TCA Intern., Inc. v. B & B Custom Auto, Inc.

• Decision Date: 22 September 1998
• Docket Number: No. 1-98-0252,1-98-0252
• Citation: 701 N.E.2d 105,233 Ill.Dec. 462,299 Ill.App.3d 522
• Parties: , 233 Ill.Dec. 462 TCA INTERNATIONAL, INC., an Illinois Corporation, Plaintiff-Appellant, v. B & B CUSTOM AUTO, INC., d/b/a J & B Marketing a/k/a Automotive Stylin' Warehouse, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 105

701 N.E.2d 105

299 Ill.App.3d 522, 233 Ill.Dec. 462

TCA INTERNATIONAL, INC., an Illinois Corporation, Plaintiff-Appellant, v. B & B CUSTOM AUTO, INC., d/b/a J & B Marketing a/k/a Automotive Stylin' Warehouse, Defendant-Appellee.

No. 1-98-0252.

Appellate Court of Illinois First District, Second Division.

Sept. 22, 1998.

Edward S. Margolis, Teller, Levit & Silvertrust, P.C., Chicago, for Plaintiff-Appellant.

Michael J. Hayes, John T. Roache, Gardner, Carton & Douglas, Chicago, for Defendant-Appellee.

Justice GORDON delivered the opinion of the Court:

Plaintiff TCA International, Inc. (TCA) appeals from an order of the Circuit Court of Cook County granting the motion of defendant B & B Custom Auto, Inc. (J & B) to quash service and dismiss the action for lack of personal jurisdiction. We reverse and remand.

FACTS

In September 1997 TCA filed an action against J & B in the circuit court for breach of contract. TCA, an Illinois corporation in the business of sale of automobile accessories, alleged in its complaint that J & B was "a New Jersey corporation which transacted business in the State of Illinois and in other States including New Jersey purchasing and selling automobile parts and accessories." Plaintiff alleged that J & B placed telephone orders with TCA at TCA's offices in Glenview, Illinois, in response to which TCA shipped merchandise to J & B "directly or indirectly from suppliers, both locally and internationally." It alleged that J & B had breached its contract with TCA by failing to pay for products it had ordered and which TCA had caused to be shipped to it from TCA's supplier in France. Invoices listing TCA's address in Glenview, Illinois, were attached to the complaint.

In October J & B entered a special and limited appearance under section 2-301(a) of the Code of Civil Procedure (Code) (735 ILCS 5/2-301 (West 1994)) "for the sole purpose of objecting to the personal jurisdiction of the Court over [J & B]." J & B moved to dismiss the action and quash service, arguing that Illinois could not exercise jurisdiction over it because it was merely a "passive," not an "active," purchaser, and it did not have sufficient contacts with this State.

In support of its motion J & B attached an affidavit of its secretary and treasurer, Belfield Bovell. In his affidavit Bovell averred that J & B was a "small warehouse distributor" (5000 sq. ft. warehouse) of automotive accessories to car dealerships and retail stores located primarily in New Jersey, with some active accounts in New York and Connecticut. Bovell stated that J & B did not and never had maintained an office, bank account, mail drop or telephone number in Illinois; it was not licensed to do business in Illinois; and it did not employ any individuals in Illinois. He averred that although he did send J & B's payments to a John Schelthoff, at the latter's request, Schelthoff informed him that he would forward the payments "to TCA in France."

Bovell stated that he first became aware of TCA's products while attending the Specialty Equipment Market Association ("SEMA") trade show in Las Vegas, Nevada in October 1995. At the SEMA show he met Schelthoff, who introduced himself as a sales representative for TCA. Bovell averred that Schelthoff told him TCA "was an automotive accessory manufacturing company located in France. He also gave * * * the impression that he was the only TCA representative in the United States." Bovell stated that Schelthoff took Bovell's card but he (Schelthoff) did not have any business cards or brochures. Schelthoff telephoned him (Bovell) three weeks later to inquire whether J & B still had any interest in distributing TCA's products, and later sent him TCA's catalogues and brochures.

J & B subsequently placed several orders through Schelthoff for products shown in TCA's catalogues. Bovell averred that J & B never ordered goods which were to be specially manufactured, only stock items from TCA's catalogues. He stated that each time he placed an order, Schelthoff explained that delivery would take at least four weeks, since the goods would be shipped directly from TCA in France. Bovell stated that at all times he believed he was doing business with a foreign company. Bovell stated that all orders were shipped directly from TCA in France except that twice, when J & B's order was "backordered" in France, Schelthoff obtained the backordered goods "from other United States customers of TCA" and shipped them (a total of seven pieces in the two orders) directly to J & B. Bovell stated that J & B never negotiated with TCA regarding price; rather, Schelthoff offered J & B better prices and an opportunity to be the exclusive New York/New Jersey TCA distributor if J & B increased its orders.

According to Bovell, Schelthoff had discussed with him the possibility of using J & B's warehouse for its products because TCA did not have its own warehouse in the United States, which Bovell said on information and belief was still true. Bovell further stated that Schelthoff had visited J & B three times to check on delivery and shipment of items from France or to take inventory of TCA's goods stored in J & B's warehouse, but on information and belief, no J & B employee had ever visited Illinois for any J & B business purpose. He stated that two of Schelthoff's visits were at the request of a Jacques Djemad, who, according to what Schelthoff told Bovell, was an owner of TCA.

Bovell stated that in July 1996 he telephoned Schelthoff regarding a late delivery, and shortly thereafter received a telephone call from Djemad to apologize and explain the delay. Djemad also called Bovell from France several times to discuss payment of J & B's outstanding invoices. When Bovell told Djemad in April 1997 that J & B was having difficulty "moving the goods" because of market conditions, Djemad stated that either J & B would have to return the goods or tender payment in full. Later, on a conference call with Djemad and Schelthoff, Bovell agreed to return the goods, but in June Schelthoff told him that Djemad had changed his mind, and "J & B could expect to be sued for nonpayment on the outstanding invoices."

In November 1997 TCA filed a response to J & B's motion to dismiss, attaching the counter-affidavit of John Schelthoff, Jr., President of TCA. In his affidavit, Schelthoff stated that TCA was an Illinois corporation, located at all relevant times at 1775 Chestnut Avenue, Glenview, Illinois. TCA is the United States distributor of automobile accessories manufactured by TCA Distribution S.A., a French corporation ("TCA France").

Schelthoff stated that he was in charge of the TCA booth at the SEMA show in Las Vegas in October 1995, and at all times he wore a required "Official Exhibitor Badge" (a copy of which was attached as an exhibit to Schelthoff's affidavit) which stated in part "John Schelthoff, TCA International, Inc., Glenview, IL." He also stated that he gave business cards and brochures (copies of which were also attached as exhibits to the affidavit) "to all people who visited the [TCA] booth and who requested such materials." Both his business card and the brochures listed TCA's office as Glenview, Illinois. He denied ever introducing himself to anyone as a sales representative for TCA France.

Schelthoff averred (contrary to Bovell's affidavit) that he (Schelthoff) did not telephone J & B after the trade show. Rather, he asserted, Bovell contacted him "by telephone call into Plaintiff's office in the State of Illinois" professing his interest in becoming TCA's exclusive distributor in the northeast and requesting a price sheet. Schelthoff stated that he sent a price sheet to Bovell. That sheet, a copy of which was attached to Schelthoff's affidavit, listed TCA's address in Glenview, Illinois, and stated that prices included shipping costs "based on minimum order quantity. Other orders are shipped F.O.B. Glenview, IL." Schelthoff also stated that he later sent Bovell a copy of an article from Motor Trend Magazine about TCA (a copy of which was attached as an exhibit to his affidavit) which listed TCA's address as Glenview, Illinois.

Schelthoff asserted that after he sent the price list to Bovell, Bovell "proceeded to order merchandise from [TCA] by placing orders by telephone into the State of Illinois." He averred that the products sold to J & B "required five to six weeks of lead time for manufacture" and "were manufactured to order for vehicles sold primarily in the United States," and that J & B was "billed from the State of Illinois" and "made payments into the State of Illinois." Attached as an exhibit to the affidavit were copies of J & B's cancelled checks, which reflected having been deposited into TCA's account at Citibank, FSB, in Chicago, Illinois. Another exhibit to Schelthoff's affidavit were invoices which, on their faces, identify TCA's location as Glenview, Illinois.

Schelthoff also stated that TCA warehoused merchandise at All Freight in Illinois, and that J & B knew this fact. TCA supported this assertion with an exhibit attached to Schelthoff's affidavit of a copy of an invoice with instructions to All Freight to ship a particular piece of merchandise to J & B. Another exhibit to the affidavit was a bill of lading for shipment from All Freight, in Illinois, to J & B, with a J & B fax imprint thereon. Schelthoff maintained that the fact that J & B faxed a copy of the All Freight bill of lading back to TCA "manifest[ed] its full knowledge that the accessories were being shipped from Plaintiff's Illinois warehouse to the Defendant." Finally, Schelthoff stated that Djemad was an employee of TCA France, but had never been "an officer, director, employee or agent" of TCA, and "never had any authority to act for [TCA], or to negotiate a settlement with [J & B]."

J & B filed a reply brief with a supplemental affidavit from Bovell. Bovell averred in the supplemental affidavit that when J & B placed its...