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CONTROLLED METALS, INC. v. NON-FERROUS INTL. CORP.

March 24, 1976

CONTROLLED METALS, INC.
v.
NON-FERROUS INTERNATIONAL CORPORATION



The opinion of the court was delivered by: MCGLYNN

 McGLYNN, District Judge.

 Plaintiff instituted this contract action in the Court of Common Pleas of Bucks County, Pennsylvania, alleging an oral contract for the sale of condenser tubing and seeking damages for the alleged breach thereof by the defendant. Defendant is a New York Corporation with its principal place of business in New York. Plaintiff alleged, however, that defendant was doing business in Pennsylvania and relied on the provisions of the Pennsylvania long-arm statute, 42 P.S. § 8301 et seq. to invoke the jurisdiction of the Pennsylvania court.

 Defendant removed the case here under the provisions of 28 U.S.C. § 1441 *fn1" and then filed a motion to dismiss asserting that this Court does not have in personam jurisdiction over the defendant and that the complaint fails to state a claim upon which relief can be granted. *fn2" For the reasons hereinafter stated, we deny defendant's motion.

 I

 With regard to the jurisdictional question, we look to Pennsylvania's long-arm statute *fn3" and specifically Section 8302 which pertains to non-qualified foreign corporations. *fn4" A precondition to the exercise of in personam jurisdiction over the defendant is a finding either that its activities meet one of the criteria prescribed by section 8309(a) as "doing business" *fn5" or, that the defendant had such "minimum contacts" with Pennsylvania that maintenance of this suit would not offend due process. *fn6" See International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95, 101 (1945), McGee v. International Life Ins. Co., 355 U.S. 220, 222-223, 78 S. Ct. 199, 200-201, 2 L. Ed. 2d 223, 226 (1957), Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1239, 2 L. Ed. 2d 1283, 1297 (1958) and Columbia Metal Culvert Co., Inc. v. Kaiser Industries Corp. et al., 526 F.2d 724 (3d Cir. 1975).

 In the context of this case, the issue boils down to whether a series of telephone communications between an out-of-state buyer and an in-state seller and the delivery by mail to the seller of shipping paraphernalia represents "minimum contacts".

 According to the affidavit of plaintiff's agent, Robert J. Mc Van, this episode began on May 28, 1975 when Paul Gartlan, representing the defendant, telephoned Mc Van requesting price information for condenser tubing. *fn7" Mc Van was working as a desk salesman at plaintiff's business location in Warrington, Pennsylvania. Mc Van provided the information to Gartlan by telephone the next day. Later on the 29th, Gartlan placed an order through Mc Van over the telephone. After contacting plaintiff's supplier, Mc Van again called Gartlan confirming the terms of the order over the telephone. *fn8"

 On June 2, 1975, plaintiff received a package from defendant containing packing lists, bills of lading and packing slips bearing defendant's letterhead. These items were sent (a common practice according to Mc Van) in order for plaintiff to ship the tubing in defendant's name. Also on the 2nd, Gartlan telephoned Mc Van to inquire whether the tubing had been cut to conform to defendant's order specifications. Mc Van informed Gartlan, after first checking with the supplier, that the tubing was cut to defendant's specifications and was ready for shipment on the 3rd of June. According to Mc Van, Gartlan then requested that the shipment be delayed.

 The next day, June 3rd, Gartlan telephoned Mc Van and informed him that defendant's customer had cancelled its order with the defendant. Gartlan requested that Mc Van try to lower the price of the tubing. Mc Van telephoned Gartlan the following day and gave him a revised price. On the 5th of June, plaintiff invoiced defendant at the revised price. Thereafter, during the weeks of June 9 and June 16, 1975, Mc Van and Gartlan attempted to negotiate a new price without success. On June 25, 1975, plaintiff received in the mail a copy of its original invoice that had been sent to defendant and, also, a memo from Gartlan on behalf of the defendant advising of the return of the invoice. Plaintiff contends that this action represents a breach of the alleged agreement. *fn9"

 The affidavit of Harold Ames, President of defendant, sets forth the following: defendant's only place of business is in New York. As for Pennsylvania, it conducts no business there, has no bank accounts, no mailing address, no telephone listing, no business facility, no employees and neither executes nor performs any contracts or sales in Pennsylvania. *fn10"

 The test for minimum contacts is neither a simple quantitative analysis nor a qualitative review of the activity of the defendant, but rather a combination *fn11" which includes not only the conduct but the expectations of the parties. Campbell v. Triangle Corp., 336 F. Supp. 1002, 1007, (E.D.Pa.1972); and Proctor & Schwartz, supra, 323 A.2d at 15.

 The affidavits illustrate that defendant's agent, though never within the Commonwealth, had telephone contacts with plaintiff's agent out of which the purported agreement was formed. Since acceptance of defendant's offer to buy was made by plaintiff's agent in Pennsylvania and, since performance was to take place within Pennsylvania, the agreement must be considered a Pennsylvania contract. See Inpaco, Inc. v. Mc Donald's Corp., 413 F. Supp. ...


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