Maryland Federal Trial Court Decides to Transfer Auto Accident Case to Delaware

Published on Feb 5, 2013 at 2:08 pm in General Blogs.

A federal trial court in Maryland has sent an auto accident case to Delaware because the defendant, a landscaping company that sits on the Maryland-Delaware border, did not have enough contact with the state of Maryland for the case to be heard in Maryland’s court system. Delaware Landscape Construction, LLC’s (DLC) motion to dismiss was granted, but only to the extent that the Maryland court transferred it into a Delaware-based federal trial court.

James M. Paul, Patricia G. Paul and Melva W. Martin filed a lawsuit against DLC and Hertz Equipment Rental Corp. alleging negligence, strict liability and loss of consortium after a July 2011 auto accident. The plaintiffs alleged they were involved in an accident with a truck driven by a DLC employee while the plaintiffs were traveling south on Route 113 near Selbyville, Delaware. Paul and the others said in court papers that the DLC employee lost control of his truck, veered across a median and collided with the car in which they were riding. At the time of the accident, the DLC employee was using the truck – which DLC leased from defendant Hertz – to transport sod from a sod farm on the Maryland/Delaware border.

DLC filed a motion to dismiss the lawsuit based on lack of personal jurisdiction. A federal court has personal jurisdiction over a non-resident defendant if an applicable state statute confers jurisdiction and the assertion of that jurisdiction is consistent with constitutional due process. The Fourth Circuit has set down a three-part test for evaluating whether the assertion of jurisdiction is consistent with constitutional due process: the court must consider (1) the extent to which the defendant purposely availed itself of the privilege of conducting activities in the state; (2) whether the plaintiff’s claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable.

The plaintiffs failed to allege facts sufficient to make a showing under the first part of the test, the court said. To support its case, the plaintiffs pointed out that the sod fields of the farm from which DLC purchased its sod are located in Maryland and that DLC leased the truck from Hertz at a site in Forestville, Md.

“These facts are insufficient to support personal jurisdiction in Maryland,” the court replied, pointing out that the sod farm straddles the boundary between Delaware and Maryland and, more importantly, the farm’s business address is in Delaware and that the farm has a telephone number with a Delaware area code. “These facts create serious doubt that DLC had fair warning that its purchases from the farm would subject it to the jurisdiction of Maryland courts, or even that DLC purposely directed its activities at a resident of Maryland,” the court noted.

In addition, the court observed, DLC did not travel into Maryland to obtain the truck; instead Hertz delivered the truck to DLC at its office in Delaware. Finally, DLC’s lease agreement with Hertz for the truck is governed by New Jersey law. “DLC’s incidental contacts with Maryland do not demonstrate that DLC created a substantial connection with Maryland or purposely availed itself of the benefits and protections of Maryland law,” the court said, concluding that it lacked personal jurisdiction over DLC.

As a result, the United States District Court for the District of Maryland transferred the case to the United States District Court for the District of Delaware.

James M. Paul, et al v. Delaware Landscape Construction, LLC, et al. was released December 12.

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