LaNuova D & B, S.p.A. v. Bowe Co., Inc.

• Decision Date: 25 February 1986
• Citation: 513 A.2d 764
• Court: Supreme Court of Delaware
• Parties: LaNUOVA D & B, S.p.A. and Dibiten S.p.A. Italian corporations, Defendants, Fourth and Fifth Party Defendants Below, Appellants, v. BOWE COMPANY, INC., a New Jersey corporation, Defendant, Fourth and Fifth Party Plaintiff Below, Appellee. . Submitted:

Page 764

513 A.2d 764

LaNUOVA D & B, S.p.A. and Dibiten S.p.A. Italian corporations, Defendants, Fourth and Fifth Party Defendants Below, Appellants, v. BOWE COMPANY, INC., a New Jersey corporation, Defendant Fourth and Fifth Party Plaintiff Below, Appellee.

Supreme Court of Delaware.

Submitted: Feb. 25, 1986.

Decided: June 24, 1986.

Reargument Denied: Aug. 5, 1986.

Upon Appeal from Superior Court. Affirmed. No. 309, 1985. Court Below: Superior Court of the State of Delaware in and for New Castle County C.A. Nos. 82C-OC-9, 82C-NO-11 and 83C-FE-117.

Victor F. Battaglia and Philip B. Bartoshesky (argued), of Biggs and Battaglia, Wilmington, for appellants.

Howard M. Berg of Howard M. Berg & Associates, P.A., Wilmington, for appellee.

Before CHRISTIE, C.J., HORSEY and WALSH, JJ.

WALSH, Justice:

This is an interlocutory appeal from a decision of the Superior Court which determined that the appellants, LaNuova D & B, S.p.A. ("LaNuova"), a manufacturer of building materials and its wholly owned subsidiary, Dibiten, S.p.A., were subject to in personam jurisdiction under the Delaware Long Arm Statute (10 Del.C. § 3104). We granted review of the interlocutory ruling because of the need to determine finally LaNuova's status as a defendant in this multi-party litigation. LaNuova contends that, as a matter of law, its activities do not bring it within the ambit of the Delaware Long Arm Statute and if the Statute is so construed it violates the due process clause of the fourteenth amendment of the United States Constitution. We conclude that the Superior Court properly applied the Long Arm Statute and, given the extent of LaNuova's Delaware contacts, the corporation's due process rights have not been compromised. Accordingly, we affirm.

I

LaNuova is an Italian corporation that manufactures a roofing material known as "Dibiten." This product is manufactured in Italy and shipped to the United States for distribution by the appellee, Bowe Company, Inc., ("Bowe") a New Jersey corporation. Bowe enjoys the exclusive right to distribute Dibiten in the eastern half of the United States by reason of a written agreement between LaNuova and Bowe dated March 16, 1981. ¹ This agreement, which The agreement also authorized Bowe to extend to each ultimate purchaser of Dibiten a warranty that guarantees the roofing material against defects. The product warranty extended by Bowe was secured by liability insurance which LaNuova undertook to supply in support of the warranty. Although the distributorship agreement provided that Bowe was not the agent of LaNuova "except as hereafter provided" it was contemplated by the agreement that Bowe would distribute to each purchaser of Dibiten a written warranty agreement which had been previously signed in blank by the President of LaNuova. This arrangement was intended to enhance the marketability of Dibiten products which were competing in the American market with roofing materials that bore comparable warranties.

was entered into in the State of New Jersey and recites that it is subject to New Jersey law, designates Bowe as the sole and exclusive distributor of roofing products manufactured by LaNuova. The agreement further provides that Bowe will distribute no other products except those manufactured by LaNuova and that Bowe is obligated to make certain annual minimum purchases of Dibiten.

Bowe distributed its Dibiten products in Delaware through GAF Industries which, in turn, sold the product to roofing contractors. Bowe's practice was to deliver the warranty to the ultimate purchaser--the building owner--only upon completion of the roof. At the time of the fire which led to this litigation Bowe had delivered two such warranties to two separate purchasers in Delaware. Bowe continued to deliver the warranties after the fire and apparently has done so as a matter of course throughout its entire sales territory.

The underlying litigation arose through a claim by certain tenants of the Wilmington Merchandise Mart whose premises were damaged by fire during the renovation of the shopping center. The fire is alleged to have resulted from the improper application and/or manufacture of Dibiten. The defendant contractors and suppliers, including GAF, have joined Bowe (the distributor of the product) as an additional defendant and Bowe, in turn, seeks to join LaNuova, the manufacturer of the product.

The Delaware Long Arm Statute in 10 Del.C. § 3104 provides the means by which Delaware courts may obtain personal jurisdiction over nonresidents. Although § 3104(c) lists several activities, any one of which may supply the necessary predicate for the assertion of in personam jurisdiction, in this case the trial court focused on the requirements outlined in subsection (c)(4). ² That section, in effect, authorizes the assertion of jurisdiction in connection with any tort claim in which the injury occurred in the State of Delaware attributable to conduct occurring outside the State if certain other indicia of activity are established, including: (1) regular doing or solicitation of business, (2) engaging in any other persistent course of conduct, or (3) deriving The Superior Court reasoned that the agreement between LaNuova and Bowe permitting the widespread distribution of LaNuova's warranty, along with its product, constituted sufficient direct or indirect contact with Delaware so as to subject LaNuova to in personam jurisdiction in this State. The Superior Court did not articulate the specific indicia of activity under (c)(4) upon which it posited jurisdiction, but its analysis suggests that the basis for sustaining jurisdiction arose from the appellant's persistent course of conduct. We agree with the Superior Court that the evidence in this case supports such a conclusion.

substantial revenues from the services or products used or consumed in the State.

II

To determine whether the Delaware courts can obtain personal jurisdiction over a nonresident, a two-step analysis is applied. First, the court must consider whether the Delaware Long Arm Statute applies, and next must evaluate whether subjecting a defendant to jurisdiction in Delaware violates the due process clause of the fourteenth amendment. See Waters v. Deutz Corp., Del.Supr., 479 A.2d 273 (1984). We begin our analysis with an examination of the provisions of 10 Del.C. § 3104(c), as they apply to the facts of this case, recognizing that section 3104(c) has been broadly construed to confer jurisdiction to the maximum extent possible under the due process clause. Speakman Co. v. Harper Buffing Machine Co., 583 F.Supp. 273 (D.Del.1984); Moore v. Little Giant Industries, Inc., 513 F.Supp. 1043, 1048 (D.Del.1981) aff'd 681 F.2d 807 (3d Cir.1982).

Although Bowe, consistent with its position in the Superior Court, contends that LaNuova's activities establish a prima facie application of in personam jurisdiction under subsections (1) and (2) of § 3104(c), the Superior Court did not directly address those contentions and we find them without merit. The conduct embraced in subsections (1) and (2), the transaction of business or performance of work and contracting to supply services or things in the State, may supply the jurisdictional basis for suit only with respect to claims which have a nexus to the designated conduct. Where personal jurisdiction is asserted on a transactional basis, even a single transaction is sufficient if the claim has its origin in the asserted transaction. Speakman, 583 F.Supp. at 275; Wilmington Supply Co. v. Worth Plumbing & Heating, Inc., 505 F.Supp. 777, 780 (D.Del.1980). Thus, if the claim sought to be asserted arose from the performance of business or the discharge of the contract, no further inquiry is required concerning any other indicia of the defendant's activity in this state.

Similarly, where the claim is one for tortious injury under subsection (c)(3), a single "act or omission" in the State in which the injury was caused will suffice. Such a claim may also be viewed as transactional. The assertion of jurisdiction under subsection (c)(4), however, is not transactionally based in the sense that the claim asserted need not arise out of the claimed activity. In seeking to join LaNuova as a fourth-party defendant, Bowe asserts a common liability it shares with LaNuova and for which it seeks contribution. Here, the claim cannot be based on the general transactional provision in subsection (c)(1) since LaNuova enjoys no general presence in this state and when Dibiten is sold to Bowe, title passes in Italy. Furthermore, the claim clearly is not a contractual one since the warranties had not been issued at the time of the fire. ³

In the absence of a nexus requirement, it is sufficient if the record demonstrates a prima facie...