Dixon v. Northwestern National Bank of Minneapolis

• Decision Date: 02 November 1967
• Docket Number: No. 4-66-Civ-65.,4-66-Civ-65.
• Citation: 275 F. Supp. 582
• Parties: Howard G. DIXON, Homer Denno, Albino Zanchettin, Fred R. Harris, Joseph F. Walker, Arthur W. Rankin, Lehman H. Mengel, Karl G. Strickler, Plaintiffs, v. NORTHWESTERN NATIONAL BANK OF MINNEAPOLIS, Defendant and Third-Party Plaintiff, v. John B. DRAKE et al., Third-Party Defendants.
• Court: U.S. District Court — District of Minnesota

275 F. Supp. 582

Howard G. DIXON, Homer Denno, Albino Zanchettin, Fred R. Harris, Joseph F. Walker, Arthur W. Rankin, Lehman H. Mengel, Karl G. Strickler, Plaintiffs, v. NORTHWESTERN NATIONAL BANK OF MINNEAPOLIS, Defendant and Third-Party Plaintiff, v. John B. DRAKE et al., Third-Party Defendants.

No. 4-66-Civ-65.

United States District Court D. Minnesota, Fourth Division.

November 2, 1967.

Wright Brooks, Minneapolis, Minn., for defendant and third-party plaintiff.

Robert Henson, Minneapolis, Minn., for third-party defendants.

MEMORANDUM & ORDER

DEVITT, Chief Judge.

The question for decision now arises on the motion of the five third-party defendants to dismiss the action against them because of claimed lack of jurisdiction over them—a jurisdiction which is asserted by the service of process upon each of them outside of Minnesota under the claimed authority of the new Minnesota long-arm statute, Minnesota Laws 1967, Chapter 427, M.S.A. 543.19, effective May 15, 1967.

In the main action several former employees of Johnson, Drake & Piper, Inc., a Minneapolis-based contracting firm, have sued the Northwestern National Bank of Minneapolis, which acted as trustee for certain assets administered by a profit-sharing committee of Johnson, Drake & Piper, Inc., on the theory that Northwestern National Bank breached its fiduciary duty in investing assets of the profit-sharing fund in certain preferred stock of Johnson, Drake & Piper, Inc. and in distributing such stock, rather than cash, to the plaintiffs. The Northwestern National Bank takes the position that its action in these respects was taken at the direction of, and solely as an agent for, the profit-sharing committee, and that if it be held liable for such conduct, it should be indemnified by the members of the profit-sharing committee. Hence its action in seeking to join the 5 named third-party defendants.

The principal contention of the third-party defendants on the motion to dismiss is that although each of them was served after the enactment of Laws 1967, Chapter 427, the cause of action arose before the enactment of that law and to sustain jurisdiction upon such service would be to afford retroactive effect to the statute, contrary to established principles of law, and particularly to M.S.A. 645.21, a statutorily expressed policy against retroactive construction of legislative enactments.

It is clear that absent a contrary indication by the Legislature a law is not to be construed retroactively. Minnesota Statutes Annotated 645.21 provides that:

"No law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature."

Two Minnesota Supreme Court decisions give voice to this principle. Chapman v. Davis, 233 Minn. 62, 45 N.W.2d 822 (1951), and Hughes v. Lucker, 233 Minn. 207, 46 N.W.2d 497 (1951).

The third-party plaintiff, Northwestern National Bank of Minneapolis, contends, however, that the application of the newly enacted long-arm statute to these third-party defendants would not give the statute a retroactive effect and urges in support thereof Beck v. Spindler, 256 Minn. 543, 99 N.W.2d 670 (1959) and Aftanase v. Economy Baler Co., 343 F.2d 187 (8th Cir. 1965). These cases do hold the non-retroactivity principle to be inapplicable. Each is a tort action, however, and the claimed wrong in each of them did not arise until after the pertinent jurisdictional long-arm statute was enacted, although the sales of articles causing the injury were made before the single-act statute was enacted.

Northwestern contends that its cause of action against the third-party defendants for indemnity did not arise before May 15, 1967, the date of the enactment of the new long-arm statute, but will only arise, in futuro, if the plaintiffs recover against it.

It is established law in Minnesota that a claim for contribution or indemnity does not accrue until the person entitled to the contribution or indemnity has sustained damage by paying a loss or discharging a liability that should properly be...