

McWILLIAMS, Circuit Judge.

The ultimate issue presented in this appeal is whether the trial court erred in dismissing a complaint, and the cause of action pleaded therein, on the ground that the court lacked jurisdiction. The more immediate question is whether a Colorado state court has jurisdiction to hear a claim for damages based on personal injuries sustained as a result of the defendants' negligence, where the plaintiff is a citizen of Louisiana, the two corporate defendants are incorporated in Hawaii and Pennsylvania, respectively, with each corporation qualified to do business in Colorado, and the cause of action is not based on the business activity carried on by either corporation within the State of Colorado, but rather on an accident which occurred in Viet-Nam. In our view, the answer to this question is in the affirmative, and hence the trial court committed error in dismissing the action. We therefore reverse.

The underlying facts are not in dispute. Budde, a civilian employee of a corporation rendering services under contract to the United States Government in Viet-Nam, was injured when a private Jeep in which he was riding as a passenger overturned. The driver of the Jeep was one Jessie Francis, a civilian employee of Kentron Hawaii, Ltd., which, like Budde's employer, was rendering services under contract to the United States Government in Viet-Nam. Budde suffered severe personal injuries, including brain damage, and is said to have no present recollection of the accident. Some time after his return to his home in Louisiana, he received a military accident report which disclosed that Francis was the driver of the Jeep, and that Francis was an employee of Kentron Hawaii, Ltd.

Budde initially filed an action in the federal district court for the Eastern District of Louisiana against Francis, ^* Ling-Temco-Vought, Inc., doing business as Kentron Hawaii, Ltd., and its insurer, Insurance Company of North America. That court, in an unreported decision, dismissed the action for the reason that the action was barred by the Louisiana one-year statute of limitations. On appeal, the Fifth Circuit affirmed without formal opinion. Budde v. Insurance Company of North America, 502 F.2d 783 (5th Cir. 1974).

Budde next filed similar actions in the federal district courts in Florida and New Mexico, presumably seeking to find a forum in which the applicable statute of limitations had not run. The action in Florida is presently in abeyance pending the outcome of this appeal. The federal district court in New Mexico dismissed the action filed in that court for lack of jurisdiction. On appeal, we affirmed. Budde v. Ling-Temco-Vought, Inc., 511 F.2d 1033 (10th Cir. 1975).

Budde then instituted the present proceeding in the United States District Court for the District of Colorado, naming as defendants Kentron Hawaii, Ltd., Jessie Francis and Kentron's insurer, the Insurance Company of North America. As indicated, Francis' whereabouts remain unknown, and presumably he has never been served in any of Budde's several proceedings. At least he was not served in the Colorado proceeding. Kentron Hawaii, Ltd., an Hawaiian corporation, is qualified to do business in Colorado and has designated "The Corporation Company, 1700 Broadway, Denver, Colorado, 80202" as its registered agent for service of process. Budde caused service to be made in Colorado on Kentron Hawaii's designated agent.

The Insurance Company of North America, a Pennsylvania corporation, is also qualified to do business in Colorado. In accordance with Colorado law, Budde caused service to be made on the Insurance Commissioner of the State of Colorado, the designated agent for service of process in Colorado for the Insurance Company of North America.

Kentron Hawaii, Ltd. and Insurance Company of North America filed a motion to dismiss on the ground that the court lacked jurisdiction over them. The trial court granted the motion and dismissed the action as to each. Budde appeals.

The starting point in our analysis of the matter is Perkins v. Benquet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). In Perkins, a non-resident of Ohio filed in an Ohio state court an action in personam against a foreign corporation incorporated under the laws of the Philippine Islands. That company temporarily carried on in Ohio, during the Japanese occupation of the Philippines in World War II, a continuous and systematic, but limited, part of its general business. The president of the foreign corporation was personally served in Ohio. The cause of action did not arise in Ohio, nor did it relate to the corporation's activity in Ohio. In Perkins, the trial court quashed such service of process and the Ohio Court of Appeals affirmed. Certiorari was granted in order to pass upon the suggestion that federal due process required the result reached by the Ohio courts. The Supreme Court held that federal due process did not require the result reached by the Ohio courts, and the case was remanded to the Ohio courts so that the state court could determine whether under the laws of Ohio, "the courts of that State will choose to take jurisdiction over the (Philippine) corporation." In thus holding, the Supreme Court stated that federal due process did not prohibit Ohio from opening its courts to the proceeding against the foreign corporation, and, at the same time, neither did federal due process compel Ohio to open its courts to such litigation. In other words, it was purely a local Ohio matter.

In the instant case, then, we must look to local Colorado law to resolve the present controversy. In this connection we are not concerned with the Colorado long-arm statute. Colo.Rev.Stat. § 13-1-124 (1973). Rather, we are concerned with the Colorado statutory provisions pertaining to the service of process on a foreign corporation, qualified to do business in Colorado, which has appointed an agent upon whom process may be served, Colo.Rev.Stat. § 7-9-119 (1973).

Before examining Colorado law, however, mention should first be made of our own opinion in Budde v. Ling-Temco-Vought, Inc., 511 F.2d 1033 (10th Cir. 1975). In dismissing the present action for lack of jurisdiction, the trial court relied on that case. We believe that case is distinguishable from the present one. In that case we recognized the general rule that in diversity cases "state law determines whether a corporation is subject to process in the state and federal decisions determine only if the state law is constitutional." We noted that New Mexico statutory law did not specifically provide that foreign corporations, qualified...