Carter v. American Bus Lines, Inc.

• Decision Date: 23 January 1959
• Docket Number: Civ. No. 133-L.
• Citation: 169 F. Supp. 460
• Parties: Roy CARTER, Plaintiff, v. AMERICAN BUS LINES, INC., a corporation, Defendant and Third-Party Plaintiff, and Hardy Furniture Company, a corporation, Defendant, The Flxible Company, a corporation, Third-Party Defendant.
• Court: U.S. District Court — District of Nebraska

169 F. Supp. 460

Roy CARTER, Plaintiff, v. AMERICAN BUS LINES, INC., a corporation, Defendant and Third-Party Plaintiff and Hardy Furniture Company, a corporation, Defendant The Flxible Company, a corporation, Third-Party Defendant.

Civ. No. 133-L.

United States District Court D. Nebraska.

January 23, 1959.

COPYRIGHT MATERIAL OMITTED

C. E. Sanden and F. B. Morrison (of Doyle, Morrison & Doyle) Lincoln, Neb., for plaintiff.

Robert A. Barlow (of Healey, Davies, Wilson & Barlow), Lincoln, Neb., for defendant and third-party plaintiff.

H. B. Evnen (of Baylor, Evnen & Baylor), Lincoln, Neb., for defendant.

Lawrence J. Tierney (of Cassem, Tierney, Adam, Kennedy & Henatsch), Omaha, Neb., for third-party defendant.

VAN PELT, District Judge.

The plaintiff, Carter, has alleged that on December 27, 1956 a bus owned and operated by the defendant, American Bus Lines, Inc., negligently crossed over into plaintiff's lane of traffic and collided with plaintiff head-on, injuring the plaintiff.

American Bus Lines, Inc. removed the case to this Court and thereafter impleaded the third-party defendant, The Flxible Company, which had manufactured the bus. Service of process was made on the Secretary of State, State of Nebraska, as agent for Flxible.

This motion is before the Court to dismiss as to the third-party defendant for the reason:

"That the third-party defendant is a corporation organized in the State of Ohio and is not subject to service of process within the District of Nebraska, and it is not doing business in the State of Nebraska, and has no representative in the State of Nebraska."

First, the extent of the third-party defendant's business activities in the State and District (the boundaries are co-terminous) will be stated, as drawn from the affidavits presented for the Court's consideration.

The third-party defendant has offered the affidavits of R. D. Mayer, the Secretary-Treasurer of The Flxible Company, Inc., and of Carlton McKinney, Regional Manager for Flxible Company with offices in Minneapolis, Minnesota. Mr. McKinney says that he never has had or maintained an office or employed any persons in the State of Nebraska, and that he does not have and has never had authority to bind The Flxible Company in Nebraska. He states that he never made any contracts in the State of Nebraska. He states that he contacts possible purchasers of buses but that he does not take orders or enter into any obligation in the State.

Mr. Mayer, in his affidavit, states that The Flxible Company is primarily engaged in the business of manufacturing and selling buses. He lists the following to show that Flxible is not doing business in Nebraska: No Nebraska telephone listing; no office or place of business in Nebraska; no representatives or agents located in Nebraska; no meetings of any kind in Nebraska; no independent course of advertising in Nebraska; no independent course of creating good will in Nebraska; no independent solicitation of business in Nebraska; no sales manager or managing agent, or any employees possessed with power of exercising discretion or judgment on the part of The Flxible Company maintained in the State of Nebraska; no bank account in Nebraska; no real, personal or mixed property owned in Nebraska; makes no collections, buys and sells no products in the State; does not have a distributor in Nebraska, and does not incur obligations to the citizens of Nebraska; there is not and has not been maintained in the State of Nebraska, any person, firm, or corporation performing business functions on behalf of The Flxible Company, in a regular or continuous position involving the exercise of discretion or judgment in the conduct of the regular business for which The Flxible Company was created.

Mayer does state that there has been an isolated occasion when an employee appeared in Lincoln, Nebraska, to assist the Trustees in applying to the Federal Court to purchase buses (American Buslines, Inc., then being in the process of reorganization under the Bankruptcy laws). He claims this was a mere accommodation for the Trustees. Mayer also states that on isolated occasions certain servicemen in an advisory capacity assisted employees of the Bus Company regarding maintenance and repair of buses which American had purchased from Flxible outside the State of Nebraska. Flxible does not maintain service employees in Nebraska, nor a storehouse of parts. It sends employees into Nebraska only to help a Nebraska citizen who by reason of owning a bus needs the advice and help of such servicemen. Finally, it is stated that no supervisor or any employee is maintained in Nebraska to stimulate or promote sales, nor are any servicemen under the direction of any supervisor maintained in the state, nor is there anyone in the business of The Flxible Company who works regularly and continuously for said company in the State of Nebraska.

The third-party plaintiff has submitted affidavits from the following: William F. Aikman, now President of American Buslines, Inc. and at the time of the accident, the Operating Trustee of same; A. B. Schliep, Manager of Purchases of American Buslines, Inc.; Herbert E. Roberts, General Manager for the Eastern Lines of American Buslines, Inc. and J. C. Smith, the Manager of Service for American Buslines, Inc. Mr. Aikman is located in Lincoln, Nebraska, and the other affiants are located in Omaha.

Without going through each affidavit in detail, the following facts appear from these affidavits: In the fall of 1954, American began negotiations for the purchase of new buses. The negotiations were initially conducted in Dallas, Texas. The extent of such negotiations is unclear, but a letter of December 23, 1954, attached to Mr. Aikman's affidavit reveals that an order, subject to approval of the Federal Court, was sent by letter from Lincoln, Nebraska, to the offices of The Flxible Company, at Loudonville, Ohio. The affidavit reveals that a Mr. Gettrust, a Sales Manager of The Flxible Company came to Lincoln and intended to testify before the Court as to whether General Motors or Flxible buses should be purchased, if General Motors raised the issue. This issue was not raised, so no such testimony was taken. This rather negates the conclusion of Mr. Mayer that this appearance was merely to accommodate the Trustees.

The letter of December 23, 1954 was an order for ten buses. The hearing on the application was January 31, 1955. Sometime before the hearing two things occurred: Mr. Gettrust appeared and it was decided that fifteen rather than ten buses would be purchased from Flxible, subject to Court approval. Whether the conclusion to buy more buses was reached solely in Lincoln, or elsewhere, or through the urging of Mr. Gettrust in Lincoln or elsewhere, is not apparent.

The evidence does not show whether American owned any Flxible buses prior to the 1955 purchases. It appears, however, that representatives of Flxible called on Mr. Aikman "from time to time" at his office in Lincoln during 1954. It is stated by Mr. Aikman that Mr. McKinney called on him during 1955 "on, perhaps, three or four occasions at periodical intervals, and at the time of his visits would inquire how the buses which had been purchased were operating, and whether any service problems had arisen, and generally inquired as to whether the Trustees were interested in, and were going to purchase any more buses from The Flxible Company." It is stated that McKinney indicated he would pass on any complaint to the manufacturer. It also appears that McKinney continued to call on Aikman "on at least four or five occasions during the year 1956 and called on affiant on one or two occasions during the first half of 1957." It is stated that: "Mr. McKinney apparently was interested in both sales and service."

Sixteen new buses were purchased by American from Flxible in 1956. Six of these buses were delivered to American garages in Omaha during May of 1956. Shortly after the receipt of the first of these vehicles, a Mr. R. V. Shenberger, service representative of Flxible, called on Mr. Smith, the Manager of Service at Omaha, and discussed maintenance and service problems regarding the Flxible buses. After he left, a representative of Flxible and a representative of the manufacturer of the motor used in Flxible buses came to Omaha and conducted a one-day service school for American's mechanics at its garage in Omaha, giving instruction, showing slides, etc. After mentioning this school, Mr. Roberts states: "Thereafter, a service representative of The Flxible Company would call from time to time at the office and garage of American Buslines in Omaha."

Apparently during the summer and fall of 1956, the 1956 Flxible buses developed air-conditioning troubles. Mr. Shenberger came to Omaha two or three times during this period, at which times he assisted with the air-conditioning systems; spent a half-day with Mr. Schliep correcting his service manual and parts manual, and inquired of Mr. Smith as to whether he was encountering certain service difficulties which other operators had encountered, and offered suggestions as to how others had met these problems.

During October of 1956, two of the 1955 model Flxible buses were assigned to Omaha. One of these was the bus involved in the accident in the main case. Apparently these two buses had defective shifting rod assemblies, and a service representative of Flxible spent about the first ten days of November, 1956 in Omaha changing this assembly. Whatever labor was done on this job by American Busline employees was billed to Flxible, and the parts were furnished by Flxible. This billing of Flxible for labor by American employees, and the furnishing of parts by Flxible without cost was also true with regard to the air-conditioning work mentioned above. In this connection, it is stated by Mr. Aikman:

"During the years 1956 and 1955 when parts or service covered by the warranty of The Flxible Company

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