Richardson v. VOLKSWAGENWERK, AG

• Decision Date: 14 April 1982
• Docket Number: No. 77-0702-CV-W-1-S-4.,77-0702-CV-W-1-S-4.
• Parties: April E. RICHARDSON, et al., Plaintiffs, v. VOLKSWAGENWERK, A.G., et al., Defendants and Third Party Plaintiffs, v. David R. STEPHENSON, Jr., et al., Third Party Defendants.
• Court: U.S. District Court — Western District of Missouri

552 F. Supp. 73

April E. RICHARDSON, et al., Plaintiffs, v. VOLKSWAGENWERK, A.G., et al., Defendants and Third Party Plaintiffs, v. David R. STEPHENSON, Jr., et al., Third Party Defendants.

No. 77-0702-CV-W-1-S-4.

United States District Court, W.D. Missouri, S.D.

April 14, 1982.

COPYRIGHT MATERIAL OMITTED

Ronald J. Stites, Kansas City, Mo., for plaintiffs.

John M. Kilroy, Shughart, Thomson & Kilroy, Kansas City, Mo., for defendants and third party plaintiffs.

MEMORANDUM OPINION AND ORDER

RUSSELL G. CLARK, Chief Judge.

Presently pending before this Court are the joint and separate motions of defendants Volkswagenwerk Aktiengesellschaft (VWAG) and Volkswagen of America, Inc. (VWOA) for judgment notwithstanding the verdict or, alternatively, for a new trial. Plaintiffs Terry Richardson and Carolyn Vienage, guardian of Terry's former spouse-April Richardson, brought this tort action seeking damages for injuries which Terry and April Richardson suffered during a two-car collision. Plaintiffs also brought a wrongful death action pursuant to Mo. Stat.Ann. § 537.080 (Vernon's 1953) for the fatal injuries suffered by the Richardsons' two-year old son, Colin, during the same accident. The defendant VWAG manufactures Volkswagen automobiles, and the defendant VWOA imports and distributes them. The defendants David Stephenson, Jr. and Linda Berkovich are the occupants of the other vehicle involved in the collision.

The tragic accident giving rise to this lawsuit occurred during the late evening of September 25, 1975 on State Highway 13 in Polk County, Missouri. This two-lane, concrete highway runs north and south. The rain was heavy that evening resulting in a slick highway and poor visibility. The defendants Stephenson and Berkovich's automobile, a Ford Mustang, was southbound at approximately 45-50 m.p.h. when the rear of the vehicle swerved sideways onto the muddy shoulder of the southbound lane. The Mustang then went into an uncontrolled, counterclockwise slide crossing the center line of the highway and entering the northbound lane. The right rear quarter panel of the Mustang collided essentially "head-on" with the left front of the plaintiffs' Volkswagen Type 18 "Thing" which, prior to the accident, had been traveling in the northbound lane at approximately 45-50 m.p.h. The force of the impact threw the Mustang approximately 30 feet east of the northbound lane where it landed on the embankment and erupted in flames. The Richardsons' Volkswagen remained on the highway. Since jurisdiction is based on diversity of citizenship, 28 U.S.C. § 1332, Missouri law is controlling. Erie R.R. v. Tompkins, 304 U.S. 64, 79, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938).

Although all of the occupants in both vehicles were injured, the injuries most relevant to the defendants' motions were those sustained by April and Colin Richardson. April Richardson sustained fractures of the ankle, leg, pelvis and nose and suffered a severe head injury resulting in brain damage and paraplegia. She was subsequently adjudicated incompetent by the Probate Court of Greene County, Missouri, and she presently resides in a nursing home. Colin Richardson sustained a fatal blow to his head.

Following the commencement of this suit the plaintiffs' claims against the defendants Stephenson and Berkovich were settled for $100,000. Plaintiffs proceeded against the remaining defendants on a strict liability in tort theory charging that the seats, dash and assist grip installed in the Richardson vehicle were defectively designed, unreasonably dangerous and failed to give the plaintiffs proper protection against the collision described above. See generally, Polk v. Ford Motor Co., 529 F.2d 259 (8th Cir. banc 1976); Keener v. Dayton Electric Mfg. Co., 445 S.W.2d 362 (Mo.1969); Restatement (Second) of Torts § 402A (1965).

The trial commenced on November 16, 1981 and concluded on December 16, 1981 at which time the jury, upon completion of its deliberations, returned verdicts in favor of the plaintiffs and against defendants VWAG and VWOA in the following amounts: $750,000 on April Richardson's claim for personal injuries, $50,000 on Terry and April Richardsons' claim for the wrongful death of Colin Richardson, and $150,000 on Terry Richardson's claim for the loss of April Richardson's services. Pursuant to Rules 50 and 59, the defendants now request this Court to set aside those verdicts. Although the jury also returned a verdict in favor of the defendants and against Terry Richardson on his claim for personal injuries, that finding will not be disturbed or discussed because neither party has challenged the verdict.

VWAG — Insufficient Service of Process

Defendant VWAG has contended through the course of this lawsuit that this Court did not acquire personal jurisdiction over it by valid service of process under either Missouri or federal law. This Court agrees. Upon the filing of their complaint, plaintiffs directed service upon VWAG through the Missouri Secretary of State under Mo.Stat.Ann. § 351.633 (Vernon's 1966), which authorizes such service upon a foreign corporation committing a tort in Missouri. See Rule 4(e). Plaintiffs instructed the Secretary to obtain process over "Volkswagenwerk, A.G., Wolfsburg, Germany" by service upon "Volkswagen of America, Inc., Mr. G. Storbeck, 818 Sylvan Avenue, Englewood Cliffs, New Jersey" as VWAG's "Designated Agent for Service." The Secretary's affidavit reveals that a copy of plaintiffs' complaint was forwarded by registered mail, return receipt requested, on October 5, 1977 to VWOA as designated agent to receive service for the foreign corporation VWAG.

The above service of process on VWAG was insufficient under Missouri law. Section 351.633, under which jurisdiction is asserted against VWAG, prescribes the manner of service and notification to a defendant foreign corporation as follows:

2. In the event that any process, notice, or demand is served on the secretary of state, he shall immediately cause a copy thereof to be forwarded by registered mail, return receipt requested, addressed to the secretary of such corporation at its principal office as the same appears in the records of the secretary of state, or if there is no such address on file, then to the corporation at its office as shown in the official registry of the state of its incorporation and such an address shall be provided by the plaintiff or his attorney.

The Missouri courts have uniformly held that a court does not obtain the power to adjudicate absent literal compliance with all statutory provisions governing process. State ex rel. Northwest Ark. Produce v. Gaertner, 573 S.W.2d 391, 396 (Mo.App. 1978); Ponder v. Aamco Automatic Transmission, Inc., 536 S.W.2d 888, 890 (Mo.App. 1976); State ex rel. Craig v. Grimm, 542 S.W.2d 335, 337 (Mo.App.1976). For example, in Sipes v. American Honda Motor Co., Inc., 608 S.W.2d 125 (Mo.App.1980), the plaintiff requested the Secretary of State to forward summons under § 351.633 to "Cheng Shin Rubber Industrial Company Ltd. of Taiwan." Reversing a trial court judgment against the defendant, the Missouri Court of Appeals found jurisdiction over the defendant lacking and stated:

The purported service in this case did not comply with the requirements of Section 351.633-2. Contrary to the requirement that the plaintiff or his attorney provide to the secretary of state the address of the defendant corporation "at its office as shown in the official registry of the state of its incorporation," plaintiffs here gave no home office address for the defendant whatsoever. This failure to comply with the statutory requirement is fatal, even if in fact defendant did receive actual notice of the pendency of this suit....

608 S.W.2d at 127. This Court is bound by Missouri law, and since process was not served on VWAG as clearly mandated by Mo.Stat.Ann. § 351.633(2) (Vernon's 1966) and the applicable Missouri case law, plaintiffs purported service of process under that statute is also fatally defective.

As to federal law supporting service of process, plaintiffs rely on dicta contained in Bollard v. Volkswagenwerke, 313 F.Supp. 126 (W.D.Mo.1970), which states that service for the purpose of a common law tort action in Missouri can be obtained upon a foreign defendant's domestic agent designated pursuant to the National Traffic and Motor Vehicle Safety Act of 1966 (Act), 15 U.S.C. § 1399(e). The foregoing federal statute provides:

It shall be the duty of every manufacturer offering a motor vehicle or item of motor vehicle equipment for importation into the United States to designate in writing an agent upon whom service of all administrative and judicial processes, notices, orders, decisions and requirements may be made for and on behalf of said manufacturer, and to file such designation with the Secretary of Transportation .... Service ... may be made upon said manufacturer by service upon such designated agent for service ... and in default of such designation of such agent, service of process, notice, order requirement or decision in any proceeding before the Secretary or in any judicial proceeding for enforcement of this subchapter or any standards prescribed pursuant to this subchapter may be made by posting such process, notice, order, requirement or decision in the Office of the Secretary of Transportation.

Contrary to plaintiffs' argument, three reasons lead to the conclusion that VWAG's designation of VWOA as an agent under 15 U.S.C. § 1399(e) is limited to service of documents by, of and from the United States Secretary of Transportation. First, the express purpose of the Act is to allow the government to establish and enforce motor vehicle safety standards. 15 U.S.C. §§ 1381, 1392. The Secretary of Transportation can prohibit the importation of substandard vehicles or assess civil penalties for standard violations. 15 U.S.C. §§ 1397, 1398. Subpart (a) of section 1399, Title 15 U.S.C., grants United States...