Olmstead v. American Granby Co., 4672

• Decision Date: 13 May 1977
• Docket Number: No. 4672,4672
• Citation: 565 P.2d 108
• Parties: Roger Noel OLMSTEAD, Appellant, (Plaintiff below), v. AMERICAN GRANBY COMPANY, a Delaware Corporation, et al., Appellees, (Some of defendants below).
• Court: Wyoming Supreme Court

Page 108

565 P.2d 108

Roger Noel OLMSTEAD, Appellant, (Plaintiff below), v. AMERICAN GRANBY COMPANY, a Delaware Corporation, et al., Appellees, (Some of defendants below).

No. 4672.

Supreme Court of Wyoming.

May 13, 1977.

Lee Overfelt and Charles A. Bradley, Billings, Mont., and H. S. Harnsberger, Jr., Riverton, for appellant.

R. R. Bostwick, of Murane, Bostwick, McDaniel, Scott, Greenlee & Owens, Casper, for appellee-American Granby Co.

Michael S. Messenger and Louis L. Walrath, Thermopolis, for appellee-Billings Pipe and Pump Supply Co.

Richard M. Davis, Jr., of Burgess & Davis, Sheridan, for appellee-State Stove and Mfg. Co., Inc.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

ROSE, Justice.

The appellant, Roger Noel Olmstead, brought this action, alleging negligence and breach of warranty, against the appellees, American Granby Company, Billings Pipe and Pump Supply Company, State Stove and Manufacturing Company, Inc., and six other defendants, seeking to recover damages for personal injuries sustained when an air pressure tank exploded while he was adjusting it near Powell, Wyoming.

The district court dismissed the complaint against each of the appellees, finding that it did not have jurisdiction over these parties under the Wyoming long-arm statute, § 5- The appellant contends that service was had upon all three appellees under the Wyoming long-arm statute, supra, while the appellees argue that no such service has been effected.

                4.2, W.S.1957, 1975 Cum.Supp.  1  The appellant filed a notice of appeal from these dismissals, but the appeal was dismissed by this court because of the failure to comply with the requirements of Rule 54(b), W.R.C.P. Olmstead v. Cattle, Inc., Wyo., 541 P.2d 49.  Subsequently, the appellant moved for and the district court entered a final judgment, dismissing the appellees from the suit, consistent with the requirements of Rule 54(b), W.R.C.P.  The appellant again filed a notice of appeal from this judgment, and the matter is now properly before this court
                

The trial court's order dismissing the complaints against the appellees will be reversed.

The following business relationships of the three corporate appellees to Wyoming is significant to a discussion of the question presented herein.

American Granby Company:

This company is a Delaware corporation engaged in the design, manufacture and marketing of air pressure tanks and other plumbing equipment. It supplied the air tank in question in this litigation to the Billings Pipe and Pump Supply Company. American Granby, an affiliate of State Stove, has no office or facility for its products in Wyoming and has not designated an agent for service of process in this state. It pursues its business activities through the utilization of eight wholesalers located in Casper, Cheyenne, Powell and Sheridan, Wyoming, and revenues earned in this state do not exceed $5,000.00. ²

Billings Pipe and Pump Supply Company:

Billings Pipe is a Montana corporation, having its principal place of business in Montana. It is a wholesaler-retailer of tanks, pumps, pipes and other plumbing equipment. Billings Pipe is not qualified to do business in Wyoming and does not maintain an agent, solicit business or advertise here. It does fill unsolicited orders from this state and, in fact, filled the order for the tank in question by trans-shipment through an independent carrier. In 1973, Billings Pipe had 30 Wyoming customers, nine of which were retail firms, generating 70 orders and $8,423.80 in revenue. In 1974, it had 29 customers, nine of which were retail firms, generating 77 orders and $13,366.48 in revenue.

State Stove and Manufacturing Company, Inc.:

State Stove is a Tennessee corporation and, at all times relevant here, was engaged in the design, manufacture and installation of water heaters, pump tanks and other plumbing equipment and, in fact, manufactured the tank in question. State Stove, through its affiliate American Granby, shipped, or through its agents caused to be shipped, the questioned tank involved in

                this case to appellee Billings Pipe and Supply, which company forwarded the item to retailer A. L. Scott & Sons of Powell.  This last mentioned company sold the tank to the ultimate consumer, upon whose property it was located when the appellant was injured.  State Stove has no offices, employees or agents in Wyoming and does not solicit or advertise here.  It offers no installation services to customers and is generally unaware of the ultimate destination of its products.  Its products have in the past been sent through independent parties to customers in Wyoming, generating less than 1/100 of 1% of its total revenue.  3  State Stove has received orders from N. A. Nelson Construction Company of Sheridan, Wyoming, which it fills by shipment to a Colorado firm which then ships the product to N. A. Nelson Construction Company
                

THE BACKGROUND

The problem of whether or not a court has jurisdiction in such circumstances as these is always presented in two parts. First, it must be decided whether or not the state law was intended to include the corporate service and activity. If that question is resolved affirmatively, it must next be determined whether the state law, as applied to the facts of the case, offends the due process clause of the Federal and State constitutions. Ford Motor Company v. Arguello, Wyo., 382 P.2d 886, citing Lone Star Motor Import, Inc. v. Citroen Cars Corp., 5 Cir., 288 F.2d 69, 72.

We have previously considered the question of the sufficiency of the activities of a foreign corporation which will subject it to the jurisdiction of Wyoming courts. Ford Motor Company v. Arguello, supra; and Cozzens v. Piper Aircraft Corp., Wyo., 514 P.2d 1375. See also Federal court cases, Pullen v. Hughes, 10 Cir., 481 F.2d 602; Prehoda v. Edward Hines Lumber Co., D.C.Wyo., 399 F.Supp. 643; Leff v. Berger, D.C.Wyo., 383 F.Supp. 441; and Whitaker v. Denver Post, Inc., 401 F.Supp. 60 (D.Wyo.1975), reversed in part Anselmi v. Denver Post, Inc., 10 Cir., 552 F.2d 316 (opinion handed down March 7, 1977). ⁴

While these decisions have not answered all questions pertaining to the powers and scope of the Wyoming long-arm statute and § 17-36.104, W.S.1957, C.1965, 1975 Cum.Supp., and its predecessor § 17-44, W.S.1957, reference to them, nonetheless, provides valuable guidelines for the consideration of the issue here presented.

In holding that Ford was doing business ("does business", § 17-44, W.S. 1957), we decided in Ford v. Arguello, supra, that the activities in which Ford was engaged in Wyoming through its dealership sales and service were sufficient to grant jurisdiction to the courts of this state in a products liability type of action. In so holding, we embraced the doctrine of minimum contact which we recognized must be weighed and balanced against the safeguard of due process of law. We said, quoting from International Shoe Company v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 158, 159, 160, 90 L.Ed. 95:

" '. . . But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice. " (Citations).' "

In Ford v. Arguello, supra, at 895, we concluded that the foundation case law contained in International Shoe Company v. State of Washington, supra, McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; and Hanson v Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, reh. den. 358 U.S. 858, 79 S.Ct. 10, 3 L.Ed.2d 92, gave rise to the general rule:

". . . (S)o long as the activities of a foreign corporation are sufficiently qualitative in nature and extent reasonably to show 'minimal contacts' with the state and state law on the subject is justly construed and applied to reach those activities for jurisdictional purposes under 'traditional notions of fair play and substantial justice,' all demands of due process are satisfied."

In Cozzens v. Piper Aircraft, supra, at 1378, we went on to emphasize, citing Hanson v. Denckla, supra, that

" ' * * * The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. * * * ' "

We noted that Hanson, supra, cautioned that International Shoe Company, supra, does not serve to eliminate all restrictions on personal jurisdiction of state courts, observing the

". . . ever pervasive shadow of due process beyond which we cannot go." ⁵

Even where due process requirements are shown to be satisfied, Wyoming's statutory law must also be measured against the activities of the companies in question in reaching a decision as to whether or not jurisdiction is conferred upon the state courts. In Ford Motor Company v. Arguello,supra at 895-896, we construed § 17-44, W.S.1957, now superseded by § 17-36.104, W.S.1957, C.1965, 1975 Cum.Supp. ⁶, and found it gave the Wyoming court jurisdiction of the Ford Motor Company in a personal injury action where plaintiff alleged that a defective product caused the accident. In coming to our conclusion, we observed:

". . . It seems apparent also that to accomplish its purpose the legislature purposely prescribed a broad standard in order that the statute might receive a reasonable interpretation in keeping with advancements in the law relating thereto and...