Coca-Cola Co. v. A. Epstein and Sons Intern., Inc.

• Decision Date: 23 September 1980
• Docket Number: COCA-COLA,No. 79-1732,79-1732
• Citation: 44 Ill.Dec. 551,411 N.E.2d 917,89 Ill.App.3d 253
• Court: United States Appellate Court of Illinois
• Parties: , 44 Ill.Dec. 551 TheCOMPANY et al., Plaintiffs, v. A. EPSTEIN AND SONS INTERNATIONAL, INC. et al., Defendants. A. EPSTEIN AND SONS INTERNATIONAL, INC. et al., Third Party Plaintiffs- Appellants, v. APPROVED ROOFING AND SHEET METAL COMPANY, INC., Third Party Defendant-Appellee, and Crowther, Inc. et al., Third-Party Defendants.

Page 917

411 N.E.2d 917

89 Ill.App.3d 253, 44 Ill.Dec. 551

The COCA-COLA COMPANY et al., Plaintiffs, v. A. EPSTEIN AND SONS INTERNATIONAL, INC. et al., Defendants.

A. EPSTEIN AND SONS INTERNATIONAL, INC. et al., Third Party Plaintiffs- Appellants, v. APPROVED ROOFING AND SHEET METAL COMPANY, INC., Third Party

Defendant-Appellee,

and

Crowther, Inc. et al., Third-Party Defendants.

No. 79-1732.

Appellate Court of Illinois, First District, Second Division.

Sept. 23, 1980.

Rehearing Denied Oct. 22, 1980.

William I. Goldborg, John H. Ward and Antonow & Fink, Chicago, for plaintiffs-appellants.

Franklin P. Auwarter, Herbert J. Sue and Mayer, Brown & Platt, Chicago, for defendant-appellee.

PERLIN, Presiding Justice:

Third party plaintiffs, A. Epstein and Sons International, Incorporated (a Delaware corporation headquartered in Illinois), and its wholly owned subsidiaries, A. Epstein & Sons Incorporated and the Mc Kinley Company (both Illinois corporations) appeal from an order of the circuit court of Cook County dismissing for lack of personal jurisdiction a third party complaint against the non-resident third party defendant, Approved Roofing and Sheet Metal Company (hereinafter referred to as APPROVED), an Ohio corporation. The question presented by this appeal is whether the jurisdictional facts alleged establish sufficient contacts between the non-resident defendant and the State of Illinois to justify the courts of Illinois exercising personal jurisdiction.

For reasons hereinafter set forth we affirm the judgment of the circuit court of Cook County.

Third party plaintiffs contend that APPROVED transacted business within this state, thereby rendering it amenable to jurisdiction within Illinois pursuant to Section 17 of the Illinois Civil Practice Act (Ill.Rev.Stat.1977, ch. 110, par. 17) which provides for in personam jurisdiction over non-resident defendants. Commonly known as the Illinois "long arm" statute, Section 17 states in pertinent part:

"1) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any such acts:

(a) The transaction of any business within this State * * *."

It is undisputed that if jurisdiction is to be sustained over the non-resident defendant in the instant case it must be acquired under the Illinois "long arm" statute. It is our conclusion that APPROVED's alleged contacts with the State of Illinois are not of such a nature and quality to support the exercise of personal jurisdiction.

The pertinent facts, while contradictory as to certain allegations, are as follows:

The Coca-Cola Company and Canners for Coca-Cola Bottlers, Incorporated (hereinafter referred to collectively as Coca-Cola), brought suit against A. Epstein & Sons International, Incorporated (hereinafter referred to as International), its wholly owned Illinois subsidiaries, A. Epstein & Sons, Incorporated (hereinafter referred to as Sons) and the Mc Kinley Company (hereinafter referred to as Mc Kinley), and the A. Epstein Companies, Incorporated (hereinafter referred to as Companies) ¹, for alleged breach of six written contracts relating to the design and construction of the roofs of six facilities located in three states: Ohio, Illinois and New Hampshire. International, Sons, Mc Kinley and Companies answered denying the material allegations and asserting various defenses. Additionally, three of the defendants, International, Companies and Mc Kinley (hereinafter collectively referred to as third party plaintiffs), filed on May 3, 1978 a third party complaint against the three subcontractors who had actually installed four of the allegedly defective roofs. Third party defendant, Crowther Roofing & Sheet Metal, Inc. is an Illinois corporation. Third party defendant, Reliable Roofing & Sheet Metal Co. Inc., a foreign corporation, does not appeal from the determination of the trial court that it had sufficient contacts with Illinois. Only APPROVED, the Ohio third party defendant, is before this court on appeal.

On June 2, 1978 APPROVED filed a special and limited appearance and a motion to quash service of summons, attacking the jurisdiction of the Illinois courts (Ill.Rev.Stat.1977, ch. 110, par. 20). Summons had been served in accordance with the Illinois Civil Practice Act (Ill.Rev.Stat.1977, ch. 110, par. 1, et seq.). In support of its motion to quash service of summons, APPROVED submitted memoranda of law and an affidavit alleging that it had done no act to submit to the jurisdiction of the Illinois courts. Third party plaintiffs filed a memorandum and affidavits in opposition to the motion of APPROVED. After arguments of counsel, the trial court on November 1, 1978 granted APPROVED's motion. On January 17, 1979 third party plaintiffs filed a motion to reconsider the order of November 1, 1978 dismissing APPROVED (Ill.Rev.Stat.1977, ch. 110A, par. 304(a)). After additional memoranda and arguments of counsel, the trial court on March 7, 1979 denied the third party plaintiffs' motion. On August 16, 1979 the orders of November 1, 1978 and March 6, 1979 were certified by the trial court and this appeal taken.

APPROVED is a roofing contractor located in Columbus, Ohio. It is a corporation organized and existing under the laws of Ohio. APPROVED maintains it has never performed services or furnished materials outside Ohio and its business is limited almost exclusively to construction projects located within a 75 mile radius of Columbus, Ohio. In 1969 and 1970 APPROVED was listed in the directory of the National Roofing Contractors Association headquartered in Oak Park, Illinois. This directory lists the names and addresses of its members.

During 1970 APPROVED subscribed to reporting services listing construction contracts to be put out for bid in Ohio. APPROVED learned from such a service that bids were to be accepted on a contract for the installation of a roof on a can manufacturing plant and warehouse to be built in Columbus, Ohio. At some time prior to the deadline for bids on the aforementioned project, APPROVED contacted Mc Kinley's Ohio construction manager, William Swigert, in Columbus, Ohio, for the specifications pertaining to the project. APPROVED met with Swigert and ultimately submitted its bid on the project to Swigert in Columbus, Ohio. Swigert then forwarded the bid to Mc Kinley in Chicago.

A written contract, entitled "purchase order," addressed to APPROVED and dated December 10, 1969, was prepared by Mc Kinley in Chicago, Illinois and sent to Columbus, Ohio. The contract allegedly incorporated the terms of APPROVED's bid and specified additionally that the terms and conditions of the contract between Coca-Cola and the general contractor, Mc Kinley, would become part of this contract between Mc Kinley and APPROVED.

The terms of the contract between Coca-Cola and Mc Kinley provide that "(t)he law of the place of the building shall govern the construction of the contract," and that Mc Kinley maintain in Ohio an on-site representative. The contract between Mc Kinley and APPROVED further provided that APPROVED furnish Workmen's Compensation and Structural Insurance and issue a guarantee to Mc Kinley when its contract was completed. The contract between Mc Kinley and APPROVED further required that Mc Kinley's Ohio construction manager, Swigert, review, initial and approve any requests for payment submitted by APPROVED.

During the performance in Ohio of the contract between Mc Kinley and APPROVED, Mc Kinley issued from Chicago various change orders addressed to APPROVED to be performed in Ohio. Each of the change orders expressly provided that to expedite payment APPROVED should have Swigert, the Ohio construction manager, review and initial all payment requests. Invoices requesting payment were addressed to Mc Kinley in Chicago but were submitted by APPROVED to Swigert in Columbus, Ohio. Swigert then forwarded the invoices to Mc Kinley in Chicago, and Mc Kinley paid for the completed work by sending checks drawn on an Illinois bank to APPROVED in Ohio. All but two of the invoices in the record on appeal bear the initials "WFS."

The other two documents concerning the performance of the contract which do not bear the initials of Swigert, Mc Kinley's Ohio construction manager, are the Final Statement dated September 17, 1970 and stamped received by Mc Kinley on September 23, 1970, and the Guarantee dated October 2, 1970 and stamped received by Mc Kinley on December 2, 1970. Mc Kinley contends on appeal that the "final statement" and "guarantee" were mailed directly to Mc Kinley, thereby evidencing direct contact by APPROVED with the State of Illinois. Further, Mc Kinley asserts that the two invoices which do not bear the initials of Swigert additionally demonstrate direct communication by APPROVED. In response to these assertions APPROVED replies that consistent with its practice of submitting all documents to Swigert in Ohio, these documents also were delivered to Swigert who forwarded them to Mc Kinley in Chicago. The lapse of time between the dates on the documents and the notations of receipt by Mc Kinley are cited by APPROVED to support its argument that even these documents were not mailed by it directly to Mc Kinley in Illinois.

The Illinois "long arm" statute was intended to assert jurisdiction over non-resident defendants to the extent permitted by due process. (Nelson v. Miller (1957), 11 Ill.2d 378, 389, 143 N.E.2d 673; Chicago Film Enterprises v. Jablanow (1st Dist. 1977), 55 Ill.App.3d 739, 741, 13 Ill.Dec. 466, 371 N.E.2d 161.) The parties are in agreement that the constitutional standard for determining whether Illinois may rightfully assert jurisdiction over APPROVED is set forth in International Shoe Co. v....