Court Opinion

ID: 9689329
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:27:59.394666+00
Date Added: 2024-06-11T18:18:47.045755
License: Public Domain

J. H. Gillis, J.
(dissenting). I respectfully dissent. In my opinion, Elliott-Canada’s sale of the boring mill to Elliott-Delaware with knowledge that it would be installed and operated in Michigan by plaintiffs subrogor constituted purposeful availment of the privilege of transacting business in the forum state, sufficient to create limited personal jurisdiction under MCL 600.715(2); MSA 27A.715(2).
It is well settled that a court may exercise personal jurisdiction over a nonresident defendant only if there exist "minimum contacts” between the defendant and the forum state. International Shoe Co v Washington, 326 US 310, 316; 66 S Ct 154; 90 L Ed 2d 95 (1945). Sufficient "minimum contacts” exist where a corporation "purposefully avails itself of the privilege of conducting activities within the forum State”. Hanson v Denckla, 357 US 235, 253; 78 S Ct 1228; 2 L Ed 2d 1283 (1958), Khalaf v Bankers & Shippers Ins Co, 404 Mich 134, 148; 273 NW2d 811 (1978). A single transaction may be sufficient to meet the "minimum contacts” test. Parish v Mertes, 84 Mich App 336, 339; 269 NW2d 591 (1978).
The United States Supreme Court in World-Wide Volkswagen Corp v Woodson, 444 US 286; 100 S Ct 559; 62 L Ed 2d 490 (1980), held that *329mere "foreseeability” that the defendant’s product will cause harm in the forum state is insufficient to establish personal jurisdiction under the Due Process Clause. However, the Court’s subsequent comments indicate. that a defendant’s affirmative act of marketing its product in the forum state will establish requisite "minimum contacts”:
"This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant’s conduct and connection with the forum State are such that he should reasonably, anticipate being haled into court there.
"[I]f the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. Compare Gray v American Radiator & Standard Sanitary Corp, 22 Ill 2d 432; 176 NE2d 761 (1961).” (Citations omitted; emphasis supplied.) 444 US 286, 297-298.
The Court also noted that the "mere 'unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State’ ”. 444 US 286, 298, quoting Hanson v Denckla, supra, 253.
In the case at bar, the requisite contact arises *330not from Schreiber’s unilateral activity but from Elliott-Canada’s affirmative act of contracting for the sale of the mill with actual knowledge that it would ultimately be operated in Michigan and could cause harm to persons in Michigan. Moreover, Elliott-Canada supplied personnel to install and inspect the mill at Schreiber’s plant and was compensated by Elliott-Delaware, thereby receiving additional financial benefit from the sale of the product in Michigan.
The decisions in Khalaf v Bankers & Shippers Ins Co, supra, and Hapner v Rolf Brauchli, Inc, 404 Mich 160; 273 NW2d 822 (1978), do not preclude a finding of jurisdiction in this case. Khalaf involved a plaintiff who was injured while operating a press in Michigan. He commenced an action in Michigan against National Machine Service Co, Inc., an Illinois corporation, for negligence and breach of implied warranty in servicing the press. National’s insurer, Bankers & Shippers Ins. Co., refused to defend on the ground that the policy issued to National did not cover the operations which resulted in plaintiff’s injury. Plaintiff obtained a default judgment against National but was unable to collect. He then brought an action in Michigan against Bankers and the insurance agent who had procured the policy for National from Bankers, alleging negligence in such procurement. The question on appeal was whether the agent’s procurement of insurance for National, a business whose operations he knew extended beyond Illinois, constituted "minimum contacts” sufficient for the exercise of jurisdiction by Michigan. There was no evidence in the case that the agent had ever transacted business in Michigan, nor was there evidence that National, apart from the activities that occasioned plaintiff’s loss, ever did busi*331ness in Michigan. The Supreme Court held that the mere fact that the agent had reason to believe that National might do business at some indeterminate future time in some other state, possibly Michigan, and should reasonably have foreseen that negligent performance of his agreement to procure insurance could cause loss to a Michigan resident was insufficient to establish jurisdiction. The Court noted that:
"A different question might be presented on evidence that the insurance agent agreed to insure specific risks in the forum state or that he transacted substantial business for insureds located in the state.” 404 Mich 134, 157.
In Hapner v Rolf Brauchli, Inc, supra, plaintiff was injured in Michigan by a hair dryer purchased in Illinois and manufactured by Solis Apparatus Manufactories, Ltd., a Swiss corporation. The question on appeal was whether Michigan had limited personal jurisdiction over Solis. The evidence established that Solis exported its products to the United States through independent exporters, none of which were located in Michigan. There was no evidence that Solis’s products were in fact distributed in Michigan or that Solis had reason to believe they were distributed in Michigan. On these facts, a majority of Supreme Court justices held that Solis had not purposefully availed itself of the privilege of acting in the forum state, even though it was foreseeable that a purchaser might be a Michigan resident or might bring the product into Michigan.
In short, Khalaf and Hapner hold only that the foreseeability that a defendant’s product or actions will cause harm or loss to Michigan residents does not constitute purposeful availment. I would hold *332that, where, as here, a defendant places a product into the stream of commerce with knowledge that it will ultimately be sold in Michigan, it has purposefully availed itself of business opportunities in Michigan and is subject to personal jurisdiction in the state. See Behlke v Metalmeccanica Plast, SPA v Danson Corp, Ltd, 365 F Supp 272 (ED Mich, 1973), Gray v American Radiator & Standard Sanitary Corp, 22 Ill 2d 432; 176 NE2d 761 (1961).
I also dissent from the majority’s finding as to issue II, upholding the trial court’s grant of accelerated judgment in favor of Elliott-Delaware. The letters dated July 25, 1978, and August 1, 1978, which embody the settlement agreement between Schreiber and Elliott-Delaware, do not disclose whether the parties intended to settle all of Schreiber’s claims, including the claim for business interruption losses or whether they intended to settle only the claim for replacement and installation costs. I believe there exists a material question of fact as to whether Schreiber’s agreement to execute a covenant not to sue barred all of the claims in this lawsuit. I would find error in the grant of accelerated judgment to Elliott-Delaware.