Peterson v. U-Haul Co.

• Decision Date: 25 April 1969
• Docket Number: No. 19338.,19338.
• Citation: 409 F.2d 1174
• Parties: Frederick N. PETERSON, Administrator of the Estate of Charles Steven Peterson, Deceased, Appellant, v. U-HAUL CO., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

409 F.2d 1174 (1969)

Frederick N. PETERSON, Administrator of the Estate of Charles Steven Peterson, Deceased, Appellant, v. U-HAUL CO., Appellee.

No. 19338.

United States Court of Appeals Eighth Circuit.

April 25, 1969.

Lyman L. Larsen, of Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., for appellant.

Theodore J. Stouffer, of Cassem, Tierney, Adams & Henatsch, Omaha, Neb., for appellee, John B. Henley, Omaha, Neb., on the brief.

Before GIBSON, LAY and HEANEY, Circuit Judges.

GIBSON, Circuit Judge.

Frederick N. Peterson, administrator of the estate of Charles Steven Peterson and plaintiff below, appeals from decisions of the United States District Court for the District of Nebraska sustaining motions of the defendant, U-Haul Co. (a North Carolina corporation), to dismiss for not being amenable to suit in Nebraska under either Nebraska's Non-Resident Motor Vehicle Statute or Nebraska's Business Corporation Act. We affirm the decisions of the District Court.

On June 7, 1965, Charles Steven Peterson, a young lad of 11 years, was walking north on U. S. Highways 81 and 30 across the Loop River Bridge south of Columbus in Platte County Nebraska. He was walking close to the east side of the bridge and was carrying a fishing pole. Gary Frederick Neuhalfen was also proceeding north on the highway in a 1953 Dodge automobile, pulling a cargo trailer which he had leased from a U-Haul dealer in Long Beach, California. Neuhalfen's automobile overtook the boy on the bridge and as the trailer passed by it struck the boy and catapulted him some 20 feet through the air into the bridge structure. The boy suffered massive skull and brain damage from which he died on June 15, 1965.

The plaintiff, as administrator, brought a diversity action in the United States District Court for wrongful death against Gary Frederick Neuhalfen, the driver of the automobile, and U-Haul Co. (U-Haul), a North Carolina corporation, as owner of the trailer. A South Carolina license on the trailer had been issued to defendant U-Haul. Plaintiff alleged specific acts of negligence against the driver, Neuhalfen, and also against U-Haul, which allegations included defective manufacture and improper maintenance of the trailer.

Plaintiff first sought to establish jurisdiction in Nebraska under the state's Non-Resident Motor Vehicle Statute, and then after an adverse ruling quashing service, maintained that defendant U-Haul was doing business in Nebraska, thus making it amenable to suit in Nebraska. The Honorable Richard E. Robinson, Chief Judge, held: (1) the Nebraska Non-Resident Motor Vehicle Statute was not applicable as defendant U-Haul's participation in the series of events that placed the accused trailer in Nebraska did not constitute the use or operation of a motor vehicle in Nebraska by U-Haul; and (2) "* * * the mere presence of property legally owned by U-Haul Co. in the state is not sufficient to meet the minimal requirement for `doing business' in Nebraska."

I. SERVICE UNDER NEBRASKA'S NON-RESIDENT MOTOR VEHICLE STATUTE

The District Court in its opinion said it is "* * * doubtful whether a trailer is a `motor vehicle' * * *" under Nebraska's Non-Resident Motor Vehicle Statute, citing Hayes Freight Lines v. Cheatham, 277 P.2d 664, 48 A.L.R.2d 1278 (Okl.1954), but purposely did not reach that issue. Plaintiff contends a cargo trailer is a motor vehicle, while defendant U-Haul contends otherwise.¹ We likewise refrain from passing on that issue as the holding that defendant U-Haul was not using or operating a vehicle on the Nebraska highways is dispositive on the applicability of the Non-Resident Motor Vehicle Statute.

Plaintiff first views Neuhalfen as the agent for U-Haul in using the trailer on the highways of Nebraska, thus subjecting U-Haul to the jurisdiction of Nebraska. Plaintiff also contends that even if Neuhalfen is not considered the agent of U-Haul, U-Haul was engaged in the "use" of the trailer.²

In a diversity case neither this Court nor the District Court make any declarations of law. The federal courts undertake to apply state law where authoritative decisions are available. Where there are no governing state decisions, then the federal court must rule the issues as it is believed the highest state court would rule. Admittedly, this is a hazardous and unsatisfactory method of deciding litigation. Federal court decisions in diversity cases have no precedential value as state law and only determine the issues between the parties. Regardless of what it thinks the law ought to be the federal court must make an objective effort to rule the issues according to state law.

The Nebraska Non-Resident Motor Vehicle Statute³ is to be strictly construed. The Supreme Court of Nebraska in Rose v. Gisi, 139 Neb. 593, 298 N.W. 333, 335 (1941) held: "It is well settled in this state that the nonresident motorists' law is to be strictly construed and held to apply only to those persons specifically named in the statute." See, Covert v. Hastings Mfg. Co., 44 F.Supp. 773, 776 (D.C.Neb.1942).

Plaintiff contends that both the defendant U-Haul and Neuhalfen, as its agent, were using and operating the trailer on Nebraska highways. Plaintiff considers Neuhalfen the agent of defendant U-Haul in two respects. First, Neuhalfen, pursuant to his agreement with a U-Haul dealer in California, was to deliver the trailer to a dealer in South Dakota, making Neuhalfen an agent for delivery; and second, since under Nebraska law Neuhalfen's negligence is imputed to defendant U-Haul, Neuhalfen is thereby a statutory agent of U-Haul.

The first contention that Neuhalfen was an agent for delivery does not comport with common law agency concepts. Neuhalfen leased the trailer for his own purpose — primarily to haul that which he desired to South Dakota. The California U-Haul dealer's interest in the transaction was rental proceeds from the lease agreement, not the transporting of the trailer from California to South Dakota. In Boulay v. Pontikes, 93 F.Supp. 826 (W.D.Mo.1950), plaintiff was involved in an accident with the lessees of an auto owned by an out-of-state leasing company and sought to have the company served under Missouri's Non-Resident Motorist Statute. Service would be proper under the statute if the lessee was an "agent" of the lessor. The Court held at 828 of 93 F.Supp.:

"We do not believe that authorities are necessary to conclude that the term `agent\' as used in said statutes non-resident motorist statutes must be interpreted other than according to the legal meaning which the law ordinarily attaches to it. In the sense in which that term is therein used, it is apparent that it contemplates a relationship that has all the legal consequences of respondeat superior considered from a tort liability stand-point. That is the only legal and sensible construction that can be made of such term so as to make a non-resident owner of an automobile liable for an injury occasioned by the negligent use of his car within the ambit of said statutes.

* * * * * *

"A `lessee\' is not an `agent\' of the owner of a motor vehicle within the purview of said statute."

Accord, Gately v. U-Haul Co., 350 Mass. 483, 215 N.E.2d 743, 744 (1966).

Plaintiff's second contention that Neuhalfen was U-Haul's agent by statute does not appear warranted. R.R.S.Neb. 1943 (Reissue 1968) 39-7,135⁴ imposes joint liability on the owner and the lessee of any leased truck or trailer. Plaintiff reasons that the statute makes Neuhalfen the agent of U-Haul by imputing his negligence to U-Haul. Plaintiff then equates the term "agent" in the Non-Resident Motor Vehicle Statute with the joint statutory liability expressed in Chapter 39-7,135 and urges that "as a matter of law and public policy a principal-agent relationship" should be considered as established.

Plaintiff cites no cases directly in point for his contention, but seeks to draw an analogy to the family purpose doctrine. Ewing v. Thompson, 233 N.C. 564, 65 S.E.2d 17 (N.C.1951); Norwood v. Parthemos, 230 S.C. 207, 95 S.E.2d 168 (S.C.1956); and Morrison v. District Court, 143 Colo. 514, 355 P.2d 660 (Colo.1960), utilize the family purpose doctrine to attach liability on nonresident automobile owners served under nonresident motorist statutes. The rationale of these cases is that a member of a family or his nominee driving a family automobile is the agent of the owner, making the owner vicariously liable for the agent's negligence. This rule applies in Nebraska, Piechota v. Rapp, 148 Neb. 442, 27 N.W.2d 682, 685 (Neb.1947).

Even assuming arguendo the applicability of R.R.S.Neb.1943 (Reissue 1968) 39-7,135, a point not passed on by the District Court, we do not believe the statute establishes an agency relationship between lessor and lessee and thus between Neuhalfen and U-Haul. Plaintiff's analogy to the family purpose doctrine is not persuasive. That doctrine is not based on the common law rules of agency as generally understood and applied, but is rather a legal fiction utilized as an instrument of public policy in imposing vicarious liability on those whom the courts think should bear the responsibility for negligence committed by a member of the family. See, 2 Harper and James, The Law of Torts § 26.15, pp. 1420-1421 (1956): Prosser, Torts § 72, p. 497 (3d ed. 1964).

While R.R.S.Neb.1943 (Reissue 1968) 39-7,135 may serve to impute the negligence of a lessee to the lessor of a trailer in Nebraska, the statute does not purport to base its provision for vicarious liability on conventional concepts of agency, or respondeat superior. To say that the Legislature intended those parties made liable under Chapter 39-7,135 to be included as agents under the Non-Resident Motor Vehicle Statute is to do violence to legislative intent. The Legislature is capable of a more explicit expression in this area.

In Downing v. Schwenck, 138 Neb. 395, 293 N.W. 278 (Neb.1940), the Supreme

Court of Nebraska held the Non-Resident Motor Vehicle ...