Stevens v. White Motor Corp.

• Decision Date: 29 March 1977
• Docket Number: No. 75-301,75-301
• Citation: 252 N.W.2d 88,77 Wis.2d 64
• Parties: Delbert J. STEVENS, Plaintiff, v. WHITE MOTOR CORPORATION, a Foreign Corporation of Cleveland, Ohio, Defendant-Respondent, Cutler Metal Products Company, a Foreign Corporation of Camden, New Jersey, Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 88

252 N.W.2d 88

77 Wis.2d 64

Delbert J. STEVENS, Plaintiff, v. WHITE MOTOR CORPORATION, a Foreign Corporation of Cleveland Ohio, Defendant-Respondent Cutler Metal Products Company, a Foreign Corporation of Camden, New Jersey, Defendant-Appellant.

No. 75-301.

Supreme Court of Wisconsin.

Submitted on Briefs March 3, 1977.

Decided March 29, 1977.

Aberg, Bell, Blake & Metzner, S.C., Madison, for defendant-appellant.

Campbell, Brennan, Steil & Ryan, S.C., Janesville, for White Motor corp.

Axley, Brynelson, Herrick & Gehl, Madison, for Delbert J. Stevens.

ABRAHAMSON, Justice.

Cutler Metal Products Company appeals from an order holding it amenable to process of a Wisconsin court under this state's "long arm" statute, sec. 262.05, Stats.1971 (renumbered to sec. 801.05, Stats., effective January 1, 1976). The dispositive issue is whether the record supports the trial court's finding that the facts requisite to jurisdiction under subsec. (4)(b) of the statute ¹ are present in this case.

I.

The facts may be summarized as follows: This is an action to recover damages for personal injuries sustained by the plaintiff, Delbert J. Stevens, on June 15, 1971. The complaint alleges that Stevens was injured at the Janesville, Wisconsin, terminal of the Schwerman Trucking Company, by whom Stevens was employed as a driver, when an aluminum air pressure tank installed on a Schwerman truck exploded as Stevens was entering the vehicle's cab. Amputation of Stevens' right leg was required as a result of the explosion. Defendant White Motor Company manufactured the truck involved in the accident and sold it to the Schwerman Trucking Company. Defendant Cutler Metal Products Company manufactured the air tank, which served as a reservoir for the air brake and air starting systems of the truck, and sold it to the White Motor Company. The complaint sets up against each defendant causes of action for negligence and for product liability.

As provided in sec. 262.16(2)(c), Stats.1971, defendant Cutler objected in its answer to the assertion of jurisdiction over it by the Wisconsin court. So much of the facts as are undisputed on this appeal show that Cutler is a New Jersey corporation having its only manufacturing facility and office in Camden, New Jersey. Personal service in this action was effected upon Cutler there. The manufacture of automotive parts for the trucking industry constitutes 80 to 85 percent of Cutler's business. It produces a variety of parts ranging in unit cost from 35cents to $5,000, but its major product line, making up approximately 70 percent of its automotive business, is fuel tanks. Air and hydraulic tanks account for about 15 percent of Cutler's automotive trade. It does not manufacture standard products, all parts being manufactured to specifications provided by its customers. Cutler is a component part manufacturer; its products are sold to other manufacturers who incorporate them into finished products, such as trucks, for sale to the ultimate user.

In 1971 Cutler employed approximately 220 persons and had sales of $4.7 million. There are apparently but three other firms competitive with Cutler in the production of fuel and air tanks for trucks. White Motor Company is Cutler's third largest customer in dollar volume, with sales of $780,000 in 1970 and $576,000 in 1971, most of which represented sales of fuel tanks. Cutler has been selling truck air tanks to White since sometime in the 1950's, and sold White 476 air starting tanks of the particular type here involved between May of 1967 and May of 1970. With respect to the expected end use of Cutler's products, Mr. H. H. Cutler, president of the company, gave the following testimony at his deposition:

"Q. . . . you would not be surprised to find your products on trucks in Florida, overseas, or wherever, would you?

"A. No. I would expect that wherever they sold their truck and could deliver. I would not be surprised, no.

". . . I

"A. (I)f you are asking me where they go I don't know. I have to assume that if its trucks, they are traveling, naturally, from state to state. That's, I think, a basic the use of a truck."

Cutler ships its products to customers via common carrier. No agent or employee of Cutler has ever been in Wisconsin carrying on business. As to its automotive products, Cutler has five or six customers located in seven states, Wisconsin not among them, and Canada. Howard G. Halvorsen, service manager of what prior to June, 1971 was the Milwaukee factory branch of White Motors, stated in his deposition that Cutler air tanks "might have been" shipped directly to Milwaukee. However, there is no evidence in the record that this did occur in fact, and H. H. Cutler testified that all of his company's products ordered by White Motor Company were shipped to White's Cleveland plant.

On this state of facts the trial court concluded by memorandum decision of April 30, 1975, that it had jurisdiction over Cutler Metal Products Company pursuant to sec. 262.05(4)(b), Stats.1971 (supra note 1). Inasmuch as no decision of this court construing subsec. (4)(b) was available at that time, the trial court relied upon McPhee v. Simonds Saw & Steel Co., 294 F.Supp. 779, 782 (W.D.Wis.1969) in which the Federal District Court for the Western District of Wisconsin construed the statute to require that, at the time of the injury alleged, more than one item processed, serviced or manufactured by the defendant was used or consumed within Wisconsin in the ordinary course of trade. As we read the trial court's decision, it adopted the interpretation given the statute in McPhee and found that the requirement of two or more products was met. An order overruling Cutler's jurisdictional objection was entered on May 14, 1975, and the instant appeal followed.

II.

At the outset it may be noted that Cutler has not claimed either in the trial court or on appeal that subjecting it to the jurisdiction of this state would work a denial of due process of law. Cutler virtually concedes that there are present in this case

". . . such contacts of the (defendant) with the state of the forum as make it reasonable, in the context of our federal system of government, to require the (defendant) to defend the particular suit which is brought there." International Shoe Co. v. Washington, 326 U. S. 310, 317, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).

Defendant Cutler sells the bulk of its products to truck manufacturers, and does so with the admitted expectation that trucks incorporating those products will be sold and used throughout the United States, including the State of Wisconsin. The injury that is the subject of this action arose directly from a Cutler product, allegedly defective, which made its way here in the ordinary course of trade. Under the circumstances Cutler's concession on the due process issue is well advised. See Buckeye Boiler Co. v. Superior Court of Los Angeles County, 71 Cal.2d 893, 80 Cal.Rptr. 113, 458 P.2d 57 (1969); Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961); Annot., Products Liability: In Personam Jurisdiction over Nonresident Manufacturer or Seller Under "Long-Arm" Statutes, 19 A.L.R.3d 13 (1968). In any event, where jurisdictional facts sufficient under sec. 262.05, Stats., are shown, as we conclude below is the case here, due process requirements are prima facie satisfied as well. ² III.

As stated above, the trial court construed sec. 262.05(4)(b), Stats. 1971, to require that, at the time of the injury herein, more than one Cutler product have been used in this state in the ordinary course of trade. The trial court's ruling in this regard is not disputed by the parties, and is consistent with this court's decision in Hasley v. Black, Sivalls & Bryson, Inc., 70 Wis.2d 562, 579, 580, 235 N.W.2d 446 (1975), rendered while the instant appeal was pending. Accordingly, we move to a consideration of what in our view is the only issue presented by this case: whether there is support in the evidence for the finding that as of June, 1971, more than one product manufactured by Cutler was used in Wisconsin in the ordinary course of trade. ³ If there is credible evidence in the record upon which the trial court's finding could be based, it will stand unless against the great weight and clear preponderance of the evidence.

We have already set forth the general nature of Cutler's business. The record establishes that the bulk of Cutler Metal Products Company's multimillion dollar annual sales consist of component parts, principally tanks, sold to manufacturers of trucks. This was true in 1971 and for a considerable period before that year. In addition to White Motor Company, Cutler numbered among its customers the Ford Motor Company, Diamond Reo, Dodge and Mack. Cutler is apparently one of but four firms competing in its principal product lines, with sales to the trucking industry of approximately 3.75 million dollars in 1971. It is common knowledge that a large number of trucks have for many years traveled in and through this state, and that trucks manufactured by some, if not all, of Cutler's customers have been present in Wisconsin.

The record also contains the deposition of Howard G. Halvorsen, Service Manager of White Wisconsin Trucks, Inc., a dealership, which prior to June 15, 1971 (coincidentally the date of the accident herein) had been the Milwaukee factory branch of defendant White Motor Company. Halvorsen had been Service Manager of the Milwaukee factory branch before it became independent. He testified as follows:

"Q. You have seen Cutler air tanks before, have you not?

"A. Yes, sir.

". . ., §

"Q. For years White Motor has purchased Cutler Metal Products starting tanks, have they not?

"A. Yes, sir.

"Q. To your knowledge before June 15, 1971, did the factory branch in Milwaukee ever purchase any air starting tanks from Cutler Metal Products directly?

"A. No, they did not. They might have been...