Plant Food Co-op v. Wolfkill Feed & Fertilizer Corp., CO-O
| Citation | 633 F.2d 155 |
| Decision Date | 10 December 1980 |
| Docket Number | P,78-2482,CO-O,Nos. 78-2481,s. 78-2481 |
| Parties | 30 UCC Rep.Serv. 99 PLANT FOODlaintiff, v. WOLFKILL FEED & FERTILIZER CORPORATION, Defendant, Third Party Plaintiff- Appellee, v. A. R. SMITH & CO., INC., Third Party Defendant-Appellee, and Pillsbury of Canada Ltd., Third Party Defendant-Appellant. A. R. SMITH & CO., INC., Cross-Plaintiff-Appellee, v. PILLSBURY OF CANADA LTD., Cross-Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
Richard F. Cebull, John J. Cavan, Billings, Mont., argued for Pillsbury of Canada; Sandall & Cavan, Billings, Mont., on brief.
F. D. Moulton, Moulton, Bellingham, Longo & Mather, Billings, Mont., argued for Plant Food Co-op; Brent R. Cromley, Billings, Mont., on brief.
Appeal from the United States District Court for the District of Montana.
Before SKOPIL and FARRIS, Circuit Judges, and THOMPSON, * District Judge.
INTRODUCTION
This case involves the constitutional limits of the reach of Montana's long-arm jurisdiction. Appellant attacks the summary judgments entered against it as void for lack of personal jurisdiction. We find that appellant's purposeful contacts with Montana were sufficient to support the district court's exercise of personal jurisdiction. We affirm.
Plant Food Co-op (Plant Food) is a fertilizer dealer in Edgar, Montana. Plant Food ordered four rail car loads of ammonium nitrate fertilizer (called "34-0-0" in the industry) from Wolfkill Feed & Fertilizer Corp. (Wolfkill). Wolfkill is a Washington corporation.
Wolfkill ordered ordered the fertilizer from A. R. Smith and Co. (Smith), also a Washington corporation. Smith, in turn, purchased the fertilizer from Pillsbury of Canada Ltd. (Pillsbury). Pillsbury is located in Alberta, Canada. Pillsbury purchased the fertilizer from Love Feeds, Ltd. (Love), also located in Alberta.
The fertilizer was eventually shipped by means of a sight draft bill of lading. The bill of lading showed Pillsbury as shipper and Smith as consignee "c/o Food Co-op". The destination of the shipment was shown Some of the fertilizer was received by Plant Food and unloaded into bins already containing ammonium nitrate fertilizer. A few days later Plant Food discovered that it had received ammonium sulfate and urea instead of ammonium nitrate. The ammonium nitrate already in Plant Food's bins was ruined and the bins were damaged.
as Edgar, Montana. The contents of the cars was shown as "BULK 34-0-0 FERTILIZER."
Attempts by Plant Food and Wolfkill to resolve the problem were unsuccessful. Plant Food brought an action against Wolfkill in the district court for the district of Montana. Jurisdiction was based on diversity of citizenship.
Plant Food alleged a breach of the express warranty of description and the implied warranty of merchantability. It alleged loss by contamination of its ammonium nitrate and other products plus incidental expenses as damages.
Wolfkill answered and filed a third party complaint against Smith and Pillsbury. Wolfkill alleged that if the allegations of Plant Food's complaint were correct, it was because Smith or Pillsbury had caused the wrong fertilizer to be delivered.
Pillsbury moved to dismiss and submitted the affidavit of its employee in charge of the fertilizer transaction. The affidavit showed that Pillsbury did not manufacture the fertilizer in question. Pillsbury's dealings were only with Love and Smith. Smith gave Pillsbury the shipping instructions after the order had been placed. Love actually shipped the fertilizer, although Pillsbury was shown as shipper on the bill of lading. Pillsbury never had physical custody or control over the fertilizer.
The district court denied Pillsbury's motion to dismiss. Pillsbury then answered and filed a third party complaint against Love. Smith answered and cross-claimed against Pillsbury. Love does not appear again in this action.
Plant Food obtained separate summary judgments against Wolfkill on the issues of liability and damages. Plant Food sought and was awarded as damages only the wholesale cost of the contaminated fertilizer and the cost of testing and storing the misdescribed fertilizer and the other contaminated products. Wolfkill did not appeal.
The district court granted Smith's motion for summary judgment against Wolfkill on Wolfkill's third party complaint. The court also granted summary judgment in favor of Wolfkill against Pillsbury, but denied Wolfkill's motion for judgment against Smith and/or Love. The district court denied Pillsbury's motion for a new trial.
Smith's motion for summary judgment against Pillsbury on its cross-complaint was then granted. These appeals followed.
There are two judgments appealed here. One is Wolfkill's judgment against Pillsbury based on Wolfkill's third-party complaint. The claim was in the nature of indemnity and judgment was for the amount of Plant Food's judgment against Wolfkill. The other is Smith's judgment against Pillsbury on Smith's cross-claim. The judgment is for the amount Smith paid Pillsbury for the bad fertilizer (but not Smith's lost profit).
Pillsbury's attack on the district court's exercise of personal jurisdiction is its only basis of appeal from Smith's judgment. The appeal from Wolfkill's judgment is based on both lack of personal jurisdiction and lack of privity.
In determining whether the district court has personal jurisdiction, two questions must be asked: first, whether the applicable statute potentially confers jurisdiction; second, whether assertion of such jurisdiction comports with due process. H. Ray Baker, Inc. v. Associated Banking Corp., 592 F.2d 550 (9th Cir. 1979).
Montana Rule of Civil Procedure 4B provides as follows:
"B. (JURISDICTION OF PERSONS).
(1) Subject to Jurisdiction. All persons found within the State of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:
(a) the transaction of any business within this state;
(b) the commission of any act which results in accrual within this state of a tort action;
(c) the ownership, use or possession of any property, or of any interest therein, situated within this state;
(d) contracting to insure any person, property or risk located within this state at the time of contracting;
(e) entering into a contract for services to be rendered or for materials to be furnished in this state by such person; or
(f) acting as director, manager, trustee, or other officer of any corporation organized under the laws of, or having its principal place of business within, this state, or as executor or administrator of any estate within this state."
Pillsbury contends that the only arguable basis for jurisdiction under the statute on the facts of the case is subsection (b), the commission of an act resulting in the accrual of a tort action in Montana. It appears that the district court relied on this basis of personal jurisdiction. Pillsbury argues that the facts show only a contract action, and not a tort action, arising out of its acts. Pillsbury also argues that it did not transact business within Montana so as to fall within subsection (a) of rule 4B.
The tortious nature of the conduct complained of here is somewhat obscured by the contract language of warranty used to describe the nature of the supplier's breach. See W. Prosser, The Law of Torts 634-35 (4th ed. 1971); Restatement (Second) of Torts § 402B, comment d (1965).
The nature of Plant Food's damages, for which indemnity is sought, should make it clear that the underlying claim sounds in tort, at least as far as Wolfkill's action is concerned. Wolfkill sought indemnity for the property damage suffered by Plant Food.
Furthermore, Pillsbury does not address another potentially relevant subsection of rule 4B. Subsection (e) confers jurisdiction over any person as to any claim arising from the entering into a contract for services to be rendered or for materials to be furnished in the state by such person. Pillsbury contends that it entered into a contract for shipment of fertilizer to Smith in Washington. The bill of lading reveals, however, that Pillsbury contracted with Smith to deliver fertilizer to Plant Food in Montana. It is irrelevant that that portion of the agreement was entered into after Pillsbury initially accepted the order from Smith. We therefore conclude that Montana's long-arm statute potentially conferred personal jurisdiction over Pillsbury for both Wolfkill's and Smith's claims.
Principles of due process limit the scope of a court's in personam jurisdiction. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The test is whether the defendant has sufficient contacts with the forum to make it fair or just to require the defendant to appear and defend the action in the forum state, and to give the forum court power over the defendant. World-Wide Volkswagen, supra, 444 U.S. at 291-92, 100 S.Ct. at 564.
If a non-resident defendant's activities in the forum are not so pervasive as to subject it to general personal jurisdiction, the court must evaluate the nature and quality of defendant's contacts in relation to the cause of action. In this circuit three criteria are applied. First, the non-resident defendant must do some act or consummate some transaction within the forum or otherwise perform some act by which it purposefully avails itself of the privilege of conducting activities in the...
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