Ehlers v. U.S. Heating & Cooling Mfg. Corp.
| Decision Date | 22 November 1963 |
| Docket Number | Nos. 38929--38931,s. 38929--38931 |
| Citation | 267 Minn. 56,124 N.W.2d 824 |
| Parties | George W. EHLERS v. U.S. HEATING & COOLING MFG. CORP. et al., Appellants. H. J. KRAMER, d.b.a. Kramer Plumbing & Heating Co., defendant and third partyplaintiff, Respondent, v. Ross KRANING, d.b.a. Kraning's Sales and Service Co., third party defendant andthird party plaintiff, Respondent, v. NATIONAL HEATING & COOLING MFG. CORP., third party defendant, Appellant. (And 2other cases consolidated with this one). |
| Court | Minnesota Supreme Court |
Syllabus by the Court
Process served in the manner specified by Minn.St. 303.13, subd. 1(3), is effectual to confer jurisdiction over a corporation organized in Delaware with its principal place of business in Ohio when a product manufactured by it in that state causes property damage in Minnesota attributable to the negligent manufacture of the product, even though the contact of the foreign corporation with this state was limited to the sale and manufacture of a mass-production unit, termed a 'Fireball' boiler, the purchase and use of which in this state as the result of ordinary marketing processes was reasonably foreseeable.
Porter, Stanley, Treffinger & Platt, Columbus, Ohio, Danforth & Allen, Minneapolis, for appellants.
Streater & Murphy, Winona, Robins, Davis & Lyons, Minneapolis, Brehmer & McMahon, Winona, for respondent.
Appeals from an order of the district court denying motions for dismissal of third-party complaints.
A fire at Winona, Minnesota, on November 28, 1959, resulted in property damage to Zywicki Investment Company, Inc., owner, and to George W. Ehlers and Floyd Voss, lessee-occupants, all residents of that city. Each began a separate action in the state district court attributing the fire to a newly installed boiler. Several distinct parties were joined as defendants. Causes of action were pleaded against H. J. Kramer, d.b.a. Kramer Plumbing & Heating Company, on the theory that he had sold to plaintiff Zywicki and installed a 'Fireball' boiler warranted to be fit for the purpose and of merchantable quality, with installation to be done in a workmanlike and safe manner. It was alleged that the boiler proved to be defective and the installation to be inadequate so that the boiler caused a fire destroying the building in which it was placed and the contents therein located. Causes of action based on claimed negligent manufacture were asserted against four allied foreign corporations--National Heating & Cooling Manufacturing Corporation, U.S. Heating & Cooling Manufacturing Corporation, U.S. Plumbing & Fixture Corporation, and Home Essentials Corporation.
In the Voss and Zywicki actions the corporate defendants effected removal to the Federal District Court, and even though absence of complete diversity appeared on the face of the petition for removal, they resisted remand and obtained an order quashing service upon them.
Subsequently, in each of the three actions, a third-party complaint was served by defendant Kramer on his local supplier, Ross Kraning, d.b.a. Kraning's Sales and Service Company, also of Winona. Respondent Kraning, not being a party to the proceedings in Federal District Court and, therefore, not being affected by its ruling, in turn instituted third-party proceedings against defendant National Heating & Cooling Manufacturing Corporation, hereinafter called National Heating. Kraning's theory was that, being an intermediary in the marketing process, he was entitled to indemnification from the admitted manufacturer of the faulty boiler, either on the theory of breach of warranty or on general principles of negligence, for any loss he might sustain in the suit brought by Kramer. Service of the third-party complaints was made pursuant to Minn.St. 303.13, subd. 1(3). At this point, National Heating, organized under the law of Delaware and having its principal place of business in Ohio, filed in the Winona County District Court, in each of the three actions, its motion to quash the service of the third-party complaint and to dismiss the action. The factual basis for the motion was provided by an affidavit of one of its officers from which the following facts appear:
The boiler here involved was manufactured and assembled in a new condition by third-party defendant, National Heating, at its plant located at Zanesville, Ohio, and, on July 31, 1959, sold and delivered by it to Home Essentials Corporation, organized under the law of New York but also having its principal place of business in Ohio. The boiler was sold and delivered by Home Essentials Corporation in a new condition to F. W. Sieffert & Son, of Chicago, Illinois, on August 3, 1959, which, on the same day, sold and delivered it to Kraning's Sales & Service Company of Winona. That company then sold and delivered it to H. J. Kramer, d.b.a. Kramer Plumbing & Heating Company, by whom it was installed in the building where the fire occurred. No employee, agent, officer, or representative of National Heating had anything to do with the boiler after it was sold to F. W. Sieffert & Son of Chicago, or participated in the sale and delivery of the boiler either to Kraning's Sales & Service Company or H. J. Kramer of Winona. No one connected with National Heating was involved in the installation of the boiler in the building involved. The corporation is not and never has been licensed or authorized to do or transact business within the State of Minnesota. It 'does not do, nor has it ever done or transacted business' within the State of Minnesota. It owns no real or personal property within this state and has no plant, office, or place of business here. The corporation had no contract of any kind with any person, firm, corporation, or resident of Minnesota in connection with this boiler.
The motion for dismissal in each of the three third-party actions was denied and separate appeals are taken from these orders. 1
Minn.St. 303.13, subd. 1, provides:
'A foreign corporation shall be subject to service of process, as follows:
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