Elliott v. Edwards Engineering Corp.
| Decision Date | 04 May 1965 |
| Docket Number | Civ. A. No. 8757. |
| Parties | Allen W. ELLIOTT, as Administrator of the Estate of Lloyd E. Elliott, Deceased, Plaintiff, v. EDWARDS ENGINEERING CORP., a New Jersey corporation, White-Rodgers Co., a Missouri corporation, and Snodgrass and Smith Co., a partnership doing business in Colorado, Defendants. |
| Court | U.S. District Court — District of Colorado |
Hindry, Erickson & Meyer, Jay L. Gueck, Denver, Colo., for plaintiff.
Yegge, Hall, Treece & Evans, George M. McClure, Denver, Colo., for defendant Snodgrass and Smith Co.
Wood, Ris & Hames, Eugene S. Hames, Denver, Colo., for defendant White-Rodgers Co.
Weller, Friedrich & Hickisch, William H. Hazlitt, Denver, Colo., for defendant Edwards Engineering Corp.
This matter is before the Court on the motion of defendant White-Rodgers Co. to quash return of alias summons served upon Paul T. Williams and on the motion of defendant Edwards Engineering Corp. to dismiss for lack of jurisdiction relating to the purported service of process upon Fred Mahe of Chas. A. Davis and Associates in Denver, Colorado, which the Court has chosen to treat as a motion to quash service. Having heard oral argument by counsel, having read the depositions submitted by plaintiff, having carefully examined the file and being fully advised in the premises, the Court is of the opinion that the motions should be granted.
Neither White-Rodgers Co., nor Edwards Engineering Corp., is authorized to do business or has its principal place of business in the State of Colorado, therefore both motions present the same legal question of whether or not either one of these defendants was doing sufficient business in Colorado as to subject it to service of process in this state. We consider first the motion of White-Rodgers.
Service was made on Paul T. Williams, the sole employee of White-Rodgers in the State of Colorado. Mr. Williams is a sales engineer for White-Rodgers, whose primary activities include sales of merchandise to wholesalers and distributors and some "trouble shooting" at the request of individuals. However, sales are never made directly to individuals. He has no authority to bind White-Rodgers on any order, and all orders are sent by him to St. Louis, Missouri, for approval. For placing orders with wholesalers in a ten state area, he is paid a guaranteed salary of $500 a month, plus a 2% commission by White-Rodgers Co. He has a general list of wholesalers that are his accounts, and he calls on them frequently, checking their inventory and suggesting purchases they might make.
White-Rodgers Co. is listed in the Metropolitan Denver telephone directory at the home address of Mr. Williams. He maintains a desk and filing cabinet in his home for company purposes, but none of the property used by him in Colorado is owned by White-Rodgers Co. His office is situated in Colorado for convenience, and only a small fraction of the time spent in his territory is spent in Colorado.
White-Rodgers Co. manufactures the allegedly defective gas control valve located in the Edwards boiler, which exploded giving rise to this action. However, Mr. Williams did not sell the valve in question to Edwards Engineering Corp., nor by his statement does he ever sell to that company. The allegedly defective White-Rodgers valve was sold to Edwards Engineering Corp. and made a part of the boiler somewhere "back east". The entire boiler was sent to Snodgrass and Smith Co. in Denver, and from there it went to the home of the deceased Lloyd E. Elliott in Wyoming.
These are the pertinent facts from which the Court must decide whether or not White-Rodgers Co. was doing business in the State of Colorado, hence amenable to the jurisdiction of the Courts in that state.
It is basic to the great abundance of law on the question of "doing business" that every case must be decided solely on its own facts. Certain factors are generally recognized as bearing on the question, but the complete test is one of total impact. It is all of the facts of a particular case considered in the light of the applicable law that produces the ultimate resolution of the question. This test has never been more aptly expressed than by the Supreme Court of the United States, when it said that the corporation must "* * * have certain minimum contacts with it the state such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. State of Washington, et al., 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).
In answering the question of whether or not White-Rodgers Co. was doing business in Colorado, it is fundamental that we must look to Colorado law. Colorado law was recently reviewed in Focht v. Southwestern Skyways, Inc., 220 F.Supp. 441 (Dist.Colo.1963); Cessna Aircraft Company v. Focht, 336 F.2d 603 (10th Cir. 1964), a case which placed substantial emphasis on the amount of control the corporation exerted over its representative in the state. In the case at hand, it would appear that White-Rodgers Co. probably exercised sufficient control over its representative Williams to meet the basic test expressed in Focht.
Also, the fact that White-Rodgers Co. maintains a listing in the Denver telephone directory is another factor which points toward "doing business." Wm. I. Horlick Co. v. Bogue Electric Mfg. Co., 146 F.Supp. 347 (D.C.Mass.1956). And of course, the fact that Williams was paid directly by White-Rodgers Co. is further evidence of the corporation doing business in Colorado through its representative.
However, when the quantity of business done by Williams in Colorado is analyzed in light of the earlier-stated International Shoe test, there is no clear answer. Whether the "small fraction" of time spent by Williams in Colorado meets the "minimum contacts" requirements or not, is a question this Court would find difficult to hold determinative of this...
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