Deutsch v. West Coast Machinery Co., 42163

• Decision Date: 08 June 1972
• Docket Number: No. 42163,42163
• Citation: 497 P.2d 1311,80 Wn.2d 707
• Parties: Jerry DEUTSCH, Plaintiff, v. WEST COAST MACHINERY COMPANY, Defendant, Marubeni-lida, Inc., a corporation, Respondent, Kansai Iron Works, Ltd., a Japanese corporation, Petitioner.
• Court: Washington Supreme Court

Page 707

80 Wn.2d 707

497 P.2d 1311

Jerry DEUTSCH, Plaintiff, v. WEST COAST MACHINERY COMPANY, Defendant, Marubeni-lida, Inc., a corporation, Respondent, Kansai Iron Works, Ltd., a Japanese corporation, Petitioner.

No. 42163.

Supreme Court of Washington, En Banc.

June 8, 1972.

Houger, Garvey, Schubert & Barnes, L. William Houger, E. Charles Rough, Seattle, for appellant.

Karr, Tuttle, Koch, Campbell, Mawer & Morrow, Steven V. Lundgren, Robert P. Piper, Seattle, for respondent.

HUNTER, Justice.

This is a review of an order denying the motion of the third party defendant (petitioner), Kansai Iron Works, Ltd. (a Japanese corporation hereafter referred to as Kansai), to dismiss for lack of jurisdiction a cross complaint by the third party plaintiff (respondent), Marubeni-Iida, Inc. (a New York corporation hereafter referred to as Marubeni America).

The suit giving rise to the cross-claim and to this action was initiated by the plaintiff, Jerry Deutsch, against the defendants, West Coast Machinery Company (a Washington corporation hereafter referred to as West Coast), Marubeni America and Kansai. Service of process was made upon West Coast and Marubeni America, but not upon Kansai. The plaintiff is now barred by the statute of limitations from asserting any claim against Kansai.

The plaintiff, an employee of the Boeing Company on June 28, 1968, seriously injured his hand at work while operating a large mechanical metal press. The press was sold to the Boeing Company by West Coast. West Coast purchased the press from Marubeni America, which in turn purchased the press from Marubeni-Iida Co., Ltd. (a Japanese corporation hereafter referred to as Marubeni Japan). Marubeni Japan purchased the press from Kansai, the manufacturer and petitioner herein.

Kansai is an Osaka, Japan company engaged in the manufacture of heavy machinery. In May of 1966, upon receipt of a purchase order from Marubeni Japan, Kansai manufactured a 110 ton openback non-inclinable power press. The record indicates that the press was manufactured according to extensive specification furnished by the Boeing Company. The press was delivered to Marubeni Japan, a large Japanese trading company, which in turn shipped it to its subsidiary, Marubeni America, at its Los Angeles headquarters. The press was then sent to West Coast who delivered it to the Boeing Company. In January of 1967, Kansai sent its engineers to the Boeing Company in Washington to test the operation of the press. Subsequently, a selector switch failed. At the request of Marubeni Japan, Kansai sent a replacement switch to West Coast for installation on the press. In June of 1967, Kansai sent its engineers to the Boeing Company with parts for the machine. Pursuant to Boeing Company policies, however, Boeing personnel made the actual repairs in replacement of the parts. In July of 1967, Kansai sent an engineer, Mr. Obatake, to the United States with respect to machinery in other states and to that located at the Boeing Company. Mr. Obatake, however, was not allowed to make any adjustments or repairs to the press.

The plaintiff Deutsch claims that the press was defective and malfunctioned, severing most of his left hand, for which he is asking $275,000. On April 10, 1970 Marubeni America filed a cross-claim for indemnification against Kansai. On December 3, 1970, Kansai filed a notice of appearance to contest jurisdiction. On July 30, 1971, Kansai moved for an order dismissing the complaint against it on the grounds that the Washington court lacked jurisdiction over it. The motion was denied September 23, 1971, and this court granted a writ of certiorari on October 15, 1971, which has brought the matter here for review.

The petitioner, Kansai, claims that service of process was not made on it by Marubeni America; however, we find this contention to be without merit as service was admitted by Japanese counsel for Kansai in the documents which are on file and constitute a part of the record in this case. Furthermore, the record contains substantial additional evidence supporting the conclusion that service was effected upon Kansai through the Osaka District Court in Japan.

Kansai's primary contention is that it has no sales representatives, service facilities, or other personnel in the state of Washington or anywhere in the United States and that it does not directly advertise or solicit orders or transact any business in the state of Washington which would submit it to the Washington jurisdiction.

The third party plaintiff, Marubeni America, claims that the Washington court has jurisdiction over Kansai under the provisions of RCW 4.28.185, our long-arm statute, which provides, in part, as follows:

(1) Any person, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts in this section enumerated, thereby submits said person, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of said acts:

(a) The transaction of any business within this state;

(b) The commission of a tortious act within this state;

The basic issue here is whether the courts of this state, under the long-arm statute, have jurisdiction over Kansai Iron Works, Ltd., a Japanese corporation, as a third party defendant under a cross-claim for indemnification, when a product of that corporation is sold through intermediaries to a Washington corporation, with the knowledge that the product is being sold ultimately to a Washington corporation and that product causes injury in the state of Washington by reason of an asserted defective manufacture of the product, while being used for the purposes for which it was intended.

It is well established in this state that under the long-arm statute, RCW 4.28.185, our courts may assert jurisdiction over nonresident individuals and foreign corporations to the extent permitted by the due process clause of the United States Constitution, except as limited by the terms of the statute. See Oliver v. American Motors Corp., 70 Wash.2d 875, 425 P.2d 647 (1967), and Tyee Constr. Co. v. Dulien Steel Prods. Inc., 62 Wash.2d 106, 381 P.2d 245 (1963), and cases cited therein. In order to subject nonresident defendants and foreign corporations to the in personam jurisdiction of this state as the forum under RCW 4.28.185(1)(a) and (b), the following factors must coincide: (1) The nonresident defendant or foreign corporation must purposefully do some act or consummate some transaction in the forum state; (2) the cause of action must arise from, or be connected with, such act or transaction; and (3) the assumption of jurisdiction by the forum state must not offend traditional notions of fairplay and substantial justice, consideration being given to the quality, nature, and extent of the activity in the forum state, the relative convenience of the parties, the benefits and protection of the laws of the forum state afforded the respective parties, and the basic equities of the situation. Callahan v. Keystone Fireworks Mfg. Co.,72 Wash.2d 823, 435 P.2d 626 (1967); Quigley v. Spano Crane Sales & Serv. Inc., 70 Wash.2d 198, 422 P.2d 512 (1967); Tyee Constr. Co. v. Dulien Steel Prods. Inc., supra.

In the instant case, the record shows numerous uncontroverted contacts between Kansai and the state of Washington. Kansai manufactured, packaged and shipped the press according to Boeing Company specifications, as evidenced by Boeing Spec. No. EEUM 6204P containing the following relevant provisions 1.0 Scope

1.1 This specification is intended to cover the procurement of a Kansai Iron Works, 110 Ton Openback Non-Inclinable Press, with features and modifications to meet or exceed the requirements specified.

3.0 Requirements

Manfuacturer's contractual obligations for the design and function of an existing, standard model press.

4.0 Inspection and Acceptance

4.6 Final acceptance shall be contingent upon the equipment meeting the specifications and above requirements after installation at the Buyer's plant.

6.0 Shipping

6.1 The press, when shipped, shall include all necessary electrical motors, pumps, piping and controls, wiring and piping between press, pumps, motors and control units to be operative when set up.

6.2 All rust preventive coatings, packing, crating, etc., must conform to good export practices in order to insure minimum exposure of equipment during shipment.

6.3 The number of shipping units and/or crates shall appear on each unit and/or crate and contents of each shall be furnished to the customer.

7.0 Manufacturer's Responsibility

7.1 The machine tool manufacturer shall be responsible for the design, manufacture, performance, reliability and packaging of the control system and the controlled equipment as defined in this specification. This responsibility shall provide for technical direction during installation and maintenance assistance during the warranty period.

7.2 Warranty:

The vendor shall warrant that all equipment delivered to this specification shall be free from defects in materials and workmanship, that all items will conform to applicable specifications and drawings and to the extent that such items are not manufactured pursuant to detailed design furnished by buyer, that all items will be free from defects in design and suitable for the intended purpose. Warranties shall extend for one year from date of first full and satisfactory operation at the buyer's plant assuming equipment to be installed within 60 days of shipping date.

And as evidence by West Coat's purchase order containing, Inter alia, the following requirement:

4. Packaging and shipping must be in accordance with Boeing form ADX 4797.

In June 1966, at the request of Kansai, Boeing personnel were present for a test operation of the press at its plant in Japan. And, as heretofore stated, in January 1967, Kansai sent its engineers to the Boeing Company in...