Sackett Enterprises, Inc. v. Staren

• Decision Date: 28 March 1991
• Docket Number: No. 1-89-1502,1-89-1502
• Citation: 211 Ill.App.3d 997,156 Ill.Dec. 226,570 N.E.2d 702
• Parties: , 156 Ill.Dec. 226 SACKETT ENTERPRISES, INC., Plaintiff-Appellee, v. John F. STAREN, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 702

570 N.E.2d 702

211 Ill.App.3d 997, 156 Ill.Dec. 226

SACKETT ENTERPRISES, INC., Plaintiff-Appellee, v. John F. STAREN, Defendant-Appellant.

No. 1-89-1502.

Appellate Court of Illinois,

First District, First Division.

March 28, 1991.

Braun & Rivkin, Ltd., Chicago (Lee M. Weisz, of counsel), for defendant-appellant.

Holleb & Coff, Chicago (Howard J. Stein and Bradley S. Block, of counsel), for plaintiff-appellee.

Justice CAMPBELL delivered the opinion of the court:

Defendant John Staren appeals an order of the circuit court of Cook County granting plaintiff Sackett Enterprises, Incorporated's ("Sackett") petition to register a default judgment rendered against Staren in the circuit court of Gibson County, Indiana. For the reasons stated below, we affirm.

The record on appeal indicates the following. Defendant is a resident of Illinois. Plaintiff is the lessee of certain oil wells located in Indiana. In 1986, plaintiff solicited defendant by telephone and mail to invest in these oil wells. Face-to-face negotiations concerning this investment took place in Chicago, Illinois. Plaintiff and defendant entered into an agreement under which defendant received an undivided fractional interest in oil wells in Knox County, Indiana. Defendant's purchase of this interest was financed by a loan from an Illinois bank.

On August 1, 1986, plaintiff filed suit against defendant in the circuit court of Gibson County, Indiana, for services and expenses which were allegedly incurred in the operation of the oil wells. The trial court entered a default judgment of $19,365.18 against defendant on October 7, 1986.

Plaintiff then petitioned the circuit court of Cook County for registration of the Indiana judgment pursuant to section 12-602 of the Illinois Code of Civil Procedure (Ill.Rev.Stat.1987, ch. 110, par. 12-602), which is also part of the Uniform Enforcement of Foreign Judgments Act ("Foreign Judgments Act"). (Ill.Rev.Stat.1987, ch. 110, par. 12-617.) Defendant contested the registration on the ground that the Indiana courts lacked jurisdiction over him. Following a hearing on the matter, the circuit court of Cook County granted plaintiff's petition.

Defendant now appeals, continuing to argue that the circuit court of Gibson County, Indiana, lacked personal jurisdiction over him, thus preventing the registration of the Indiana judgment.

A "foreign judgment" is defined as "any judgment, decree, or order of a court of the United States or of any State or territory, which is entitled to full faith and credit in this state." (Ill.Rev.Stat.1987, ch. 110, par. 12-601(a).) The purpose of the Foreign Judgments Act is to implement the full faith and credit clause of the United States Constitution. (Ace Metal Fabricating Co. v. Arvid C. Walberg & Co. (1985), 135 Ill.App.3d 452, 90 Ill.Dec. 266, 481 N.E.2d 1066; Ayers Asphalt Paving, Inc. v. Allen Rose Cement & Construction Co. (1982), 109 Ill.App.3d 520, 522, 65 Ill.Dec. 52, 54, 440 N.E.2d 907, 909; Thompson v. Safeway Enterprises, Inc. (1978), 67 Ill.App.3d 914, 916, 24 Ill.Dec. 561, 564, 385 N.E.2d 702, 705.) The Constitution requires that "Full Faith and Credit shall be given in each State to the public Acts, Records and judicial Proceedings of every other State." (U.S. Const., art. IV, sec. 1.) The intended purpose of the full faith and credit clause is "to alter the status of the several states as independent foreign sovereignties, each free to ignore obligations created under the laws or by the judicial proceedings of the others, and to make them integral parts of a single nation throughout which a remedy upon a just obligation might be demanded as of right, irrespective of the state of its origin." (Milwaukee County v. M.E. White Co. (1935), 296 U.S. 268, 277, 56 S.Ct. 229, 234, 80 L.Ed. 220, 228 (cited in Wisconsin v. Ubrig (1984), 128 Ill.App.3d 743, 745, 83 Ill.Dec. 877, 879, 470 N.E.2d 1297, 1299).) The Uniform Enforcement of Foreign Judgments Act was adopted in Illinois to aid the enforcement of judgments across state lines. Light v. Light (1957), 12 Ill.2d 502, 505, 147 N.E.2d 34, 37; Brownlee v. Western Chain Co. (1977), 49 Ill.App.3d 247, 250, 7 Ill.Dec. 635, 637, 364 N.E.2d 926, 928, cert. denied (1978), 435 U.S. 968, 56 L.Ed.2d 59.

"Under the doctrine of full faith and credit, the forum court will not rehear a case on its merits because the judgment is res judicata." (All Seasons Industries, Inc. v. Gregory (1988), 174 Ill.App.3d 700, 124 Ill.Dec. 308, 529 N.E.2d 25; Thompson, 67 Ill.App.3d at 916, 24 Ill.Dec. at 564, 385 N.E.2d at 705.) When a party seeks to register a foreign judgment in Illinois, however, the trial court may inquire into the proceedings of a sister State to determine whether the court had subject matter and personal jurisdiction. (Ace Metal, 135 Ill.App.3d at 457, 90 Ill.Dec. at 270, 481 N.E.2d at 1070; Grant, Schon, Wise & Grant, P.C. v. R.W. Borrowdale Co. (1983), 114 Ill.App.3d 89, 92, 69 Ill.Dec. 856, 858, 448 N.E.2d 574, 576; Evans v. Advance Schools, Inc. (1979), 70 Ill.App.3d 947, 950, 27 Ill.Dec. 40, 42, 388 N.E.2d 1003, 1005; Davis v. Nehf (1973), 14 Ill.App.3d 318, 321, 302 N.E.2d 382, 385.) If this inquiry reveals a jurisdictional defect which would either render the foreign judgment void according to the law of the foreign State, or deprive the foreign court of jurisdiction over the nonresident under the general Constitutional standards of due process, the foreign judgment has no Constitutional claim to full faith and credit. Grant, Schon, Wise & Grant, 114 Ill.App.3d at 92, 69 Ill.Dec. at 858, 448 N.E.2d at 576; Evans, 70 Ill.App.3d at 950, 27 Ill.Dec. at 42, 388 N.E.2d at 1005, citing Kolman v. National Racing Affiliates, Inc. (1965), 64 Ill.App.2d 61, 64, 212 N.E.2d 313, 315. Nevertheless, a judgment rendered by a court of general jurisdiction of a sister State carries a strong legal presumption that the court had jurisdiction and that its proceedings conformed to the law of the State in which it was rendered. (Ace Metal, 135 Ill.App.3d at 457, 90 Ill.Dec. at 270, 481 N.E.2d at 1070; Evans, 70 Ill.App.3d at 950-51, 27 Ill.Dec. at 42, 388 N.E.2d at 1005; Watts v. Barrett Industries Corp. (1978), 59 Ill.App.3d 1009, 1011, 17 Ill.Dec. 545, 546, 376 N.E.2d 691, 692; Nelson v. Sutton (1924), 232 Ill.App. 93, 100.) In Evans, the court held that this presumption prevailed where the defendant failed by certain and positive averments to negate every fact from which the jurisdiction of the court could arise. Evans, 70 Ill.App.3d at 951, 27 Ill.Dec. at 43, 388 N.E.2d at 1006.

In determining whether an Indiana court has personal jurisdiction over a nonresident defendant, Indiana courts ask: (1) whether the Indiana long-arm statute authorizes the exercise of jurisdiction over the nonresident; and (2) whether the exercise of personal jurisdiction pursuant to the long-arm statute would violate the nonresident's due process rights under the Fourteenth Amendment to the United States Constitution. See Reames v. Dollar Savings Association (Ind.App.1988), 519 N.E.2d 175; Bryan Mfg. Co. v. Harris (Ind.App.1984), 459 N.E.2d 1199.

The parties are in dispute as to whether defendant submitted himself to the jurisdiction of the Indiana courts pursuant to Indiana's long-arm statute (Ind.Rules of Procedure, Trial Rule 4.4(A)), which provides in relevant part:

(A) Acts Serving as a Basis for Jurisdiction. Any person or organization that is a non-resident of this state, a resident of this state who has left the state, or a person whose residence is unknown, submits to the jurisdiction of the courts of this state as to any action arising from the following acts committed by him or his agent:

(1) doing any business in this state;

* * * * * *

(5) owning, using, or possessing any real property or an interest in real property within this state * * *

The courts of Indiana have often addressed the issue of personal jurisdiction over nonresident defendants on the basis of their business activities within Indiana. (E.g. Condos v. Sun State Painting, Inc. (Ind.App.1983), 450 N.E.2d 86; Woodmar Coin Center, Inc. v. Owen (Ind.App.1983), 447 N.E.2d 618; Tietloff v. Lift-A-Loft Corp. (Ind.App.1982), 441 N.E.2d 986.) Although the purpose of the Indiana long-arm statute is to extend jurisdiction to the outer limits of due process (Dura-Line Corp. v. Sloan (Ind.App.1986), 487 N.E.2d 469), Indiana courts generally seem to require that the act be "substantial" and "business related." See Bryan Mfg., 459 N.E.2d at 1203-04 (discussing Griese-Taylor Corp. v. Lemmons (Ind.App.1981), 424 N.E.2d 173 (stock transfer, consulting services and payments in Indiana to Indiana residents) and Suyemasa v. Myers (Ind.App.1981), 420 N.E.2d 1334 (discussion of sale, negotiation and sale of stock to Indiana resident in Indiana).)

In this case, defendant trades pork bellies on the Chicago Mercantile Exchange. The interest at issue here is the only oil investment held by defendant. Defendant was solicited by plaintiff and never visited Indiana in the course of negotiating the transaction. The agreement was negotiated, executed and financed in Chicago. Telephone calls, by themselves, are not sufficient to fall within the "business" provision of the Indiana long-arm statute. See Subacz v. Town Tower Motel Corp. (N.D.Ind.1983), 567 F.Supp. 1308 (interpreting similar provision of Michigan law).

We therefore consider whether defendant has submitted himself to the jurisdiction of the Indiana courts by owning, using or possessing real property or an interest therein in Indiana. The Indiana legislature has generally defined "real property" as including lands, tenements and hereditaments. Ind.Code.Ann. § 1-1-4-5 (Burns 1990).

The interest at issue in this appeal is a "working interest," which has been defined as the interest of the lessee under an oil and gas lease--i.e.--an undivided interest in the gas and oil produced on a given parcel of land (See Williams v. Sohio...