Ideal Ins. Agency, Inc. v. Shipyard Marine, Inc.

• Decision Date: 10 May 1991
• Docket Number: No. 2-90-1008,2-90-1008
• Citation: 572 N.E.2d 353,213 Ill.App.3d 675,157 Ill.Dec. 284
• Parties: , 157 Ill.Dec. 284 IDEAL INSURANCE AGENCY, INC., Plaintiff-Appellant, v. SHIPYARD MARINE, INC., Defendant-Appellee. Second District
• Court: United States Appellate Court of Illinois

Page 353

572 N.E.2d 353

213 Ill.App.3d 675, 157 Ill.Dec. 284

IDEAL INSURANCE AGENCY, INC., Plaintiff-Appellant, v. SHIPYARD MARINE, INC., Defendant-Appellee.

No. 2-90-1008.

Appellate Court of Illinois,

Second District.

May 10, 1991.

Dooley, Chessick & Giudice, Daniel L. Giudice, Robert Earl Dooley, Schaumburg, for Ideal Ins., Inc.

Bishop Rossi Garvey & Scarlatti, Oak Brook, Donald B. Garvey, C. Kent Frederick, for Shipyard Marine Ins.

Justice INGLIS delivered the opinion of the court:

Plaintiff, Ideal Insurance Company, appeals from an order of the circuit court of Du Page County which quashed the service of summons on defendant, Shipyard Marine, Inc. Plaintiff contends that the circuit court erred in determining that there was no in personam jurisdiction over defendant, a Wisconsin corporation. The issue on appeal is whether defendant transacted business in this State so as to come within the reach of the State's "long-arm" jurisdiction.

In 1989, the president of plaintiff, Gerald Grupe, was interested in buying a 43-foot Wellcraft Portofino boat to conduct a charter boating business. He was considering buying the boat from Rodi Yachts in Chicago (Chicago company), but had not actually seen the boat. Grupe learned that a Portofino boat was on display at a boat show in Racine, Wisconsin. On August 16, 1989, Grupe travelled to Racine and found the boat. While touring the boat, he was approached by Craig Braun, the president of defendant, who owned the boat. Grupe stated in his affidavit that Braun asked him if he was interested in the boat and that Grupe told him he was planning to purchase such a boat from the Chicago company. Grupe stated that Braun then said his company serviced and delivered boats in Chicago and that plaintiff should consider buying the boat from defendant.

Grupe's affidavit further indicated that Braun made the next telephone call in which Braun stated that defendant would match any bid which the Chicago company made and that defendant could deliver the boat in October or November because it had already had a slot with the manufacturer. It appears from the affidavits that both parties made telephone calls between defendant's Green Bay, Wisconsin, office and plaintiff's Lombard, Illinois, office. The parties discussed the cost of adding additional equipment and options to the price of the basic Portofino boat. Plaintiff decided to accept delivery of the boat at the manufacturer's docks in Florida, where plaintiff could operate charters during the winter.

On September 6, 1989, plaintiff received a final quotation and order form via facsimile machine from the Chicago company. Plaintiff telephoned defendant with the price, which defendant said it would match plus "throw in" a $5,000 autopilot device at no charge and make delivery by October 14, 1989. Defendant claimed that date was sooner than the other company could deliver the boat because defendant already had a hull arranged with the manufacturer and the Chicago company was allegedly "on probation" with the manufacturer. Defendant sent a contract by facsimile machine to plaintiff with instructions to sign the facsimile page and re-fax the page back to defendant. Defendant also instructed plaintiff to execute a formal copy of the contract in addition to the facsimile and send it back along with a $10,000 check as a deposit. On September 11, 1989, Grupe telephoned defendant, who told him that Braun would also transport the boat by trailer from Florida to Chicago in the summer, for a fee of $5,200. Plaintiff accepted defendant's bid, signed the contract in its office in Lombard, Illinois, sent a facsimile copy of the signed page to defendant, and mailed the executed copy and a $10,000 check to defendant in Wisconsin. The record does not reflect when Braun, as president of defendant, signed the contract.

The contract listed the basic price of the boat as $221,700, plus 33 specified options which brought the total to $276,500, less a discount of $53,758, and plus Florida sales tax of $11,137, for a balance of $233,879. No place of delivery is specified in the contract. The back side of the contract contained the following paragraph:

"10. CONTROLLING LAW. The parties acknowledge that the transaction which is the subject of this contract bears a reasonable relation to the State of Wisconsin and that the laws of the State of Wisconsin shall govern their rights and duties. The parties specifically intend that the provisions of the Uniform Commercial Code-Sales, as enacted in the State of Wisconsin. [sic ]"

When plaintiff's bank failed to approve financing, plaintiff cancelled the order and requested defendant to return the deposit. Defendant refused, and plaintiff filed suit in the circuit court of Du Page County, Illinois. Defendant filed a special and limited appearance (see Ill.Rev.Stat.1989, ch. 110, par. 2-301) and moved to quash the service of summons on the ground that jurisdiction was improper under the "long-arm" statute (Ill.Rev.Stat.1989, ch. 110, par. 2-209). The circuit court agreed and granted defendant's motion. Plaintiff now appeals.

The issue before this court is whether the State of Illinois can properly exercise jurisdiction over the nonresident defendant. This issue involves three similar but distinct analyses which can easily be confused and combined. The first is whether a nonresident defendant was "doing business" in this State so as to maintain a presence subjecting it to in personam jurisdiction for all matters. The second analysis is, alternatively, where a defendant is not doing business in this State generally, whether it has sufficiently transacted a business act in this State to come within the "long-arm" jurisdiction. Third, whether the defendant has created certain minimum contacts with this State such that due process of law would not be violated in compelling it to litigate the controversy in this State.

A court need not make each analysis in every case. For example, it is unnecessary to determine whether the requirements of the long-arm statute have been met when the due process clause bars any exercise of jurisdiction over a defendant. (Wiles v. Morita Iron Works Co. (1988) 125 Ill.2d 144, 149, 125 Ill.Dec. 812, 530 N.E.2d 1382; Chalek v. Klein (1990), 193 Ill.App.3d 767, 770-72, 140 Ill.Dec. 760, 550 N.E.2d 645 (nonresident passive buyers who purchase by mail order do not have minimum contacts with Illinois, disagreeing with the rule in Empress International, Ltd. v. Riverside Seafoods, Inc. (1983), 112 Ill.App.3d 149, 154-55, 67 Ill.Dec. 891, 445 N.E.2d 371).) Conversely, if the long-arm requirements are not met, there is no need to determine whether jurisdiction is constitutionally permissible under the due process clause. R.W. Sawant & Co. v. Allied Programs Corp. (1986), 111 Ill.2d 304, 311, 95 Ill.Dec. 496, 489 N.E.2d 1360; Konicki v. Wirta (1988), 169 Ill.App.3d 21, 25-26, 119 Ill.Dec. 692, 523 N.E.2d 160.

First, jurisdiction in this case is grounded solely on the long-arm power of this State, not on the basis that defendant was "doing business" in this State such that it maintained a presence here. We note here that the "doing business" form of jurisdiction has recently been codified as section 2-209(b)(4) of the Code of Civil Procedure (Code) (Ill.Rev.Stat.1989, ch. 110, par. 2-209(b)(4)). While there were vague references that defendant admitted to delivering and servicing boats in Illinois, defendant denied that it had an office or a sales agent in this State. Plaintiff's allegations were insufficient to establish that defendant was continuously and systematically doing business in this State so as to be present for service of process in the same manner as other resident corporations. See Braband v. Beech Aircraft Corp. (1978), 72 Ill.2d 548, 557-58, 21 Ill.Dec. 888, 382 N.E.2d 252, cert. denied (1979), 442 U.S. 928, 99 S.Ct. 2857, 61 L.Ed.2d 296; Chandler Leasing Co. v. Trus Joist Corp. (1980), 90 Ill.App.3d 875, 878, 46 Ill.Dec. 293, 414 N.E.2d 15.

Next, we analyze whether Illinois has jurisdiction over defendant under the long-arm statute. Under the long-arm statute, a nonresident submits to the jurisdiction of this State upon "(1) [t]he transaction of any business within this State; * * * [or] (7) [t]he making or performance of any contract or promise substantially connected with this State." (Ill.Rev.Stat.1989, ch. 110, pars. 2-209(a)(1), (a)(7).) Only the cause of action arising from that act may be asserted against a defendant based on long-arm jurisdiction. (Ill.Rev.Stat.1989, ch. 110, par. 2-209(f).) Thus, an Illinois court will accept jurisdiction only where the defendant transacted business in this State; the cause of action arose from the transaction; and the exercise of jurisdiction is consistent with due process. Mandalay Associates Limited Partnership v. Hoffman (1986), 141 Ill.App.3d 891, 894, 96 Ill.Dec. 225, 491 N.E.2d 39.

The scope of the long-arm statute may not be coextensive with the jurisdictional aspect of the Federal due process considerations in any particular situation. The long-arm statute has a definite meaning and scope which does not fluctuate with every new pronouncement of the limits of Federal due process, which merely delineates the outer limits beyond which a State may not go to acquire jurisdiction over nonresidents. (Green v. Advance Ross Electronics Corp. (1981), 86 Ill.2d 431, 436, 56 Ill.Dec. 657, 427 N.E.2d 1203.) The Illinois long-arm statute may restrict the power that the courts of this State have to bring nonresidents before them to a greater extent than do the Federal due process clause and the "minimum contacts" standard which the Supreme Court has developed over the years. Rollins v. Ellwood (1990), 141 Ill.2d 244, 271-72, 152 Ill.Dec. 384, 565 N.E.2d 1302.

On September 7, 1989, the day defendant sent its bid, before the parties made several telephone calls and before plaintiff signed the contract, a new version of the...