Solargenix Energy, LLC v. Acciona, S.A.

• Decision Date: 01 August 2014
• Docket Number: No. 1–12–3403.,1–12–3403.
• Parties: SOLARGENIX ENERGY, LLC, Individually and Derivatively on Behalf of Acciona Solar Power, Inc., Plaintiff–Appellee, v. ACCIONA, S.A., and Acciona Energía, S.A., Defendants–Appellants (Acciona Solar Energy, LLC, Acciona Solar Power, Inc., Acciona Energy North America Corporation, Defendants).
• Court: United States Appellate Court of Illinois

17 N.E.3d 171

SOLARGENIX ENERGY, LLC, Individually and Derivatively on Behalf of Acciona Solar Power, Inc., Plaintiff–Appellee

v.ACCIONA, S.A., and Acciona Energía, S.A., Defendants–Appellants (Acciona Solar Energy, LLC, Acciona Solar Power, Inc., Acciona Energy North America Corporation, Defendants).

No. 1–12–3403.

Appellate Court of Illinois, First District, Fifth Division.

Aug. 1, 2014.

Mayer Brown LLP, of Chicago (Michele Odorizzi, Michael R. Feagley, and Ethan A. Hastert, of counsel), for appellants.

Sidley Austin LLP, of Chicago (Thomas K. Cauley, Jr., Robert N. Hochman, and Ashley K. Martin, of counsel), for appellee.

OPINION

Justice PALMER

delivered the judgment of the court, with opinion.

¶ 1 Plaintiff Solargenix Energy, LLC (Solargenix), filed the instant suit against defendants raising various claims related to defendants' alleged breach of joint venture agreements with Solargenix. Defendants-appellants Acciona, S.A. (Acciona), and Acciona Energia, S.A. (together, the Spanish defendants) filed a motion to dismiss for lack of personal jurisdiction. The circuit court denied the motion. This court granted the Spanish defendants' petition for leave to appeal that decision pursuant to Supreme Court Rule 306(a)(3)

. Ill. S.Ct. R. 306(a)(3) (eff. Feb. 16, 2011). For the reasons that follow, we affirm.

¶ 2 I. BACKGROUND¹

¶ 3 According to Solargenix, in 2005 it was a leader in the concentrating solar power market in the United States and it was constructing a large-scale concentrating thermosolar power plant in Nevada called “Nevada Solar One.” In November 2005, the Spanish defendants' United States subsidiaries and Solargenix formed a joint venture and they executed several related agreements to that end. Solargenix claimed that Acciona, a publicly traded, global renewable energy company, sought Solargenix's solar power technology and expertise, while Solargenix was interested in gaining access to Acciona's worldwide network and resources.

¶ 4 According to Solargenix's complaint, Solargenix is a North Carolina limited liability company with its principal place of business in North Carolina. Acciona and Acciona Energia are Spanish corporations with their principal places of business in Spain. Acciona Energia is directly wholly owned by another corporation, which is in turn directly wholly owned by Acciona. Acciona Energy North America Corporation (Acciona North America) and Acciona Solar Energy, LLC (Acciona Solar Energy), are United States subsidiaries. Acciona North America is a directly, wholly owned subsidiary of a corporation which is in turn directly and wholly owned by Acciona Energia, and is organized under Delaware law with its principal place of business in Chicago, Illinois. Acciona Solar Energy is a wholly owned subsidiary of Acciona North America and is a Delaware limited liability company with its principal place of business in Chicago.

¶ 5 Pursuant to the joint venture agreements, the parties formed a joint venture entity, initially called Solargenix Energy, Inc., but later renamed Acciona Solar Power, Inc. (ASP),² which was to serve as their exclusive vehicle for developing thermosolar power plants worldwide (except for Spain and China, which were specifically carved out). However, Solargenix alleged in its complaint that defendants³ fraudulently induced it to form the joint venture so that they could obtain ownership of Solargenix's valuable proprietary solar technology, employees, and expertise, in order to pursue other projects outside of the joint venture and at the expense of developing ASP, which eventually caused ASP to become insolvent.⁴

¶ 6 In its complaint, Solargenix alleged that, in an effort to rid itself of the partnership with Solargenix, defendants ultimately “manufactured” a deadlock on the ASP board of directors and sent a purchase notice to Solargenix in September 2010, invoking the buy/sell provision of the shareholders agreement.⁵ Solargenix indicated that Acciona also attempted to condition the purchase notice on Solargenix waiving any claims against Acciona, but Acciona removed this restriction after Solargenix filed a complaint in the chancery court contesting it. Solargenix ultimately agreed to sell its interest in ASP for $11.5 million. Solargenix asserted that, by that time, Acciona's neglect of ASP had rendered ASP insolvent and reduced the value of the shares, and had it purchased Acciona's shares instead, it would have been left with a worthless company.

¶ 7 After completion of the sale in 2011, Solargenix filed an initial complaint seeking rescission of the joint venture agreements and compensatory damages of more than $100 million, among other relief. Solargenix later filed an amended complaint in which it alleged that Acciona Energia, Acciona North America, and Acciona Solar Energy fraudulently induced it to enter into the joint venture agreements; breach of contract by Acciona Energia (with respect to the letter of adhesion it executed, discussed further, infra ); tortious interference with contractual rights against Acciona for allegedly causing Acciona Energia and the United States subsidiaries to breach the joint venture agreements; and unjust enrichment against Acciona and Acciona Energia for the alleged torts.

¶ 8 A. Joint Venture Agreements

¶ 9 Solargenix alleged in its complaint that its principal, John Myles, initially contacted the Chief Executive Officer (CEO) of Acciona Energia, Esteban Morras, in November 2004 and proposed the creation of a formalized joint venture. In February 2005, Acciona North America and Solargenix signed a cooperation agreement pursuant to which Acciona North America loaned $13 million to Solargenix to finance the development of Nevada Solar One, while retaining the right to convert the loan into a controlling equity investment in Solargenix's solar power plant business.

¶ 10 Several months later, following more negotiations, several days of which occurred in Chicago,⁶ an amended cooperation agreement and other joint venture agreements were executed on November 30, 2005. The signatory parties to the amended cooperation agreement were representatives of Solargenix, Acciona Solar Energy, Acciona North America, and ASP. Under the agreements, the $13 million loan debt was canceled and, in exchange, Acciona North America received a 55% interest in ASP, through its subsidiary Acciona Solar Energy. Acciona Solar Energy was granted the right to appoint three of the five board of director positions of ASP and ASP's chief executive officer. Solargenix held a 45% stake in ASP and had the right to appoint two directors and the chief financial officer. Solargenix assigned over its solar power plant division, including its project assets (such as Nevada Solar One, leases, agreements, equipment, technology, patents, intellectual property, and inventory). The amended cooperation agreement provided that the parties intended to amend the initial cooperation agreement “in contemplation of a larger cooperative relationship between the parties.”

¶ 11 The amended cooperation agreement also stated in section V, paragraph A, entitled “Worldwide Investment Vehicle”:

“[T]he parties agree that one of the primary business purposes of the Company [ASP] shall be to serve as the investment vehicle for future thermosolar power generation projects undertaken by [Solargenix], [Acciona Solar Energy], or their affiliates worldwide, except in Spain * * *. The participation and final ownership of such projects shall be determined according to the respective financial investment and risk assumptions of each of the parties involved, * * * but the parties agree that one of the principal purposes of the Company [ASP] is to accrue sufficient available cash so as to invest in and pursue ownership opportunities with respect to such projects. Each party agrees that the opportunity to invest in such projects shall be deemed corporate opportunities of the Company, and may not be pursued by either party outside the Company [ASP] except with the unanimous consent of the Company's Board of Directors.”

¶ 12 Under the same section, in paragraph B, entitled “Worldwide Thermosolar Development,” it provided:

“[T]he parties agree that one of the primary business purposes of the Company [ASP] shall be to serve as the development, engineering, operations, and management services provider for future thermosolar power generation projects (i) undertaken by third parties and developed by either shareholder or (ii) undertaken by [Solargenix], [Acciona Solar Energy], or their affiliates worldwide, except in Spain and in China * * *. Each party agrees that the opportunity to provide development, engineering, operations, and management services to such projects shall be deemed corporate opportunities of the Company [ASP], and may not be pursued by either party outside the Company except with the unanimous consent of the Company's Board of Directors.”

¶ 13 Also under section V, in paragraph D, entitled “Future Projects,” it stated that Acciona North America agreed to contract with ASP to perform basic engineering and project management for two thermosolar projects in Spain, and that “[t]he parties acknowledge that [Acciona Energia] has agreed that it is bound by the agreements in paragraphs A [ (the Worldwide Investment Vehicle provision) ], B [ (the Worldwide Thermosolar Development provision) ], and D above through the Letter of Adhesion.”

¶ 14 Under section III, entitled “SPAIN,” and paragraph A, “Exclusive Agent,” it provided that the parties “discussed an arrangement under which [Acciona North America] would become the exclusive agent of [Solargenix and ASP] in Spain for solar thermal power plants” and the parties agreed to negotiate further in that regard in good faith. It further provided that “[t]he parties acknowledge that Acciona Energia, SA (‘Acciona’) has agreed that it is bound by this agreement through the letter of adhesion attached hereto.”

¶ 15 Additionally, in section VIII, entitled “MI...