Jamik, Inc. v. Days Inn of Mount Laurel, 99 C 3990.

Decision Date30 November 1999
Docket NumberNo. 99 C 3990.,99 C 3990.
Citation74 F.Supp.2d 818
PartiesJAMIK, INC., d/b/a Luxury Commercial Bath Systems, Plaintiff, v. DAYS INN OF MOUNT LAUREL, d/b/a Days Inn Fellowship, William Juliano, Sr. and William Juliano, Jr., Defendants.
CourtU.S. District Court — Northern District of Illinois

Anthony C. Valiulis, Kimberly A. Krugman, Much Shelist Freed Denenberg Ament & Rubenstein, P.C., Chicago, IL, for plaintiff.

James P. Mullally, Konewko Grief & I Mullally, Ltd., West Chicago, IL, for defendants.

MEMORANDUM OPINION AND ORDER

ALESIA, District Judge.

Before the court is defendants' motion to dismiss plaintiff's first amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) or, in the alternative, to transfer venue pursuant to 28 U.S.C. § 1404(a). For the reasons that follow, the court grants defendants' motion to dismiss.

I. BACKGROUND

Defendants William T. Juliano and William J. Juliano (collectively "defendants") own and operate a Days Inn Hotel, pursuant to a franchise agreement, in Mount Laurel, New Jersey. Defendants both reside in New Jersey. Plaintiff Luxury Commercial Bath Systems ("plaintiff") is a corporation located in Chicago Ridge, Illinois.

In or about June of 1998, plaintiff contacted William T. Juliano in New Jersey in an effort to solicit defendants' business for the sale and installation of bathroom-related items in defendants' hotel. After receiving plaintiff's telephone call, defendants returned that call and requested a written proposal for the delivery and installation of bathroom-related items in defendants' New Jersey hotel. Plaintiff then sent a hard-copy of this proposal to defendants in New Jersey. On or about January 12, 1999, while in New Jersey, defendants executed this agreement with plaintiff.

Pursuant to this agreement, plaintiff manufactured bathtub enclosure units for shipment to New Jersey. The units were delivered to defendants' hotel in Mount Laurel, New Jersey, where plaintiff or its agent was to install them. Plaintiff, or plaintiff's agent, was only able to install a portion of the bathtub enclosure units before a fire, causing extensive damage to defendants' hotel, occurred. However, plaintiff or its agent remain ready, willing and able to complete the contract. (Pl. Compl. ¶ 6.) Thus, plaintiff claims that it is entitled to full payment under the contract, in the amount of $168,446.85. (Pl. Compl. ¶¶ 4, 8.)

In their motion to dismiss, defendants allege that this fire was caused by plaintiff or plaintiff's agent during the installation of the bathtub units. (Defs.Mem. in Support of Mot. to Dismiss at 3.) According to defendants, the fire started when plaintiff or plaintiff's agent dropped a tool down a hollow wall. (Id.) This tool hit wires located within the wall and caused sparks to ignite. (Id.) Defendants argue that this fire — allegedly caused by plaintiff or plaintiff's agent — serves as a defense to the contract claim and as an independent counterclaim against plaintiff.

II. DISCUSSION
A. Personal Jurisdiction

In a case based upon diversity of citizenship, a federal court sitting in Illinois has personal jurisdiction over a nonresident defendant only if an Illinois court would have jurisdiction. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir.1997); Daniel J. Hartwig Assoc., Inc. v. Kanner, 913 F.2d 1213, 1216 (7th Cir.1990). Under Illinois law, the plaintiff bears the burden of establishing personal jurisdiction. RAR, 107 F.3d at 1276 (citing McIlwee v. ADM Indus. Inc., 17 F.3d 222, 223 (7th Cir.1994)). In deciding a motion to dismiss for lack of personal jurisdiction, the court may receive and consider affidavits from both parties. Turnock v. Cope, 816 F.2d 332, 333 (7th Cir.1987). The court resolves factual disputes in the pleadings and affidavits, but takes as true those facts contained in defendant's affidavits that remain unrefuted by the plaintiff. Boese v. Paramount Pictures Corp., No. 93 C 5976, 1994 WL 484622, *2 (N.D.Ill. Sept.2, 1994).

Illinois authorizes personal jurisdiction to the limit allowed under the due process clauses of the Illinois and United States Constitutions. RAR, 107 F.3d at 1276-77; Dehmlow v. Austin Fireworks, 963 F.2d 941, 945 (7th Cir.1992) (explaining that the amendment of the Illinois long-arm jurisdictional statute collapsed the statutory part of the personal jurisdiction analysis into one, constitutional inquiry). Thus, the inquiry is whether personal jurisdiction is permitted by (1) the due process clause of the Illinois Constitution and (2) the Due Process Clause of the Fourteenth Amendment of the Constitution of the United States. RAR, 107 F.3d at 1276. If jurisdiction is improper under either constitution, the court cannot exercise jurisdiction over the defendant. Glass v. Kemper Corp., 930 F.Supp. 332, 338 (N.D.Ill.1996).

1. Illinois Due Process

The Illinois Constitution contains a guarantee of due process that is separate and independent from the federal due process clause. Under the Illinois Constitution's guarantee of due process, "[j]urisdiction is to be asserted only when it is fair, just, and reasonable to require a nonresident defendant to defend an action in Illinois, considering the quality and nature of the defendant's acts which occur in Illinois or which affect interests located in Illinois." Rollins v. Ellwood, 141 Ill.2d 244, 152 Ill.Dec. 384, 565 N.E.2d 1302, 1316 (1990). Unfortunately, with respect to personal jurisdiction, the Illinois courts have given little guidance as to how Illinois due process differs from federal due process.

Some Illinois courts have upheld personal jurisdiction — under the Illinois Constitution's due process clause — "over a non-resident corporate purchaser engaged in a commercial relationship with an Illinois corporation through the placing of purchase orders to the plaintiff in Illinois for products manufactured in Illinois." RAR, 107 F.3d at 1276 (citing Autotech Controls Corp. v. K.J. Elec. Corp., 256 Ill.App.3d 721, 195 Ill.Dec. 526, 628 N.E.2d 990, 995-96 (1993)). On the other hand, some Illinois courts have found that merely entering into a contract with an Illinois resident is not enough to subject the nonresident party to personal jurisdiction in Illinois. Mellon First United Leasing v. Hansen, 301 Ill.App.3d 1041, 235 Ill.Dec. 508, 705 N.E.2d 121, 127 (1998) (finding that nonresident defendant was not subject to personal jurisdiction in Illinois because defendant (1) executed the contracts and obtained and used the equipment in California; (2) never came to Illinois; and (3) only had contact with Illinois through correspondence). In this case, defendants entered into a contract with an Illinois resident, after the Illinois resident solicited the defendants' business. Second, defendants obtained and used the equipment in New Jersey. Finally, defendants did not travel to Illinois, but dealt with plaintiff only by telephone, fax, or mail. Thus, it appears that defendants are not subject to personal jurisdiction under the Illinois due process. However, given the lack of guidance Illinois courts have provided in determining when it is "fair, just, and reasonable" to subject a nonresident defendant to personal jurisdiction in Illinois, the court will turn to the federal constitutional issue. See RAR, 107 F.3d at 1277 (finding no definitive state law, the Seventh Circuit turned to federal due process law).

2. Federal Due Process

The Due Process Clause of the Fourteenth Amendment limits when a state court may assert personal jurisdiction over a nonresident defendant. Id. Federal due process requires that the defendants have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). Courts have typically considered the due process analysis as a two-part inquiry: (1) the court must determine whether minimum contacts exist, and if so, (2) the court must determine whether the exercise of personal jurisdiction comports with traditional notions of fair play and substantial justice. Tingstol Co. v. Rainbow Sales, Inc., 8 F.Supp.2d 1113, 1115 (N.D.Ill.1998).

Minimum contacts are those acts by which the defendant has "purposefully avail[ed] [himself] of the privilege of conducting activities within the forum," Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), such that he should "reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). If a defendant has purposefully availed himself of the privilege of conducting business within the state, he has enjoyed the benefits and protections of that state's laws such that jurisdiction over him satisfies due process. Hanson, 357 U.S. at 253, 78 S.Ct. 1228.

Subject to the limits of due process, a court may exercise two types of personal jurisdiction over an out-of-state defendant: general and specific. What the minimum contacts standard means in a particular case depends on whether the jurisdiction is general or specific. RAR, 107 F.3d at 1277.

a. General jurisdiction

General jurisdiction arises when the nonresident defendant has "continuous and systematic general business contacts" with the forum state. Id. (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). This is a fairly high standard requiring a great amount of contacts. Glass, 930 F.Supp. at 338. In this case, plaintiff has not alleged that defendants have had such continuous and systematic contacts with Illinois. However, to the contrary, in their affidavits, defendants claim that (1) they have never lived in Illinois; (2) they have...

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