Dixie Portland Flour Mills, Inc. v. Dixie Feed & Seed Co.

• Decision Date: 12 September 1967
• Docket Number: No. 17199.,17199.
• Parties: DIXIE PORTLAND FLOUR MILLS, INC. and Selective Insurance Company, Plaintiffs-Appellees, v. DIXIE FEED & SEED COMPANY, J. Ralph Whitehead, Individually and d/b/a Comer Gin Company, and James Lee Johnston, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

382 F.2d 830 (1967)

DIXIE PORTLAND FLOUR MILLS, INC. and Selective Insurance Company, Plaintiffs-Appellees, v. DIXIE FEED & SEED COMPANY, J. Ralph Whitehead, Individually and d/b/a Comer Gin Company, and James Lee Johnston, Defendants-Appellants.

No. 17199.

United States Court of Appeals Sixth Circuit.

September 12, 1967.

Paul R. Leitner, of Bishop, Thomas, Leitner, Mann & Milburn, Chattanooga, Tenn., and Robert L. Green, of Neely, Green & Fargarson, Memphis, Tenn., for appellants.

J. W. Kirkpatrick, Memphis, Tenn., for appellees, George P. Bowie, St. Louis, Mo., Max D. Lucas, Jr., Memphis, Tenn., on the brief, Kirkpatrick & Lucas, Memphis, Tenn., of counsel.

Before McCREE and COMBS, Circuit Judges, and CECIL, Senior Circuit Judge.

COMBS, Circuit Judge.

This is an interlocutory appeal from an order of the District Court of the Western District of Tennessee denying defendants-appellants' motion to dismiss and sustaining plaintiffs-appellees' motion to amend the complaint in a suit for contribution.

Plaintiff Dixie Portland Flour Mills, Inc., and defendants Dixie Feed & Seed Company, J. Ralph Whitehead, and James Lee Johnston were co-defendants in a personal injury action filed by Stanifer G. Byrd in the Circuit Court of Hamilton County, Tennessee. The accident from which the personal injury action arose involved a tractor-trailer rig. Dixie Feed owned the tractor, Whitehead owned the semi-trailer, and Johnston was the driver of the combined rig. Judgment was obtained by Byrd against Dixie Portland, Dixie Feed, and Johnston in the amount of $290,000.00. Judgment was entered in favor of Whitehead based on the jury's verdict. The judgment was paid by Dixie Portland and its insurance carrier, Selective Insurance Company. Hence, this suit for contribution or indemnity as the case may be.

Dixie Portland is a Tennessee corporation and Selective Insurance Company is an Ohio corporation. Dixie Feed is a Georgia corporation and has not qualified to do business in Tennessee; Whitehead and Johnston are residents of Georgia.

Service of process on defendants was obtained under the Tennessee non-resident motorist statute, T.C.A. § 20-224, which reads:

Use of highways as appointment of agent for process. — Any owner, chauffeur or operator of any motor vehicle that is not licensed under the laws of this state, or any nonresident of the state of Tennessee who shall hire or procure the use of a motor vehicle licensed under the laws of this state, for temporary use herein, and who shall make use of the privilege, hereby extended to nonresidents of the state, to operate such vehicle on highway or highways within the state, shall be deemed thereby to constitute the secretary of state of this state his agent for acceptance of service of process in any civil action brought by any person against him, arising out of any accident or injury occurring in this state in which such vehicle is involved. Such use of a highway shall be treated as an agreement on the part of said person that such service of process shall have the force and validity of personal service on him within the jurisdiction of this state and the county of action.

The agency of the secretary of state to accept service of process shall continue for a period of one (1) year from the date of any accident or injury and shall not be revoked by the death of such nonresident within such period of one (1) year.

The accident which resulted in the injury to Byrd occurred on July 11, 1960. The judgment was paid by Dixie Portland and Selective Insurance on May 18, 1964. This suit was filed April 13, 1965, some four years and nine months after the accident.

Three questions are raised on appeal:

(1) Can service of process be secured under the Tennessee non-resident motorist statute, T.C.A. § 20-224, in a suit for indemnity or contribution filed between joint tort feasors more than four years after the accident?

(2) Can venue be created in the District Court for the Western District of Tennessee by the execution of an assignment of Selective Insurance Company's claim to Dixie Portland Flour Mills, Inc.?

(3) Can service of process be secured under the Tennessee non-resident motorist statute on the owner of a semi-trailer, attached to a tractor when the tractor is owned by a third party?

Questions one and two are discussed at length in a memorandum decision, 272 F.Supp. 826, by District Judge Bailey Brown. Since we think he answered the questions correctly, and gave the right reasons, we quote with approval from his memorandum opinion:

"Defendants contend that service of process cannot be had under this statute in a suit for indemnity or contribution. There seems to be no Tennessee case which deals with this question, but in several cases dealing with statutes which are similarly worded, the courts have held contrary to the contention of defendants. See:

McKay v. Citizens, etc., Co., 190 Va. 851, 59 S.E.2d 121, 20 A.L.R.2d 918;

Burnett v. Agent, 227 Ark. 1050, 303 S.W.2d 575;

Dart Transit Co. v. Wiggins, 1 Ill. App.2d 126, 117 N.E.2d 314;

Southeastern Greyhound v. Myers, 288 Ky. 337, 156 S.W.2d 161;

Clare v. Fliegel, 74 N.J.Super. 31, 180 A.2d 404;

Brandt v. Olson, 179 F.Supp. 363 (D.C. Iowa)

We therefore conclude that the Tennessee statute applies to suits for indemnity or contribution.

"Defendants next contend that, in any event, service was not effective here because it was had more than one year after the accident. Plaintiffs reply that it was effective because it was had within one year of the payment of the judgment. Again, there is no Tennessee authority, but we conclude that the one-year period begins to run with the payment of the judgment. In the first place, the statute provides that the `* * * agency of the secretary of state * * * shall continue for a period of one (1) year from the date of any accident or injury * * *.\' (emphasis ours), and plaintiffs suffered the injury for which they sue only when they paid the judgment. Moreover, if this non-resident motorist statute is applicable, as we have just held it to be applicable, to suits for indemnity or contribution, and if the one-year period were held to run from the date of the accident, the use of this avenue for service of process would be severely and unduly restricted. Tennessee procedure does not allow a defendant to cross-claim for contribution or indemnity against a co-defendant; nor does it allow a defendant to make a third-party claim against another for contribution or indemnity. It is, moreover, at least highly doubtful, under Tennessee law, that an original suit for contribution or indemnity could be maintained if it were filed before a judgment had been obtained against the party seeking this relief. This would mean that, even as to personal injury actions as to which the statute of limitations is one year, the non-resident motorist statute could rarely be availed of for service of process in a suit for contribution or indemnity if the one-year period ran from the date of the accident. Lastly, and by analogy, statutes of limitations applicable to suits for contribution begin to run upon payment by the

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