Eagle Air Transp., Inc. v. Nat'l Aerotech Aviation Del., Inc.

• Decision Date: 18 December 2014
• Docket Number: Case No. 14–cv–2604
• Citation: 75 F.Supp.3d 883
• Parties: Eagle Air Transport, Inc., Plaintiff, v. National Aerotech Aviation Delaware, Inc., and Kevin Williams, Defendants.
• Court: U.S. District Court — Northern District of Illinois

75 F.Supp.3d 883

Eagle Air Transport, Inc., Plaintiff

v.National Aerotech Aviation Delaware, Inc., and Kevin Williams, Defendants.

Case No. 14–cv–2604

United States District Court, N.D. Illinois, Eastern Division, Eastern Division .

Signed December 18, 2014

Fred Michael Morelli, Jr., Morelli & Cook, Aurora, IL, Heidi Marie Emmett, Emmett Law, Ottawa, IL, for Plaintiff.

Carter A. Korey, Ryan D. Gibson, Korey Richardson LLC, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge:

Defendants National Aerotech Aviation Delaware, Inc. (“Aerotech Delaware”) and Kevin Williams (“Williams”), move to dismiss Plaintiff Eagle Air Transport, Inc.'s (“Eagle Air Transport”) Third Amended Complaint (the “Complaint”).¹ For the reasons set forth below, the Court grants Defendants' motion in part and denies it in part.

BACKGROUND

In evaluating this motion to dismiss, the Court accepts as true the Complaint's well-pleaded factual allegations and draws all reasonable inferences in favor of Plaintiff. Stayart v. Yahoo!, Inc., 623 F.3d 436, 438 (7th Cir.2010). This action arises out of Aerotech Delaware's sale of a De Haviland DHC–6–200 aircraft (the “Aircraft”) to Eagle Air Transport pursuant to an Aircraft Purchase and Sale Agreement (the “Agreement”). (R. 29, Third Am. Compl. ¶ 18.); (R. 29–1, Third Am. Compl. Ex. A, Agreement.) Eagle Air Transport is incorporated in the state of Illinois and has its principal place of business in Ottawa, Illinois. (R. 29, Third Am. Compl. ¶¶ 12.); (R. 38–1, Nelson Aff. ¶ 3.) Aerotech Delaware is incorporated in the state of Delaware with its principal place of business in Hampton, Georgia. (R. 29, Third Am. Compl. ¶ 3.) Defendant Kevin Williams is the general manager of Aerotech Delaware and its sole shareholder, director, and officer. (Id. ¶¶ 54–55.) Williams is a citizen of Georgia. (Id. ¶ 4.)

In late 2012 or early 2013, Eagle Air Transport posted on LinkedIn that it sought to purchase an aircraft. (Id. ¶ 7.) Aerotech Delaware saw the posting and reached out to Eagle Air Transport. (Id. ¶ 8.) The parties proceeded to negotiate by phone and e-mail, with Eagle Air Transport in Illinois and Aerotech Delaware in Georgia. (Id. ¶¶ 8, 14.) In the spring of 2013, two representatives of Eagle Air Transport traveled to Georgia to view the Aircraft, and Eagle Air Transport and Aerotech Delaware eventually entered into the Agreement for its sale. (Id. ¶¶ 15, 18.) Aerotech Delaware sent the draft Agreement via e-mail to Eagle Air Transport, Inc, which executed the contract in Illinois, and then faxed it back to Aerotech Delaware in Georgia. (Id. ¶ 21.) Under the Agreement, Aerotech Delaware delivered the Aircraft to Plaintiff in Georgia. (Id. ¶ 28.)

Plaintiff alleges that shortly after taking possession of the Aircraft on or about August 28, 2013, it discovered multiple, severe problems that adversely affected the Aircraft's airworthiness and safety. (Id. ¶¶ 28, 31.) In September 2013, Aerotech Delaware sent a mechanic to perform work on the Aircraft in Illinois, but he did not successfully fix its problems. (Id. ¶ 34.) The next month, Williams personally came to Illinois and performed work on the Aircraft, but he also failed to correct all of its deficiencies. (Id. ¶ 35.) Eagle Air Transport then advised Defendants that the Aircraft was not as they had represented and that their work did not fulfill the terms of the warranty contained in the Agreement. (Id. ¶ 36.) Defendants responded by repudiating the warranty, and refusing to perform any further work on the Aircraft. (Id. ¶ 36.)

In its Third Amended Complaint, Plaintiff alleges four counts, all based on diversity jurisdiction: 1) breach of the Aircraft Purchase and Sale Agreement; 2) breach of warranty; 3) an alter ego claim; and 4) tortious interference with contractual relations. Plaintiff brings Counts One and Two against both Defendants, and Counts Three and Four solely against Kevin Williams individually. Defendants move to dismiss all four counts based on a lack of personal jurisdiction and subject-matter jurisdiction, and for failure to state a claim on which relief can be granted. See Fed. R. Civ. P. 12(b)(1), (2), and (6).

ANALYSIS

Defendants move to dismiss the Complaint on several grounds. First, they argue that under Rule 12(b)(2) the Court does not have personal jurisdiction over either Defendant. Second, they assert that under Rule 12(b)(1) the Court does not have subject matter jurisdiction over this action. Finally, they argue that under Rule 12(b)(6) each of the Complaint's four counts fails to state a claim for relief and thus the Court should dismiss the Complaint in its entirety. The Court will examine each argument in turn.

I. Personal Jurisdiction

A. Legal Standard

Because Plaintiff brings this case based on diversity jurisdiction, personal jurisdiction is governed by the law of the forum state. Fed. R. Civ. P. 4(k)(1)(A) ; N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir.2014) ; Felland v. Clifton, 682 F.3d 665, 672 (7th Cir.2012). A “court's exercise of jurisdiction over the defendant must be authorized by the terms of the forum state's personal-jurisdiction statute and also must comport with the requirements of the Fourteenth Amendment's Due Process Clause.” Felland, 682 F.3d at 672 (citing Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir.2010) ); see also N. Grain Mktg., 743 F.3d at 491–492.

“Illinois law permits its courts to exercise jurisdiction over a person ‘as to any cause of action arising from ... (1)[t]he transaction of any business within Illinois; or ... (7)[t]he making or performance of any contract or promise substantially connected with [Illinois].’ ” N. Grain Mktg., 743 F.3d at 491 (quoting 735 ILCS 5/2–209(a)(1), (7) ). It also contains a catch-all provision which permits a court to exercise personal jurisdiction “on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States.” 735 ILCS 5/2–209(c) ; see id. at 491–92. “Thus, the [Illinois] statutory question merges with the constitutional one.” N. Grain Mktg., 743 F.3d at 492. Because the Seventh Circuit has held that in Illinois “there is no operative difference” between the limits of the Illinois Constitution and the United States Constitution, the question is “whether the exercise of personal jurisdiction would violate federal due process.” See Mobile Anesthesiologists Chicago, LLC v. Anesthesia Associates of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir.2010) (citations omitted); Russell v. SNFA, 2013 IL 113909, ¶¶ 32–33, 370 Ill.Dec. 12, 987 N.E.2d 778, 785–86 (Ill.2013).

For a court to exercise personal jurisdiction over an out-of-state defendant, the defendant must have sufficient “minimum contacts” with the forum state “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Mobile Anesthesiologists Chicago, 623 F.3d at 443 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). Personal jurisdiction may be either general or specific. See Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc. , 751 F.3d 796, 800 (7th Cir.2014) (citing Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 753, 187 L.Ed.2d 624 (2014) ).

Here, Plaintiff does not allege that general jurisdiction exists, and argues solely that it has established specific jurisdiction. “Specific jurisdiction is available for a suit that arises out of the forum-related activity.” Advanced Tactical, 751 F.3d at 800. The “court's exercise of specific jurisdiction requires that the defendant's contacts with the forum state relate to the challenged conduct.” Felland, 682 F.3d at 673. Three requirements exist to establish specific jurisdiction: “(1) the defendant must have purposefully availed himself of the privilege of conducting business in the forum state or purposefully directed his activities at the state; (2) the alleged injury must have arisen from the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with traditional notions of fair play and substantial justice.”Id. (internal citations omitted).

When a district court determines a Rule 12(b)(2) motion based on the submission of written materials without holding an evidentiary hearing, the plaintiff must make a prima facie case of personal jurisdiction. See uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423–24 (7th Cir.2010) ; GCIU–Emp'r Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir.2009). Under such circumstances, the plaintiff bears the burden of establishing that personal jurisdiction exists. See uBID, Inc. , F.3d at 423–24 ; see also GCIU–Emp'r Ret. Fund, 565 F.3d at 1023. In determining whether the plaintiff has met its burden, courts resolve all factual disputes in the plaintiff's favor. See uBID, Inc. , F.3d at 423–24 ; GCIU–Emp'r Ret. Fund, 565 F.3d at 1020 n. 1. Here, only Plaintiff submitted affidavits—accordingly, the Court accepts as true any facts contained therein. See Purdue Res. Found . v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir.2003).

B. Personal Jurisdiction over Aerotech Delaware

Plaintiff argues that Illinois has personal jurisdiction over Aerotech Delaware for several reasons.² First, Aerotech Delaware initiated contact with Plaintiff in Illinois by responding to Plaintiff's posting on LinkedIn that Plaintiff was looking for an airplane, and continued to negotiate with Plaintiff via telephone and e-mail knowing that Plaintiff was located in Illinois. Second, Aerotech Delaware knew that the purchaser of its Aircraft was located in Illinois, and that if the Aircraft needed any warranty work under the Agreement, such work would necessarily take place in Illinois.

“With respect to contract disputes, ‘contracting with an out-of-state party alone cannot establish automatically sufficient minimum contacts in the other party's home forum.’ ” N. Grain Mktg., ...