Dixon v. GAA Classic Cars, LLC

• Decision Date: 30 September 2019
• Docket Number: No. 1-18-2416,1-18-2416
• Citation: 2019 IL App (1st) 182416,145 N.E.3d 429,437 Ill.Dec. 856
• Parties: John DIXON, Plaintiff-Appellant, v. GAA CLASSIC CARS, LLC, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

2019 IL App (1st) 182416

145 N.E.3d 429

437 Ill.Dec. 856

John DIXON, Plaintiff-Appellant,

v.GAA CLASSIC CARS, LLC, Defendant-Appellee.

No. 1-18-2416

Appellate Court of Illinois, First District, FIRST DIVISION.

September 30, 2019

Craig R. Annunziata and Jason D. Keck, of Fisher & Phillips, LLP, of Chicago, for appellant.

Marc C. Smith, of Fox Rothschild LLP, of Chicago, for appellee.

JUSTICE WALKER delivered the judgment of the court, with opinion.

¶ 1 John Dixon sued GAA Classic Cars, LLC (GAA), for fraudulent misrepresentations in connection with the sale of an automobile at an auction livestreamed over the Internet from North Carolina. The circuit court granted GAA's motion to dismiss the complaint for lack of personal jurisdiction. We hold that Dixon's allegations that GAA sent fraudulent advertisements, e-mails, and phone calls to Illinois and made fraudulent misrepresentations on its website suffice to give Illinois courts personal jurisdiction over GAA. We reverse the circuit court's judgment.

¶ 2 I. BACKGROUND

¶ 3 On January 25, 2018, plaintiff John Dixon saw an advertisement posted by GAA on a car-related website. The advertisement listed a 1973 Ford Bronco for sale at auction. Dixon responded to the advertisement by sending an e-mail to GAA, requesting more information about the Bronco, including how to bid for it. GAA responded with an e-mail to Dixon, inviting Dixon to bid on the Bronco at the auction scheduled for March 2, 2018. GAA's email told Dixon he could participate "via live simulcast bidding or on the telephone via phone bidding." GAA added that Dixon could find more information about the Bronco at GAA's website. Dixon, via e-mail, asked for pictures of the Bronco's engine. GAA again responded by e-mail that it would send him pictures of the engine once GAA received the Bronco from its owner. GAA told Dixon that the auction price for the Bronco should "run around $30,000.00 - $40,000.00."

¶ 4 Dixon spoke telephonically with an agent of GAA on February 6, 2018. They discussed registration for the March auction, and the agent offered to e-mail the forms that Dixon needed to return for participation in the auction. In a subsequent phone conversation, GAA reaffirmed the representations it made in the advertisement, that the owner had the Bronco "Frame Off Restored in 2017" with "New Brakes & Tires" and the Bronco was "Garage Kept & Frequently Driven Since Restoration." GAA's agent added that the Bronco was rated "4.5 out of 5." Dixon returned the signed registration form to GAA, and GAA forwarded a photograph of the Bronco via text message to Dixon's cell phone. On February 27, 2018, GAA sent Dixon two photographs of the Bronco's engine.

¶ 5 GAA telephoned Dixon on March 2, 2018, at his Illinois telephone number, to obtain Dixon's bids on the Bronco. Dixon watched GAA's simulcast of the auction, and in the simulcast, GAA again said the Bronco was "frame off restored." Dixon bid $37,000 for the Bronco, and he was the highest bidder. GAA e-mailed a bill of sale to Dixon, along with payment instructions. Dixon hired the shipping transport company GAA recommended to ship the Bronco to Illinois. On March 13, 2018, Dixon received the Bronco, and he immediately recognized that it had significant problems because GAA had misrepresented the Bronco's condition.

¶ 6 Dixon had the Bronco towed to a mechanic "well-versed in the repair, building, and restoration of 1973 Ford Broncos." The mechanic determined that the Bronco

"(1) was not ‘frame off’ restored; (2) was in a mechanically and electrically unsafe condition; (3) contained significant material defects that were purposefully hidden to conceal their discovery and identity; (4) had significant safety issues that were hidden to conceal their discovery and identity; (5) was inoperable and could not have been ‘frequently drive[n]’ as represented by Defendant; (6) did not have ‘new brakes’ as represented by Defendant; (7) had a steering stabilizer that was worn out and leaking; (8) did not have an operable heating system; (9) had an illegally oversized right rear drum; (10) had cut electrical wires controlling the turn signal connector, windshield wiper, and interior lights; (11) contained an engine that was not original and had been improperly modified; and (12) was not, by any means, in a condition where it would receive a ‘4.5/5’ rating."

¶ 7 In May 2018, Dixon filed a complaint against GAA. The complaint, as amended, alleged negligent misrepresentation, fraudulent misrepresentation, deceptive practices, and fraudulent concealment. GAA filed a motion to dismiss the first amended complaint for lack of jurisdiction. GAA, a North Carolina corporation with its principal place of business in Greensboro, North Carolina, argued that it did not have ongoing activity in Illinois and never purposely availed itself of the privilege of conducting business in Illinois.

¶ 8 The circuit court granted GAA's motion, finding that the circuit court lacked specific personal jurisdiction over GAA because GAA did not have sufficient contacts with the state of Illinois. Dixon now appeals.

¶ 9 II. ANALYSIS

¶ 10 On appeal, Dixon argues he alleged facts showing that Illinois courts have personal jurisdiction over GAA. Because the circuit court decided the jurisdictional issue solely on documentary evidence, we review the ruling de novo . Wiggen v. Wiggen , 2011 IL App (2d) 100982, ¶ 20, 352 Ill.Dec. 572, 954 N.E.2d 432.

¶ 11 Illinois courts have general jurisdiction over a nonresident defendant only if the defendant's "affiliations with the State in which suit is brought are so constant and pervasive as to render [it] essentially at home in the forum State." (Internal quotation marks omitted.) Daimler AG v. Bauman , 571 U.S. 117, 122, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). Dixon does not argue that Illinois courts have general jurisdiction over GAA. Thus, we address only the issue of whether Dixon met his burden of alleging facts that establish a prima facie case for specific jurisdiction over GAA. See Wiggen , 2011 IL App (2d) 100982, ¶ 20, 352 Ill.Dec. 572, 954 N.E.2d 432.

¶ 12 Specific jurisdiction requires

"a showing that the defendant purposefully directed its activities at the forum state and the cause of action arose out of or relates to the defendant's contacts with the forum state. [Citation.] Under specific jurisdiction, a nonresident defendant may be subjected to a forum state's jurisdiction based on certain single or occasional acts in the state but only with respect to matters related to those acts." (Internal quotation marks omitted.) Russell v. SNFA , 2013 IL 113909, ¶ 40, 370 Ill.Dec. 12, 987 N.E.2d 778.

¶ 13 Dixon points to several alleged acts by which GAA directed its activities to Illinois. GAA posted an advertisement on a website that reached a national audience. GAA sent e-mails to Dixon in Illinois, and those e-mails included forms for Dixon to fill out to enter the auction and to complete the purchase of the Bronco. The e-mails included a link to GAA's website, which also reached a national audience. In the e-mails and in phone calls, GAA invited Dixon to participate in the auction by watching it as GAA simulcast it on its website. GAA engaged in several telephone conversations with Dixon, and GAA called him in Illinois on March 2, 2018, to solicit his bid for the Bronco.

¶ 14 "The type of Internet activity that is sufficient to establish personal jurisdiction remains an emerging area of jurisprudence." Bombliss v. Cornelsen , 355 Ill. App. 3d 1107, 1114, 291 Ill.Dec. 925, 824 N.E.2d 1175 (2005). Generally, "a website that provides only information does not create the minimum contacts necessary to establish personal jurisdiction over a defendant." Illinois v. Hemi Group LLC , 622 F.3d 754, 759 (7th Cir. 2010). In ruling that Illinois courts had personal jurisdiction over Hemi Group, the Hemi Group court found:

"Hemi created several commercial, interactive websites through which customers could purchase cigarettes from Hemi. Hemi held itself out as open to do business with every state (including Illinois) except New York. After the customers made their purchases online, Hemi shipped the cigarettes to their various destinations. It is Hemi reaching out to residents of Illinois, and not the residents reaching back, that creates the sufficient minimum contacts with Illinois that justify exercising personal jurisdiction over Hemi in Illinois." Hemi Group , 622 F.3d at 758.

¶ 15 Similarly, operating a website that permitted Illinois users to submit payment online for goods and services sufficed to give Illinois courts jurisdiction over the nonresident defendant in uBID, Inc. v. GoDaddy Group, Inc. , 623 F.3d 421 (7th Cir. 2010). GAA's website included information on cars for sale to customers in all states, and it simulcast an auction in which GAA solicited bids from all across the country.

¶ 16 GAA also sent e-mails to Dixon in Illinois, including forms and instructions that served as an integral part of its extraction of money from Dixon. "[E-]mails may be properly considered in minimum contacts analyses, especially if they were purposefully sent to a forum resident knowing that they would ‘most likely’ be read in the forum." Levin v. Posen Foundation , 62 F. Supp. 3d 733, 740 (N.D. Ill. 2014) (quoting Felland v. Clifton , 682 F.3d 665, 676 n.3 (7th Cir. 2012) ). In Bryant v. Smith Interior Design Group, Inc. , 310 S.W.3d 227, 229 (Mo. 2010), the Missouri Supreme Court found that Missouri courts had jurisdiction over a nonresident defendant who "sent e-mails and fraudulent or misleading documents into Missouri with the intent to defraud [the plaintiff] and to conceal the true nature of [the defendant's] commission charges, resulting in harm to [the plaintiff] in Missouri."

¶ 17 Dixon alleged that in the advertisement and in his telephone conversations with GAA, GAA misrepresented the condition of the Bronco. Dixon alleged that GAA stated, falsely, that the Bronco's owner...