Yanmar Co. v. Slater

• Decision Date: 08 March 2012
• Docket Number: No. 11–370.,11–370.
• Parties: YANMAR CO., LTD., d/b/a Yanmar Diesel Engine Company, Ltd., and Yanmar America Corporation, Appellants v. Wanda H. SLATER, Appellee.
• Court: Arkansas Supreme Court

2012 Ark. 36

386 S.W.3d 439

YANMAR CO., LTD., d/b/a Yanmar Diesel Engine Company, Ltd., and Yanmar America Corporation, Appellants

v.Wanda H. SLATER, Appellee.

No. 11–370.

Supreme Court of Arkansas.

Feb. 2, 2012.

Rehearing Denied March 8, 2012.

Steven W. Quattlebaum, Emmett Bowers Chiles, Jennifer Wethington Merritt and Patrick James Goss, Little Rock, for appellant.

James M. Simpson, Jr., Martin A. Kasten, Jamie Huffman Jones and Phillip M. Brick, Little Rock, for appellee.

DONALD L. CORBIN, Justice.

Appellants Yanmar Co., Ltd., d/b/a Yanmar Diesel Engine Co., Ltd. (Yanmar Japan), and Yanmar America Corporation appeal the order of the Jefferson County Circuit Court awarding $2.5 million to Appellee Wanda H. Slater. On appeal, Yanmar Japan argues at the outset that the order should be reversed and dismissed where the circuit court lacked personal jurisdiction over Yanmar Japan and where substantial evidence did not support the jury determination that it manufactured an unreasonably defective or dangerous tractor or that its failure to install a rollover-protection system (ROPS) caused the death of Rudolph Slater, Appellee's husband. Yanmar Japan also argues that the circuit court erred in allowing the jury to consider that it had a post-sale duty to warn of the absence of a ROPS or to retrofit the tractor. Yanmar America arguesthat there was not substantial evidence to support the jury's finding that it was negligent, as it had nothing to do with the manufacture or sale of the tractor and never supplied parts for the tractor. Additionally, both Appellants argue that the circuit court erred with regard to certain evidentiary rulings. This case was certified to this court because it involves an issue of first impression and an issue requiring clarification or development of the law; hence, our jurisdiction is pursuant to Arkansas Supreme Court Rule 1–2(b)(1) and (5) (2011). Because the circuit court lacked personal jurisdiction over Yanmar Japan and because the jury's verdict as to Yanmar America is not supported by substantial evidence, we reverse and dismiss this case.

Rudy Slater purchased a Yanmar YM2000 tractor from Chris Elder Enterprises, Inc., on September 28, 2004. The tractor had been manufactured in 1977 by Yanmar Japan and sold to Koide Agricultural Equipment Co., Ltd., an authorized Yanmar distributor in the Toyama Prefecture of Japan. At the time of its manufacture, the tractor was equipped with a rotary tiller. In 2003, some twenty-six years after it was manufactured, and without Yanmar Japan's knowledge, the tractor came into the possession of a Vietnamese company, Lucky Company, f/k/a Le Chau Company, Ltd.

The tractor was then imported to the United States on January 10, 2004, through the “gray market” and sold to LCI Equipments, Inc., a Texas company. ¹ An Le, owner of LCI, regularly purchased tractors from Lucky Company. LCI, in turn, sold the tractor at an auction in Oklahoma to Chris Elder, owner of Chris Elder Enterprises, Inc. At the time he purchased the tractor, it was equipped with a front-end loader that had apparently been added to the tractor while in the possession of Lucky Company. Mr. Elder then equipped it with a bush hog, as the original rotary tiller had been removed at some point. According to Mr. Elder, the tractor looked brand new, as it had new paint, new rear tires, and the hours meter on the tractor was very low. Mr. Elder also stated that the tractor had been refurbished, all the stickers on it were new, and that it did not appear to be a thirty-year-old tractor. On October 4, 2004, just days after Mr. Elder sold the tractor to him, Mr. Slater was using the tractor to mow grass on a slope near a pond on his property when it rolled over, killing him.

Following the death of Mr. Slater, Mrs. Slater and the couple's son, Barton Slater, filed a wrongful-death action against Yanmar Japan, Yanmar America, and Chris Elder Enterprises, Inc. A second amended complaint was filed, adding LCI and John Does 1–10 as defendants. In her third amended complaint, Mrs. Slater added Lucky Company as a defendant. She alleged therein claims for fraud, strict liability, breach of implied and express warranties, negligence and negligent failure to warn, violation of the Arkansas Deceptive Trade Practices Act, and violation of the odometer-regulation statutes. She sought both compensatory and punitive damages.

Following lengthy discovery and several motions for summary judgment, the case was tried beginning on October 19, 2009.²Of the claims alleged, the jury was ultimately allowed to consider claims for negligence as to Yanmar Japan, Yanmar America, and LCI, and strict liability against Yanmar Japan and LCI. The jury returned a verdict in favor of Mrs. Slater, finding in her favor on each of the aforementioned counts and awarding her damages in the amount of $2.5 million. The jury apportioned fault as follows: Yanmar Japan, 39%; Yanmar America, 25%; LCI, 29% and; Mr. Slater, 7%.

The circuit court entered judgment accordingly, and the Yanmar defendants appealed to the Arkansas Court of Appeals. The court of appeals dismissed the appeal without prejudice because some of the claims remained outstanding. Yanmar Co. v. Slater, 2011 Ark. App. 167, 2011 WL 715972. After obtaining a final order from the circuit court, the Yanmar defendants again appealed and, as previously stated, the appeal was transferred to this court.

I. Yanmar Japan

The first issue we consider is Yanmar Japan's argument that the circuit court lacked personal jurisdiction over it and, thus, erred in denying its motion for a directed verdict. Specifically, Yanmar Japan argues that there was no substantial evidence to support the conclusion that it had the requisite contacts with the State of Arkansas to subject it to suit here. According to Yanmar Japan, the judgment against it should be reversed and the case dismissed. Mrs. Slater counters that the evidence demonstrates that Yanmar Japan had continuous and systematic contacts with Arkansas that satisfied the finding of personal jurisdiction. Further, Mrs. Slater argues that Yanmar Japan waived its objection to personal jurisdiction when it voluntarily invoked the power of the court by seeking contribution, indemnity, and a judgment against codefendant LCI. We review the circuit court's finding of jurisdiction under our clearly erroneous standard of review. John Norrell Arms, Inc. v. Higgins, 332 Ark. 24, 962 S.W.2d 801 (1998).

We begin our analysis with a review of this state's long-arm statute. Under prior law, a court of this state could exercise personal jurisdiction over a nonresident defendant through the long-arm statute when there was a cause of action arising from the person transacting any business in this state, contracting for services or things in this state, causing tortious injury in this state, owning real property in the state, as well as other grounds. SeeArk.Code Ann. § 16–4–101(C) (repealed 1995). But, that statute was amended by Act 486 of 1995, and is now limited only by the constraints imposed by the Due Process Clause of the Fourteenth Amendment. Arkansas's long-arm statute now reads in relevant part:

Personal Jurisdiction. The courts of this state shall have personal jurisdiction of all persons, and all causes of action or claims for relief, to the maximum extent permitted by the due process of law clause of the Fourteenth Amendment of the United States Constitution.

Ark.Code Ann. § 16–4–101(B) (Repl.2010).

We recently explained in Gibbs v. PrimeLending, 2011 Ark. 255, 381 S.W.3d 829, that unlike some long-arm statutes, and unlike previous versions of Arkansas's long-arm statute, the current statute does not limit the exercise of personal jurisdiction to certain enumerated circumstances. Rather, the exercise of personal jurisdiction is limited only by federal constitutional law. Accordingly, “this court now looks only to Fourteenth Amendment due processjurisprudence when deciding an issue of personal jurisdiction.” Davis v. St. John's Health Sys., Inc., 348 Ark. 17, 23, 71 S.W.3d 55, 58 (2002).

We turn now to that due-process jurisprudence. The seminal case on the issue of personal jurisdiction is International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), wherein the United States Supreme Court first articulated the minimum-contacts test as a way to establish jurisdiction over a defendant not physically present in the state. The touchstone principle announced by the Court in International Shoe is that due process requires “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Id. at 316, 66 S.Ct. 154 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). The Court in International Shoe looked to the nature of the contacts that the nonresident defendant had with the forum state, explaining that attention must be paid to the “quality and nature” of those contacts, and also to whether that defendant through those contacts enjoyed the “benefits and protection” of the laws of the foreign state. Id. at 319, 66 S.Ct. 154. The Court further acknowledged that there may be situations in which a nonresident-defendant's contacts with a forum state may be so substantial and continuous as to justify jurisdiction over that defendant, even though the cause of action is “entirely distinct from those activities.” Id. at 318, 66 S.Ct. 154.

The Supreme Court has revisited the law on personal jurisdiction since the holding in International Shoe. Notably, the Court held in World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), that a nonresident defendant's contacts with a forum state must be sufficient to cause the defendant to “reasonably anticipate being haled into court there.” “This ‘purposeful availment’ requirement ensures that a defendant will not be...