Volvo of America Corp. v. Wells

• Decision Date: 27 May 1977
• Citation: 551 S.W.2d 826
• Parties: 21 UCC Rep.Serv. 988 VOLVO OF AMERICA CORPORATION, and Volvo Capitol, Inc., Appellants, v. J. K. WELLS, and Volkswagen of Huntington, Inc., Appellees.
• Court: Kentucky Court of Appeals

Page 826

551 S.W.2d 826

21 UCC Rep.Serv. 988

VOLVO OF AMERICA CORPORATION, and Volvo Capitol, Inc. Appellants, v. J. K. WELLS, and Volkswagen of Huntington, Inc., Appellees.

Court of Appeals of Kentucky.

May 27, 1977.

Gregory L. Monge, Vanantwerp, Hughes, Monge & Jones, Ashland, for appellants.

John V. Porter, Michael J. Schmitt, Wells, Porter & Schmitt, Paintsville, for J. K. Wells.

S. H. Johnson, Paintsville, for Volkswagen.

Before HOWARD, LESTER and PARK, JJ.

HOWARD, Judge.

This is a suit for revocation of acceptance and/or breach of warranty in regard to the purchase of a new Volvo automobile by the appellee, J. K. Wells. On January 18, 1975, the plaintiff purchased from the defendant, Volkswagen of Huntington, Incorporated, one 1974 Volvo automobile. The purchase was made at the dealer's place of business in Huntington, West Virginia, but the Volvo was delivered to the plaintiff-appellee in Paintsville, Kentucky, where the bill of sale was also delivered and the plaintiff-appellee delivered his trade-in which was a 1974 Oldsmobile Cutlass and his bill of sale.

The proof is uncontradicted that the plaintiff-appellee had considerable trouble with the vehicle which developed the habit of completely stalling on high speed highways without any warning to the plaintiff-appellee. This happened on several occasions and the testimony of the plaintiff-appellee and his wife are very graphic as to the danger and difficulty they encountered because of the failure of this vehicle to perform. The car was taken back to the dealer on several occasions and the testimony shows that there was a defective computer control and electronic and electrical ignition system which caused the motor to die or stall and it would take from one-half ( 1/2) hour to a couple of hours for the vehicle to cool off and start again. On the occasions that the vehicle was taken in the plaintiff-appellee was assured that the new parts would remedy the situation, but he continued to have trouble. Within a reasonable time, Wells returned the vehicle to the dealer and demanded a return of the purchase price.

The suit was brought and a trial by jury had resulted in a verdict for the plaintiff-appellee for the purchase price and a directed verdict in favor of the defendant-appellee, Volkswagen of Huntington, Incorporated, on its plea for indemnity. To the finding of the jury and court on all these matters the defendant-appellants hereby appeal complaining of these errors:

(1) That the Johnson Circuit Court did not have jurisdiction under the long arm statute of Kentucky of the defendants-appellants.

(2) That the Court should have ruled that the implied warranties were properly disclaimed.

(3) That the Court was in error in directing a verdict for the dealer on its plea of indemnity.

The Kentucky Revised Statutes Section 454.210 is the so called long arm statute in Kentucky. Subsection 5 reads as follows:

Causing injury in this Commonwealth to any person by breach of warranty expressly or impliedly made in the sale of goods outside this Commonwealth when the seller knew such person would use, consume, or be affected by the goods in this Commonwealth if he also regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this Commonwealth.

The defendants-appellants claim that this statute is not sufficiently broad to give the Johnson Circuit Court in personam jurisdiction or, if so, that same is not constitutional. We disagree with this contention since the evidence shows that these companies handle the manufacturing and distribution of Volvo automobiles in the United States of America. Although this particular automobile was bought from a dealer in Huntington, West Virginia, it is not unreasonable to require the Volvo companies to be responsible for their product after the product enters the main stream of commerce. It must be assumed that these defendants-appellants knew or should have known that the vehicles they shipped to this particular dealer in Huntington, West Virginia, would be likely to end up being owned and driven by citizens and residents of the state of Kentucky, the state of Ohio, as well as West Virginia, since Huntington is the commercial center of the tri-state area of these three (3) states. Furthermore, the record shows that Volvo advertises in the state of Kentucky. Also, Volvo states in its driver's manual that its dealers are authorized to service Volvos anywhere in the country, including dealerships in Kentucky. This is sufficient to qualify for in personam jurisdiction under the phrase in the statute . . . "if he also regularly does or solicits business . . . " and . . . "engages in any other persistent course of conduct". Although there was no direct evidence in the record, it must be assumed that Volvo derived substantial profits from the sale of Volvo automobiles in the state of Kentucky.

As to the constitutionality of this particular statute in regards to this case we feel that the trial court was correct on this issue. In the case of Eyerly Aircraft Company v. Killian, 414 F.2d 591 (1969) the Fifth Circuit upheld the Texas long arm statute in a suit where a child was injured at a carnival on a ride manufactured by Eyerly Aircraft Company in Oregon and sold in Chicago. The Company had no direct contact with the state of Texas. The Court held that considering the...