Furbush v. Otsego Machine Shop, Inc.

914 F. Supp. 1275, 1996 U.S. Dist. LEXIS 1836, 1996 WL 69679
CourtDistrict Court, E.D. North Carolina
DecidedFebruary 13, 1996
DocketNo. 4:95-CV-121-F1
StatusPublished

This text of 914 F. Supp. 1275 (Furbush v. Otsego Machine Shop, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Furbush v. Otsego Machine Shop, Inc., 914 F. Supp. 1275, 1996 U.S. Dist. LEXIS 1836, 1996 WL 69679 (E.D.N.C. 1996).

Opinion

ORDER

JAMES C. FOX, Chief Judge.

This matter is before the court on the defendants’ motions to dismiss, pursuant to Fed.R.Civ.P. 12(b)(2), based on lack of jurisdiction over the person. Also before the court is the plaintiffs motion to disqualify Timothy C. Barber and Barber & Associates as counsel for the defendants. The parties have fully briefed all the motions, and the court finds them ripe for ruling. For the reasons discussed below, the court will deny the defendants’ motions to dismiss, and allow the plaintiffs motion to disqualify defense counsel.

I. The Motions to Dismiss for Lack of Personal Jurisdiction

A Statement of the Relevant Facts

The court here recites the facts relevant to these motions as revealed in the record, and, as it must, draws all reasonable inferences and resolves all factual disputes in the plaintiffs favor. In the fall of 1993, defendant Otsego Machine Shop, Inc., (“OMS”) contracted with the Hexacomb Corporation to design and build a piece of equipment for Hexacomb’s Farmville, North Carolina, facility. This equipment, known as “the hugger section,” was essentially a set of parallel conveyor belts, one on top of the other, with a gap between them that could be adjusted from zero to six inches. In the spring of 1994, when Hexacomb began experiencing problems with the equipment, OMS sent the engineer who had designed the hugger section, defendant Poe, to Farmville to work on it.

On the morning of March 25, 1994, Poe enlisted the aid of plaintiff Furbush, a Hexacomb employee at the Farmville plant, in diagnosing the hugger section’s problems. While Poe manually started and stopped the conveyor belts by touching two wires together at the control panel, Furbush would measure the distance the belts drifted off track. Sometime during this process, the belts started moving without warning to Furbush, dragging his right hand and arm into the gap between the belts, severely injuring him.

[1277]*1277OMS was incorporated and has its principal place of business in Michigan. Poe also resides in Michigan. OMS and Hexacomb negotiated and contracted for the manufacture of the hugger section outside the state of North Carolina. All design, manufacture, assembly, and testing of the hugger section occurred outside this state as well. OMS conducts no business in North Carolina, has no office or agent in the state, and has never contracted for the sale of goods or services with any North Carolina corporation. OMS has never owned or leased any real or personal property in North Carolina, and the hugger section in Farmville is the only product of OMS present in the state. OMS does not advertise in North Carolina. Poe, likewise, has no contacts with the state other than those arising from the facts of this case.

However, Furbush sued Poe and OMS in a North Carolina state court, filing his complaint in the General Court of Justice, Superior Court division for Pitt County, on October 13,1995. He alleged claims for negligent design, manufacture, testing, repair, and failure to warn against Poe and OMS; and for breach of implied and express warranties against OMS. Defendants removed the action to this court on November 14,1995. On December 21, 1995, they filed amended answers and motions to dismiss certain of the claims against them for lack of personal jurisdiction.

B. Analysis

A federal court sitting in diversity may exercise in personam, jurisdiction over a nonresident defendant only when a two-pronged test is satisfied. First, some jurisdictional statute, usually a state “long arm” statute, must allow for the exercise of jurisdiction. Second, the exercise of jurisdiction, upon the facts of the case, must satisfy constitutional due process. Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1199 (4th Cir.1993). Because long arm statutes are often liberally drawn and construed to allow for the exercise of jurisdiction to the fullest extent possible under the due process clause, the second prong of this test often swallows the first. See, e.g., Id.

Whether the foreign defendant has been afforded due process turns on the nature of the defendant’s contacts with the forum state. As often quoted, “due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citations omitted).

The United States Supreme Court and other federal and state courts have, since 1945, expounded upon the “minimum contacts” analysis in a line of cases studied in every law student’s first year Civil Procedure course. To aid their analyses, these courts have sometimes defined two kinds of personal jurisdiction — general jurisdiction and special jurisdiction. When the defendant has sufficient contacts with the forum state to warrant the assertion of jurisdiction over it for all matters and all cases, there is said to be “general jurisdiction” over the defendant. The defendant must engage in “continuous and systematic” general business contacts with the forum state to justify the state’s subjecting it to such a broad exercise of power. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). On the other hand, when a court in the forum state may exercise personal jurisdiction over the defendant only because the plaintiff’s claims arise out of or relate to the defendant’s activities within, or in some way directed at, the forum state, there is said to be “special jurisdiction” over the defendant.

The defendants here concede that the North Carolina long arm statute, N.C.Gen.Stat. §§ 1-75.1 et seq., permits the court’s exercise of jurisdiction over them regarding all of the plaintiff’s claims, thus satisfying the first prong of the test. (Defs.’ Mem.Supp. Mot. to Dismiss at 6-7.) Defendants further agree that, regarding the plaintiffs claim for negligent repair only, the operative facts and actions of the defendants occurred in North Carolina. Thus the court may exercise spe[1278]*1278cial jurisdiction over them, consistent with the strictures of the due process clause, to adjudicate the plaintiffs claim for negligent repair. (Id.)

However, say the defendants, with regard to the plaintiffs claims for negligent design, manufacture, and testing; failure to warn; and breach of implied and express warranties, the operative facts did not occur in North Carolina. Thus, they continue, the court may not exercise special jurisdiction over them, but may adjudicate these claims only if the court finds the “continuous and systematic” contacts with North Carolina required to support general jurisdiction. The defendants argue vociferously, analogizing a recent federal and a recent state case, that those kinds of contacts simply aren’t present, and so the court must dismiss these claims.

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Cite This Page — Counsel Stack

Bluebook (online)
914 F. Supp. 1275, 1996 U.S. Dist. LEXIS 1836, 1996 WL 69679, Counsel Stack Legal Research, https://law.counselstack.com/opinion/furbush-v-otsego-machine-shop-inc-nced-1996.