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DAMON COATS, INC. v. MUNSINGWEAR

April 20, 1977

DAMON COATS, INC.
v.
MUNSINGWEAR, INC.



The opinion of the court was delivered by: TROUTMAN

 TROUTMAN, J.

 This is a diversity action in which plaintiff Damon Coats, Inc. (Damon) seeks damages for an alleged breach of sales contracts by defendant Munsingwear, Inc. (Munsingwear). Damon is incorporated in New York with its principal place of business in New Jersey. Munsingwear is incorporated in Delaware with its principal place of business in Minnesota, and the amount in controversy exceeds $10,000.00. Jurisdiction is based upon 28 U.S.C. § 1332.

 Munsingwear has moved to dismiss for lack of jurisdiction of the person, improper venue and insufficient service of process, pursuant to F.R.C.P. 12(2), (3) and (5).

 In determining whether this Court has jurisdiction of Munsingwear's person we apply Pennsylvania law. Gorso v. Bell Equipment Corporation, 476 F.2d 1216 (3d Cir. 1973). The applicable statute is 42 P.S. § 8302, which deals with nonqualified foreign corporations: *fn1"

 
"§ 8302. Nonqualified foreign corporations
 
"(a) General rule. -- Any foreign corporation which shall have done any business in this Commonwealth without procuring a certificate of authority to do so from the Department of State as required by statute, shall be conclusively presumed to have designated the Department of State as its true and lawful attorney authorized to accept, on its behalf, service of process in any action arising within this Commonwealth. Service of process shall be made in the manner provided by section 8307 of this title (relating to procedure for service of process)."

 To find jurisdiction of the person, we must determine that Munsingwear has "done business" in the Commonwealth. "Doing business" is defined in 42 P.S. § 8309:

 
"§ 8309. Acts affecting jurisdiction
 
"(a) General rule. -- Any of the following shall constitute 'doing business' for the purposes of this chapter:
 
"(1) The doing by any person in this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object.
 
"(2) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.
 
"(3) The shipping of merchandise directly or indirectly into or through this Commonwealth.
 
"(4) The engaging in any business or profession within this Commonwealth, whether or not such business requires license or approval by the Commonwealth or any of its agencies.
 
"(5) The ownership, use or possession of any real property situate within this Commonwealth."

 Munsingwear contends that it does very scant business in Pennsylvania, having several salesmen in the Commonwealth who solicit orders but cannot make contracts binding on Munsingwear. It argues that the present cause of action concerns garments manufactured in New Jersey for shipment to Minnesota. The cause of action in no way arose in Pennsylvania and is unrelated to Munsingwear's activities in Pennsylvania.

 In this regard, Myers v. Mooney Aircraft, Inc., 429 Pa. 177, 181, n.5, 240 A. 2d 505 (1967) held that it is only necessary that "the 'action arise' in Pennsylvania". The Third Circuit has held this language to mean "nothing more than that the cause of action is filed in Pennsylvania". Siders v. Upper Mississippi Towing Corporation, 423 F.2d 535, 537, n.3 (3d Cir. 1970). This case has been consistently followed *fn2" with one possible exception. *fn3" As Judge Fullam stated in Arnstein v. Manufacturing Chemists Association, Inc., 414 F. Supp. 12, 14 (E.D. Pa. 1976), "While this interpretation has not been universally acclaimed * * * it is controlling in this case."

 This action having been filed in Pennsylvania, Munsingwear is subject to personal jurisdiction in Pennsylvania if it has done business in the Commonwealth. Munsingwear admits that its garments are sold in many stores "including certain stores located within the Commonwealth of Pennsylvania". (Affidavit of W. James Winspear, p. 2, para. 2.) This conduct involves shipping garments into the Commonwealth in a manner consistent with 42 P.S. § 8309(a)(3) which declares that "the shipping of merchandise directly or indirectly into or through this Commonwealth" is "doing business" to an extent sufficient to give rise to in personam jurisdiction.

 In Glen Knit Industries, LTD. v. E. F. Timme & Son, Inc., 384 F. Supp. 1176 (E.D. Pa. 1974) the Court held that:

 
"* * * Defendant does not deny that from time to time it has made shipments to persons located in Pennsylvania * * * Hence, for the purposes of the long-arm statute, it has 'done business' within the Commonwealth." Id. at 1177.

 Crucible, Inc. v. Stora Kopparbergs Bergslags AB, 403 F. Supp. 9 (W.D. Pa. 1975) held that shipment of goods into Pennsylvania by defendant's wholly-owned subsidiary constituted "doing business" under 42 P.S. § 8309(a)(3). The Court noted that goods were shipped into the Commonwealth with the defendant's knowledge and guidance. Under such circumstances, the Court reasoned, if personal jurisdiction were not found to exist, a foreign corporation could market ...


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