Kesler v. Schetky Equipment Corporation

200 F. Supp. 678, 1961 U.S. Dist. LEXIS 2922
CourtDistrict Court, N.D. California
DecidedDecember 7, 1961
DocketCiv. 7990
StatusPublished
Cited by12 cases

This text of 200 F. Supp. 678 (Kesler v. Schetky Equipment Corporation) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kesler v. Schetky Equipment Corporation, 200 F. Supp. 678, 1961 U.S. Dist. LEXIS 2922 (N.D. Cal. 1961).

Opinion

HALBERT, District Judge.

Defendant Schetky has moved in this action to quash service of summons and to dismiss the action. The ground for such motion is that this Court lacks jurisdiction over Schetky. It is asserted that Schetky is an Oregon corporation, with its principal place of business in Oregon, and that it does no business in California which would make it subject to service of process of this Court.

For the purpose of deciding a motion to quash service of summons upon a foreign corporation, the facts averred in the affidavits of the opposing parties relating to the issue of whether the corporation was doing business within the state are required to be accepted as true, *679 when they are not conflicting (Alexander Young Distilling Co. v. National Distillers Products Corp., D.C., 33 F.Supp. 334). The parties here, however, have come forth with affidavits which directly contradict each other, both as to facts and as to the interpretations to be placed upon those facts. In a motion of this type, plaintiffs have the burden of establishing the presence of the defendant they undertake to sue (McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135; Fergus Motors v. Standard-Triumph Motor Company, D.C., 130 F.Supp. 780).

Accepting plaintiffs’ affidavits and complaint as true (without so deciding; See: Woodworkers Tool Works v. Byrne, 9 Cir., 191 F.2d 667, 673), the jurisdictional facts in this action would appear to be as follows: Schetky is incorporated under the laws of Oregon, with its principal place of business in Portland, Oregon. Plaintiffs are all citizens of California. Schetky has not designated an agent for service of process in California. On or about July 19,1957, Keith Wesp, an agent and salesman for Schetky, contacted plaintiffs and endeavored to sell them a semi-dump trailer, quoting prices, types and giving general specifications. Wesp again contacted plaintiffs on August 19, 1957 for the same purpose, and a third time on September 9, 1957. Each of these three contacts was made in Eureka, California. On the third occasion, in the presence of Wesp and Orin Flail, sales manager of Schetky, plaintiffs allegedly signed a contract to purchase said trailer and executed a chattel mortgage securing the same. According to plaintiffs, the chattel mortgage falsely recites that the signing took place in Portland,' Oregon.

Plaintiffs, in additional affidavits, assert that Schetky, through its agents Wesp and Hall, solicited business from one James T. Lampley in Eureka, California, and from four other persons, two of whom are unknown.

Rule 4(d) (7) of the Federal Rules of Civil Procedure, 28 U.S.C.A., sanctions service on a foreign corporation by the method prescribed by the forum state law. There is, however, no unanimity of opinion on the question of whether amenability to process is to be determined by applying state standards as they are limited by concepts of due process, or by applying federal “general law” concepts (Bar’s Leaks Western v. Pollock, D.C., 148 F.Supp. 710).

Where federal jurisdiction is based on diversity grounds, the policy underlying the doctrine of intra-state uniformity, as expressed in Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 and Angel v. Buffington, 330 U.S. 183, 67 S.Ct. 657, 91 L.Ed. 832, seems to require the application of state standards seasoned with appropriate due process concepts (Partin v. Michaels Art-Bronze Co., 3 Cir., 202 F.2d 541; Pulson v. American Rolling Mill Co., 1 Cir., 170 F.2d 193). This issue has been fully discussed in Kenny v. Alaska Airlines, D.C., 132 F.Supp. 838, and the determination there made is at least inferentially supported by the Court of Appeals for the Ninth Circuit in L. D. Reeder Contractors of Ariz. v. Higgins Industries, 265 F.2d 768.

Preliminarily it should be noted that if a foreign corporation is doiny business in California, it is amenable to service in California, even if it has not registered to do intrastate business pursuant to California law (Steiner v. 20th Century-Fox Film Corp., 9 Cir., 232 F.2d 190). “Doing business” within the meaning of California law is synonymous with the power of the state to subject foreign corporations to local process (Fisher Governor Co. v. Superior Court, 53 Cal.2d 222, 1 Cal.Rptr. 1, 347 P.2d 1; Cosper v. Smith & Wesson Arms Co., 53 Cal.2d 77, 346 P.2d 409; Carl Borgward, G. M. B. H. v. Superior Court, 51 Cal.2d 72, 330 P.2d 789; and Henry R. Jahn & Son v. Superior Court, 49 Cal.2d 855, 323 P.2d 437). The term is a descriptive one that the courts have equated with such “minimum contacts with [the state] that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice’ ” (International Shoe Co. *680 v. Washington, 326 U.S. 310, 66 S.Ct. 154, 158, 90 L.Ed. 95).

The concept of “doing business” requires a more or less continuous effort to conduct within the state some part of the business in which the company is engaged, as opposed to mere isolated or sporadic sales (Knapp v. Bullock Tractor Co., D.C., 242 F. 543; West Publishing Co. v. Superior Court, 20 Cal.2d 720, 128 P.2d 777). Moreover, the recent decisions have indicated that an answer to the question of whether or not a corporation is “doing business” in a particular state so as to be amenable to service of process within that state may depend upon whether or not the particular cause of action [or contract] sued upon arose [or was executed] in the forum state (Compare Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, with McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; and compare Fisher Governor Co. v. Superior Court, supra, with Cosper v. Smith & Wesson Arms Co., supra).

The affidavits submitted by the parties create a conflict concerning the actual place where the final sale was transacted.

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200 F. Supp. 678, 1961 U.S. Dist. LEXIS 2922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kesler-v-schetky-equipment-corporation-cand-1961.