Brandon Apparel Group v. Quitman Manufacturing Co., 98 C 7146.

Decision Date18 March 1999
Docket NumberNo. 98 C 7146.,98 C 7146.
Citation42 F.Supp.2d 821
PartiesBRANDON APPAREL GROUP, INC., Plaintiff, v. QUITMAN MANUFACTURING COMPANY INC., Defendant.
CourtU.S. District Court — Northern District of Illinois

Donald Kroyer Sylvanus Petersen, Petersen & Lefkofsky, P.C., Bloomfield Hills, MI, John A. Sopuch, III, J. Jeffrey Nouhan, Sopuch, Nouhan, Higgins & Arnett, LLP, Chicago, IL, for plaintiff.

Shayle P. Fox, John T. Martin, Fox and Grove, Chartered, Chicago, IL, David E. Mullis, Smith & Mullis, Valdosta, GA, for defendant.

MEMORANDUM OPINION AND ORDER

ALESIA, District Judge.

Before the court is defendant Quitman Manufacturing Company, Inc.'s motion (1) to dismiss for lack of personal jurisdiction; (2) to dismiss for improper venue; or, alternatively, (3) to transfer venue. For the following reasons, the court denies defendant's motion in full.

I. BACKGROUND

Plaintiff Brandon Apparel Group, Inc. ("Brandon") is a Delaware corporation that has its corporate headquarters and principal place of business in Chicago, Illinois. Defendant Quitman Manufacturing Company, Inc. ("Quitman") is a Georgia corporation that has its principal place of business in Georgia. Brandon is a manufacturer and distributor of licensed apparel that is embroidered with the logos of various athletic teams. Brandon purchases blank garments from companies such as Quitman, embroiders the logos on the garments, and then sells the garments to its customers, which include major retail department stores. Brandon also purchases fully embroidered garments from companies such as Quitman and then packages and sells these garments to its customers.

In October or November of 1997, Suzanne Anderson of Brandon sent Quitman a letter, asking whether Quitman would be available to cut and sew garments for Brandon. In response to the letter, Bruce Feinberg ("Bruce"), who is President of Quitman, contacted Anderson and told her that Quitman was not interested in being a contractor for Brandon but was interested in producing finished product for Brandon. Bruce asked Anderson to send him information so that he could provide a price quote. Anderson sent the requested information and asked Bruce to advise her as to what Quitman's best F.O.B. price was. On January 7, 1998, Bruce sent a letter to Anderson in Chicago stating Quitman's best price for the garments.

After sending the letter and before March 4, 1998, Bruce tried calling Anderson, but she never returned his calls. During this time, Bruce spoke with Steve Everhart, who is associated with another apparel manufacturer and who spoke periodically with Brad Keywell ("Keywell"), who is the President of Brandon. Bruce asked Everhart to tell Keywell about Quitman.

On March 4, 1998, Keywell called Bruce, stating that Everhart had told him to call. Keywell invited Bruce to come visit Brandon's distribution center in Chicago to talk about doing business together. Bruce then made arrangements for him and Larry Snyder, a Quitman sales representative, to go visit Brandon in Chicago.

On March 13, 1998, Bruce and Snyder visited Brandon in Chicago. Bruce, Snyder, Keywell, and Eric Lefkofsky, who is Brandon's Chief Executive Officer, were present for the meeting, during which the parties discussed Brandon's needs for production and how Quitman could meet those needs. The parties also discussed Quitman's quest to form an alliance with another company in the sports apparel business. The meeting ended with parties agreeing that Brandon would supply Quitman with information about Brandon's needs for the Fall of 1998 so that Quitman could prepare a price quote and that discussions would continue about how the two companies could form an alliance of some sort. After the meeting, Bruce and Snyder toured Brandon's facility.

After the March 13th meeting and before April 13, 1998 (the date on which Quitman representatives would visit Brandon in Chicago again), the parties sent a number of communications to one another. This included Brandon faxing Bruce the information about Brandon's production needs for the Fall of 1998 and Bruce faxing Brandon a list of the orders that Brandon had given Quitman, which listed the quantities ordered and agreed upon ship dates.

On April 14, 1998, Bruce and Snyder returned to Chicago, along with Phillip Feinberg, who is the Secretary/Treasurer of Quitman, to visit Brandon. The parties toured Brandon's facilities and discussed various ways of integrating their organizations.

During April of 1998 through June of 1998, Brandon faxed Quitman many purchase orders for the purchase and manufacture of thousands of garments. The purchase orders identified the garments being purchased by Brandon from Quitman, the garments being manufactured by Quitman for Brandon, and the amount of money to be paid by Brandon to Quitman. The purchase orders were prepared and completed in Chicago and were faxed to Quitman's offices in New York. As part of the agreement, Brandon agreed to, and did, supply Quitman with materials and supplies for the manufacture of garments, which ended up being over $100,000 worth of materials.

After the April 14th meeting and before the end of June 1998 (the time at which Quitman representatives would visit Brandon for a third and final time), the parties communicated back and forth with one another by phone, fax, and letter with respect to matters concerning the purchase orders. These communications included letters and faxes sent by Quitman to Brandon in Chicago and telephone calls between Bruce and Keywell or Lefkofsky in Chicago.

Pursuant to the purchase orders, Quitman made many shipments of goods to Brandon. The first shipment was shipped overnight via United Parcel Service. Quitman claims that besides the first shipment, all product was picked up by Brandon in Georgia rather than Quitman shipping the product to Illinois. According to Carolyn Brooker (the Brandon employee who handled Brandon's relationship with Quitman on a day-to-day basis), there were shipments that were F.O.B. Georgia; however, there were also shipments where Quitman sent the product to Illinois. In support of Brooker's statement, Brandon submitted a copy of a Bill of Lading which shows that Quitman shipped product to Illinois.

Meanwhile, discussions about the possibility of a merger between the two companies continued. In June of 1998, Quitman representatives visited Brandon in Chicago to conduct a due diligence investigation, during which Quitman representatives discovered what they believed to be problems with Brandon's accounting records. After the due diligence investigation, Quitman representatives made no further trips to Illinois on behalf of Brandon and all merger negotiations ceased. After that occurred, all discussions between Brandon and Quitman were via telephone and fax and consisted of discussions about shipping and payment. During the months from June through mid-October of 1998, over 200 calls were placed from Quitman to Brandon in Chicago, with at least 38 of those calls lasting longer than two minutes.

According to Brandon, during the months from May through October of 1998, Bruce and Phillip made representations to Lefkofsky and Keywell that Quitman would supply Brandon with quality goods in a timely fashion and would use only the materials supplied by Brandon to Quitman for use in garments that Quitman was making pursuant to a Brandon purchase order. At the time that these representations were made, Lefkofsky and Keywell were in Lefkofsky's office in Chicago. Brandon alleges that despite these representations, Quitman failed to deliver the garments ordered by Brandon in an acceptable condition and at the dates and times agreed to by the parties. Brandon further alleges that Quitman refused to use the materials and supplies provided by Brandon to manufacture the garments ordered by Brandon and refuses to return the materials and supplies to Brandon.

Based on the above, Brandon filed a complaint against Quitman in this court, which was amended on November 16, 1998. The first amended complaint contains claims for breach of contract, fraud and misrepresentation, and unjust enrichment. This court has subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1332 as there exists complete diversity between the parties and the amount in controversy exceeds $75,000. In response to Brandon's complaint, Quitman filed a motion to dismiss for lack of personal jurisdiction, to dismiss for improper venue, or, alternatively, to transfer the case to the United States District Court for the Middle District of Georgia pursuant to 28 U.S.C. § 1404(a).

II. DISCUSSION
A. Quitman's motion to dismiss for lack of personal jurisdiction

Quitman has moved to dismiss for lack of personal jurisdiction, arguing that Quitman's "contacts with Illinois do not meet the requirements of due process under either the Illinois or United States Constitutions." (Def.'s Mot. at 6.) Brandon opposes the motion, arguing that this court's assertion of jurisdiction would not violate due process.

The standard for deciding a motion to dismiss for lack of personal jurisdiction is straightforward. The plaintiff bears the burden of proving that personal jurisdiction exists. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997); McIlwee v. ADM Indus., Inc., 17 F.3d 222, 223 (7th Cir.1994). In deciding a motion to dismiss for lack of personal jurisdiction, the court may receive and consider affidavits from the parties. Turnock v. Cope, 816 F.2d 332, 333 (7th Cir.1987). The court resolves factual disputes in the pleadings and affidavits in favor of the plaintiff but takes as true those facts contained in the defendant's affidavits that remain unrefuted by the plaintiff. RAR, 107 F.3d at 1275; Boese v. Paramount Pictures Corp., No. 93 C 5976, 1994 WL 484622, at *2 (N.D.Ill. Sept.2, 1994) (citing Nelson v. Park Indus., Inc., 717 F.2d...

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