Green v. Robertshaw-Fulton Controls Company

Decision Date05 January 1962
Docket NumberNo. TH 61-C-16.,TH 61-C-16.
Citation204 F. Supp. 117
PartiesHazel GREEN v. ROBERTSHAW-FULTON CONTROLS COMPANY, Rheem Manufacturing Company.
CourtU.S. District Court — Southern District of Indiana

David E. Rosenfeld, of Rosenfeld & Wolfe, Terre Haute, Ind., for plaintiff.

Hugh E. Reynolds of Locke, Reynolds, Boyd & Weisell, Indianapolis, Ind., for Robertshaw-Fulton Controls Company.

James E. Rocap, of Rocap, Rocap & Reese, Indianapolis, Ind., for Rheem Manufacturing Company.

STECKLER, Chief Judge.

This is an action for personal injuries in the nature of bodily burns allegedly suffered on August 4, 1960, as a result of a gas explosion which occurred while plaintiff was attempting to light an automatic gas hot water heater in the basement of her home. It is alleged that defendant, Robertshaw-Fulton Controls Company, manufactured the gas control device on the hot water heater and that the hot water heater with the gas control assembly incorporated as a part thereof was manufactured by the defendant, Rheem Manufacturing Company. The complaint alleges that the defendants were negligent as set forth in the complaint in the manufacture and sale of the automatic gas control assembly and the hot water heater, and as a proximate result thereof plaintiff sustained the injuries and damages complained of.

The defendant, Rheem Manufacturing Company, filed a motion to dismiss the cause of action as to it, or in lieu thereof to quash the return of service of process on the grounds that "(1) the court lacks jurisdiction over the person of defendant, Rheem Manufacturing Company, or in the alternative, (2) service of process on defendant as shown by the affidavit of G. W. Mallatratt, Vice President of Rheem Manufacturing Company, * * *."1

For brevity, Rheem Manufacturing Company will be referred to merely as "Rheem," or "defendant Rheem."

The record shows that the summons issued against Rheem was served on the Secretary of State of the State of Indiana pursuant to Ind.Ann.Stat. § 25-316 (1960)2 and Rule 4(d) (7), Fed.R.Civ.P., 28 U.S.C. (1960), validating service of process on a foreign corporation when made in accordance with a state statute. In its pertinent parts, Section 25-316 of the Indiana statute provides as follows:

"The engaging in any transaction or the doing of any business in this state by any foreign corporation not licensed nor admitted to do business in this state under any existing act or any act hereafter enacted shall be deemed equivalent to an appointment by such foreign corporation of the secretary of state, or his successor in office, to be the true and lawful attorney and agent of such foreign corporation upon whom may be served all lawful processes, writs, notices, or orders in any action or proceeding against such foreign corporation arising or growing out of, directly or indirectly, any act or thing done by such corporation within the state of Indiana. The engaging in any transaction or the doing of any business in this state by any foreign corporation not licensed nor admitted to do business in this state under any existing act or any act hereafter enacted shall be significant of the agreement of such foreign corporation that any such process, writ, notice, or order against it, which is so served, shall be of the same legal force and effect as if served upon a designated resident agent of such foreign corporation. * * *"

As to the method of serving process and notifying the foreign corporation of the pendency of an action, the statute provides that the service shall be made by leaving a duplicate copy thereof with a fee of one dollar with the Secretary of State, or in his office, and that such service shall be sufficient service upon the foreign corporation, provided that a notice thereof and a copy are forthwith sent by registered mail with return receipt requested to the foreign corporation at the principal office of such foreign corporation designated in the articles of incorporation. The record shows compliance with this provision of the statute in that the return receipt was signed by Mr. Mallatratt at the company's New York office.3

Thus, Rheem is not questioning the adequacy of the notice. Its basic premise is, merely because it had solicitors, or sales representatives, in Indiana, soliciting orders for its products, does not make it subject to service of process under Section 25-316, nor make it amenable to suit in an action for a judgment in personam in this state.

In the memorandum in support of the motion, Rheem cites and relies on the Seventh Circuit decision in the case of Schmidt v. Esquire, Inc., 210 F.2d 908 (7th Cir.), cert. denied, Schmidt v. Crowell-Collier Publishing Co., 348 U.S. 819, 75 S.Ct. 31, 99 L.Ed. 646 (1954). It states that that case comes closest to construing Section 25-316, but adds, unfortunately the statute has never been fully construed by the courts of Indiana.

The plaintiff, on the other hand, cites and relies on the approach adopted in the famous case of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Reliance is also placed on the reasoning in Smyth v. Twin State Improvement Corp., 116 Vt. 569, 80 A.2d 664, 25 A.L.R.2d 1193 (1951) and similar "tortious act" cases. Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961); Nelson v. Miller, 11 Ill.2d 378, 143 N.E.2d 673 (1957). See also Annot. 78 A.L.R.2d 397 (1961).

Since the motion presents questions of fact, the case was set for a hearing limited to the issue of whether at the time of the filing of the action and prior thereto, Rheem was "engaged in any transaction or the doing of any business" in the State of Indiana within the meaning of Section 25-316, as such terms are construed in a jurisdictional sense as to foreign corporations in actions in personam.

From the evidence the court finds the following:

FINDINGS OF FACT

1. The defendant Rheem is a corporation organized and existing under the laws of California, with its principal office at 400 Park Avenue, New York City, New York, with midwest sales offices and manufacturing plant at 7600 South Kedzie, Chicago, Illinois.

2. The corporation has never been, and is not now, admitted, nor licensed, to do business in the State of Indiana under any of the laws of Indiana.

3. Aside from electronic manufacturing operations on the West Coast, Rheem has two divisions whose products have been sold since "the early forties," and currently are being sold, in the State of Indiana in a systematic and continuous sales program. These divisions are the Home Products Division, and Container Division.

4. The Home Products Division manufactures and sells plumbing fixtures, hot water heaters, warm air furnaces, and air conditioners to so-called wholesale distributors in Indiana. There are approximately ten of these, who sell to retailers and plumbing and heating contractors.

5. The wholesalers to whom Rheem sells its home products are independent distributors. None of the distributors are on the pay roll of Rheem and none of them are financed by Rheem.

6. Rheem has no written contracts, no franchise agreements, and no exclusive dealership agreements with any of the wholesale distributors in Indiana.

7. It has no office, no telephone listing, no bank account, no warehouse, and no showroom in Indiana.

8. No direct sales are made to home owners, nor to retailers.

9. The distributors are not limited to the sale of Rheem products.

10. Distributors in the Hammond and Gary area of Indiana are served by sales representatives from Chicago. The sales representative serving the remainder of Indiana is under the supervision of the Chicago office, though he resides in Louisville, Kentucky. He calls on the distributors at least once a month, and some of them twice, "depending on where they are and how much business they do with the defendant Rheem * * *." (Testimony of John J. Nangle, Office Administrator, in Charge of Systems and Procedures, Customer Relations, Home Products Division. Record, p. 22..)

11. The sales representatives are salaried personnel; they travel in personally owned automobiles — at company expense, and enjoy a "modest bonus" for meritorious sales achievements.

12. Sales are promoted, in part, by the sales representatives assisting the distributors in arranging the latter's displays, in traveling with salesmen of the distributors to call on customers of the distributors, such as dealers, retailers, plumbing contractors, and home builders.

13. The duties of the sales representative are to "promote" and sell products of the Home Products Division, and gain acceptance of them through architects, engineers, plumbing contractors, and distributors. His primary responsibility is with the distributor, but if the wholesale distributor wants him to travel with the wholesaler salesman to call on plumbing contractors in the interest of Rheem products, the sales representative does so. Catalogues showing models and suggested prices are provided the distributor. It is the sales representative's duty to see to it that the catalogues are kept up to date with the changes in models and suggested prices, by providing new catalogue pages, and what publicity the company has on the changes.

In the words of Mr. Nangle (Record, pp. 33, 34), the sales representative's duties are:

"* * * to promote and sell products of the Home Products Division to wholesalers who in turn sell them to dealers, who in turn sell them to consumers and to accomplish this he works primarily with the wholesalers. To be sure that they maintain adequate stocks of our products. But he also is expected to make periodic calls upon people like architects, home — home builders. And as time permits, which gives him quite a little bit to do when he travels two or three states, I would — I would say that our territory salesman spends most of his time with the wholesaler or with the wholesaler's purchasing agent, or
...

To continue reading

Request your trial
22 cases
  • Edwards v. St. Louis-San Francisco Railroad Company
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • May 13, 1966
    ...156 F.Supp. 564 (E.D.Ill.1957); Rensing v. Turner Aviation Corporation, 166 F.Supp. 790 (E.D.Ill.1958); Green v. Robertshaw-Fulton Controls Company, 204 F.Supp. 117 (S.D.Ind.1962). While this issue has presented some difficulty to the courts that have considered it and there is authority to......
  • Arrowsmith v. United Press International
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • June 11, 1963
    ...270 F.2d 472, 475 (7 Cir. 1959), cert. denied, 361 U.S. 959, 80 S.Ct. 584, 4 L.Ed. 2d 542 (1960); Green v. Robertshaw-Fulton Controls Co., 204 F. Supp. 117, 127-128 and n. 9 (S.D. Ind.1962); Eighth: Charles Keeshin, Inc. v. Gordon Johnson Co., 109 F.Supp. 939 (W.D.Ark.1952); Hilmes v. Marli......
  • Marival, Inc. v. Planes, Inc.
    • United States
    • U.S. District Court — Northern District of Georgia
    • June 26, 1969
    ...long-arm statute, Ill.Rev.Stat.1955, §§ 16, 17, which is almost identical to Georgia's statute; Green v. Robertshaw-Fulton Controls Co., 204 F.Supp. 117, 128-129 (S.D.Ind., 1962); McGee v. International Life Ins. Co., 355 U.S. 220, 222, 78 S. Ct. 199, 2 L.Ed.2d 223 (1957). Thus, in the inst......
  • Berk v. Gordon Johnson Company
    • United States
    • U.S. District Court — Western District of Michigan
    • December 19, 1962
    ...is mainly involved in deciding whether to subject a foreign corporation to service of process in the state. Green v. Robertshaw-Fulton Controls Co. (S.D.Indiana), 204 F.Supp. 117. In other words, if due process is satisfied, a foreign corporation may be subject to the ordinary process of th......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT