Klump v. Duffus

• Decision Date: 12 January 1996
• Docket Number: No. 94-3756,94-3756
• Citation: 71 F.3d 1368
• Parties: Loretta KLUMP, Plaintiff-Appellee, v. J. David DUFFUS, Jr., Law Offices of Dixon, Duffus & Doub, a partnership, and Accident and Injury Referral Service, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1368

71 F.3d 1368

64 USLW 2401

Loretta KLUMP, Plaintiff-Appellee, v. J. David DUFFUS, Jr., Law Offices of Dixon, Duffus & Doub, a

partnership, and Accident and Injury Referral

Service, Defendants-Appellants.

No. 94-3756.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 9, 1995.

Decided Dec. 18, 1995.

Rehearing and Suggestion for Rehearing En Banc Denied Jan. 12, 1996.

George Ripplinger (argued), Ripplinger & Associates, Belleville, IL, for Plaintiff-Appellee.

Richard E. Boyle (argued), Thomas R. Peters, Gundlach, Lee, Eggmann, Boyle & Roessler, Belleville, IL, for Defendants-Appellants.

Before CUMMINGS, WOOD, Jr., and EASTERBROOK, Circuit Judges.

CUMMINGS, Circuit Judge.

Loretta Klump retained J. David Duffus, Jr., a Greenville, North Carolina lawyer, to represent her in an Illinois lawsuit against the driver of the car that injured her. Mr. Duffus, however, did not file Klump's suit prior to the lapsing of the Illinois Statute of Limitations. ¹ Klump subsequently sued Duffus, the Law Offices of Dixon, Duffus & Doub, and the Accident and Injury Referral Service ² for legal malpractice. The jury awarded Klump $474,000: the amount it determined that she would have been awarded if Duffus had filed her claim against the driver in a timely manner. The defendants appeal that verdict, claiming inter alia that the district court erred in precluding the introduction of evidence as to Klump's ability to collect the hypothetical judgment. For the reasons discussed below, we reverse the judgment of the district court and remand the case for a new trial.

BACKGROUND

Loretta Klump was injured in an automobile accident that occurred on January 26, 1987, near Troy, Illinois, when her vehicle was struck by a station wagon driven by Curt Eaves. Following the accident, the employment of Klump's husband required that the couple move to North Carolina. While there, Klump retained Duffus to represent her in an Illinois lawsuit against Eaves. Shortly thereafter, Klump and her husband moved to California and then returned to Troy, Illinois, where they still reside. Duffus failed to file Klump's lawsuit prior to the lapsing of the Illinois Statute of Limitations and as a result was sued by Klump for legal malpractice. The defendants admitted liability for all damages that were proximately caused by the automobile accident and Duffus's failure to timely file suit against Eaves.

Prior to trial, the district court granted Klump's motion in limine, deciding that no evidence could be presented to the jury regarding Eaves's ability to pay the hypothetical judgment. Defendants' offer of proof on the issue established that Eaves was unemployed, had no assets with which to satisfy a judgment against him, and had only a $25,000 insurance policy with respect to the accident. The action proceeded to trial on February 14, 1994, and a jury awarded Klump a judgment against the defendants in the amount of $424,000. The defendants appeal that judgment and we have jurisdiction over their appeal pursuant to 28 U.S.C. Sec. 1291.

DISCUSSION

1. Personal Jurisdiction

The defendants initially challenge the judgment below on the ground that the district court did not properly have personal jurisdiction over them. The determination of personal jurisdiction is a question of law that we review de novo. McIlwee v. ADM Indus., Inc., 17 F.3d 222, 223 (7th Cir.1994). A federal district court exercising diversity jurisdiction has personal jurisdiction over a nonresident "only if a court of the state in which it sits would have such jurisdiction." Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir.1990), certiorari denied, 499 U.S. 947, 111 S.Ct. 1415, 113 L.Ed.2d 468.

The Illinois long-arm statute was amended in 1989 to provide that an Illinois court "may ... exercise jurisdiction on any ... basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States." 735 ILCS 5/2-209(c). Paragraph 2-209(c) is now coextensive with the due process requirements of the United States Constitution. FMC v. Varonos, 892 F.2d 1308, 1310 n. 5 (7th Cir.1990). Thus "if the contacts between the defendant and Illinois are sufficient to satisfy the requirements of due process, then the requirements of both the Illinois long-arm statute and the United States Constitution have been met, and no other inquiry is necessary." L.B. Foster Co. v. Railroad Serv., Inc., 734 F.Supp. 818, 822 (N.D.Ill.1990).

The defendants do not challenge the fact that Duffus's negligence caused harm to Klump. Instead, they focus upon the fact that the action against them is largely based upon Duffus's negligent failure to act, which they argue "occurred" in North Carolina. Therefore, they argue that Duffus committed no tort within Illinois boundaries and cannot be subject to jurisdiction there. In support of this position, they cite Yates v. Muir, 112 Ill.2d 205, 97 Ill.Dec. 394, 492 N.E.2d 1267 (1986). The court in Yates held that the allegedly negligent action of a Kentucky attorney who failed to file an appeal in Illinois did not "occur" in Illinois such that the attorney would be subject to Illinois jurisdiction. ³

However, Yates was decided prior to the amendment of 735 ILCS 5/2-209 that extended the Illinois long-arm statute to the limit allowed by the due process standards of the United States Constitution. See Varonos, supra. Those standards have repeatedly been held to allow jurisdiction over a defendant who acts outside of a State's boundaries, but causes harm to an individual within the State, provided that it comports with "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95; Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528 ("So long as a commercial actor's efforts are 'purposefully directed' toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there."); Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790; Calder v. Jones, 465 U.S. 783, 788-790, 104 S.Ct. 1482, 1486-1487, 79 L.Ed.2d 804. Jurisdiction in such situations is proper where the defendant had "minimum contacts" with the forum State such that he had "fair warning" that he might be required to defend there, and where he has not presented a compelling case that it is unreasonable to do so. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-478, 105 S.Ct. 2174, 2182-2185, 85 L.Ed.2d The "fair warning" requirement is met if the defendant "purposely avails itself of the privilege of conducting activities within the forum State thereby invoking the benefits and protections of the forum's laws." Burger King, 471 U.S. at 471-478, 105 S.Ct. at 2181-2185. Thus the proper focus of our inquiry is not Duffus's precise locale when the Illinois Statute of Limitations lapsed, but whether the contacts proximately resulting from his representation of Klump created a sufficient connection with Illinois such that he "personally availed" himself of the privilege of conducting activities there. Two recent Illinois cases are instructive on the issue.

                528. 4  The requirement of "fair warning" meets due process standards by "giv[ing] a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit."   World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490
                

In Ores v. Kennedy, 218 Ill.App.3d 866, 161 Ill.Dec. 493, 578 N.E.2d 1139 (1st Dist.1991), an Illinois plaintiff sued an Illinois law firm for legal malpractice. The law firm impleaded a Texas attorney who had been retained on the plaintiff's behalf to admit an estate to probate in Texas. The Texas attorney had made telephone calls and written letters to the Continental Bank in Chicago and billed the plaintiffs directly for those contacts. The court held that the attorney had fair warning that he might be required to defend himself in Illinois because he "personally directed" his activities at Illinois residents. Id. at 873, 161 Ill.Dec. at 498, 578 N.E.2d at 1144. Similarly, the court in Culligan Int'l v. Wallace, Ross & Sims, 273 Ill.App.3d 230, 208 Ill.Dec. 871, 650 N.E.2d 565 (4th Dist.1995), found that it was not unreasonable for a nonresident attorney to defend himself in Illinois in a malpractice action stemming from a West Virginia lawsuit. The court concluded that despite the fact that the lawsuit did not take place in Illinois, the attorney had "purposely availed" himself of Illinois because he had been in contact with his Illinois client in person, by telephone, and by mail. Id. at 232, 208 Ill.Dec. at 874, 650 N.E.2d at 568.

Duffus's relationship with regard to Illinois is as follows. He was retained to handle an Illinois lawsuit involving an automobile accident that occurred between two Illinois residents within the boundaries of Illinois. After hiring Duffus in North Carolina, and following a brief stay in California, Klump returned to Troy, Illinois, where she resided during much of Duffus's trial preparation. In the course of that preparation Duffus was in frequent telephonic and written contact with Klump, her treating physicians, her insurance carrier, and Eaves's insurance carrier, all of whom were located in Illinois. For that matter, the defendants have not notified us of any party relevant to the litigation who was not located in Illinois. It is clear that when Duffus agreed to represent Klump he was aware that the case would exclusively involve Illinois parties, Illinois law, and would take place in Illinois. ⁵

We conclude that Duffus "[personally] availed [himself] of the privilege of conducting

                business in [Illinois]."  Burger King, 471 U.S. at 476, 105 S.Ct.

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