Innovative Garage Door Co. v. High Ranking Domains, LLC

• Decision Date: 03 December 2012
• Docket Number: No. 2–12–0117.,2–12–0117.
• Citation: 2012 IL App (2d) 120117,367 Ill.Dec. 163,981 N.E.2d 488
• Parties: INNOVATIVE GARAGE DOOR COMPANY, Plaintiff–Appellant, v. HIGH RANKING DOMAINS, LLC, Defendant–Appellee.
• Court: United States Appellate Court of Illinois

2012 IL App (2d) 120117

981 N.E.2d 488

367 Ill.Dec. 163

INNOVATIVE GARAGE DOOR COMPANY, Plaintiff–Appellant,

v.HIGH RANKING DOMAINS, LLC, Defendant–Appellee.

No. 2–12–0117.

Appellate Court of Illinois,

Second District.

Dec. 3, 2012.

Michael A. Cotteleer, Young & Cotteleer, Wheaton, IL, for appellant.

Timothy A. Armstrong and Kenneth M. Mastny, Berglund, Armstrong & Mastny, PC, Oak Brook, IL, for appellee.

OPINION

Justice HUDSON delivered the judgment of the court, with opinion.

[367 Ill.Dec. 167]¶ 1 In this breach-of-contract case, plaintiff, Innovative Garage Door Company (Innovative), appeals the trial court's order dismissing its complaint against defendant, High Ranking Domains, LLC (HRD), for lack of personal jurisdiction. At issue is whether HRD's activities are sufficient to establish jurisdiction over it. We conclude that they are. Accordingly, we reverse and remand for further proceedings.

¶ 2 I. BACKGROUND

¶ 3 Innovative is an Illinois corporation that repairs and installs garage doors. HRD is an Arizona limited liability company with its principal place of business in Colorado. HRD owns at least three websites, including garagedoorsofamerica.com, designed to solicit inquiries from people seeking handyman, plumbing, or garage-door services. HRD then sells these leads to companies throughout the United States.

¶ 4 When the website garagedoorsofamerica. com is viewed,¹ a form allows users to seek services in specific states and cities. Illinois is listed in various locations as a supported state. Separate text links allow users to seek services in specific states, including Illinois. A person using the website can use pull-down menus to choose a specific city in Illinois and select a desired service in order to seek an estimate. The website then identifies a company that serves the area, provides a local telephone number to call for a free estimate, and lists coupon codes. HRD does not have offices in Illinois, and its employees do not regularly travel to Illinois or physically conduct business in this state.

¶ 5 In 2007, the president of Innovative saw an advertisement placed by HRD in International Door and Opener Magazine that invited garage-door installers across the country to enter into a contract to obtain installation and repair leads. Innovative became one of HRD's customers by downloading a written service agreement from HRD's website at highrankingdomains.com, which it submitted to HRD by mail or fax. HRD accepted the contract in Arizona. The highrankingdomains.com website states that HRD is an Internet lead-generation company that specializes in search-engine marketing. All indications from the website are that HRD does most, if not all, of its business online.

[367 Ill.Dec. 168]¶ 6 Under the agreement, HRD sold approximately 150 leads per year to Innovative for $15 each. The leads were compiled by HRD, concerned garage-door services in Illinois, and were for cities in Illinois that Innovative chose from an online selection. HRD transmitted the leads from Arizona to Innovative in Illinois, and Innovative paid for the leads using its Illinois credit-card account. How the leads were transmitted is unknown. The contract allowed for transmittal by telephone or e-mail, and the copy in the record does not indicate how leads were actually transmitted. Billing took place from Arizona and charges were made based on a credit-card authorization form that was sent to HRD in Arizona when the agreement was sent.

¶ 7 In November 2010, HRD terminated the agreement in order to sell the leads to another company. Innovative then filed a complaint seeking damages for breach of contract, contending that a clause in the contract required HRD to continue services indefinitely, with Innovative being the only party who could cancel the contract. HRD moved to dismiss the complaint, contending that the trial court lacked personal jurisdiction over it.

¶ 8 The trial court determined that, because there were no HRD offices in Illinois, no travel to Illinois, and no maintenance of business activities in Illinois, it lacked personal jurisdiction over HRD. The court found HRD's Internet activity akin to an advertisement and concluded that HRD was merely a conduit for connecting consumers with service providers. The court stated that HRD's activities were not sufficient to subject it to jurisdiction in every state where it brought together two in-state parties. Thus, the court dismissed the complaint. Innovative now appeals.

¶ 9 II. ANALYSIS

¶ 10 Innovative contends that the trial court erred in dismissing the case, arguing that HRD was subject to the lawsuit in Illinois because it collected information from Illinois residents via its Internet business and sold that information to Innovative in Illinois. HRD contends that subjecting it to suit in Illinois would violate due process (HRD mentions the Illinois long-arm statute (735 ILCS 5/2–209 (West 2010)) in its brief; however, the parties' arguments largely focus on federal due process principles).

¶ 11 “ ‘The plaintiff has the burden of proving a prima facie case for jurisdiction when seeking jurisdiction over a nonresident defendant.’ ” Wiggen v. Wiggen, 2011 IL App (2d) 100982, ¶ 20, 352 Ill.Dec. 572, 954 N.E.2d 432 (quoting Bolger v. Nautica International, Inc., 369 Ill.App.3d 947, 949, 308 Ill.Dec. 335, 861 N.E.2d 666 (2007)). “When the trial court decides the issue of personal jurisdiction based solely on documentary evidence, our review is de novo.” Id. “ ‘In reviewing affidavits and pleadings, we resolve conflicts between the documents in the plaintiff's favor for purposes of determining whether a prima facie case for jurisdiction has been shown.’ ” Id. (quoting Bolger, 369 Ill.App.3d at 950, 308 Ill.Dec. 335, 861 N.E.2d 666). “ ‘A plaintiff's prima facie case for jurisdiction can be overcome by a defendant's uncontradicted evidence that defeats jurisdiction.’ ” Id. (quoting Bolger, 369 Ill.App.3d at 950, 308 Ill.Dec. 335, 861 N.E.2d 666).

¶ 12 Section 2–209(c) of the Code of Civil Procedure (the long-arm statute) allows an Illinois court to exercise personal jurisdiction on any basis permitted by the Illinois Constitution and the Constitution of the United States. 735 ILCS 5/2–209(c) (West 2010). “ ‘Thus, the long-arm statute has been held to be coextensive with the due process requirements of the Illinois and United States Constitutions.’ ” Wiggen, 2011 IL App (2d) 100982, ¶ 21, 352 Ill.Dec. 572, 954 N.E.2d 432 (quoting Bolger, 369 Ill.App.3d at 950, 308 Ill.Dec. 335, 861 N.E.2d 666). Accordingly, the issue is addressed according to due-process requirements. Id.

¶ 13 “Under state due process guarantees, it must be fair, just, and reasonable to require a nonresident to defend an action in Illinois, considering the quality and nature of the defendant's acts that occur in Illinois or that affect interests located in Illinois.” Id. ¶ 22. The federal due process analysis considers whether “ ‘(1) the nonresident defendant had “minimum contacts” with the forum state such that there was “fair warning” that the nonresident defendant may be haled into court there; (2) the action arose out of or related to the defendant's contacts with the forum state; and (3) it is reasonable to require the defendant to litigate in the forum state.’ ” Bolger, 369 Ill.App.3d at 950, 308 Ill.Dec. 335, 861 N.E.2d 666 (quoting Keller v. Henderson, 359 Ill.App.3d 605, 613, 296 Ill.Dec. 125, 834 N.E.2d 930 (2005)) ²; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471–77, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Moreover, personal jurisdiction is not a contest between two states, with the winner being able to assert jurisdiction. Viktron Ltd. Partnership v. Program Data Inc., 326 Ill.App.3d 111, 118–19, 259 Ill.Dec. 706, 759 N.E.2d 186 (2001). Thus, conduct by a party that might allow another state to exercise jurisdiction is not relevant to assessing whether Illinois may assert it as well. Id. at 119, 259 Ill.Dec. 706, 759 N.E.2d 186.

¶ 14 At issue in this appeal is whether HRD had sufficient minimum contacts with Illinois so that Illinois courts can assert personal jurisdiction over it. “The minimum contacts required for the exercise of personal jurisdiction differ depending on whether general jurisdiction or specific jurisdiction is being sought.” Wiggen, 2011 IL App (2d) 100982, ¶ 24, 352 Ill.Dec. 572, 954 N.E.2d 432 (citing Bolger, 369 Ill.App.3d at 951, 308 Ill.Dec. 335, 861 N.E.2d 666). The present case arises out of HRD's relationship with Innovative; hence, we limit our inquiry to the question of specific jurisdiction and express no opinion on the subject of general jurisdiction. “ ‘A court has specific jurisdiction over a defendant if the suit arises out of or relates to the defendant's contacts with the forum state.’ ” Wiggen, 2011 IL App (2d) 100982, ¶ 29, 352 Ill.Dec. 572, 954 N.E.2d 432 (quoting Bolger, 369 Ill.App.3d at 952, 308 Ill.Dec. 335, 861 N.E.2d 666). “For specific jurisdiction, the suit must arise directly out of the contacts between the defendant and the forum.” Id.

¶ 15 A. Minimum Contacts

¶ 16 “ ‘In order for personal jurisdiction to comport with federal due process requirements, the defendant must have certain minimum contacts with the forum state such that maintaining the suit there does not offend traditional notions of fair play and substantial justice.’ ” Wiggen, 2011 IL App (2d) 100982, ¶ 24, 352 Ill.Dec. 572, 954 N.E.2d 432 (quoting Bolger, 369 Ill.App.3d at 951, 308 Ill.Dec. 335, 861 N.E.2d 666). “At a minimum, the court must find an act by which the defendant purposefully avails him or herself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.” Id. ¶ 29. “The focus is on the defendant's activities within the forum State, not on those of the plaintiff.” (Internal quotation marks omitted.) Id. “The purposeful-availment requirement exists so that an out-of-state defendant...