Nerlund v. Schiavone, 37083
| Decision Date | 28 June 1957 |
| Docket Number | No. 37083,37083 |
| Citation | 250 Minn. 160,84 N.W.2d 61 |
| Parties | Katrina NERLUND et al., Plaintiffs, v. Carlo R. SCHIAVONE et al., Defendants. Carlo R. SCHIAVONE, Defendant and Third-Party-Plaintiff, Respondent, v. UNDERWRITERS AT LLOYD'S LONDON, et al., Third-Party-Defendants, Gilbert James McGowan and John Hunter McGowan, d/b/a McGowan Agency, Third-Party-Defendant, Appellant. |
| Court | Minnesota Supreme Court |
Syllabus by the Court.
1. Before a court of this state may entertain jurisdiction in personam over a foreign defendant, two requirements must be met. First, the court must have power to subject the defendant to the jurisdiction of the court, and, second, the defendant must effectively be brought before the court by proper notice.
2. The questions stated above involve due process under the Federal Constitution, so the applicable rules must be found in the decisions of the United States Supreme Court.
3. The more recent test in determining whether a foreign defendant is amenable to suit in a state is whether such defendant has such minimal contacts with the state where the suit is brought as to make it reasonable, in the context of our federal system of government, that it be required to defend the particular suit.
4. Where the dealings of a foreign defendant are casual, sporadic, or isolated transactions of a rather insignificant nature and do not evince an intent of doing a regular and systematic business here, it cannot be held that the minimal requirements of applicable rules have been met.
5. The evidence in this case fails to establish the necessary minimal contacts of McGowan Agency with this state to render it amenable to suit here.
6. To constitute a person the agent of another, there must be consent, express or implied, of the one to be bound as principal.
7. If authority of an agent is to be implied, such implication must be drawn from facts for which the principal is responsible.
8. The evidence in this case fails to establish that Fred H. Barney was the agent of McGowan Agency.
Meagher, Geer, Markham & Anderson, David W. Nord and O. C. Adamson, II, Minneapolis, for appellant.
Russell H. Larson, Minneapolis, for respondent.
This is an appeal from an order of the district court denying a motion of third-party defendant, McGowan Agency, for dismissal of the action against it for lack of jurisdiction.
The facts are not seriously in dispute. On August 22, 1955, a collision occurred between an automobile owned and driven by defendant Carlo R. Schiavone and one owned and driven by plaintiff Alfred J. Nerlund. Katrina Nerlund was a passenger in the latter car, and she and Alfred sued Schiavone and his employer, Roy Bazinet, to recover for injuries alleged to have been sustained in that collision. By leave of court, Schiavone joined Underwriters at Lloyd's London, British Commercial Insurance Company, Fred H. Barney, and McGowan Agency, claiming that in various ways not material here they had breached a duty to provide him with insurance.
McGowan Agency is a trade name used by a partnership composed of Gilbert James McGowan and John Hunter McGowan. These partners are licensed insurance agents and brokers in the State of Illinois but not in the State of Minnesota. They have no office in Minnesota, nor do they employ agents here or solicit business here. The agency has never qualified as an insurance agent in Minnesota and has not filed any consent to the appointment of the commissioner of insurance as its agent for the service of process.
Fred H. Barney, who does business as Barney & Barney at Minneapolis, is a licensed insurance agent in Minnesota. He is an agent for a number of companies and, as such, is authorized to commit some of them to insurance risks.
Roy Bazinet is the owner of a carnival which travels about the country and owns, in connection therewith, a number of motor vehicles. Prior to 1953, Barney had written fire insurance on homes and automobiles of Bazinet and his predecessor, Richard Raney. In the spring of 1953, Barney approached Bazinet about writing liability insurance on some of the vehicles used in his carnival business as well. 1 Bazinet told Barney to go ahead and see if he could place the insurance. Barney first tried to place the risk with United States Fidelity & Guaranty Insurance Company, which he represented, but they refused to write the insurance. He then contacted acquaintances in the insurance business, who likewise declined to accept the risk, but these acquaintances referred him to the McGowan Agency in Chicago. That is the first time Barney knew anything of McGowan Agency. After some negotiation, the insurance was written by McGowan Agency with Underwriters at Lloyd's London.
In 1954, at the suggestion of Bazinet, Barney solicited the insurance of Schiavone, who was employed by Bazinet and owned a motor vehicle used in connection with such employment. Schiavone stated in his affidavit that Barney held himself out as the authorized agent of McGowan Agency, but Barney denies this. In any event, the insurance was written by the McGowan Agency on Schiavone's vehicle. Insurance on the trucks of two other individuals connected with the carnival company of Bazinet was written, also at the request of Barney.
McGowan Agency had no direct dealings with Schiavone, Bazinet, or the two others they covered by insurance. Premiums on the policies were paid to Barney and forwarded by him to McGowan Agency. McGowan Agency wrote a total of 14 policies of insurance in the State of Minnesota, all of which were on vehicles of the four individuals mentioned above with the exception of one policy written at the request of a St. Paul broker.
Service of the third-party summons and complaint upon McGowan Agency was attempted in three different ways. On January 13, 1956, a copy of the court's order, summons, and complaint was left with the state insurance commissioner. On January 16, 1956, a copy thereof was left with Fred Barney 'as agent' for McGowan Agency. On March 9, 1956, copies of the same papers were served on the secretary of state and mailed to McGowan Agency at Chicago.
Two questions are presented for our determination: (1) Was McGowan Agency amenable to suit in the State of Minnesota? (2) Was jurisdiction acquired over McGowan Agency through any one of the three attempted services of process?
1. It is elementary that two requirements must be met before a court may entertain jurisdiction over a foreign defendant in personam. First, the court must have power to subject the defendant to the jurisdiction of the court, and, second, the defendant must effectively be brought before the court by proper notice. 2
2. Inasmuch as these questions involve due process under the Federal Constitution, the applicable rules must be found in the decisions of the United States Supreme Court. 3
3. A determination of when a foreign defendant is amenable to suit in this state involves a problem that is not always easy of solution. At least up to the present time, no hard-and-fast rule has been evolved which will fit all cases. Certain elementary rules must be observed, but, beyond that, each case must be determined on its own facts. 4 We have recently had occasion to consider this subject in Schilling v. Roux Distributing Co., Inc., 240 Minn. 71, 59 N.W.2d 907. 5 The more recent test, as announced by the United States Supreme Court, is whether a foreign defendant has such minimal contacts with the state where the suit is brought as to make it reasonable, in the context of our federal system of government, that it be required to defend the particular suit which is brought in this state. 6
4. While this test still leaves much to be desired, the facts of each case must be examined with the end in view of determining whether the company actually is engaged in business here to such an extent that it ought reasonably to be held to be subject to suit here. 7 Where its dealings in the state are casual, sporadic, or merely isolated transactions of a rather insignificant nature and do not evince an intent of doing a regular and systematic business here, it cannot be held that the minimal requirements of applicable rules have been met. 8
5. Here, McGowan Agency had no office in Minnesota; it employed no salesmen here...
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