Miller Brewing Co. v. Acme Process Equip. Co.

• Decision Date: 20 October 1977
• Docket Number: No. 75-C-589,75-C-592,75-C-588 and 75-C-591.,75-C-589
• Citation: 441 F. Supp. 520
• Parties: MILLER BREWING COMPANY, a Wisconsin Corporation, and Blount Brothers Corporation, a Foreign Corporation, Plaintiffs, v. ACME PROCESS EQUIPMENT CO., a Foreign Corporation, and Safeco Insurance Company of America, a Foreign Corporation, Defendants (two cases). MILLER BREWING COMPANY, a Wisconsin Corporation, and Gilbane Building Company, a Foreign Corporation, Plaintiffs, v. ACME PROCESS EQUIPMENT CO., a Foreign Corporation, and Safeco Insurance Company of America, a Foreign Corporation, Defendants (two cases).
• Court: U.S. District Court — Eastern District of Wisconsin

441 F. Supp. 520

MILLER BREWING COMPANY, a Wisconsin Corporation, and Blount Brothers Corporation, a Foreign Corporation, Plaintiffs, v. ACME PROCESS EQUIPMENT CO., a Foreign Corporation, and Safeco Insurance Company of America, a Foreign Corporation, Defendants (two cases).

MILLER BREWING COMPANY, a Wisconsin Corporation, and Gilbane Building Company, a Foreign Corporation, Plaintiffs, v. ACME PROCESS EQUIPMENT CO., a Foreign Corporation, and Safeco Insurance Company of America, a Foreign Corporation, Defendants (two cases).

Nos. 75-C-589, 75-C-592, 75-C-588 and 75-C-591.

United States District Court, E. D. Wisconsin.

October 20, 1977.

Quarles & Brady by L. C. Hammond and Ross R. Kinney, Milwaukee, Wis., for plaintiffs.

Kluwin, Dunphy, Hankin & McNulty by Bernard Hankin, Milwaukee, Wis., for Safeco.

Frisch, Dudek & Slattery by Thomas J. Arenz, Milwaukee, Wis., for Acme.

DECISION and ORDER

INTRODUCTION

MYRON L. GORDON, District Judge.

The defendant Acme Process Equipment Company has filed a motion to dismiss this action for lack of personal jurisdiction, for lack of venue, and for failure to state a claim on which relief can be granted. Acme has also moved to dismiss the cross-claim filed by the defendant Safeco Insurance Company for lack of personal jurisdiction.

Acme has withdrawn its motion with respect to venue, and the parties have not filed submissions on Acme's contention that the complaint fails to state a claim on which relief can be granted. Accordingly, I will not address these bases for Acme's motion. In this decision, I will resolve the claim that this court lacks personal jurisdiction over Acme. Because I believe that the court may exercise personal jurisdiction over Acme, the motion to dismiss on that ground will be denied.

These are actions for declaratory relief relating to the alleged breach of three contracts involving the manufacture and installation of certain brewery equipment. It appears from the records before me that the plaintiff, a Wisconsin corporation with its principal offices in Milwaukee, is engaged in the business of brewing and selling beer. The defendant Acme is a Pennsylvania corporation engaged in the business of manufacturing and installing large-scale equipment. The plaintiffs Gilbane and Blount are both corporations engaged in the business of construction general contracting with their principal offices in Rhode Island and Alabama, respectively. The defendant Safeco is a bonding corporation with principal offices in Washington.

During 1974, Miller and Acme entered into three contracts for the manufacture and installation of brewery equipment. Two of these contracts are the subject of the Miller-Gilbane consolidated actions, cases 75-C-588 and 75-C-591. In the first of those two contracts, Acme agreed to manufacture and install a brewing line in a Miller brewery in Fulton, New York, at an initial contract price of $1,278,000. In the second contract, Acme agreed to manufacture and install twenty fermenting tanks, initially at a cost of $1,670,000, in the New York brewery. Miller later exercised the option contained in the second contract to have twenty more tanks made and installed, at an original additional cost of $1,670,000.

Gilbane was the construction general contractor for the two New York contracts. During 1974, Miller assigned those contracts to Gilbane.

The Miller-Blount consolidated actions, cases 75-C-589 and 75-C-592, relate to a third contract in which Acme agreed to manufacture a brewing line for Miller for the latter's Fort Worth, Texas, brewery at an original cost of $1,397,460. Blount was the construction general contractor for this contract, and in 1974 Miller assigned the contract to Blount.

Safeco entered into a bonding contract with Acme as to the three contracts. Safeco has filed a cross-claim in both actions, seeking indemnity from Acme for any losses and expenses Safeco incurs in these actions.

Miller's complaints seek to have this court determine, inter alia, whether it violated the contracts, whether Acme violated the contracts, whether Safeco is liable for damages sustained by Miller, Blount, and Gilbane in relation to these contracts, and, if Acme violated the contracts, whether Safeco must undertake their performance.

MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION

Acme and Miller have submitted extensive affidavits and memoranda on the issue of personal jurisdiction. In addition, in resolving the motions, I have considered other pertinent evidentiary materials previously filed in these cases.

The controversy here is whether this court may exercise personal jurisdiction over Acme under two provisions of the Wisconsin long-arm statute, namely Wis.Stats. § 801.05(1)(d) formerly § 262.05(1)(d) and § 801.05(5)(d) formerly § 262.05(5)(d), and whether the assertion of such jurisdiction violates due process under the Constitution. On the basis of all of the submissions, I find that personal jurisdiction may be exercised pursuant to the provisions of Wis.Stat. § 801.05(1)(d) and that such exercise does not offend due process. Accordingly, it is not necessary for me to decide whether personal jurisdiction may be asserted over Acme pursuant to Wis.Stat. § 801.05(5)(d).

Wis.Stat. § 801.05(1)(d) provides as follows:

"Personal jurisdiction, grounds for generally. A court of this state having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to s. 801.11 under any of the following circumstances:

"(1) Local Presence or Status. In any action whether arising within or without this state, against a defendant who when the action is commenced:

.....

"(d) Is engaged in substantial and not isolated activities within this state, whether such activities are wholly interstate, intrastate, or otherwise."

Acme contends that it was not engaged in "substantial and not isolated activities within this state" when "the action was commenced" within the meaning of the statute. Acme also emphasizes that its physical plant and directors are all located in Pennsylvania and that the contracts involved in these actions were negotiated or performed in the states of Pennsylvania, Texas, New York, and Missouri (the location of a firm of consulting engineers involved in the contracts but not a party to this action), in addition to Wisconsin. Miller points to what it characterizes as Acme's extensive activities within this state before, during, and after the commencement of these actions, in support of its position that personal jurisdiction may be asserted under § 801.05(1)(d).

There are certain disputed factual issues raised by the affidavits submitted on this motion. For instance, Miller claims, and Acme denies, that Acme has had business dealings in Wisconsin unrelated to this action. In my opinion, it is unnecessary to resolve these disputed issues because there are other contacts between Acme and this state which are not disputed and which in and of themselves form a sufficient statutory and constitutional basis for the exercise of personal jurisdiction over Acme. These latter contacts are the extensive interstate dealings between Miller and Acme in the negotiation and performance of the contracts, the occasional Milwaukee meetings between representatives of Miller and Acme, and, of lesser importance, Acme's listings in certain publications which are distributed interstate.

The evidentiary materials disclose that Miller and Acme engaged in extensive interstate communication by telephone and correspondence in connection with the negotiation and performance of these contracts. The communications spanned a period between late 1973 and late 1975 and were initiated variously by representatives of either Miller or Acme. It appears that discussions about the negotiation and performance of all three contracts were in progress during this two-year period. Acme objects to my consideration of affidavits purporting to summarize the subject matter of these communications because the affiants were not parties to them. However, Acme does not contend that the telephone calls and other communications did not take place or that they did not relate to the contracts involved in these lawsuits. Therefore, I believe that these interstate communications may properly be considered in deciding whether Acme's contacts with this state were substantial within the meaning of the Wisconsin statute. See National Gas Appliance Corporation v. AB Electrolux, 270 F.2d 472 (7th Cir. 1959).

Acme officials also traveled to Milwaukee on several occasions during the two-year period to meet with Miller officials. Acme apparently does not deny that these meetings concerned the contracts involved in this action. Rather it claims that these meetings did not further the negotiation or performance of the contracts. According to Acme, its representatives agreed to travel to Milwaukee solely at the whim and behest of Miller, the dominant party to the contracts in terms of size and influence.

I cannot say on the present record that the...