Mid-Continent Freight Lines, Inc. v. Highway Trailer Industries, Inc.

• Decision Date: 01 October 1971
• Docket Number: Nos. 42454,42855,MID-CONTINENT,s. 42454
• Citation: 190 N.W.2d 670,291 Minn. 251
• Parties: FREIGHT LINES, INC., Respondent, v. HIGHWAY TRAILER INDUSTRIES, INC., defendant and third-party plaintiff, Appellant, v. HUTCHENS AND SON METAL PRODUCTS INC., third-party defendant, Respondent.
• Court: Minnesota Supreme Court

Page 670

190 N.W.2d 670

291 Minn. 251

MID-CONTINENT FREIGHT LINES, INC., Respondent, v. HIGHWAY TRAILER INDUSTRIES, INC., defendant and third-party plaintiff, Appellant, v. HUTCHENS AND SON METAL PRODUCTS INC., third-party defendant,

Respondent.

Nos. 42454, 42855.

Supreme Court of Minnesota.

Oct. 1, 1971.

Syllabus by the Court

Jurisdiction of an indemnity action by a nonresident defendant against a nonresident third-party defendant is not asserted where the interest of this state in providing a forum is minimal.

Richards, Montgomery, Cobb & Bassford, Melvin D. Heckt and Jon D. Jensvold, Minneapolis, for appellant.

Robins, Davis & Lyons, Minneapolis, for Mid-Continent Freight Lines, Inc.

Wurst, Bundlie, Carroll & Crouch and Norman Larsen, Minneapolis, for Hutchens and Son Metal Products, Inc.

Heard before KNUTSON, C.J., and NELSON, PETERSON, KELLY, and ROLLOFF, JJ.

OPINION

PETERSON, Justice.

This is an appeal from the district court's orders dismissing an indemnity action against a nonresident third-party defendant brought by a nonresident defendant subject to a products liability action in this state brought by a resident plaintiff.

Defendant and third-party plaintiff, Highway Trailer Industries, Inc. (hereafter Highway Industries), a Delaware corporation with its principal place of business in Edgerton, Wisconsin, manufactures and sells over-the-road trailers. Third-party defendant, Hutchens and Son Metal Products Inc., (hereafter Hutchens), a Missouri corporation with its principal place of business in Springfield, Missouri, manufactures and sells component parts for tractor-trailers, including a 'spring hanger' which Highway Industries purchased from it and incorporated into the assembly of a 1966 trailer thereafter sold to plaintiff, Mid-Continent Freight Lines, Inc. (hereinafter Mid-Continent), a Minnesota corporation engaged in the business of interstate trucking. This trailer was part of a tractor-trailer unit which Mid-Continent was operating as a common carrier between Kansas City and Dallas on December 18, 1966, and which collided with a bridge near North Pleasanton, Kansas, while being so operated.

Mid-Continent sued Highway Industries to recover its property damage in the amount of $18,522. This action was based on theories of negligence, strict liability, and breach of warranty, alleging that failure of the spring hanger caused the accident. Defendant Highway Industries by its answer denied liability, and in addition it commenced a third-party indemnity action against Hutchens, alleging failure of the spring hanger.

The status of the nonresident parties to this litigation, with respect to business contact with this state, is for the most part uncontroverted. Highway Industries was licensed to do business, and was doing business, in Minnesota at the time of the sale to plaintiff on March 15, 1966, and at the time of the accident on December 18, 1966, but on December 28, 1967, shortly before plaintiff commenced its action, Highway Industries 'affirmatively withdrew' and surrendered its authority to transact business in Minnesota. ¹

Hutchens has never been licensed to do business in Minnesota, but it has advertised its products in Minnesota and a number of Minnesota firms serve as Minnesota outlets for its products. ² Sales representatives or other persons purporting to act directly on behalf of Hutchens have called upon these firms and transacted business with them in Minnesota. From 1965 to the present, Hutchens has sold to Highway Industries various products which are incorporated into trailer units manufactured by Highway Industries at its Wisconsin plant, and Hutchens has known that these trailer units are advertised, sold, and used throughout the United States, including in Minnesota.

The relevant long-arm statutes are Minn.St. 303.13, the corporate long-arm statute, and § 543.19, which applies to individuals as well as corporate defendants. Section 303.13, subd. 1(3), provides in part:

'If a foreign corporation makes a contract with a resident of Minnesota to be performed in whole or in part by either party in Minnesota, or if such foreign corporation commits a tort in whole or in part in Minnesota against a resident of Minnesota, such acts shall be deemed to be doing business in Minnesota by the foreign corporation and shall be deemed equivalent to the appointment by the foreign corporation of the secretary of the state of Minnesota and his successors to be its true and lawful attorney upon whom may be served all lawful process in any actions or proceedings against the foreign corporation arising from or growing out of such contract or tort.'

Section 543.19, subd. 1, provides:

'As to a cause of action arising from any acts enumerated in this subdivision, a court of this state with jurisdiction of the subject matter may exercise personal jurisdiction over any foreign corporation or any non-resident individual, or his personal representative, in the same manner as if it were a domestic corporation or he were a resident of this state. This section applies if, in person or through an agent, the foreign corporation or non-resident individual:

'(a) Owns, uses, or possesses any real or personal property situated in this state, or

'(b) Transacts any business within the state, or

'(c) Commits any tort in Minnesota causing injury or property damage, or

'(d) Commits any tort outside of Minnesota causing injury or property damage within Minnesota, if, (1) at the time of the injury, solicitation or service activities were carried on within Minnesota by or on behalf of the defendant, or (2) products, materials or things processed, serviced or manufactured by the defendant were used or consumed within Minnesota in the ordinary course of trade.'

These statutes were enacted primarily for the protection of residents of this state, and the legislature, to that end, intended to extend the jurisdiction of this state's courts over foreign corporations and other nonresident defendants to the maximum limits consistent with due process safeguards. Hunt v. Nevada State Bank, 285 Minn. 77, 96, 172 N.W.2d 292, 304, certiorari denied, Burke v. Hunt, 397 U.S. 1010, 90 S.Ct. 1239, 25 L.Ed.2d 423.

Ehlers v. United States Heating & Cooling Mfg. Corp., 267 Minn. 56, 124 N.W.2d 824, exemplifies the broad reading we have given our long-arm statutes. There, plaintiffs, Minnesota residents, sued defendant, a Minnesota corporation, in a products liability action, for property damage resulting from a fire, claiming that it was caused by a defective boiler sold by defendant and installed on premises occupied by plaintiffs. The boiler was manufactured by a Delaware corporation having its principal place of business in Ohio, which sold it to a New York corporation with its principal place of business in Ohio, which sold it to a Chicago distributing company, which sold it to the Minnesota supplier. The Minnesota defendant in turn commenced a third-party indemnity action against the foreign...