Yules v. General Motors Corporation

• Decision Date: 21 March 1969
• Docket Number: Civ. No. 746.
• Citation: 297 F. Supp. 674
• Parties: Richard B. YULES, Lila Susan Yules and Imperial Casualty and Indemnity Co., Plaintiffs, v. GENERAL MOTORS CORPORATION and Cooley Chevrolet Co., Inc., Defendants.
• Court: U.S. District Court — District of Montana

297 F. Supp. 674

Richard B. YULES, Lila Susan Yules and Imperial Casualty and Indemnity Co., Plaintiffs, v. GENERAL MOTORS CORPORATION and Cooley Chevrolet Co., Inc., Defendants.

Civ. No. 746.

United States District Court D. Montana, Billings Division.

March 21, 1969.

Packwood & Bjertness, Billings, Mont., for plaintiffs.

Anderson, Symmes, Forbes, Peete & Brown, Billings, Mont., for Cooley Chevrolet Co.

ORDER AND OPINION

JAMESON, District Judge.

This is an action for personal injuries and property damage resulting from an automobile accident which occurred on June 8, 1966, on U. S. Highway No. 191, approximately ten miles north of Big Timber, Montana.

Plaintiffs Richard B. Yules and Lila Susan Yules are citizens of California, and plaintiff Imperial Casualty and Indemnity Company is incorporated and has its principal place of business in Nebraska. Defendant General Motors Corp. is incorporated in Delaware, with its principal office in Michigan. Defendant Cooley Chevrolet Co., Inc. (hereinafter referred to as "Cooley") is incorporated and has its principal office in Connecticut.

On July 2, 1968, the defendant General Motors moved to dismiss on the ground that the complaint fails to state a claim against General Motors. No brief was filed in support of that motion.

On August 1, 1968, the defendant Cooley moved to dismiss on the grounds that (1) the complaint fails to state a claim against Cooley on which relief can be granted and (2) this court lacks jurisdiction over the person of this defendant. On September 11, 1968, defendant Cooley filed an affidavit and brief in support of its motion, contending that it had never transacted business within Montana and that the exercise of jurisdiction in this court would offend the "traditional notions of fair play and substantial justice" embodied in the "minimum contacts" test of International Shoe Company v. State of Washington, 1945, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95.

From time to time plaintiffs were granted additional time for an answer brief, but no brief was filed. On February 24, 1969, the motion to dismiss for lack of jurisdiction was set for preliminary hearing pursuant to Rule 12 (d)¹ of the Federal Rules of Civil Procedure on March 10, 1969. Oral argument was presented and plaintiffs' counsel filed an affidavit.

The complaint alleges, inter alia, that plaintiff Richard B. Yules purchased a new 1966 Chevrolet Biscayne station wagon from defendant Cooley on March 16, 1966; that at the time of the accident "the pins or bolts holding the right rear wheel on the said vehicle severed, the right rear wheel came off * * * and caused the said vehicle to veer across the * * * highway and turn over, causing the injuries and damages" complained of. Various acts of negligence and breach of warranty are alleged in the design, building, assembly and selling of the vehicle.

The affidavit of plaintiffs' counsel reads:

"That the automobile involved herein was purchased from the defendant Cooley Chevrolet Co., Inc. for the express purpose of transporting the plaintiffs Richard B. Yules and Lila Susan Yules and their belongings from Connecticut across Canada and the United States to California as they were moving to California and that this was communicated to the agents of defendant Cooley Chevrolet Co., Inc. and that in preparation therefore heavy duty tires and other equipment was installed by the defendant Cooley Chevrolet Co., Inc., or ordered installed by it."

An affidavit of counsel for the defendant Cooley reads:

"That this defendant does not now have, nor has it ever had or maintained, a place of business within the state of Montana, nor has it ever done business within the state of Montana, either permanently or temporarily; nor has this defendant ever qualified to do business in the state of Montana; nor has this defendant, either voluntarily or at the direction of any purchaser, shipped any goods distributed by it into the state of Montana; nor has this defendant, through an employee or agent, or otherwise, ever done any of the acts specified by Rule 4.B. of the Montana Rules of Civil Procedure, which acts, if done, would have subjected this defendant to the jurisdiction of the courts of the state of Montana."

The extent to which Montana's "long arm" statute² permits a court in Montana to exercise jurisdiction over nonresidents without offending due process has been considered by this court several times since the passage of the statute.³ The history of the trend toward extending a state court's jurisdiction to the point where a nonresident need only have "minimum contacts" with the forum state is outlined in Boit v. Emmco Inc. Co. (note 3) and it is not necessary to repeat it here.

The brief of defendant Cooley recognizes for the purpose of its motion that "Rule 4B is broad enough in its language to encompass the factual situation alleged in the plaintiffs' complaint". The sole question for determination accordingly is whether the service of process on Cooley in Connecticut would offend Cooley's constitutional right to due process.

In the most recent issue of Montana Law Forum, Professor Edwin Briggs discusses recent interpretations of "long arm" statutes by this court and other courts in the Ninth Circuit. He suggests, while approving, that the Atwood & Morrill case, (note 3) "gives a very broad interpretation indeed to the permissible scope of Montana's Long Arm Statute, perhaps approaching its outer constitutional limits".⁴

In Atwood & Morrill, this court denied a motion by defendant to dismiss or for change of venue. Plaintiff Stearns-Roger Corporation had a contract for the installation of a newly constructed turbine driven reform compressor in the plaintiff Continental Oil Company's refinery in Billings, Montana. Graham Manufacturing Company was a subcontractor for the job. Graham, from its New York office, ordered an "atmospheric relief valve" from defendant, Atwood & Morrill, a Massachusetts corporation, later adding instructions that the valve be shipped to Billings.

There was no evidence that defendant had had any other contact with the state of Montana. Although the shipment of the valve was an isolated transaction, the "intention to do business in Montana" could reasonably be inferred from the direct shipment to Montana, inasmuch as defendant regularly engaged in manufacturing such special order valves for shipment to all parts of the nation.

In L. D. Reeder Contractors of Ariz. v. Higgins Industries, 9 Cir. 1959, 265 F. 2d 768, the court established three tests for determining whether a nonresident defendant is subject to in personam jurisdiction in the forum state. These have been adopted by this court in the Continental Oil Co. v. Atwood & Morrill Co. and the Brecht v. RMK-BRJ cases (note 3). In Taylor v. Portland Paramount Corp., 9 Cir. 1967, 383 F.2d 634, 641, the Court of Appeals again discussed and upheld the use of these three tests:

"The first requirement is that the nonresident defendant must do some act or consummate some transaction within the forum. Personal presence, however, is not required. Thus, for example, use of the mails may suffice. McGee v. International Life Ins. Co., 1957, 355 U.S. 220, 78 S.Ct. 199,

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