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Taca International Airlines Inc. v. Rolls-Royce

Decided: June 1, 1964.

TACA INTERNATIONAL AIRLINES, INC., A CORPORATION OF EL SALVADOR, PLAINTIFF,
v.
ROLLS-ROYCE, LTD., A CORPORATION OF ENGLAND, ROLLS-ROYCE OF CANADA, LTD., A CORPORATION OF CANADA, ROLLS-ROYCE, INC., A CORPORATION OF DELAWARE, CAPITAL AIRLINES, INC., A CORPORATION OF DELAWARE AND UNITED AIRLINES, INC., A CORPORATION OF DELAWARE, DEFENDANTS



Conklin, J.s.c.

Conklin

These actions involve two suits by plaintiff Taca International Airlines, Inc., for property damage to its Viscount aircraft, which aircraft crashed and was destroyed in Managua, Nicaragua, on March 5, 1959.

The complaints charge negligence and breach of warranty on the part of five defendants, Rolls-Royce, Ltd., hereinafter referred to as "Ltd.," an English corporation; Rolls-Royce of Canada, Ltd., hereinafter referred to as "Canada," a Canadian corporation; Rolls-Royce, Inc., referred to as "Inc.," a Delaware corporation; Capital Airlines, Inc., a Delaware corporation; and United Airlines, Inc., a Delaware corporation.

The first and second counts of the complaints charge Rolls-Royce, Ltd., with negligence in the manufacture and assembly of engine No. 6425. The third and fourth counts allege that in October 1958 the three Rolls-Royce defendants, in connection with their overhaul and repair of the above-mentioned engine, negligently supplied inferior parts, technical advice and information. Capital Airlines is charged with negligently overhauling and repairing said engine in the fifth and sixth counts, while the seventh and eighth counts of the complaint are against United Airlines, which as a result of a merger has assumed Capital's liabilities.

The first action was commenced against the Rolls-Royce defendants by service upon Andrew P. Young and John E. Grillo, employees of Rolls-Royce, Inc., at the "Inc." motor parts depot in West Englewood, New Jersey, on March 5, 1962.

The second action was started on approximately January 6, 1964, by service of the summons and complaint by registered mail upon "Ltd.," and "Canada," at their respective home offices. There is no dispute that the notice by registered mail was received by the respective Rolls-Royce defendants.

Plaintiff has moved to consolidate the actions on the grounds that common questions of law and fact are involved. The court finds that contention to be true and grants plaintiff's motion to consolidate pursuant to R.R. 4:43-1.

Defendants "Ltd." and "Canada" have moved to dismiss the complaint in this action and to quash the alleged service of process upon them pursuant to the provisions of R.R. 4:12-2 on the grounds of lack of jurisdiction, insufficiency of process, and insufficiency of service of process. The question, therefore, which this court must decide is whether it has jurisdiction over "Ltd." and "Canada" in regard to the present suit.

Neither "Ltd." nor "Canada" is directly engaged in business in the State of New Jersey. "Ltd." is an English company which manufactures and sells motor cars, airplane engines, and marine engines. "Canada" is a Canadian corporation engaged in the assembly and manufacture of spare parts for Rolls-Royce products. Its facilities include a manufacturing and overhauling plant and administrative offices in Canada, where it distributes Rolls-Royce motor cars and parts.

Neither "Ltd." nor "Canada" maintains offices in New Jersey, nor do they have any employees within the State. Neither corporation is authorized to do business in New Jersey, nor does either corporation maintain bank accounts in this jurisdiction.

There is no dispute, however, that Rolls-Royce, Inc., does engage in business within the confines of this State. "Inc." maintains a motor parts depot in Englewood, New Jersey. It has a service representative at Newark Airport and also has a service representative in Millville.

Basically, it is the contention of plaintiff that the operations of "Inc." are so interwoven with the operations of "Canada"

and "Ltd." so as to make the former the alter ego of the latter two in regard to "Inc's" activities within this State. Plaintiff maintains that the activities of "Inc." are therefore sufficient to subject "Ltd." and "Canada" to the jurisdiction of this court.

We therefore must turn to an examination of the relationship between "Inc." and the other Rolls-Royce defendants. A myriad of facts has been introduced to show the connection between "Inc." and the other Rolls-Royce defendants. The court points to some of those which it finds significant.

As a result of an increased use of Rolls-Royce aero engines by certain American airlines, it was decided in 1956 by the management of "Ltd.," the parent company in the Rolls-Royce structure, that it would be feasible to set up an American subsidiary. Later it was decided that the American subsidiary should also perform certain services in conjunction with Rolls-Royce's automobile engine activities. With ...


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