Skipper Marine Electronics, Inc. v. Cybernet Marine Products

• Decision Date: 27 June 1990
• Docket Number: No. 1-89-0693,1-89-0693
• Citation: 558 N.E.2d 324,200 Ill.App.3d 692
• Parties: , 146 Ill.Dec. 361 SKIPPER MARINE ELECTRONICS, INC., an Illinois corporation, Plaintiff-Appellant, v. CYBERNET MARINE PRODUCTS, a division of Kyocera Electronics, Incorporated, a California corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 324

558 N.E.2d 324

200 Ill.App.3d 692, 146 Ill.Dec. 361

SKIPPER MARINE ELECTRONICS, INC., an Illinois corporation Plaintiff-Appellant, v. CYBERNET MARINE PRODUCTS, a division of Kyocera Electronics Incorporated, a California corporation, Defendant-Appellee.

No. 1-89-0693.

Appellate Court of Illinois First District, Third Division.

June 27, 1990.

Rehearing Denied Aug. 3, 1990.

Shifris & Barry, Ltd., Northbrook (Kevin G. Barry and Donald S. Shifris), for plaintiff-appellant.

Spensley Horn Jubas & Lubitz, Los Angeles, Cal., Victor A. Rodger Shoenberg, Fisher & Newman, Ltd., Chicago, Leonard A. Nelson, for defendant-appellee.

Justice WHITE delivered the opinion of the court.

Plaintiff, Skipper Marine Electronics, Inc. ("SMI") ¹ appeals from an order of the circuit court granting the motion of defendant Cybernet Marine Products to dismiss SMI's action pursuant to section 2-619(a)(3) of the Code of Civil Procedure (Ill.Rev.Stat.1987, ch. 110, par. 2-619(a)(3)), on the ground that there was another action pending between the parties in a California court. SMI contends that Illinois is the proper forum for the action and that the trial court abused its discretion in granting defendant's motion to dismiss.

On March 17, 1988, SMI filed suit in the circuit court of Cook County against defendant, a division of the California corporation Kyocera Electronics, Inc. ("Kyocera"). SMI's complaint alleged that SMI was a dealer/distributor of defendant's products; that defendant had entered into contracts with SMI for the purchase of defendant's products; and that although these purchases qualified for defendant's "Volume Bonus" and "Cooperative Advertising" incentive programs, defendant refused to credit SMI's account for the amount of incentives earned. SMI also alleged that by seeking strict enforcement of the provisions of the incentive programs against SMI, but not against other dealer/distributors, defendant was in violation of the Illinois Anti-Trust Act. Ill.Rev.Stat.1987, ch. 38, par. 60-7(2).

Defendant was served with process on March 24, 1988, and on September 13, 1988, defendant filed a motion to dismiss or transfer on the ground of forum non conveniens and a motion for involuntary dismissal pursuant to section 2-619(a)(3). Section 2-619(a)(3) provides that a defendant may file a motion for dismissal of an action on the ground that there is another action pending between the same parties for the same cause.

Attached to defendant's section 2-619(a)(3) motion for involuntary dismissal was a copy of a complaint filed by Kyocera in the Municipal Court of California against a California corporation also named Skipper Marine Electronics, Inc. ("SMC"). The complaint, which was filed on March 10, 1988 and served on March 29, alleged that SMC was in debt to Kyocera in the amount of $11,770 for goods furnished to SMC by Kyocera at SMC's request and that despite Kyocera's demands SMC had refused to pay for the goods ordered. The complaint also requested a judicial declaration of the parties' rights and duties under Kyocera's Volume Bonus and Cooperative Advertising incentive programs and of whether these rights were affected by SMC's failure to make timely payments as required by the terms of the incentive programs.

In support of its motion to dismiss, defendant argued that the California action was filed prior to the Illinois action and that both sought a determination of the same issue, i.e., the parties rights under Kyocera's incentive programs. Defendant further argued that to allow both actions to proceed would result in unnecessary expense to the parties, a duplication of judicial resources, and the possibility of inconsistent rulings.

In its reply to defendant's motion, SMI acknowledged that it was affiliated with SMC and that products billed to SMI were delivered to SMC. SMI argued however that defendant's motion to dismiss should not be granted: (1) because SMI was not a party to the California action; (2) because the Illinois court first acquired jurisdiction over the parties, when service of process was obtained in the Illinois action five days before it was obtained in the California action; and (3) because all transactions and sales between SMI and defendant were conducted in Illinois.

In response, defendant presented the trial court with certified copies of pleadings filed by SMC in the California court. In these pleadings, SMC requested that the California court stay or dismiss Kyocera's action on the ground that an identical action involving the same parties was pending in the courts of the State of Illinois. Defendant also filed documents showing that Donald Shifris, one of SMC's attorneys, was both president of SMI and chief executive officer of SMC; that the only other officer in either corporation was Virginia Pietrzycki, who served as secretary of both; and that Shifris and Pietrzycki were the only directors of the two corporations.

Following a hearing on defendant's motion to dismiss pursuant to section 2-619(a)(3), the trial court entered an order dismissing plaintiff's action. No action was taken on defendant's motion to dismiss for forum non conveniens.

In its appeal, SMI argues that the parties to the Illinois and California actions were not the same and, therefore, it was error for the trial court to dismiss the action pursuant to section 2-619(a)(3). SMI further argues that because defendant failed to allege fraud or demonstrate that one of the corporations was a "dummy" or sham for the other, the trial court was precluded from finding that the parties were the same. We find that these arguments are wholly without merit.

Even a cursory reading of section 2-619(a)(3) and the caselaw interpreting it would reveal that there is no requirement that there be an allegation of fraud or impropriety before a trial court may dismiss an action on the ground that there is another action pending between the same parties for the same cause. Further, it is well settled that a dismissal pursuant to section 2-619(a)(3) does not require a finding that the litigants in the two actions are identical. (People ex rel. Fahner v. Climatemp, Inc. (1981) 101 Ill.App.3d 1077, 57 Ill.Dec. 416, 428 N.E.2d 1096.) The "same parties" requirement of section 2-619(a)(3) is met where the litigants' interests are sufficiently similar, even though the litigants differ in name or number. Cummings v. Iron Hustler Corp. (1983), 118 Ill.App.3d 327, 73 Ill.Dec. 829, 454 N.E.2d 1078; Baker v. Salomon (1975), 31 Ill.App.3d 278, 334 N.E.2d 313.

In the present case, SMI admitted in its response to defendant's motion to dismiss that it was affiliated with SMC and that goods purchased by and billed to SMI were shipped to SMC. In addition, defendant presented documents establishing that one of SMI's attorneys and another individual served as the only officers and directors of both SMI and SMC. Defendant also presented certified copies of pleadings filed with the California court in which SMC argued that the California action should be dismissed because the same parties were involved in an action pending in the Illinois courts. We find that this evidence is sufficient to support a conclusion that the interests of SMI and SMC are substantially similar for purposes of section 2-619(a)(3).

SMI also argues that the trial court dismissal of the action was an abuse of discretion because the Illinois court was the first to acquire jurisdiction over the matter; because the court's action would require SMI to asset it claim for relief under the Illinois...