JJ & J. Foundation Co., Inc. v. Tommy Moore, Inc., 85 C 8830.

• Decision Date: 01 August 1986
• Docket Number: No. 85 C 8830.,85 C 8830.
• Court: U.S. District Court — Northern District of Illinois
• Parties: J.J. & J. FOUNDATION COMPANY, INC., Plaintiff, v. TOMMY MOORE, INC., a corporation, d/b/a Fort Worth Tower Company, Defendant.

640 F. Supp. 1119

J.J. & J. FOUNDATION COMPANY, INC., Plaintiff, v. TOMMY MOORE, INC., a corporation, d/b/a Fort Worth Tower Company, Defendant.

No. 85 C 8830.

United States District Court, N.D. Illinois, E.D.

August 1, 1986.

Joseph A. Wolsztyniak, Law Offices of Thomas D. Chase, Elgin, Ill. for plaintiff.

Patrick J. Phillips, Jenner & Block, Chicago, Ill., Bruce McGee, Gandy, Michener, Swindle, Whitaker & Pratt, Fort Worth, Tex., for defendant.

MEMORANDUM OPINION AND ORDER

NORDBERG, District Judge.

Plaintiff, J.J. & J. Foundation Company, Inc. ("J.J. & J."), brings this diversity breach of contract action against defendant, Tommy Moore, Inc. ("Tommy Moore"), doing business as Fort Worth Tower Company, alleging that Tommy Moore has failed to pay J.J. & J. approximately $48,600.00 for work J.J. & J performed for Tommy Moore in Illinois and other states. This matter is now before the court on Tommy Moore's Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. For the reasons set forth below, the court grants Tommy Moore's motion to dismiss.

I. Facts

J.J. & J. is an Illinois corporation with its principal place of business in Kane County, Illinois. Tommy Moore is a Texas corporation with its principal place of business in Fort Worth. Texas. Tommy Moore is not licensed to do business in Illinois, does not own property in Illinois, does not solicit business in Illinois, and does not maintain an office or registered agent in Illinois.

Tommy Moore is in the business of erecting microwave transmission towers throughout the United States. Tommy Moore typically hires independent contractors doing business in a particular locality to erect the towers. J.J. & J. is one such independent contractor. Tommy Moore arranged for J.J. & J. to perform certain cementing services for Tommy Moore on job sites in Maryland, Florida, Texas, Ohio, Colorado, Wyoming and Illinois.¹ (Plaintiff claims $500 for the limited work performed in Illinois.) In making this arrangement, Tommy Moore did not solicit J.J. & J.'s business in Illinois. In fact, at no time did any Tommy Moore employee, agent or representative travel to Illinois to discuss, supervise or act in any way with regard to the transactions which form the basis of J.J. & J.'s complaint.

Instead, a representative of J.J. & J. traveled to Texas to propose an arrangement with Tommy Moore's representatives. The parties conducted all of the negotiations concerning the agreement, and entered into the agreement, in Texas. J.J. & J. then performed cementing services for Tommy Moore, but without Tommy Moore's supervision, in the various states.

Tommy Moore now moves to dismiss the complaint, alleging that this court does not have personal jurisdiction over it under either the Illinois long-arm statute, Ill.Rev. Code ch. 110 ¶ 2-209(a),² or the Due Process Clause of the Fourteenth Amendment. J.J. & J., on the other hand, contends that the court may properly exercise jurisdiction over Tommy Moore under the "transaction of business" provision in the Illinois long-arm statute and the Due Process Clause.

II. Motion To Dismiss For Lack of Personal Jurisdiction

A federal court has personal jurisdiction in a diversity case only if the forum state would have jurisdiction. Jacobs/Kahan & Co. v. Marsh, 740 F.2d 587, 589 (7th Cir. 1984); Fed.R.Civ.P. 4(e). The plaintiff bears the burden of proving sufficient facts to support jurisdiction. United States Railway Equipment Co. v. Port Huron & Detroit Railroad Co., 495 F.2d 1127, 1128 (7th Cir.1974). Plaintiff's burden is two-fold: it must establish the existence of jurisdiction under Illinois law, and it must show that the exercise of jurisdiction over the defendant is consistent with Due Process as defined by prevailing constitutional standards. Jacobs/Kahan, 740 F.2d at 590; Snyder v. Smith, 736 F.2d 409, 415 (7th Cir.1984), cert. denied, 469 U.S. 1037, 105 S.Ct. 513, 83 L.Ed.2d 403 (1984).

In this case, J.J. & J. must establish that Tommy Moore is subject to this court's jurisdiction under the Illinois long-arm statute and the Due Process Clause. The Illinois Supreme Court has recently made clear that these two standards are not to be equated. Cook Associates, Inc. v. Lexington United Corp., 87 Ill.2d 190, 196-99, 57 Ill.Dec. 730, 733-35, 429 N.E.2d 847, 850-52 (1981); Green v. Advance Ross Electronics Corp., 86 Ill.2d 431, 436-37, 56 Ill.Dec. 657, 660, 427 N.E.2d 1203, 1206 (1981). The Due Process minimum contacts standard represents only the outer limit "beyond which a State may not go to acquire jurisdiction over nonresidents." Cook Associates, 87 Ill.2d at 197, 57 Ill.Dec. at 733, 427 N.E.2d at 850. A state may set its own limits within the parameters of the Due Process Clause, and Illinois has done so in its long-arm statute. Id. The court first considers whether jurisdiction is proper under the transaction of business provision of the Illinois long-arm statute.

A. Personal Jurisdiction Under The Illinois Long-Arm Statute

J.J. & J. contends that Tommy Moore supervised J.J. & J.'s work, and the work of other independent contractors, in Illinois; therefore, J.J. & J. and other independent contractors acted as Tommy Moore's agents while working on the Illinois projects. Tommy Moore consequently "transacted business" in Illinois through its agents, J.J. & J. and other independent contractors. However, in a sworn affidavit attached to the motion to dismiss, Betty Moore, the Secretary-Treasurer of Tommy Moore, states that Tommy Moore had absolutely no control over the independent contractors which performed all of the work on the Illinois projects. The court therefore finds that the independent contractors, including J.J. & J., transacted business in Illinois for themselves, and not as agents of Tommy Moore. See Biltmoor Moving and Storage Co. v. Shell Oil Co., 606 F.2d 202, 205, 208 (7th Cir.1979) (subcontractor was agent of general contractor for jurisdictional purposes where the general contractor directed and approved the subcontractor's activities). Cf. Lewis v. Mount Greenwood Bank, 91 Ill.App.3d 481, 46 Ill.Dec. 926, 414 N.E.2d 1079 (1980) (the issue of whether a contractor is an agent or an independent contractor turns on the principal's right to control the manner in which the work is to be done.)

The question remains, however, whether Tommy Moore itself "transacted business" in Illinois by virtue of its entrance into a contract with J.J. & J., under which J.J. & J. was required to perform certain cementing services in Illinois, as well as other states. In a trio of recent cases, the Seventh Circuit has considered whether, when a defendant enters into a contract which the plaintiff is required to perform in the forum state, the defendant is thereby subject to the jurisdiction of the courts of the forum state. Madison Consulting Group v. State of South Carolina, 752 F.2d 1193 (7th Cir.1985); Biltmoor, 606 F.2d 202 (7th Cir.1979); Lakeside Bridge & Steel Co. v. Mountain State Construction Co., Inc., 597 F.2d 596 (7th Cir.1979), cert. denied, 445 U.S. 907, 100 S.Ct. 1087, 63 L.Ed.2d 325 (1980). In all of these cases, however, the court considered whether jurisdiction by virtue of entrance into such an agreement would comport with the Due Process Clause, not the Illinois long-arm statute.³ Madison, 752 F.2d at 1195 n. 2; Biltmoor, 606 F.2d at 206; Lakeside, 597 F.2d at 599. As pointed out above, the Illinois Supreme Court has held that the Illinois long-arm statute does not extend to the outer limits of the Due Process Clause. Cook, 87 Ill.2d at 196-199, 57 Ill.Dec. at 733-35, 429 N.E.2d at 850-52; Green, 86 Ill.2d at 436-37, 56 Ill. Dec. at 660, 427 N.E.2d at 1206.

This court now finds that a corporation does not "transact business" in Illinois when it merely enters into a contract which the plaintiff must perform in part in Illinois. It is well-settled that Section 2-209's "transaction of business" standard does not require that the nonresident defendant conduct business within Illinois regularly or systematically; a single act may be sufficient, as long as the cause of action arises from that act. Jacobs/Kahan, 740 F.2d at 591 n. 4; Snyder, 736 F.2d at 416. Courts have found the solicitation or negotiation of a contract in Illinois sufficient to constitute transaction of business under Section 2-209. See, e.g., Jacobs/Kahan, 740 F.2d at 590 (defendants' partial negotiation and execution of a contract while in Illinois constitutes the transaction of business); Snyder, 736 F.2d at 416 (defendant mailed a letter from Illinois exercising his option to purchase, and negotiated the purchase price in Illinois; therefore, defendant transacted business in Illinois).

However, no court has found that, where a defendant has not solicited, negotiated, or performed under the contract in Illinois, but the contract requires the plaintiff to perform in Illinois, the defendant has "transacted business" in Illinois under Section 2-209. The Biltmoor court cited several Illinois cases for the proposition that the Illinois long-arm statute and the Due Process Clause permit Illinois courts to gain jurisdiction over a person or corporation who merely enters into a contract knowing that it will be performed in Illinois. Biltmoor, 606 F.2d at 207. However, in all of these cases, the defendants had also solicited, negotiated or performed under the contract in Illinois.⁴ This court therefore finds that a plaintiff's performance within Illinois, even if required under the contract, is not sufficient alone to support a finding that the defendant transacted business within Illinois pursuant to Section 2-209.⁵

B. Personal Jurisdiction Under The Due Process Clause

The court need not consider whether jurisdiction based solely on the required performance of the plaintiff within Illinois is consistent with Due Process in light of its holding that such an exercise of jurisdiction is not authorized under Illinois law. Jacobs/Kahan, ...