Riordan v. WJ Bremer, Inc., Civ. A. No. 478-88 to 478-90.

• Decision Date: 07 March 1979
• Docket Number: Civ. A. No. 478-88 to 478-90.
• Citation: 466 F. Supp. 411
• Parties: John Edward RIORDAN, Individually, and as Administrator of the Estate of Charlotte Gilchrist Riordan, Deceased, Plaintiff, v. W. J. BREMER, INC., Marion Mike, the Home Insurance Company, the Home Indemnity Company, et al., Defendants and Third-Party Plaintiffs, v. HAMMET COMPANY, INC., Third Party Defendant. Joann Renee RIORDAN, a minor, by her next friend and guardian, John Edward Riordan, Plaintiff, v. W. J. BREMER, INC., Marion Mike, the Home Insurance Company, the Home Indemnity Company, et al., Defendants and Third-Party Plaintiffs, v. HAMMET COMPANY, INC., Third Party Defendant. Ann E. GUSMANO, Plaintiff, v. W. J. BREMER, INC., Marion Mike, the Home Insurance Company, the Home Indemnity Company, et al., Defendants and Third-Party Plaintiffs, v. HAMMET COMPANY, INC., Third Party Defendant.
• Court: U.S. District Court — Southern District of Georgia

466 F. Supp. 411

John Edward RIORDAN, Individually, and as Administrator of the Estate of Charlotte Gilchrist Riordan, Deceased, Plaintiff, v. W. J. BREMER, INC., Marion Mike, the Home Insurance Company, the Home Indemnity Company, et al., Defendants and Third-Party Plaintiffs, v. HAMMET COMPANY, INC., Third Party Defendant.

Joann Renee RIORDAN, a minor, by her next friend and guardian, John Edward Riordan, Plaintiff, v. W. J. BREMER, INC., Marion Mike, the Home Insurance Company, the Home Indemnity Company, et al., Defendants and Third-Party Plaintiffs, v. HAMMET COMPANY, INC., Third Party Defendant.

Ann E. GUSMANO, Plaintiff, v. W. J. BREMER, INC., Marion Mike, the Home Insurance Company, the Home Indemnity Company, et al., Defendants and Third-Party Plaintiffs, v. HAMMET COMPANY, INC., Third Party Defendant.

Civ. A. Nos. 478-88 to 478-90.

United States District Court, S. D. Georgia, Savannah Division.

March 7, 1979.

Joseph B. Bergen, Savannah, Ga., for plaintiff.

A. Martin Kent, Falligant, Kent & Toporek, Savannah, Ga., for defendant, W. J. Bremer, Inc.

Stanley M. Karsman, Karsman, Brooks & Doremus, Savannah, Ga., for third-party defendant, Hammet Co., Inc.

LAWRENCE, District Judge.

I.

These three diversity actions were filed in this Court by residents of New York in May, 1978, arising from an automobile collision which occurred in South Carolina in June, 1976.¹ The defendants are W. J. Bremer, Inc., a Georgia corporation, and Marion Mike who was driving its tractor-trailer at the time of the collision which occurred on June 3, 1976.²

Defendants impleaded Hammet Company, Inc., a Florida corporation, as a third-party defendant. Hammet moves to dismiss such action for lack of personal jurisdiction over it in Georgia. The jurisdictional issue is the same in each law suit and represents the only legal question now before this Court. For the sake of convenience, the three cases are treated together.

The complaint alleges negligence by Bremer and its driver in the operation of its tractor-trailer in losing control thereof immediately south of Hardeeville, South Carolina at the point where U.S. Highway 17 now intersects with Interstate 95. As a result, the Bremer vehicle crossed Highway 17 into the path of the south-bound station wagon which allegedly had come to a stop. Negligence is also claimed in driving at an excessive speed under the highway construction conditions existing at that time and place.

II.

Bremer's third-party complaint seeks judgment against Hammet Company for all sums that may be adjudged against it in the litigation. It is alleged by the defendants that Hammet was engaged as contractor in the road construction being carried on at the time and place of the collision; that Hammet's employees directed the Bremer vehicle through the construction area; that the highway at that point was negligently designed and constituted a hazard; that traffic control devices were not provided as required by the South Carolina Manual on Uniform Traffic Control Devices for Streets and Highways, 1972; and that such negligence caused the Bremer truck to jackknife and cross the road into the path of the station wagon driven by Riordan.

Hammet has moved to dismiss the third-party action on the ground of lack of personal and subject matter jurisdiction over it in Georgia.

III.

Discussion of that question necessitates a more detailed factual setting. Hammet's motion to dismiss the third-party action against it is supported by an affidavit stating that there has been no corporate activity by the third-party defendant in Georgia. Hammet's contention is summarized in the motion of the third-party defendant to dismiss as follows:

"Defendant is not subject to the jurisdiction of this Court in that it was not doing business in the State of Georgia at the time of the incident in question and has not done business in Georgia subsequent thereto and does not presently do business in Georgia, said third party defendant has not solicited and does not solicit business within the State of Georgia, has not engaged and does not engage in any other persistent course of conduct and has not derived and does not derive substantial goods used or consumed or services rendered, in the State of Georgia."

The argument by Hammet is directed at the claim that personal jurisdiction can be obtained under the Georgia "Long-Arm" statute. Ga.Code Ann. § 24-113.1. However, this is neither here nor there since counsel for the third-party plaintiff does not rely on that statute. They contend that the "third-party defendant is a resident of Georgia for jurisdictional purposes and is subject to the process and jurisdiction" of this Court.³ What Bremer argues is that Hammet registered with the Secretary of State to transact business in Georgia which subjects it to suit even though the cause of action arose outside this State.

No foreign corporation shall have the right to transact business in Georgia without a certificate of authority to do so from the Secretary of State — "except that when another statute of this State requires foreign corporations of a particular class to qualify thereunder to transact business in this State the requirements of such other statute shall govern." Ga.Code Ann. § 22-1401(a). In order for a foreign corporation to qualify to transact business in Georgia, it must make an application to the Secretary of State setting forth certain information which include filing a copy of the articles of incorporation and amendments; amount of issued stock; and capital expressed in dollars; and the designation of a proposed registered agent. § 22-1405(a)(5). The Georgia Act of 1968 conforms to the Model Corporation Act.

IV.

In 1961 the General Assembly enacted a statute dealing with nonresident contractors. See Ga.Code Ann. § 92-401 et seq.⁴ The Act requires registration by the foreign contractor for contracts to be performed in Georgia. §§ 92-403, 407. The purpose of such legislation is thus expressed in the Act (§ 92-402):

"To the end that the State of Georgia and the political subdivisions thereof may receive all reports pertaining to and taxes due thereon in every instance, including contributions due under the Employment Security Law, contractors, who are nonresidents of this State, desiring to engage in, prosecute, follow or carry on the business of contracting as defined in this Chapter shall register with the State Revenue Commissioner for each contract where the total contract price or compensation to be received amounts to more than $10,000."

The Act requires the registration of contracts of foreign contractors before the making or performance thereof and the furnishing of a bond which shall be conditioned upon payment of all taxes (including contributions under the Employment Security Law) due the State and its political subdivisions. Ga.Code Ann. §§ 92-401 et seq. Apparently such a bond was furnished by Hammet. The nonresident contractor shall appoint the Secretary of the State of Georgia as the agent for service of all lawful process against it in proceedings for taxes accruing on account of the performance of such contract. Such agency designation shall be of the same legal force and validity as if served upon the contractor personally within the State. Ga.Code Ann. §§ 92-403, 404.

In respect to the qualification of Hammet Company, Inc., to do business in Georgia, counsel for the third-party defendants have filed a certified copy of the documents on file in the office of the Secretary of State pertaining to the Florida corporation. It appears that in 1964 Hammet Company, Inc. filed with the Secretary of State a resolution appointing Frank W. Swift of Atlanta as designated agent for service in Georgia. (Incidentally, Mr. Swift was the agent served with the third-party process in the instant case.)

The information furnished to the Secretary of State included the charter and amendments of Hammet Company, Inc.; the initial capital; the names and addresses of the directors, etc. Such report appears on a form captioned and headed "NONRESIDENT CONTRACTOR'S CONSENT TO SERVICE OF PROCESS."

Two basic legal issues arise out of the record and statutes before this Court in regard to jurisdiction over the third-party action against Hammet. They are:

1. Whether Georgia's foreign corporation statute and the appointment of an agent for service of process required thereunder confers personal jurisdiction over nonresident corporations in all suits in torts or contract despite the total lack of any connection with Georgia except the fact that two defendants in the main case are Georgia residents.

2. If so, does the qualification of a foreign contractor under the Georgia Nonresident Contractors Act of 1961 and the designation of an agent for service who is not the Secretary of State (as called for by that statute) have the effect of creating general jurisdiction over transitory actions in the Georgia courts independent of any nexus with this State? Or does registration by such a Nonresident Contractor merely for the purpose of compliance with the Act restrict the appointment of an agent for service to the function of service of process in suits to recover taxes due by such foreign contractor to this State or its subdivisions?

V.

Under the Erie doctrine, Georgia law controls the legal questions presented by the statutes discussed above. As so often occurs in diversity cases, it proves an illusion. Dearth and famine characterize the adjudications in this State in respect to the two points of law posed above. The decisions are frequently eroded by contrary authority or adumbrated by distinctions drawn by our appellate courts. There is nothing a federal court can do except play the guessing game if it decides the question of Georgia law involved in the challenge by Hammet of the jurisdiction of its courts in the third-party action against it.

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The Qualification of Foreign Corporations to Transact Business in Georgia...