Sprow v. Hartford Ins. Co.

• Decision Date: 23 April 1979
• Docket Number: 76-1094,Nos. 76-1093,s. 76-1093
• Citation: 594 F.2d 412
• Parties: John J. SPROW, Plaintiff, v. HARTFORD INSURANCE COMPANY et al., Defendants-Third Party Plaintiffs-Appellants, v. Arnold L. BRESEMAN et al., Third Party Defendants-Appellees. Anna Mae Magash KELLER, Plaintiff, v. HARTFORD INSURANCE COMPANY et al., Defendants-Third Party Plaintiffs-Appellants, v. Arnold L. BRESEMAN et al., Third Party Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 412

594 F.2d 412

John J. SPROW, Plaintiff, v. HARTFORD INSURANCE COMPANY et al., Defendants-Third Party Plaintiffs-Appellants, v. Arnold L. BRESEMAN et al., Third Party Defendants-Appellees.

Anna Mae Magash KELLER, Plaintiff, v. HARTFORD INSURANCE COMPANY et al., Defendants-Third Party Plaintiffs-Appellants, v. Arnold L. BRESEMAN et al., Third Party Defendants-Appellees.

Nos. 76-1093, 76-1094.

United States Court of Appeals Fifth Circuit.

April 23, 1979.

Paul V. Cassisa, Metairie, La., for Hartford Ins. Co., etc.

John D. Lambert, Jr., New Orleans, La., for L. D. Gollott, et al.

A. J. McNamara, Metairie, La., for E. M. Gollott, et al.

A. Remy Fransen, Jr., New Orleans, La., C. Scott Carter, New Orleans, La., for St. Paul Companies, et al.

Gibson Tucker, Jr., New Orleans, La., for Anna M. M. Keller.

Jerald N. Andry, Gilbert V. Andry, III, New Orleans, La., for John J. Sprow.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before GEWIN, GEE and RUBIN, Circuit Judges.

GEWIN, Circuit Judge:

In these consolidated appeals appellants Hartford Insurance Company, L. D. and Helen Pickich Gollott, E. M. Gollott and Franklin Morgan challenge a summary judgment dismissing their third party and cross claims against Frazier Insurance Company, Arnold Breseman and the St. Paul Companies (St. Paul) for lack of In personam jurisdiction. We affirm in part, reverse in part and remand for further proceedings.

The matter before us arose from civil actions filed in district court by John Sprow and Anna Mae Keller against appellants. The suits had their genesis in a motor vehicle accident near Port Sulphur, Louisiana, where an automobile driven by Sprow and in which Keller was a passenger collided with a truck owned by E. M. Gollott and driven by Franklin Morgan. Both Sprow and Keller were injured.

The truck was being driven to New Orleans to obtain oysters for the mutual benefit of L. D. Gollott and his brother, E. M. Gollott, each of whom operated a seafood business in Biloxi, Mississippi. ¹ Sometime earlier the Gollott brothers had entered into an agreement to send the truck to Louisiana on a regular basis for the purpose of delivering oysters to their respective businesses. Under the agreement, E. M. Gollott was to furnish the truck and L. D. Gollott was to procure and maintain insurance on the vehicle. At the time of the agreement, L. D. Gollott had an insurance policy with appellant Hartford Insurance Company, but the policy did not cover the truck to be used in this venture. Before the accident, L. D. Gollott allegedly contacted appellant Breseman of Frazier Insurance Agency in Pascagoula, Mississippi, Hartford's representative, and instructed him to add the truck to his existing policy with Hartford. Breseman, Frazier and Hartford denied making this addition to the policy, or that such an addition could be made.

Sprow and Keller commenced their actions against the appellants on November 2, 1972. Thereafter appellees Frazier and Breseman were joined as third party and cross defendants by the appellants for their alleged negligence in failing to procure the coverage allegedly requested on E. M. Gollott's truck. Appellants also joined St. Paul as a third party or cross defendant because it was the errors and omissions insurer of Frazier. ² Both Frazier and Breseman were served with process in Pascagoula, Mississippi, and St. Paul was served through the Louisiana Secretary of State. Appellees moved to dismiss all claims on grounds that the federal district court, sitting in New Orleans, Louisiana, lacked personal jurisdiction over them as residents of Mississippi. After a hearing, Judge Comiskey denied the motion.

Judge Comiskey then resigned from the bench and the case was reassigned to Judge Boyle. After further discovery, Judge Boyle suggested that appellees resubmit the jurisdictional ground in a motion for summary judgment. Appellees filed the motion and the court granted it, dismissing Frazier, Breseman and St. Paul from the proceedings. In its opinion the court reasoned that appellees Frazier and Breseman did not have sufficient "minimum contacts" with the State of Louisiana for the district court to invoke the state's long-arm statute to obtain jurisdiction over them. ³

Appellants assert as an initial contention that the district court erred in finding a lack of minimum contacts. They argue that the requirements of both due process and the Louisiana Long-Arm Statute were satisfied by the fact that the Frazier agency, through its agent Breseman, frequently used the Hartford Regional Office in New Orleans to procure insurance for its clients.

The Louisiana Long-Arm Statute has been interpreted to extend to the fullest limits of due process in permitting the exercise of In personam jurisdiction over non-residents. Buckley v. New York Times Company, 338 F.2d 470, 472-73 (5th Cir. 1964). Thus, we are confronted in this case with synonymous state and federal principles. Due process, of course, requires that there exist a quantity of meaningful contacts between a non-resident party and the forum state making it reasonable and consonant with " 'traditional notions of fair play and substantial justice' " to subject the party to the jurisdiction of the forum. E. g., Kulko v. Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132, 141 (1978); International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Great Western United Corp. v. Kidwell, 577 F.2d 1256, 1266 (5th Cir. 1978).

Having reviewed Frazier's and Breseman's activities, we find ourselves in agreement with the district court's judgment that appellees did not have the necessary minimum contacts with Louisiana under the long-arm statute.

Frazier is located in Pascagoula, Mississippi. Breseman, a partner in the agency, also works as its agent and lives in Pascagoula. Frazier, through its agents, procures policies from various insurance companies for persons in that locale. One of those companies is Hartford which had a regional office in New Orleans. Frazier processes applications for Hartford policies through the New Orleans office. This procedure entails some degree of communication between Frazier and the New Orleans office. However, that communication represents the only real connection of Breseman and the agency with the state of Louisiana, and when considered in light of appellees' overall activities, is insufficient to support In personam jurisdiction.

Neither Frazier nor Breseman has offices or salesmen in Louisiana and the company does not supply services or attempt to sell policies in the state. There is no evidence that appellees derive economic benefits from Louisiana and neither pay taxes to the state. Frazier is licensed solely in Mississippi. Moreover, the Hartford insurance contract which underlies the third party and cross-claims against appellees, was issued in Mississippi and related to a truck registered in Mississippi and owned and used by Mississippi residents.

Given the paucity of Louisiana contacts, it would contravene due process to find appellees amenable to process under the state long-arm statute. We therefore affirm the district court's findings on this issue.

As a second contention, appellants argue that the court may exercise jurisdiction over Frazier and Breseman by virtue of Rule 4(f), Federal Rules of Civil Procedure. Rule 4(f) provides that third party and cross defendants may be served with process "at all places outside the state but within the United States that are not more than 100 miles from the place in which the action is commenced, or to which it is assigned or transferred for trial."

Both parties presented this issue to the court below, but Judge Boyle did not address it in his opinion. Appellants argued that the service on Frazier and Breseman was proper because the Frazier office is within the 100 mile bulge. To this end they offered an affidavit by appellant's counsel that a Louisiana National Guard official had informed him that the distance between Pascagoula Airport and New Orleans Lakefront Airport in air miles, measured "as the crow flies", is 85 miles. The appellees disputed these allegations concerning the applicability of Rule 4(f) and the distance from Frazier's office to the federal courthouse for the Eastern District of Louisiana. They claimed that sufficient minimum contacts with the forum state is a necessary prerequisite to valid service of process under Rule 4(f) and that they are beyond the 100 mile limit when measured properly by road miles. In dismissing Breseman and Frazier from the lawsuit, the court relied solely on the absence of sufficient Louisiana contacts.

This court is satisfied, however, that Rule 4(f) offers a distinct basis for the court's jurisdiction, if the place of service, Frazier's office, is located within the 100 mile bulge. We are unable to determine that distance because of the almost total dearth of factual evidence in the record on this point. ⁴

Appellees argue, as they did below, that Rule 4(f) is limited by the constitutional requirement that the recipient of process have minimum contacts with the forum state. This argument follows the decisions of some federal courts which hold that 4(f) relates only to the manner and scope of extraterritorial service of process, and not to amenability of the party served to the forum's jurisdiction. Coleman v. American Export Isbrandtsen Lines, Inc., 405 F.2d 250, 253 (2d Cir. 1968); Pillsbury Co. v. Delta Boat & Barge Rental, Inc., 72 F.R.D. 630, 632 (E.D.La.1976); Spearing v. Manhattan Oil Transportation Corp., 375 F.Supp. 764, 771 (S.D.N.Y.1974); Karlsen v. Hanff, 278 F.Supp. 864, 865 (S.D.N.Y.1967); See also Deloro Smelting & R. Co. v. Engelhard Minerals & C. Corp., 313 F.Supp. 470 (D.N.J.1970); McGonigle v. Penn-Central Trans. Co., 49 F.R.D. 58 (D.Md.1969). These cases state that Rule 4(f) may be invoked only if the jurisdictional standards...