Zazove v. Pelikan, Inc.

• Decision Date: 30 November 2001
• Docket Number: No. 1-00-1516.,1-00-1516.
• Citation: 761 N.E.2d 256,326 Ill. App.3d 798,260 Ill.Dec. 412
• Parties: Daniel ZAZOVE, individually and for a class of similarly situated individuals, Plaintiff-Appellant, v. PELIKAN, INC., and Pelikan International Handelgeshellschaft mbH & Co., KG., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

761 N.E.2d 256

326 Ill. App.3d 798

260 Ill.Dec. 412

Daniel ZAZOVE, individually and for a class of similarly situated individuals, Plaintiff-Appellant, v. PELIKAN, INC., and Pelikan International Handelgeshellschaft mbH & Co., KG., Defendants-Appellees.

No. 1-00-1516.

Appellate Court of Illinois, First District, Fifth Division.

November 30, 2001.

Krislov & Associates, Ltd., Chicago (Clinton A. Krislov and William Bogot, of counsel), for Appellant.

Levin & Funkhouser, Ltd., Chicago (Wilson P. Funkhouser and Damon E. Dunn, of counsel), for Appellee.

Presiding Justice CAMPBELL delivered the opinion of the court:

Plaintiff Daniel Zazove appeals an order of the circuit court of Cook County dismissing his Amended Class Action Complaint as against defendant Pelikan, Inc. (Pelikan-USA) for lack of personal jurisdiction. Defendant Pelikan International Handelgeshellschaft mbH & Co., KG. (Pelikan-Germany) is not a party to this appeal.

The record on appeal discloses the following facts. Plaintiff's Amended Class Action Complaint alleged that Pelikan-Germany, a German corporation, was the manufacturer of Pelikan writing instruments and that Pelikan-USA, a Tennessee corporation, was the sole United States agent-distributor for Pelikan-Germany until some time in 1996. Plaintiff alleged that he was "a well known collector of vintage and limited edition fountain pens * * *."

Plaintiff alleged that Pelikan-Germany, through Pelikan-USA, advertised (in Illinois and throughout the United states) its Pelikan Toledo pens as being part of a limited edition of 500 pens. This advertising was placed in national and local periodicals, including Chicago Magazine. Plaintiff also alleged that Pelikan-USA disseminated brochures to prospective purchasers and retailers. A copy of one such brochure, showing a suggested retail price of $1,200, was attached as an exhibit. Plaintiff further alleged that Pelikan-USA distributed Pelikan Toledo pens to retailers in the United States.

Plaintiff alleged that he purchased a Toledo pen in the belief that it would eventually become a rare collectible. Plaintiff alleged that his pen cane with a Toledo M900 registration certificate stating in part that "[i]n the entire United States, there are only five hundred of these rare, exquisite pens." Plaintiff alleged that on September 27, 1997, he was told by a Pelikan-USA representative in Chicago that the Pelikan Toledo pens were now available for sale to the general public, though Pelikan-USA had already sold the first 500 pens. In October 1997, plaintiff received a copy of "the Fountain Pen Hospital's October 1997 Price List," which listed new Toledo pens selling for $1,075.

Plaintiff alleged that defendants had violated the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 1998)). Plaintiff sought declaratory and monetary relief for the class of persons who purchased the first 500 Toledo pens, as well as attorney fees and costs.

On January 5, 1998, Pelikan-USA filed a special and limited appearance. On July 30, 1999, Pelikan-USA moved to dismiss the complaint against it for lack of personal jurisdiction, pursuant to section 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 1998)). Pelikan-USA submitted a sworn declaration by Scott Schumpert, the Treasurer and Secretary of Pelikan-USA. In the declaration, Schumpert states that Pelikan-USA's principal place of business is and has been in Tennessee. Schumpert also declared that Pelikan-USA was not registered to do business in the state of Illinois. Schumpert further declared that since 1990, Pelikan-USA had no offices, employees, telephone numbers, or bank accounts in Illinois. Schumpert added that Pelikan-USA had not owned or leased real estate in Illinois since 1990, and had no personal property here, except for files held by counsel relating to this litigation. Schumpert stated that while Pelikan-USA had been a past distributor for Pelikan-Germany, reselling writing instruments to independent distributors and retailers in the United States, Pelikan-USA ceased operations in March 1996, when another company obtained the exclusive distribution rights for Pelikan-Germany; Pelikan-USA no longer has any offices or employees. On February 18, 2000, the trial court granted the motion to dismiss. On April 4, 2000, the trial court granted plaintiff's motion for a finding that there was no just reason to delay enforcement or appeal of the dismissal, pursuant to Supreme Court Rule 304(a) (155 Ill.2d R. 304(a)). Plaintiff timely filed a Notice of Appeal to this court.

The sole issue on appeal is whether the trial court erred in dismissing the complaint against Pelikan-USA for lack of personal jurisdiction. A plaintiff has the burden of establishing a prima facie basis for exercising in personam jurisdiction over a non-resident defendant. Kalata v. Healy, 312 Ill.App.3d 761, 765, 245 Ill.Dec. 566, 728 N.E.2d 648, 651-52 (2000); International Business Machines Corp. v. Martin Property & Casualty Insurance Agency, Inc., 281 Ill.App.3d 854, 857-58, 217 Ill.Dec. 197, 666 N.E.2d 866, 868 (1996). Statements in plaintiff's pleadings which defendant does not controvert by affidavit are taken as true. Kutner v. DeMassa, 96 Ill.App.3d 243, 248, 51 Ill. Dec. 723, 421 N.E.2d 231, 235 (1981). A plaintiff's prima facie case may be overcome by a defendant's uncontradicted evidence that defeats jurisdiction. Gaidar v. Tippecanoe Distribution Service, Inc., 299 Ill.App.3d 1034, 1041, 234 Ill.Dec. 150, 702 N.E.2d 316, 320 (1998). However, conflicts between the parties' affidavits will be resolved in favor of the plaintiff for purposes of determining whether a prima facie case for in personam jurisdiction has been made. International Business Machines Corp., 281 Ill.App.3d at 858, 217 Ill.Dec. 197, 666 N.E.2d at 868. When the trial court hears no courtroom testimony and determines jurisdiction solely on the basis of documentary evidence, the standard of review is de novo. Stein v. Rio Parismina Lodge, 296 Ill.App.3d 520, 523, 231 Ill.Dec. 1, 695 N.E.2d 518, 521 (1998)

; E.A. Cox Co. v. Road Savers International Corp., 271 Ill.App.3d 144, 148, 207 Ill.Dec. 815, 648 N.E.2d 271, 275 (1995).

II

Plaintiff claims that Illinois courts have personal jurisdiction over Pelikan-USA under section 2-209 of the Code, which states in pertinent part:

"(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:

* * *

(2) The commission of a tortious act within this State;

* * *

(7) The making or performance of any contract or promise substantially connected with this State;

* * *

(c) A court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States.

* * *

(f) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him or her is based upon subsection (a)." 735 ILCS 5/2-209 (West 1998).

For jurisdictional purposes, allegedly tortious acts need not fit within the technical definition of a tort as long as there is a breach of duty giving rise to liability. Nelson v. Miller, 11 Ill.2d 378, 393-94, 143 N.E.2d 673, 681 (1957). However, following the enactment of subsection (c), which became effective in 1989, if the contacts between the defendant and Illinois are sufficient to satisfy the requirements of due process, then the requirements of the Illinois long-arm statute also have been met, and no other inquiry is necessary. See W.R. Grace & Co. v. CSR Ltd., 279 Ill. App.3d 1043, 1047, 216 Ill.Dec. 840, 666 N.E.2d 8, 10 (1996).

Personal jurisdiction over an out-of-state defendant may only be exercised if the defendant has certain "minimum contacts" with the forum state so that requiring the defendant to defend in the forum does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945); Wiles v. Morita Iron Works Co., 125 Ill.2d 144, 150, 125 Ill.Dec. 812, 530 N.E.2d 1382, 1385 (1988). Thus, this court turns to consider the defendant's contacts with Illinois and the fairness or reasonableness of exercising personal jurisdiction over the defendant.

A

Plaintiff argues that defendant established the requisite minimum contacts under the "stream of commerce" theory. The theory takes its name from World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 567, 62 L.Ed.2d 490, 502 (1980), in which the Supreme Court stated that "[t]he forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased in the forum State." The World-Wide court also stated that "if the sale of a product of a manufacturer or distributor * * * is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States." World-Wide, 444 U.S. at 297, 100 S.Ct. at 567,62 L.Ed.2d at 501.

The Supreme Court subsequently split over the scope of the "stream of commerce" theory. In Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), the plaintiff, a California resident, was injured while riding a motorcycle on a California highway. Thereafter, alleging in part that a defective tire tube had caused his accident, the plaintiff sued the Taiwanese manufacturer of the tire tube,...