Viktron Ltd. Partnership v. PROGRAM DATA, 2-00-1445.

Decision Date14 November 2001
Docket NumberNo. 2-00-1445.,2-00-1445.
Citation326 Ill. App.3d 111,759 N.E.2d 186,259 Ill.Dec. 706
PartiesVIKTRON LIMITED PARTNERSHIP, Plaintiff-Appellant, v. PROGRAM DATA INCORPORATED, Defendant-Appellee.
CourtUnited States Appellate Court of Illinois

Thomas J. Fleischmann, Cary S. Fleischer, Chuhak & Tecson, P.C., Chicago, for Viktron Limited Partnership.

Steven B. Ekker, James P. Marsh, James F. McCluskey, Momkus, Ozog & McCluskey, Downers Grove, for Program Data Incorporated.

Justice GROMETER delivered the opinion of the court:

Plaintiff, Viktron Limited Partnership (Viktron), appeals the decision of the circuit court of Du Page County dismissing its action against defendant, Program Data Incorporated (PDI), pursuant to section 2-619 of the Civil Practice Law (735 ILCS 5/2-619 (West 2000)). The trial court concluded that it lacked personal jurisdiction over PDI, basing this decision both upon Illinois' long-arm statute (735 ILCS 5/2-209 (West 2000)) and due process concerns (see U.S. Const., amend. V; Ill. Const. 1970, art. I, § 2). The sole issue raised in this appeal is whether the trial court correctly determined that Illinois could not assert in personam jurisdiction over PDI. For the reasons that follow, we conclude that it did not.

BACKGROUND

The following facts are taken from the complaint as well as the affidavits submitted by the parties. Viktron is an Illinois limited partnership with its principal place of business in Carol Stream, Illinois. Viktron manufactures printed circuit boards in California, Utah, Florida, and West Chicago. PDI is a California corporation that manufactures testing equipment that is used in the manufacture of printed circuit boards. PDI's principal place of business is in California, as is its separate testing facility. It maintains no facilities outside California. At issue in the present case is a contract the parties entered into in which Viktron was to purchase four circuit board testers. PDI was to provide one to each of Viktron's four plants in the above-listed states.

The events that culminated in this contract began in March 1997, when PDI learned that a company named Lika was interested in purchasing testers of the type PDI manufactured. Lika had previously approached PDI about such a purchase in 1994. PDI's president, Akin Aksu, and another PDI employee traveled to the Lika facility, which was located in California, to discuss a possible sale. During this visit, PDI learned that Lika had been purchased by Viktron. Viktron expressed interest in PDI's testers but did not have adequate funding for a purchase. Approximately one year later, PDI again sent two representatives to the California plant. Viktron's chief executive officer, Shalabh Kumar, was present and requested a demonstration of the tester's capabilities on Viktron's circuit boards. PDI set up the requested demonstration, which took place in June 1998. Kumar then requested another demonstration.

In July 1998, Kumar traveled to PDI's plant to observe the second demonstration. Kumar then requested another demonstration using different fixtures. This third demonstration also took place in July 1998 at the PDI facility and was attended by Shelley Krueger, Viktron's California engineering manager. However, one board that was to be tested required a larger testing machine. Viktron requested that a demonstration be set up for this board. PDI arranged with one of its customers, also located in California, to test this board on a PDI tester. Krueger attended this demonstration in September 1998. Viktron requested a further demonstration, and Aksu traveled to Viktron's California facility to prepare for it. Subsequently, Krueger visited PDI to discuss certain details regarding PDI's testers.

On November 11, 1998, Aksu sent Kumar a letter discussing PDI testers. The letter was sent to Viktron's West Chicago facility. On November 25, 1998, Viktron's corporate controller, Raj Thakral, called Aksu and requested that he come to Illinois to meet with Kumar. Aksu traveled to Illinois, and the meeting lasted between two and three hours. In his affidavit, Aksu asserts that, during the meeting, Kumar advanced various price-cutting proposals. Aksu states he did not agree with any of these proposals and left "without any agreement on any terms for purchase of a PDI tester." Kumar asserts, by affidavit, that the meeting involved negotiations concerning "price, quantity, warranty, delivery dates and the layout of the test equipment." Following the meeting, Kumar and Aksu engaged in a series of written and telephonic communications.

On December 7, 1998, Aksu sent Kumar a written price quotation. This correspondence was addressed to Viktron's West Chicago facility. On December 10, 1998, Aksu sent another letter to Kumar in West Chicago. The letter begins with the following statement: "Enclosed please find the confirmation of what we have [sic] discussed during our meeting in Chicago last Thursday." On December 21, 1998, Viktron sent PDI an offer. The offer was accompanied by a down payment. Aksu rejected the offer and, on January 4, 1999, sent Kumar a letter containing a counteroffer.

On January 6, 1999, two PDI engineers went to Viktron's California plant to review its products, and on January 12, 1999, Aksu proposed to Kumar that Aksu would travel there to see if an agreement could still be reached. It is unclear from the record whether this trip occurred. At this point, Aksu asserts, an agreement was not possible, and he returned Viktron's down payment.

Both parties aver that a series of communications followed concerning specifications for the testers. These communications occurred between PDI and all four of Viktron's facilities. On January 19, 1999, Aksu sent Kumar a letter containing PDI's "final offer." Two days later, Viktron wired PDI a down payment of $378,000. Shortly thereafter, Kumar called Aksu and accepted the offer.

Viktron agreed to purchase four testers. The contract required that the first tester be delivered to Viktron's plant in California and that the third be delivered to its Illinois facility. The contract required that PDI train Viktron employees on the use of the testers. Training was to take place at each of Viktron's facilities. The testers themselves were warranted for two years, and switch cards were warranted for seven. The contract obligated PDI to send technicians when necessary to Viktron's four facilities to make repairs. Also, PDI was to provide integration software for the testers and an automation upgrade for each machine at a cost of $100,000. The upgrade was to occur approximately two years from the execution of the contract.

In February 1999, the first tester was delivered to Viktron's California plant. On February 25, 1999, Kumar wrote a letter to Aksu detailing numerous problems Viktron was having with the tester. In this letter, he instructed Aksu to put the balance of the order on hold until further notification. Viktron subsequently canceled the order. No testers were delivered except for the one delivered to the California plant. In its complaint, which was filed April 16, 1999, Viktron alleges that PDI was still attempting to install the first tester so that it would operate in a proper manner.

After twice attempting to remove this case to federal court, PDI filed a motion to dismiss, alleging the lack of in personam jurisdiction. The trial court granted the motion. The trial court concluded that the only contact between PDI and Illinois occurred when the parties met in Illinois. The trial court held that this contact was of little significance because the parties did not reach a complete agreement at that time. Further, the trial court discounted the fact that the contract contemplated partial performance within this state because the contract was terminated prior to the time this performance occurred. According to the trial court, this meant that the dealings between the parties had resulted in no impact being felt in Illinois. The trial court also noted that the burden of defending this action in Illinois would be significant for PDI and believed that Illinois did not have a substantial interest in the dispute because the agreement had not been consummated in Illinois. Following this ruling, plaintiff perfected this appeal.

ANALYSIS

Viktron argues that the trial court erred in determining that personal jurisdiction over PDI was lacking. The trial court held no evidentiary hearing on PDI's motion attacking jurisdiction; therefore, review is de novo. E.A. Cox Co. v. Road Savers International Corp., 271 Ill. App.3d 144, 148, 207 Ill.Dec. 815, 648 N.E.2d 271 (1995). A plaintiff bears the burden of establishing a basis for personal jurisdiction over a nonresident defendant. G.M. Signs, Inc. v. Kirn Signs, Inc., 231 Ill.App.3d 339, 341, 172 Ill.Dec. 933, 596 N.E.2d 212 (1992). In determining whether such a basis exists, we may consider a plaintiff's complaint and any affidavits submitted by the parties. E.A. Cox Co., 271 Ill.App.3d at 148, 207 Ill.Dec. 815, 648 N.E.2d 271. Unrebutted allegations are taken as true. Doolin v. K-S Telegage Co., 75 Ill.App.3d 25, 29, 30 Ill.Dec. 520, 393 N.E.2d 556 (1979). In the event of a material evidentiary conflict, we must remand the matter to the trial court for an evidentiary hearing. Kalata v. Healy, 312 Ill.App.3d 761, 765, 245 Ill.Dec. 566, 728 N.E.2d 648 (2000).

In the present case, we base our decision primarily on two undisputed facts. First, according to Kumar's affidavit, Aksu came to Illinois and met with Kumar. During this meeting, the parties negotiated the price, quantity, delivery dates, and layout of the testers. In his affidavit, Aksu asserts that Kumar proposed various price cuts during the meeting, but he does not dispute that the matters set forth in Kumar's affidavit were discussed. It is also undisputed that an agreement was not reached at this meeting. Second, it is undisputed that partial performance of this contract...

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