Lumber Mart, Inc. v. Haas Intern. Sales & Service, Inc.

• Decision Date: 13 July 1978
• Docket Number: No. 9440,9440
• Citation: 269 N.W.2d 83
• Parties: LUMBER MART, INC., Plaintiff and Appellant, v. HAAS INTERNATIONAL SALES AND SERVICE, INC., and Ross Bros. Transportation, Inc., Defendants and Appellees. Civ.
• Court: North Dakota Supreme Court

Page 83

269 N.W.2d 83

LUMBER MART, INC., Plaintiff and Appellant, v. HAAS INTERNATIONAL SALES AND SERVICE, INC., and Ross Bros Transportation, Inc., Defendants and Appellees.

Civ. No. 9440.

Supreme Court of North Dakota.

July 13, 1978.

Zuger & Bucklin, Bismarck, for plaintiff and appellant; argued by Robert V. Bolinske, Bismarck.

Chapman & Chapman, Bismarck, for defendants and appellees; argued by Charles L. Chapman, Bismarck.

SAND, Justice.

The appellant, Lumber Mart, Inc., of Mandan, appealed from a Burleigh County district court order dismissing its suit for damages against defendant-appellees, Haas International Sales and Service, Inc., of Bismarck, and Ross Bros. Transportation, Inc., Circle, Montana, for lack of jurisdiction under either Rule 4, North Dakota Rules of Civil Procedure, or under constitutional notions of justice, fair play or due process.

Lumber Mart had filed a suit in Burleigh County district court against Haas International Sales and Service, a North Dakota corporation (hereinafter Haas), and Ross Bros. Transportation, Inc., a Montana corporation (hereinafter Ross Bros.), alleging that their negligence, both separately and concurrently, in repairing Lumber Mart's diesel tractor caused damages to Lumber Mart estimated at approximately $17,000.00. The complaint can be characterized as sounding in contract and tort (in the broad concept).

Ross Bros. responded by moving to change venue of the action from Burleigh County to McCone County, Montana, and to dismiss the action in Burleigh County for lack of jurisdiction. Ross Bros., which operated it own truck line and was registered with the North Dakota highway department truck regulatory division argued that any alleged acts or omissions on its part occurred at its garage in Circle, McCone County, Montana.

The trial court granted the motion and dismissed the complaint without prejudice to Lumber Mart. In doing so, the court made the following conclusions of law:

"I.

"That the situs of the facts and circumstances alleged in this case is the state of Montana.

"II.

"That any cause of action accruing to the Plaintiff as a result of this transaction sounds in contract, and not in tort.

"III.

"That insufficient contacts with the state of North Dakota have been alleged and shown, as would justify the jurisdiction of this Court under Rule 4, North Dakota Rules of Civil Procedure, or under constitutional notions of justice, fair play or due process."

On appeal to this Court, Lumber Mart argued that the trial court erred as a matter of law in determining that it did not have jurisdiction under North Dakota's long arm provision, as outlined in Rule 4, N.D.R.Civ.P., over the Montana corporation of Ross Bros. In determining whether or not the trial court erred in dismissing this action for lack of personal jurisdiction over Ross Bros. we find it necessary to review Ross Bros.' contacts in North Dakota with Lumber Mart.

The diesel tractor alleged to have been negligently repaired by both Ross Bros. and Haas was used by Lumber Mart in connection with its business. In August 1976 the tractor's engine was given an overhauling by Haas. During its first trip after the overhaul the tractor was found to be in need of repairs after its engine lost oil pressure near Circle, Montana. The tractor was then taken to Ross Bros. in Circle, Montana, where it was repaired for a fuel leak.

Following the repairs and the return trip to Bismarck, Lumber Mart took the tractor to Haas and informed its manager of the repair work by Ross Bros., and, according to Lumber Mart, Haas agreed to repair the engine if any further trouble developed.

In January 1977 the tractor developed a water leak and was taken to Haas for repair, but, according to Lumber Mart, Hass "negligently failed to discover a damaged water hose and instead only tightened a hose clamp" because later in January, when Lumber Mart was using the vehicle on a haul to Montana, it was noticed that the heat gauge indicated a malfunction outside of Circle. The diesel tractor failed and was then towed to Ross Bros., where the engine was taken apart and repaired. Lumber Mart alleged that the damaged water hose, which Haas should have detected but did not detect earlier, had failed.

After Ross Bros. repaired the engine, including the water hose, a Lumber Mart employee picked up the tractor, and on the return trip the vehicle broke down near Dickinson. It was towed to Cummins Diesel Repair Shop in Dickinson. At this point, Ed Breckel, manager and part-owner of Lumber Mart, telephoned Gene Ross, president of Ross Bros., to advise him of the breakdown.

The engine was taken apart at Cummins Diesel Repair Shop (Dickinson) and it was discovered that the engine was seriously damaged. Ross then agreed to pick up the truck at Dickinson and return it to Circle, Montana, for repairs. An employee of Ross Bros. traveled to Dickinson and towed the truck back to Circle, where it was repaired at Ross Bros. garage. It is not claimed or alleged that this final repair by Ross Bros. was performed in a negligent or unworkmanlike manner.

According to Lumber Mart, approximately 14 telephone calls were exchanged between Ross Bros., in Circle, Montana, and Lumber Mart in Mandan during the course of repair efforts, with approximately seven of those calls initiated by Ross Bros. personnel.

Following the completion of repairs to the diesel tractor, Gene Ross, president of Ross Bros., delivered the vehicle from Circle, Montana, to Lumber Mart in Mandan. Ross, while in Mandan, engaged in settlement negotiations with Breckel, of Lumber Mart. It was agreed that Lumber Mart would pay Ross Bros. $2,000 to obtain the release of the truck, although at the same time Lumber Mart insisted that the cost of repairs was the fault of defendants Ross Bros. and Haas.

Lumber Mart contends that the State has general jurisdiction over Ross Bros. on the basis that Ross Bros. was engaged in interstate commerce by picking up potatoes in the eastern part of North Dakota and transporting them to Montana, and by registering with the truck regulatory division of the highway department and purchasing permits for each trip.

Lumber Mart further contends that if the State does not have general jurisdiction, then it has personal jurisdiction over Ross Bros. because of the interstate commerce activity and other contacts, such as telephone calls and personal visits by an officer or agent of Ross Bros. in North Dakota with Lumber Mart, in an effort to resolve the dispute that arose as a result of Lumber Mart's claim that Ross Bros. negligently repaired the tractor which created the problem, and also because Ross Bros. came to North Dakota to return Lumber Mart's disabled truck to Montana for further repair. (This final repair, however, was not alleged to have been done in a negligent manner and is not involved in the cause of action here.)

An elaborate history of the long arm provisions (statutes and rules) of this State is set out in Hebron Brick Co. v. Robinson Brick & Tile Co., 234 N.W.2d 250 (N.D.1975). The commentary to Rule 4, N.D.R.Civ.P., as prepared by Leonard Bucklin, states that most of "the 'long-arm' provisions of the rule were added in 1971" and "were taken from the Uniform Interstate International Procedure Act." Other amendments have been adopted but they are not significant to this case. However, in comparing Rule 4(b)(2)(C) of the North Dakota Rules of Civil Procedure with § 1.03 of the Uniform Interstate International Procedure Act we do not find a similar provision. The provision of the Uniform Interstate International Procedure Act which comes close is § 1.03(a)(4), which provides:

"A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a (cause of action) (claim for relief) arising from the person's (4) causing tortious injury in this state by an act or omission outside this state If he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from the goods used or consumed or services rendered, in this state . . . ."

(Emphasis added.)

whereas Rule 4(b)(2)(C) of the North Dakota Rules of Civil Procedure provides that:

"A court of this state may exercise personal jurisdiction over a person who acts directly or by an agent, as to any claim for relief arising from the person's

(C) committing a tort within or without this state causing injury to another person or property within this state . . . ."

The proviso, "if he regularly does or solicits business" etc., as found in § 1.03(a)(4) of the Uniform Interstate International Procedure Act is not a part of North Dakota Rule 4(b)(2)(C).

In Hebron Brick Co., supra, after noting that Rule 4 of the North Dakota Rules of Civil Procedure has its roots in the Michigan statutes, and after reviewing Michigan case law, we said:

"Both (Michigan statute and North Dakota Rule 4) were designed to permit the state courts to exercise personal jurisdiction to the fullest extent permitted by due process. . . . All that is required under Rule 4(b), N.D.R.Civ.P., is that the nonresident defendant have sufficient minimal contacts with North Dakota to permit our courts to exercise personal jurisdiction without offending the basic requirements of due process."

In resolving the question whether or not the State has jurisdiction over the defendant we must determine if the conditions of any one of the subdivisions of Rule 4(b)(2), N.D.R.Civ.P., have been satisfied. The subdivisions contended by Lumber Mart that may apply are:

"(A) transacting any business in this state;

"(B) contracting to supply or supplying service, goods, or other things in this state;

"(C) committing a tort within or without the state causing injury to another person or property within this state;

"(H) enjoying any other status or capacity within this state, including cohabitation, or engaging in any other activity having such contact with...