Finkbiner v. Mullins
| Citation | 532 A.2d 609 |
| Parties | William C. FINKBINER, Plaintiff, v. Howard J. MULLINS, and Gene Mullins, individually, and t/a Gene's Auto Sales, and Charles Howard Ahmer, individually and t/a Ahmer's Used Cars, Defendants. . Submitted: |
| Decision Date | 20 March 1987 |
| Court | Delaware Superior Court |
This is the Court's decision on nonresident defendant Charles H. Ahmer's motion to dismiss pursuant to Superior Court Civil Rule 12 on the ground that the Court lacks jurisdiction over his person. The plaintiff William C. Finkbiner and co-defendant Gene Mullins have presented briefs opposing this motion, the latter asserting standing on the basis of his crossclaim against Ahmer for indemnity or contribution.
Plaintiff's cause of action is a personal injury suit arising out of an accident which occurred at 3:15 a.m. on July 10, 1984 in the parking lot of Gene's Auto Sales, a business owned by Gene Mullins, in Bridgeville, Delaware. Plaintiff alleges that he was injured when struck by a car driven in a negligent and reckless manner by defendant Howard J. Mullins, the son of Gene Mullins. Plaintiff further alleges that the car in question, a 1978 Cougar, was owned by Gene Mullins and/or Charles Ahmer and that they each breached a duty of care owed to the plaintiff when they authorized and permitted Howard Mullins to operate the car.
Defendant Charles Ahmer is a resident of Baltimore, Maryland and owner of Ahmer's Used Cars, a dealership located in Baltimore. In late June 1984, Gene Mullins inspected the 1978 Cougar on Ahmer's lot. A few days later one of the Mullins family called Ahmer and indicated that they wished to purchase it. Someone on behalf of Mullins came to Baltimore on July 7 or 8, took the keys to the vehicle that had been placed in Ahmer's office with the Mullins' name on them and drove off with the Cougar after first placing Gene Mullins' dealer's tag on it. On July 14, 1984, four days after the accident, one of the Mullins' returned to Baltimore where Ahmer wrote out a bill of sale for the vehicle and transferred title to Gene's Auto Sales. Money was also exchanged, but it is unclear whether the car in question was paid for at that time, as a later discussion of the co-defendants' business practices will reveal. Thus, at the time of the accident on July 10, 1984, the car displayed Gene Mullins' dealer's tag and its certificate of title was in the name of Ahmer's Used Cars.
Plaintiff initially sought jurisdiction over the nonresident defendant pursuant to the Delaware Nonresident Motorist Statute, 10 Del.C. § 3112. Additionally, he later served process on Ahmer pursuant to Delaware's general long-arm statute, 10 Del.C. § 3104. The nonresident defendant contends that, given the factual circumstances of this case, the Court lacks personal jurisdiction over him under either statute.
The relevant record consists of the plaintiff's complaint, the nonresident defendant's affidavit, in which he denies that he has ever transacted business in Delaware or permitted Howard Mullins to operate the vehicle, and the nonresident defendant's deposition. The deposition reveals the nature of Ahmer's business practices with his co-defendant Gene Mullins and with other Delaware auto dealers.
Ahmer is the sole proprietor of Ahmer's Used Cars, located at 4014 North Point Boulevard, Baltimore. He is licensed to do business only in Maryland. He buys used cars and sells them wholesale and retail. He primarily buys his used cars from new car dealers in the Baltimore area. He also goes to car shows and car sales, mostly in Pennsylvania. He apparently does not advertise through the media in Delaware, but he exchanges business cards with other dealers, including Delaware dealers, at the car shows and sales. People also learn of his business through friends or by driving past his car lot.
Ahmer has done business with other Delaware dealers in the past, in particular with Dover Auto Mart and Bear Auto Sales on Route 40. The transactions always occurred either at the shows in Pennsylvania or at Ahmer's lot in Baltimore. One Delaware dealer ceased doing business with Ahmer eventually because it was too far to come to purchase cars and Ahmer was unwilling to deliver cars to Delaware, having sufficient business in the Baltimore area.
Over a period of several years Ahmer sold approximately 400 to 500 cars to Gene's Auto Sales. The last transaction between the co-defendants took place in March 1986. They had an informal business arrangement which is apparently the custom between dealers. Gene Mullins and/or other members of his family would come to Baltimore to purchase cars. They would test drive cars around Ahmer's large lot or sometimes place their dealer's tags on the cars and drive them on the road. They would then select several cars to purchase. Ahmer would place the car keys labelled with the Mullins name in a designated spot in his office. One or several members of the Mullins family would return, pick up the keys, place Gene Mullins' dealer's tags on the cars and drive them back to Delaware.
The co-defendants operated on an honor system. Ahmer kept a running balance of Mullins' car purchases. On each trip to Baltimore Mullins paid Ahmer some of what he owed. Ahmer then wrote out the bills of sale for cars that had previously been driven to Delaware. A bill of sale is a requirement for title to transfer. This was not, however, an arrangement whereby Ahmer kept title to the cars as security for payment. Ahmer transferred the titles whenever Mullins needed them for his sales and Mullins paid for the cars whenever he had the money. Title often transferred before Ahmer received payment for a car. However, Mullins always paid what he owed and he never returned a car to Ahmer.
Mullins inspected the 1978 Cougar in late June. One of the Mullins family called Ahmer from Delaware in early July and told Ahmer that Mullins wished to purchase this car. One of the Mullins family took possession of the car and its keys in Baltimore on July 7 or 8 and drove the car back to Delaware. On July 14, four days after the accident, Ahmer wrote a bill of sale for eight cars, including the 1978 Cougar, and a receipt for $3800, although he may not have actually been paid that amount at that time. Ahmer then transferred title to the eight cars to Gene's Auto Sales.
When personal jurisdiction over a nonresident defendant is challenged on a motion to dismiss, the plaintiff has the burden of showing a basis for this Court's long-arm jurisdiction. Harmon v. Eudaily, Del.Super., 407 A.2d 232 (1979), aff'd, Del.Supr., 420 A.2d 1175 (1980). This burden, however, is met by a threshold prima facie showing that jurisdiction is conferred by the statute. Id. at 233. In this case, the Court must first decide whether 10 Del.C. § 3112 confers jurisdiction over defendant Ahmer. If that statute does not apply, the Court must then analyze the requirements of § 3104 to determine whether it provides for jurisdiction and, if it does, whether the exercise of that jurisdiction over defendant Ahmer would offend due process. See Moore v. Little Giant Industries, Inc., D.Del., 513 F.Supp. 1043 (1981), aff'd, 3rd Cir., 681 F.2d 807 (1982). The Court concludes that under either statute jurisdiction over the nonresident defendant would be improper and that his motion to dismiss must be granted.
10 Del.C. § 3112(a) authorizes service of process on "[a]ny nonresident owner, operator or driver of any motor vehicle, who accepts the privilege extended by law to nonresidents of this State to operate or drive such motor vehicles on the public streets, roads, turnpikes or highways of this State by operating or driving such motor vehicle or by having the same operated or driven on any public street, road, turnpike or highway of this State...." The nonresident defendant asserts that the statute must be strictly construed and that plaintiff's attempt to obtain jurisdiction under this statute fails in three particulars. First, the nonresident defendant argues that he was not an "owner, operator or driver" of the motor vehicle at the time of the accident, having transferred title and possession of the car to Gene Mullins prior to the accident. Second, he contends that Howard Mullins was not his agent and was not operating the car with his express or implied permission or authority; hence, he was not "having the [vehicle] operated or driven" in Delaware on his behalf. Third, he asserts that the operation of the vehicle which is complained of did not occur "on the public streets, roads, turnpikes or highways of this State," but rather on private property. Since these three requirements have not been met, the nonresident defendant argues that the statute does not apply to him.
The Court initially notes that the traditional rule that a statute "in derogation of the common law" must be strictly construed has been relaxed in recent years because in some cases the rule had been so rigidly applied as to frustrate the fundamental purpose of the statute. Lightburn v. Delaware Power & Light Co., Del.Supr., 158 A.2d 919 (1960); see Kohanovich v. Youree, Del.Supr., 147 A.2d 655 (1959) (); Snyder v. Beam, Del.Super., 380 A.2d 1374 (1977) (...
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