Alderson v. Southern Co.
| Citation | 321 Ill. App.3d 832,254 Ill.Dec. 514,747 N.E.2d 926 |
| Decision Date | 22 March 2001 |
| Docket Number | No. 1-99-3015.,1-99-3015. |
| Parties | Richard T. ALDERSON, Robert A. Kallok, Cyril Smotrilla, David Arcuri, and Paul Danielson, Plaintiffs-Appellees, v. SOUTHERN COMPANY; Southern Energy, Inc.; Southern Energy Resources, Inc.; Southern Energy Trading and Marketing, Inc.; SEI State Line, Inc.; State Line Holding Corporation; and State Line Energy, L.L.C., Defendants-Appellants (Southern Energy North America, Inc.; Southern Electric International, Inc. and Commonwealth Edison, Defendants). |
| Court | United States Appellate Court of Illinois |
David C. Jensen, Michael E. O'Neill and John P. Twohy, Eichhorn & Eichhorn, Hammond, Indiana, James A. Klenk, Sonnenschein, Nath & Rosenthal, Chicago, for Appellants.
Kevin P. Durkin, Clifford Law Offices, Chicago, for Appellees Alderson and Kallok.
Stephen D. Phillips, John G. Phillips & Associates, and Robert P. Sheridan, Chicago, for Appellee Smotrilla.
David K. Lietz, Coale, Cooley, Lietz, McInerny & Broadus, Washington, D.C., David Americus and Bryan E. Curry, Gozdecki & Del Guidice, Chicago, for Appellee Arcuri.
Joseph P. Sorce and Kirsten M. Dunne, Goldberg, Weisman & Cairo, Ltd., Chicago, for Appellee Danielson.
I. INTRODUCTION
The appellants in this case are affiliated corporations that allegedly owned, possessed, or operated the premises where the accident giving rise to this dispute occurred. They appeal from the order of the circuit court which denied their motions to dismiss the actions against them for lack of in personam jurisdiction. We affirm in part, reverse in part, and remand the cause to the circuit court for further proceedings.
II. BACKGROUND
The complaints in these consolidated cases stem from injuries plaintiffs Richard T. Alderson, Robert A. Kallok, Cyril Smotrilla, Paul Danielson, and David Arcuri sustained in a July 28, 1998, coal dust explosion at the State Line Generating Station (Power Plant) in Hammond, Indiana (Hammond). The Power Plant abuts the Indiana Illinois state line. Plaintiffs are employees of Indiana contractors that were performing services at the Power Plant at the time of the explosion. Alderson, Kallok, Arcuri, and Danielson are Indiana residents.
The complaints name as defendants Southern Company (Southern), Southern Energy, Inc. (Southern Energy), Southern Energy Resources, Inc. (Southern Energy Resources), Southern Energy Trading and Marketing, Inc. (Southern Energy Trading and Marketing), Southern Electric International, Inc. (Southern Electric International), Southern Energy North America, Inc. (Southern Energy North America), State Line Energy, L.L.C. (State Line Energy), SEI State Line, Inc. (SEI), State Line Holding Corp. (State Line Holding), and Commonwealth Edison. Plaintiffs alleged that all defendants other than Commonwealth Edison (hereinafter referred to collectively as defendants) owned and operated the Power Plant on the date of the accident.
The complaints contain counts against defendants sounding in negligence and res ipsa loquitur and allege general negligence in the operation and maintenance of the Power Plant. Defendants filed a special appearance and a motion to dismiss for lack of in personam jurisdiction. In the motion, defendants asserted that they do not transact business, own property, maintain offices, or have employees in Illinois and attached affidavits of officers or employees to support these assertions.
The trial court granted plaintiffs leave to conduct limited discovery on the issue of jurisdiction before responding to the motion. Discovery revealed the following pertinent facts. Southern is essentially a holding company organized primarily to acquire and hold the securities of electric power, light and gas, and other public utility companies. It is the parent corporation of Southern Energy. Southern Energy North America is a wholly-owned subsidiary of Southern Energy. Southern Energy North America owns SEI and State Line Holding. Southern Energy Trading and Marketing was the entity within the Southern organization which facilitated the trading of energy resources among utility companies. According to deposition witnesses, in September 1997, Southern Energy Trading and Marketing merged with another corporation to form Southern Company Energy Marketing. Southern Energy Trading and Marketing maintains a registered agent for service of process in Illinois. Each defendant just described is a Delaware corporation and has its principal office in Georgia.
SEI and State Line Holding own State Line Energy. State Line Energy is an Indiana limited liability company and owns the power plant and its equipment. State Line Energy has no employees. All personnel at the Power Plant on the date of the accident were employees of Southern Energy Resources. Many of the workers employed at the Power Plant are Illinois residents. As is the case with State Line Energy, most of the Southern entities do not have employees but instead draw their personnel from Southern Energy Resources. A subsidiary of Southern Energy, Southern Energy Resources is a Delaware corporation, has its principal office in Georgia, and maintains a registered agent for service in Illinois. Plaintiffs served summons upon the Illinois registered agents of Southern Energy Trading and Marketing and Southern Energy Resources. With the exception of the suits filed in connection with the July 28, 1998, incident, defendants have never been sued in Illinois.
Pursuant to an Asset Sale Agreement dated April 17, 1996, State Line Energy purchased the Power Plant from Commonwealth Edison Company of Indiana, Inc., a wholly-owned subsidiary of Commonwealth Edison. On that same date, State Line Energy executed a Power Purchase Agreement under which it agreed to supply the Power Plant's electrical output exclusively to Commonwealth Edison for 15 years. This agreement required State Line Energy to commit the Power Plant's normal operating capacity, 490 megawatts at the time the parties entered into the agreement, to Commonwealth Edison. The Power Purchase Agreement also granted Commonwealth Edison a right of first refusal regarding any power generated beyond 490 megawatts.
Commonwealth Edison retained title to equipment on the Power Plant premises to enable it to take title to the electricity at that location. It distributed the power from there to its customers. Both the Asset Sale Agreement and the Power Purchase Agreement were executed in Illinois and contained Illinois choice-of-law provisions. The notice provisions in both agreements directed that communications to State Line Energy be sent to the offices of SEI in Georgia.
There are several other agreements that define the relationship between State Line Energy and Commonwealth Edison. Pursuant to a Coal Supply Agreement dated December 29, 1997, Commonwealth Edison agreed to supply all of the coal required to satisfy State Line Energy's obligations under the Power Purchase Agreement. The Coal Supply Agreement contained an Illinois choice-of-law provision, a venue provision designating Illinois as the chosen forum for any action to enforce the provisions of the agreement, and a notice provision providing that communications to State Line Energy be sent to its Hammond, Indiana, address.
A Facilities Agreement dated December 30, 1997, sets forth State Line Energy's obligations regarding the maintenance of certain equipment at the Power Plant to ensure the reliable delivery of electrical power to Commonwealth Edison. The Facilities Agreement also provided for a communications link, in the form of a dedicated telephone line, between the Power Plant and Commonwealth Edison offices in Illinois. The purpose of the dedicated line was to allow the parties to the agreement to communicate regarding output requirements and conditions affecting the output or reliability of the Power Plant. The Facilities Agreement likewise contained an Illinois choice-of-law provision and a notice provision directing that communications to State Line Energy be sent to the offices of SEI in Georgia.
In a Consulting Services Agreement dated January 1, 1998, Commonwealth Edison undertook to provide consulting services to State Line Energy. This agreement contained an Indiana choice-of-law provision and a notice provision directing that any communications to State Line Energy be sent either to a post office box in Chicago or to its Hammond address.
In a Training Services Agreement dated June 10, 1998, Commonwealth Edison agreed to provide emergency response training to State Line Energy at a Commonwealth Edison facility in Illinois. This agreement listed State Line Energy's Chicago post office box address and contained an Illinois choice-of-law provision.
In connection with its purchase of the Power Plant, State Line Energy filed a petition requesting that the Indiana Utility Regulatory Commission (IURC) refrain from asserting jurisdiction over the Power Plant's operation. In the petition, State Line Energy stated that, because of its obligations under the Power Purchase Agreement, it would not be making any sale of power to a retail customer in Indiana or elsewhere. The petition further stated that the The petition further represented that, as an exempt wholesale generator, State Line Energy was subject to the regulation of the Federal Energy Regulatory Commission and that Illinois, in effect, would review State Line Energy's transactions through its regulation of Commonwealth Edison.1
The discovery materials also contain the deposition testimony of several witnesses. In his deposition, Randall...
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