Russell v. Balcom Chemicals, Inc.

• Decision Date: 05 January 1983
• Docket Number: No. 13520,13520
• Citation: 328 N.W.2d 476
• Parties: Richard RUSSELL, Plaintiff and Appellant, v. BALCOM CHEMICALS, INC., Selco Supply Co., and Ward Van Horn, Defendants and Appellees.
• Court: South Dakota Supreme Court

Page 476

328 N.W.2d 476

Richard RUSSELL, Plaintiff and Appellant, v. BALCOM CHEMICALS, INC., Selco Supply Co., and Ward Van Horn Defendants and Appellees.

No. 13520.

Supreme Court of South Dakota.

Argued Feb. 23, 1982.

Decided Jan. 5, 1983.

Roger Tellinghuisen and John J. Delaney of Amundson & Fuller, Lead, for plaintiff and appellant.

Acie W. Matthews of Willy, Pruitt, Matthews, Farrell, Frankman & Johnson, Sioux Falls, for defendant and appellee Balcom Chemicals, Inc.

Franklin J. Wallahan of Hanley & Wallahan, Rapid City, for defendant and appellee Selco Supply Co.; Debra D. Watson of Hanley & Wallahan, Rapid City, on brief.

Gene R. Bushnell of Costello, Porter, Hill, Nelson, Heisterkamp & Bushnell, Rapid City, for defendant and appellee Van Horn; Thomas Barnes of Costello, Porter, Hill, Nelson, Heisterkamp & Bushnell, Rapid City, on brief.

WOLLMAN, Justice.

Appellant Russell brought this action based on claims of negligence and strict liability against appellees Balcom and Selco for injuries sustained as a result of exposure to sheep tick dust manufactured by appellees. Appellant was a minor at the time of the injury on May 4, 1975, and attained his majority on September 7, 1977. Service of the summons and complaint was not made on any of the appellees until after August 1980. All appellees appeared and by answer raised the affirmative defense of the statute of limitations, moving for summary judgment on that basis. Russell appeals from the order granting summary judgment in favor of appellees Balcom and Selco. ¹ We remand.

Selco and Balcom are Colorado corporations that manufacture, formulate, and distribute ranching and agricultural products. Selco is a subsidiary of Balcom. Selco has never done business in South Dakota. Balcom claims that in 1970 it assumed a trade name, Growers Ag Service, and since that time has been doing business in Nebraska as Growers Ag Service. Balcom also claims that in 1972 it opened a warehouse in Huron, South Dakota, again electing to do business as Growers Ag Service, and since that time Growers Ag Service has been selling goods in South Dakota. Van Horn purchased the Selco brand sheep dust from a chemical company in Rapid City.

SDCL 15-2-22 ² provides that the time during which a plaintiff is an infant will not be a part of the time limited for the commencement of an action. SDCL 15-2-22 also provides that the period in which the action must be brought cannot be extended longer than one year after infancy ceases. Appellant contends that the requirement that the action be brought within one year after infancy ceases is not applicable since neither Selco nor Balcom was present in South Dakota and that therefore the statute of limitations was tolled by virtue of SDCL 15-2-20, which provides:

If when the cause of action shall accrue against any person he shall be out of the state, such action may be commenced within the terms herein respectively limited after the return of such person into the state; and if after such cause of action shall have accrued, such person shall depart from and reside out of the state, the time of his absence shall not be deemed or taken as any part of the time limited for the commencement of such action; provided that the provisions of this section shall not apply to an action for the foreclosure of any real estate mortgage, or to the foreclosure of any real estate mortgage by advertisement.

Balcom and Selco maintain, however, that they were amenable to service of process at all material times and that therefore the tolling provisions of SDCL 15-2-20 do not apply.

A foreign corporation is generally entitled to the benefit of a statute of limitations if it has so placed itself within the state as to make itself amenable to personal service of the process of its courts. The statute will run while the foreign corporation continues to be available for service of process. See generally 36 Am.Jur.2d Foreign Corporations § 73 (1968). In Busby v Shafer, 75 S.D. 428, 66 N.W.2d 910 (1954), this court held that a nonresident motorist is subject to substituted service of process if involved in an accident in this state, no matter how fleeting his presence here. We said, "[W]here provision is made by statute for substituted service of process ... the provision makes the defendant as amenable to process as if he resided within the state and has the effect of nullifying any statute suspending the period of limitations (citations omitted)." 75 S.D. at 430-31, 66 N.W.2d at 911. The rationale of Busby, although not totally controlling, applies in this case, provided that Balcom and Selco were amenable to process within the state.

Both Balcom and Selco maintain that since plaintiff's injuries occurred in South Dakota they were amenable to process at any time material herein under both SDCL 15-7-2 and SDCL 47-8-17. ³ SDCL 15-7-2 provides in part:

Any person is subject to the jurisdiction of the courts of this state as to any cause of action arising from the doing personally, through any employee, or through an agent, any of the following acts:

* * *

(2) The commission of any act which results in accrual within this state of a tort action[.]

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SDCL 47-8-17 provides:

If a foreign corporation makes a contract with a resident of South Dakota to be performed in whole or in part by either party in South Dakota, or if such foreign corporation commits a tort in whole or in part in South Dakota against a resident of South Dakota, such acts shall be deemed to be doing business in South Dakota by the foreign corporation and shall be deemed equivalent to the appointment by the foreign corporation of the secretary of state of the state of South Dakota and his successors to be its true and lawful attorney upon whom may be served all lawful process in any actions or proceedings against the foreign corporation arising from or growing out of such contract or tort. The making of the contract or the committing of the tort shall be deemed to be the agreement of the foreign corporation that any process against it which is so served upon the secretary of state shall be of the same legal force and effect as if served personally within the state of South Dakota.

Appellant contends that constitutional considerations render these statutes inapplicable to the present case.

In Marsh v. Tillie Lewis Foods, Inc., 254 F.Supp. 490 (D.S.D.1966), the federal district court for South Dakota determined the effect of the provisions of what is now SDCL 47-8-17. The court determined that notwithstanding the presence of the statute, in a case where only the injury occurs in South Dakota and all of the acts in the chain of events leading to the injury occur outside the state, the requisite minimal contacts are absent and the due process clause of the fourteenth amendment bars the state from asserting jurisdiction over the nonresident corporate defendant. Numerous jurisdictions have held contrary to this holding, see Annot., 24 A.L.R.3d 532 § 15 (1969), and we decline to follow the principle announced in the Marsh case.

The United States Supreme Court has promulgated standards for states attempting to exercise jurisdiction over nonresidents. ⁴ In International Shoe Co. v Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the Court held that states could exercise jurisdiction if the nonresidents had such "minimum contacts" with the state "that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " 326 U.S. at 316, 66 S.Ct. at 158, 90 L.Ed. at 102 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 283 (1940)). Due process requires "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." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283, 1298 (1958). Due process also requires that the defendant's conduct and connection with the forum state be such that he should reasonably anticipate being haled into court there. Kulko v. California Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978); Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977).

In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Supreme Court held that an Oklahoma state court could not exercise personal jurisdiction over a New York automobile retailer and distributor when an automobile sold by the New York defendant was involved in an accident while passing through Oklahoma. The Court observed that the defendant solicited no business in Oklahoma either through salespersons or through advertising reasonably calculated to reach the state. Unlike the case at hand, the product in World-Wide Volkswagen was neither purchased within the forum state nor was it purchased by a resident of the forum state.

Our consideration of the long-arm statutes and judicial principles, as well as our recognition of the trend to expand the states' powers to impose jurisdiction over nonresidents, leads us to conclude that both Balcom and Selco were amenable to process within the state. Amenability to process, however, is not the only factor determinative of whether the statute of limitations has been tolled.

In G.D. Searle & Co. v. Cohn, 455 U.S. 404, ----, 102 S.Ct. 1137, 1142, 71 L.Ed.2d 250, 257 (1982) ⁵, the Supreme Court commented:

[T]he unrepresented foreign corporation remains potentially difficult to locate. Long-arm jurisdiction does not alleviate this problem, since a ... plaintiff must find the unrepresented foreign corporation before it can be served.... [There is] a reasonable assumption that unrepresented foreign corporations, as a general rule, may not be so easy to find and serve.

We also recognize the possible difficulty in locating unrepresented foreign corporations. In Lipe v. Javelin Tire Co., Inc., 96...