Schmitz v. Hunter Machinery Co.
| Decision Date | 30 May 1979 |
| Docket Number | Nos. 76-671,76-672,76-673,s. 76-671 |
| Citation | 89 Wis.2d 388,279 N.W.2d 172 |
| Parties | Frank J. SCHMITZ and Frieda Schmitz, and Rudy Ewers and Doris Ewers, Plaintiffs-Respondents, v. HUNTER MACHINERY COMPANY, Defendant-Respondent, Mayco Crane Corp. and Reserve Insurance Company, Defendants-Respondents and Third-Party Plaintiffs, F. B. Kroll A/S, Hafnia-Haand I Haand Forsikring A/S, Third-Party Defendants-Appellants, Lawrence Wipperfurth, Third-Party Defendant. Lawrence J. WIPPERFURTH and Lavona M. Wipperfurth, Plaintiffs-Respondents, v. HUNTER MACHINERY CO., INC., and Mayco Crane Corp. and Tubular Structures Corp. of America d/b/a Mayco Mfg., Defendants-Respondents and Third-Party Plaintiffs, F. B. Kroll A/S, Hafnia-Haand I Haand Forsikring A/S, Third-Party Defendants-Appellants, Frank J. Schmitz, Third-Party Defendant. EMPLOYERS MUTUAL LIABILITY INS. CO. of Wisconsin and Vogel Brothers Building Co., Plaintiffs-Respondents, v. RESERVE INS. CO., a foreign corp., and Mayco Crane Corporation, Defendants-Respondents and Third-Party Plaintiffs, F. B. Kroll A/S, a foreign corporation, Third-Party Defendant-Appellant. |
| Court | Wisconsin Supreme Court |
The three cases identified in the title were consolidated for trial. The third-party defendants, F. B. Kroll A/S, and its insurer, Hafnia-Haand I Haand Forsikring A/S, are both foreign corporations, both organized and located in Denmark. These two foreign corporations objected to the Wisconsin court assuming personal jurisdiction over them. They appeal from an order denying their motion to dismiss for lack of jurisdiction.
Eugene O. Gehl (argued) and Axley, Brynelson, Herrick & Gehl, Madison, on briefs; John F. McClure and Arnstein, Gluck, Weitzenfeld & Minow, Chicago, Ill., of counsel, for defendants-appellants F. B. Kroll A/S and Hafnia-Haand I Haand Forsikring A/S.
Brian E. Butler (argued), Susan R. Steingass (argued) and Stafford, Rosenbaum, Rieser & Hansen, Madison, for Mayco Crane Corp., Tubular Structures Corp. of America and Reserve Ins. Co., and by John F. Jenswold and Jenswold, Studt, Hanson, Clark & Kaufmann, Madison, for Hunter Machinery Co.
Kent I. Carnell (argued) and Lawton & Cates, Madison, for Frank J. Schmitz, et al.
James J. Murphy, Gary R. Kuphall and Habush, Gillick, Habush, Davis & Murphy, Milwaukee, for Lawrence J. Wipperfurth, et al.
Marvin Resnick, S. C., Milwaukee, for Employers Mutual Liability Ins. Co., et al.
Two issues have been raised: (1) Are the jurisdictional facts, as they appear, sufficient to satisfy the Wisconsin long-arm statute; and (2) does the exercise of personal jurisdiction over the two foreign defendants comply with the requirements of due process.
All three actions arise from a single construction accident which occurred on April 11, 1974 during the building of an addition to St. Marys Hospital Medical Center in Madison, Wisconsin. The accident happened when the supporting mechanism of the tower of the large Mayco-Kroll K 90 climbing crane failed while the crane was in the process of being lowered. The tower of the crane dropped to the lowest level and the boom fell onto the roof of the building.
The crane in question was manufactured in Denmark by the third-party defendant Kroll, and sold in 1965 by Kroll f. o. b. Copenhagen, Denmark to Mayco Crane Corporation (Mayco), a California corporation. Mayco at that time was the sole representative in the United States and other adjacent areas. Mayco sold the crane to the defendant, Hunter Machinery Company, Inc., a heavy equipment dealer in Milwaukee. Hunter leased the crane with an option to purchase to Vogel Brothers Building Company. Vogel exercised its option to purchase and owned the crane at the time of the accident. Vogel was the general contractor for the St. Marys project and it was Vogel's employees who were injured in the accident.
The consolidated actions are variously grounded on negligence, breach of express and implied warranties and products liability. The actions are brought to recover damages for personal injuries and property loss.
The plaintiffs Frank Schmitz and Rudy Ewers, employees of Vogel, and their spouses brought an action against Hunter, Mayco and Reserve Insurance Company, Mayco's liability insurer, for injuries sustained by the two men who were working on or near the crane when the tower fell. The action alleged negligence and products liability and was commenced by filing a summons and complaint in the Circuit Court for Dane County on November 19, 1975. Employers Mutual Liability Insurance Company of Wisconsin (Employers), Vogel's worker's compensation carrier, was later joined as subrogated plaintiff by leave of the court. A total judgment of $775,000 was demanded.
The second suit arising out of the 1974 construction accident was begun on similar grounds against Mayco and Hunter in the Circuit Court for Milwaukee County by Lawrence Wipperfurth and his wife. Damages in the amount of $825,000 were demanded for injuries sustained by Wipperfurth, a Vogel employee who was inside the operator's cabin on the tower and operating the controls for raising the tower when it fell. The summons and complaint were filed on October 21, 1975. Employers Insurance of Wausau, Vogel's worker's compensation carrier for the plaintiff employee, was given notice of the institution of the action in accordance with sec. 102.29(1), Stats.
In the third action, Employers Mutual sued Reserve Insurance Company and Mayco to recover damages for loss of the crane and other equipment, $34,850 for the amount paid by Employers to Vogel under its policy of insurance and $83,883.53 for Vogel's property losses which were not covered by insurance. Summons and complaint were served on Mayco on September 12, 1975, and filed in the Circuit Court for Milwaukee County on January 20, 1976.
In all three actions Mayco sought to implead Kroll, the Danish manufacturer of the crane, and its liability insurer Hafnia-Haand, also a Danish corporation. Both overseas corporations were duly served with copies of the summons and third-party complaints and amended third-party complaints. The allegations against the manufacturer included breach of implied warranties and strict liability in tort for a product placed in the stream of commerce in a defective condition unreasonably dangerous to the user. The jurisdictional basis for the third-party complaints and amended third-party complaints was the Wisconsin long-arm statute, formerly sec. 262.05, Stats., now sec. 801.05. The third-party defendants in answers filed on May 21, 1976, denied liability and objected to the actions on jurisdictional grounds, namely, that neither Kroll nor Hafnia-Haand had the requisite contacts with the State of Wisconsin which would enable the Wisconsin court legitimately to exercise personal jurisdiction over them.
On March 1, 1976, the venue of the two actions commenced in Milwaukee County was changed to Dane County. 1 The three actions were consolidated for trial in an order entered on March 23, 1976 by WILLIAM C. SACHTJEN, Circuit Judge, on motion of defendant and third-party plaintiff Mayco.
A hearing on the jurisdictional issue was held on October 18, 1976. The court, relying on the pleadings and the testimony, rendered a decision in favor of the third-party plaintiffs. 2 The court concluded that it had personal jurisdiction over the foreign corporations, specifically deciding that both the requirements of sec. 262.05(4), Stats. (1973), and due process requirements had been satisfied. An order denying Kroll and Hafnia-Haand's motion to dismiss the three complaints for lack of personal jurisdiction was entered on February 7, 1977. In conformity with the decision, a subsequent order of the court dated February 16, 1977 gave the plaintiffs in the original actions leave to amend their summons and complaints to include Kroll and Hafnia-Haand as parties defendant.
Kroll and Hafnia-Haand appeal from the order of February 7, 1977.
This case involves the application of Wisconsin's long-arm statute to an overseas manufacturer in a products liability setting. It is the position of Mayco, defendant and third-party plaintiff, that the Wisconsin court has personal jurisdiction over Kroll, the Danish crane manufacturer, and Hafnia-Haand, Kroll's liability insurer, under secs. 262.05(4)(a) and (b) and (10)(b), Stats. (1973). The applicable language of this statute is as follows:
The burden in a jurisdictional hearing is on the plaintiff to establish that under the long-arm statute the Wisconsin courts have jurisdiction over the foreign corporation. 3 Nonetheless, as was noted in Stevens v. White Motor Corp., 77 Wis.2d 64, 74, 252 N.W.2d 88, 93 (1977), ...
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