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KIRKLAND v. SAPPHIRE INTL. TOURING

November 17, 1966

William KIRKLAND, Plaintiff,
v.
SAPPHIRE INTERNATIONAL TOURING, LTD. and F.I.T. Car Hire, Inc., Defendants


McLean, District Judge.


The opinion of the court was delivered by: MCLEAN

McLEAN, District Judge.

Defendant Sapphire International Touring, Ltd. (Sapphire) moves to set aside two purported services of process upon it and to dismiss the action against it for lack of personal jurisdiction. One service was made in New York upon F.I.T. Car Hire, Inc. (FIT) as the alleged agent of Sapphire. The other was made upon Sapphire in England under the New York "long arm" statute (CPLR §§ 302, 313).

 The action arises out of an auto accident which occurred in England on March 24, 1964. The complaint contains four counts against Sapphire.

 The first count may be briefly summarized as follows. On March 17, 1964, Sapphire, through its agent FIT, contracted with plaintiff in New York to rent an automobile to plaintiff for use in England, to instruct plaintiff how to drive a motor vehicle in England, and to drive the vehicle while instructing plaintiff. In accordance with this agreement, Sapphire furnished the automobile and Jerri Tipper as a driver and instructor. She was driving the car on March 24, 1964. Plaintiff was a passenger in it. In the vicinity of Southampton, England, the automobile collided with another motor vehicle because of the negligence of Mrs. Tipper. Plaintiff sustained personal injuries to his damage in the sum of $350,000.

 The second count alleges all over again that on March 17, 1964, Sapphire, through its agent FIT, contracted with plaintiff in New York to rent an automobile to plaintiff to be used in England, and agreed to instruct plaintiff how to drive and to supply a driver instructor. This count then realleges all the allegations of the first count with respect to the happening of the accident. It is hard to see what this count adds to the first.

 The third count omits any reference to a contract between the parties, and alleges merely that while plaintiff was a passenger in a vehicle owned by Sapphire and operated by its employee Mrs. Tipper, he was injured by reason of Mrs. Tipper's negligence in so operating the vehicle that it collided with a truck.

 The fourth count repeats the allegation that on March 17, 1964, Sapphire, through its agent FIT, contracted in New York to furnish plaintiff an automobile for his use in England. This count adds the allegation that it was part of this agreement that Sapphire would obtain a "standard policy of public liability insurance as issued in the State of New York during the year 1964, or the equivalent," that Sapphire failed to do so, and that as a result of this breach of the contract plaintiff, while riding in the vehicle, "was not protected by a policy of public liability insurance," and hence was damaged in the sum of $350,000.

 Sapphire and plaintiff have each submitted affidavits in support of and in opposition to the motion. I considered it desirable to supplement the affidavits by holding a hearing at which testimony was taken and a number of exhibits were introduced. *fn1" Upon the basis of the affidavits and the evidence at the hearing, I find the facts to be as follows.

 Sapphire is a corporation organized under the laws of the United Kingdom with its principal place of business in London. Its business is the renting of automobiles, both chauffeur driven and "self driven," i.e., to be operated by the hirer. Sapphire is not qualified to do business in New York. It has no office here. It is not listed in the New York telephone book. It has no bank account or employees in New York.

 FIT is a New York corporation. Its principal place of business is in New York. Its business is renting automobiles to Americans for use in Europe. Neither Sapphire nor any individual connected with Sapphire owns any stock in FIT. Sapphire has not paid any part of FIT's operating expenses. Sapphire has given no instructions to FIT as to how to operate its business.

 In November 1963 Rosen, president of FIT, had a conversation in London with officers of Sapphire in the course of which it was agreed between them that FIT would "work with" Sapphire to send business to Sapphire. This agreement was oral. There is no written agreement between these companies. The word "agent" was not mentioned, as far as Rosen recalls. He testified that he told the Sapphire officers that he "would give it a try," and that for his English business he would "use Sapphire instead of another operator." Nothing was said as to FIT's power to bind Sapphire to any commitment to a customer.

 After this conversation, the practice followed by the two companies until they ceased doing business with each other sometime in 1965, was substantially as follows:

 Sapphire furnished FIT with a copy of Sapphire's price list or "tariff," i.e., a schedule of its rental charges. FIT in New York published a booklet under its own name labeled "Foreign Car Hire and Purchase - 1964." The booklet contained rental rates for various types of vehicles in various countries. The page for England set forth the rates which Sapphire had previously furnished to FIT. Sapphire's name was not mentioned. The rates purported to be FIT's rates.

 There appear to be several steps and several different sets of people involved in what would seem at first blush to be the relatively simple operation of renting a car for use in England. The normal practice generally followed at the time in question was this: The American would-be traveler goes to his travel agent and tells him that he wants to rent an automobile of such and such a make and model for use in England. The travel agent so informs FIT, usually by telephone. FIT then communicates with Sapphire and inquires whether such a car will be available at the specified time. If Sapphire replies in the affirmative, FIT then makes out a voucher in quintuplicate and sends two copies to Sapphire, who signs one and returns it to FIT. FIT sends two copies to the travel agent, one for the travel agent and one to be delivered by him to the traveler.

 On the back of this voucher the following legend is printed:

 
"F.I.T. Car Hire Inc. act only as the agents for the owners or contractors providing the services listed overleaf and, as such, accept no liability whatsoever for any loss, delay, accident, injury or damage to, or in respect to, any person or property howsoever caused or arising in connection with the services rendered by the said owners or contractors."

 Sapphire knew that this legend appeared on FIT vouchers. It has never objected to its use by FIT.

 If the request is for a self-drive automobile, a fourth step is necessary, inasmuch as Sapphire does not own any such automobiles itself. Sapphire proceeds to hire ...


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