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

• Court: United States State Supreme Court of Delaware
• Writing for the Court: Before CHRISTIE; WALSH
• Citation: 513 A.2d 764
• Decision Date: 25 February 1986
• 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.

Page 766

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

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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.

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.

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

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

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...