Mallory v. Conida Warehouses, Inc.

• Decision Date: 06 April 1982
• Docket Number: Docket Nos. 52235,52786
• Citation: 113 Mich.App. 280,317 N.W.2d 597
• Parties: Larry MALLORY and Nestle Farms, a Michigan co-partnership, Plaintiffs, v. CONIDA WAREHOUSES, INC., a Connecticut corporation, Defendant, Third-Party Plaintiff-Appellee, v. C & B CATTLE COMPANY, an Idaho co-partnership, and the State of Idaho, Third-Party Defendants-Appellants. MICHIGAN MILLERS MUTUAL INSURANCE COMPANY, INC., subrogee of Breckenridge-Wheeler Co-op, Inc., Plaintiff, v. BLOUNT AGRICULTURE DIVISION OF J. P. BURROUGHS & SON, INC., Defendant, Cross-Plaintiff, v. CONIDA WAREHOUSES, INC., Defendant, Cross-Defendant, Third-Party Plaintiff-Appellant, v. C & B CATTLE COMPANY, an Idaho co-partnership, Third-Party Defendant, and State of Idaho, Third-Party Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 597

317 N.W.2d 597

113 Mich.App. 280

Larry MALLORY and Nestle Farms, a Michigan co-partnership, Plaintiffs, v. CONIDA WAREHOUSES, INC., a Connecticut corporation, Defendant, Third-Party Plaintiff-Appellee, v. C & B CATTLE COMPANY, an Idaho co-partnership, and the State

of Idaho, Third-Party Defendants-Appellants.

MICHIGAN MILLERS MUTUAL INSURANCE COMPANY, INC., subrogee of

Breckenridge-Wheeler Co-op, Inc., Plaintiff, v. BLOUNT AGRICULTURE DIVISION OF J. P. BURROUGHS & SON, INC., Defendant, Cross-Plaintiff, v. CONIDA WAREHOUSES, INC., Defendant, Cross-Defendant, Third-Party Plaintiff-Appellant, v. C & B CATTLE COMPANY, an Idaho co-partnership, Third-Party Defendant, and State of Idaho, Third-Party Defendant-Appellee.

Docket Nos. 52235, 52786.

Court of Appeals of Michigan.

Submitted Dec. 3, 1981.

Decided Feb. 17, 1982.

Released for Publication April 6, 1982.

Smith & Brooker, P.C., Bay City, for Conida Warehouses, Inc.

Moffatt, Thomas, Barrett & Blanton Chartered by Donald J. Farley, Boise, and Fraser, Trebilcock, Davis & Foster, P.C. by Joel E. Dowley, Lansing, for the State of Idaho.

Before V. J. BRENNAN, P. J., and ALLEN and MEGARGLE, ^* JJ.

ALLEN, Judge.

May the State of Idaho be sued in a Michigan court for negligently inspecting kidney beans grown in Idaho? Two Michigan circuit courts have answered this question differently and appeals from those cases have been consolidated in this Court.

The two cases before this Court on interlocutory appeals arise out of a kidney bean seed growing arrangement in Idaho. Conida Warehouses, Inc., a Connecticut corporation with its principal place of business in Idaho, contracted with C & B Cattle Company, an Idaho partnership. Under that agreement, C & B grew kidney bean seeds for Conida. While growing, the beans were inspected by the State of Idaho. The bean seeds were shipped to Michigan by Conida and sold to Michigan farmers. Larry Mallory and Nestle Farms, plaintiffs in case No. 52235, are growers who purchased beans from Conida. Michigan Millers Mutual Insurance, plaintiff in case No. 52786, is the subrogee of Breckenridge-Wheeler Co-op, Inc., which purchased beans from Blount Agriculture Division of J. P. Burroughs & Son, Inc., which had purchased the beans from Conida. It was discovered that the beans grown by C & B, inspected by Idaho, and sold by Conida were infected with halo blight. Idaho was made a party in both cases after Conida filed a third-party action against it.

The record before us indicates that Idaho inspected the beans pursuant to a statutory policy aimed at improving Idaho's national bean business. In addition to inspecting beans, the state had embarked on a small-scale national advertising campaign, which featured the fact that Idaho beans are inspected. There is no evidence in the record that the plaintiffs in this case were aware of the national advertising campaign or had any contact with the campaign at all.

In carefully thought out opinions, two Michigan circuit court judges disagreed over whether Idaho could be sued in Michigan. In case No. 52786, the Saginaw County Circuit Court found that there were insufficient contacts in Michigan and that Idaho had not purposefully availed itself of the privilege of doing business in Michigan. The court held that it had no long-arm jurisdiction over the State of Idaho. The court did not address the questions of sovereign immunity or comity, as they were unnecessary to the disposition of the case.

In case No. 52235, the Gratiot County Circuit Court found that Idaho had caused consequences to occur in Michigan and so was subject to long-arm jurisdiction under the statute, that there were sufficient minimum contacts with Michigan to meet the demands of the due process clause of the Fourteenth Amendment, and that there was no bar to the suit under the doctrines of comity or sovereign immunity.

Before any constitutional considerations are considered, it is necessary to determine whether Michigan has a statutory basis for exercising long-arm jurisdiction over the State of Idaho. Long-arm jurisdiction over nonresident tortfeasors is established in Michigan under four statutes. M.C.L. Sec. 600.705; M.S.A. Sec. 27A.705 permits a Michigan plaintiff to sue an individual or his agent when any of seven circumstances occur. Among those circumstances is "[t]he doing or causing an act to be done, or consequences to occur" in Michigan resulting in an action for tort. M.C.L. Sec. 600.705(2); M.S.A. Sec. 27A.705(2). Section 715 of the Revised Judicature Act permits suit against a corporation or its agent under most of the same circumstances, including subsection 2. Similarly, Sec. 725 permits long-arm jurisdiction over partnerships for any of the reasons set forth in Sec. 715, and Sec. 735 allows suit in the same circumstances against a partnership association or an unincorporated voluntary association, or an agent thereof, providing any of the same circumstances are involved.

None of these statutes expressly permits a Michigan court to exercise long-arm jurisdiction over another state. A court created by statute, such as the circuit court, has only such jurisdiction that is bestowed by statute. Sheldon v. Sill, 49 U.S. 441, 449, 12 L.Ed. 1147 (1850). Where there is an affirmative statutory description of jurisdiction that may be exercised, there is an implication that the court lacks jurisdiction in other cases. Luyk v. Hertel, 242 Mich. 445, 447, 219 N.W. 721 (1928).

If this Court is to find that Michigan courts can exercise long-arm jurisdiction over the State of Idaho, we must find that Idaho was acting as the agent of Conida when it undertook the task of inspecting beans. If we so find, then Idaho may be haled into court, under M.C.L. Sec. 600.715; M.S.A. Sec. 27A.715, unless some other considerations prevent it.

An agent, in the broadest sense of the word, is one who acts for or represents another by his authority. Saums v. Parfet, 270 Mich. 165, 170, 258 N.W. 235 (1935). Whether an agency exists is determined by the relations of the parties. Id. The test of whether an agency has been created is whether there is a right to control the actions of the agent. Kircos v. Lola Cars Limited, 97 Mich.App. 379, 387, 296 N.W.2d 32 (1980), Birou v. Thompson-Brown Co., 67 Mich.App. 502, 507, 241 N.W.2d 265 (1976).

In Kircos, supra, this Court examined the relationship between an individual and a corporation for purposes of determining whether there was long-arm jurisdiction and found that, where there was no control of the methods or of the result of the work, no agency existed. Applying the same analysis to the case at bar, we find that no agency relationship exists between Idaho bean growers and the State of Idaho when Idaho undertakes the task of inspecting beans for export to other states.

The Idaho legislature has undertaken the promotion of Idaho beans by establishing the Idaho Bean Commission, which has powers to advertise beans nationally, to encourage research and development of better beans, and to tax bean growers and distributors to fund these tasks. Idaho Code, 22-2911 et seq. Inspection of beans, however, is relegated to a different state agency, the Idaho Department of Agriculture having the duty and power to inspect for plant diseases. Idaho Code 22-103(22). Further, the sale of infected seeds is prohibited Idaho Code...