IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

October 19, 2016 Session

IN RE PROCEEDING TO ENFORCE JUDGMENT AGAINST NATIONAL 

PARTITIONS, INC.

Appeal from the Chancery Court for Knox County

No. 187666-3 Michael W. Moyers, Chancellor

___________________________________

No. E2016-00339-COA-R3-CV-FILED-MARCH 27, 2017

___________________________________

American Plastics Technologies, Inc. (APT) and RAO Design, International, Inc. (RDI) 

(collectively the Plaintiffs) brought this action in the trial court seeking to enroll an 

Illinois judgment against National Partitions (NP). The judgment had been awarded by 

the Circuit Court of Cook County, Illinois. NP filed an answer questioning the 

jurisdiction of the Illinois court. NP coupled its answer with a counterclaim asserting that 

the Plaintiffs had been guilty of the initial breach of the contract. Following a hearing, 

the trial court decreed registration of the Illinois judgment and ultimately dismissed NP‘s 

counterclaim. NP appeals. We affirm. 

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court

Affirmed; Case Remanded

CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which D. MICHAEL 

SWINEY, C.J., and JOHN W. MCCLARTY, J., joined.

Frederick L. Conrad, Jr., Knoxville, Tennessee, for the appellant, National Partitions, Inc.

Bradley Block, Northbrook, Illinois, and Garrett P. Swartwood, Knoxville, Tennessee, 

for the appellees, American Plastics Technologies, Inc. and RAO Design International, 

Inc.

OPINION
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I.

APT and RDI are both corporations organized under the laws of the State of 

Illinois, and each has its principal place of business in Illinois. According to APT, it is 

involved 

in the business of, among other things, manufacturing 

equipment used to create IV bags and bottles containing 

sterile, pure saline and medicinal solutions. On occasion, [it] 

also helps customers design and/or construct either all or a 

portion of their factories, and supplies components for those 

factories.

APT and RDI are affiliates. NP is a corporation organized under the laws of the State of 

Tennessee and has its principal place of business in Tennessee. The Plaintiffs assert that 

―[NP] supplies components used to build clean rooms – interior rooms which have 

minimal airborne contaminants and which are frequently used in the manufacture of 

sterile, pure saline and medicinal solutions.‖

In June 2011, the parties entered into a contract for NP to supply the Plaintiffs

with components for and assembly of a clean room and assemble the clean room in 

Nigeria, Africa. The terms of the contract provide the following payment terms: 

―Deposits per policy. Balance due at shipment.‖ As agreed by the parties, APT paid a 

$60,000 deposit to NP. 

In August 2013, after APT‘s project was delayed and because NP was having 

production problems, the parties modified the contract. The modification affected the 

price and delivery date of the components and the price of the installation. At some point 

after the modification of the contract and prior to the shipment of the components, NP 

demanded that APT pay the balance due immediately. APT, however, refused to pay, 

relying upon the terms of the contract, which recite that payment of the balance is not 

required until NP ships the components. Because NP refused to ship the components 

before the Plaintiffs paid the balance, the Plaintiffs sought the return of their $60,000 

deposit due to NP‘s refusal to and failure to perform.

On September 23, 2013, because NP failed to perform under the contract or return 

the deposit, the Plaintiffs filed a complaint against NP for breach of contract and unjust 

enrichment in the Circuit Court of Cook County, Illinois. NP did not file an answer or 

make an appearance in that case. Accordingly, the Plaintiffs filed a motion for default 

judgment. On November 21, 2013, after NP failed to appear at the default hearing, the 

circuit court entered a judgment in favor of the Plaintiffs, awarding them $60,000 in

damages and $590.14 in costs.
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On July 11, 2014, the Plaintiffs sought to enroll their Illinois judgment in 

Tennessee. NP timely filed an answer objecting to enrollment of the judgment. NP 

attacked the judgment on the grounds that neither jurisdiction nor venue was proper in the 

Circuit Court of Cook County, Illinois. NP also asserted a counterclaim against the 

Plaintiffs, alleging that the Plaintiffs were the ones who, in fact, breached the contract 

and that it, NP, had suffered damages in the amount of $77,361.31. Its claim of damages 

included the unpaid balance, storage fees, administrative costs, crating and uncrating 

fees, and lost profits. 

When the Plaintiffs did not file an answer to the counterclaim, NP filed a motion 

for default judgment. NP also filed a motion for summary judgment asking the court to 

deny entry of the Illinois judgment. It stated the following in its motion for summary 

judgment:

[NP] did not appear in the . . . case . . . and, therefore, has not 

submitted to the jurisdiction of the Circuit Court for Cook 

County, Illinois.

Neither jurisdiction nor venue was appropriate in the [Illinois 

court].

[NP] does not have an office in Illinois . . . and its main office 

is located [in] Tennessee.

[NP] was contacted in Tennessee by [APT] to initiate the 

contract underlying this litigation. . . . 

The materials underlying the litigation shipped from Knox 

County, Tennessee. . . . 

The materials were to be paid by [APT] to initiate shipment 

with said payment to be made at the offices of [NP] in Knox 

County, Tennessee.

The materials underlying this litigation were to be shipped to 

Nigeria.

(Paragraph numbering in original omitted.)

Plaintiffs then filed a motion to dismiss NP‘s counterclaim on the basis of res 

judicata. In their motion to dismiss, they asserted the following:

The allegations of the [c]ounterclaim concern the same 
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contract and the same set of operative facts as the allegations 

in the [c]omplaint in the Illinois [a]ction. . . . [I]n a 

proceeding to register and enforce a foreign judgment, ―issues 

of fact underlying a foreign judgment may not form the basis 

for attacking the validity of a foreign judgment.‖ . . . ― . . . 

Foreign judgments are treated in the same manner as the 

judgment of a court of record of this state.‖ Even a judgment 

this [c]ourt believes is incorrect is still entitled to full faith 

and credit. 

[NP] may only challenge the Judgment on the same basis that 

it could vacate the Judgment under Tennessee Rule of Civil 

Procedure 60. The only such ground that [NP] has asserted is 

its . . . claim that the Illinois Court did not have personal 

jurisdiction over it. [NP] cannot contest the merits of the 

parties‘ claims in a motion made pursuant to Rule 60, and 

cannot do so here.

The second reason for dismissing the [c]ounterclaim is 

because the Uniform Enforcement of Foreign Judgments Act 

describes the procedure for registration of a foreign judgment; 

it does not provide for counterclaims whereby parties can 

litigate issues other than the validity of the foreign judgment. 

. . . [T]here is no procedure for the filing of a counterclaim at 

this time in this proceeding. 

(Internal citations and paragraph numbering in original omitted.)

In addition to its initial attack on the personal jurisdiction and venue of the Illinois 

court, NP later attacked the court‘s subject matter jurisdiction. It asserted that this action 

is transitory in nature and that only Knox County, Tennessee has jurisdiction over the 

cause of action. The Plaintiffs argued that, because the transaction originated in and took 

place in Tennessee, the cause of action in no way took place in Illinois to give it 

jurisdiction over the matter. Additionally, NP argued that APT‘s notice of its motion for 

default judgment was insufficient under Tennessee law, arguing that the notice was not 

served five days before the hearing on November 21, 2013 as required by Tennessee‘s 

Rules of Civil Procedure.

[NP] filed a motion for summary judgment seeking to deny entry of the Illinois 

judgment. The court denied the motion. Subsequently, the Plaintiffs filed a motion for 

summary judgment asking the court to enroll their foreign judgment and dismiss NP‘s

counterclaim. 
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On October 12, 2015, the trial court awarded the Plaintiffs partial summary 

judgment enrolling the Plaintiff‘s judgment. In granting partial summary judgment to the 

Plaintiffs, the trial court held as follows:

[T]he record demonstrates that [NP] had systematic and 

continuous business in the State of Illinois sufficient to 

invoke the general personal jurisdiction of Illinois;

[NP] was served with the Plaintiffs‘ complaint in the Illinois 

case;

[NP] knew it had been sued by the Plaintiffs and chose not to 

defend in that Illinois case;

[NP] cannot establish a basis to set aside the judgment in 

these proceedings; 

the jurisdiction of the Illinois Court was sufficient to render 

the Foreign Judgment valid, and the Full Faith and Credit 

clause of the U.S. Constitution requires the judgment be

enrolled and acknowledged in Tennessee; and

the Plaintiffs are entitled to summary judgment relative to the 

domestication of the Foreign Judgment in Tennessee as a 

matter of law.

(Paragraph numbering in original omitted.) The court reserved a ruling on the dismissal

of the counterclaim, allowing NP fifteen days to defend against dismissal of the 

counterclaim on the basis of res judicata. Following a hearing on NP‘s motion to be 

allowed to proceed on its counterclaim, the court found that the foreign judgment is a 

final judgment on the merits issued by a court of competent jurisdiction. It also found 

that there is an identity of parties between the Illinois action and the action at hand and an 

identity of cause of action between the cases. Accordingly, the court held that NP‘s 

counterclaim is barred by res judicata. NP appeals the trial court‘s enrollment of the 

foreign judgment and the dismissal of its counterclaim. 

II.

In the format utilized by NP, the issues, as taken verbatim from its brief, are as 

follows:

Whether the Knox County Chancery Court erred in 

domesticating a foreign judgment entered in the Circuit Court 
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of Cook County, Illinois on behalf of Plaintiffs/Appellees 

ruling that the Illinois Court had proper jurisdiction and venue 

of the subject matter and Defendant/Appellant, whether the 

Chancery Court erred in accepting entry of a judgment in 

which the notice of hearing on the motion for default would 

not have complied with the Tennessee Rules of Civil 

Procedure, and whether the Chancery Court erred in denying 

the request of Defendant/Appellant to be allowed to proceed 

on their counterclaim and to compel the Plaintiffs/Appellees 

to answer discovery on the same ruling that res judicata 

applied to bar the counterclaim of the Defendant/Appellant 

despite the fact that the State of Illinois does not have 

compulsory counterclaims and the claims of the Defendant 

had clearly not been raised in Illinois as the 

Defendant/Appellant did not appear or file pleadings in 

Illinois. 

III.

Regarding our standard of review of a grant of summary judgment, the 

Supreme Court has stated as follows:

Summary judgment is appropriate when ―the pleadings, 

depositions, answers to interrogatories, and admissions on 

file, together with the affidavits, if any, show that there is no 

genuine issue as to any material fact and that the moving 

party is entitled to a judgment as a matter of law.‖ Tenn. R. 

Civ. P. 56.04. We review a trial court‘s ruling on a motion 

for summary judgment de novo, without a presumption of 

correctness.

* * *

[I]n Tennessee, as in the federal system, when the moving 

party does not bear the burden of proof at trial, the moving 

party may satisfy its burden of production either (1) by 

affirmatively negating an essential element of the nonmoving 

party‘s claim or (2) by demonstrating that the nonmoving 

party‘s evidence at the summary judgment stage is 

insufficient to establish the nonmoving party‘s claim or 

defense. . . . The nonmoving party must demonstrate the 

existence of specific facts in the record which could lead a 

rational trier of fact to find in favor of the nonmoving party.
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Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250, 264-65 (Tenn. 

2015) (emphasis in original). 

In making the determination of whether summary judgment was correctly granted,

[w]e must view all of the evidence in the light most favorable 

to the nonmoving party and resolve all factual inferences in 

the nonmoving party‘s favor. Martin v. Norfolk S. Ry. Co., 

271 S.W.3d 76, 84 (Tenn. 2008); Luther v. Compton, 5 

S.W.3d 635, 639 (Tenn. 1999); Muhlheim v. Knox Cnty. Bd. 

of Educ., 2 S.W.3d 927, 929 (Tenn. 1999). If the undisputed 

facts support only one conclusion, then the court‘s summary 

judgment will be upheld because the moving party was 

entitled to judgment as a matter of law. See White v. 

Lawrence, 975 S.W.2d 525, 529 (Tenn. 1998); McCall v. 

Wilder, 913 S.W.2d 150, 153 (Tenn. 1995). 

Wells Fargo Bank, N.A. v. Lockett, No. E2013-02186-COA-R3-CV, 2014 WL 1673745 

at *2 (Tenn. Ct. App. E.S., filed Apr. 24, 2014).

IV.

Foreign judgments are entitled to full faith and credit pursuant to the United States 

Constitution. The Constitution provides that ―Full Faith and Credit shall be given in each 

state to the . . . judicial Proceedings of every other State.‖ U.S. Const. art. IV, § 1. Tenn.

Code Ann. § 26-6-104 codifies the Full Faith and Credit clause, providing as follows:

(a) A copy of any foreign judgment authenticated in 

accordance with the acts of congress or the statutes of this 

state may be filed in the office of the clerk of any circuit or 

chancery court of this state.

(b) The clerk shall treat the foreign judgment in the same 

manner as a judgment of a court of record of this state.

(c) A judgment so filed has the same effect and is subject to 

the same procedures, defenses and proceedings for reopening, 

vacating, or staying as a judgment of a court of record of this

state and may be enforced or satisfied in like manner.

This Court has previously stated the grounds on which a Tennessee court may 

refuse to enroll a foreign judgment and the burden that a party bears in challenging the
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enrollment. In Guseinov v. Synergy Ventures, Inc., 467 S.W.3d 920, 925 (Tenn. Ct. 

App. 2014), we stated the following:

Despite the strong policy behind [Article IV, § 1 of the 

United States Constitution], three recognized exceptions to 

the enrollment of a foreign judgment exist. Specifically, a 

forum state may decline to accord full faith and credit to a 

foreign judgment of another state if it is (1) void due to lack 

of personal or subject matter jurisdiction, (2) based upon 

fraud, or (3) where enforcement of the judgment would

violate the public policy of the forum state. Tennessee courts 

have recognized and embraced all three of these exceptions.

A party seeking to prevent the enrollment of a foreign 

judgment in Tennessee carries a  ̳stern and heavy‘ burden. 

Moreover,  ̳[t]he factual issues underlying the foreign 

judgment may not be the basis of an inquiry to deny the 

foreign judgment full faith and credit.

(Internal citations omitted; brackets in original.) With this standard in mind, we address 

NP‘s arguments against enrollment of the Illinois judgment.

V.

A.

The trial court enrolled the Plaintiffs‘ Illinois judgment against NP, finding that 

NP had sufficient contacts with Illinois for it to invoke general personal jurisdiction over 

NP, that NP had notice of the case and chose not to defend it, and that NP cannot 

establish a basis to set aside the judgment. Accordingly, the trial court (1) held that 

summary judgment on the issue of enrollment of the foreign judgment was appropriate 

and (2) enrolled the Illinois judgment.

In its brief, NP argues that the Illinois judgment is invalid. NP argues that venue 

in Illinois was improper. It cites Tenn. Code Ann. § 20-4-101 to support its assertion that 

venue was only proper in Knox County, Tennessee. That statute provides that ―[i]n all 

civil actions of a transitory nature, unless venue is otherwise expressly provided for, the 

action may be brought in the county where the cause of action arose or in the county 

where the individual defendant resides.‖ NP‘s argument, however, is flawed. The 

Plaintiffs filed their action in Illinois, so Illinois‘s venue statute, not Tennessee‘s, is 

applicable to the issue of venue. 

NP also challenges venue under an Illinois statute, which provides that an action 
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must be commenced ―in the county in which the transaction or some part thereof 

occurred out of which the cause of action arose.‖ 735 ILL. COMP. STAT. 5/2-101. Illinois 

law, however, provides that ―[n]o order or judgment is void because rendered in the 

wrong venue, except in the case of judgment by confession . . . .‖ 735 ILL. COMP. STAT.

5/2-104(a). Accordingly, under Illinois law, even if venue were deemed to be improper

— something to which we cannot agree — the judgment would not be considered void 

merely because of improper venue. 

Finally, even if venue was improper, improper venue is not one of the grounds that 

would allow a Tennessee court to refuse to enroll the judgment. See Guseinov, 467 

S.W.3d at 925. We hold that the Illinois judgment is not invalid because of improper 

venue.

B.

NP also challenges the Illinois judgment on the ground that the Illinois court 

lacked jurisdiction over the cause of action. It appears to us that NP is attacking the 

court‘s subject matter jurisdiction over the case by alleging that the Illinois court lacked 

venue. In its brief, NP‘s statement of the issues questions whether the Illinois court ―had 

proper jurisdiction and venue over the subject matter.‖ Other than that statement, NP 

makes no specific argument regarding the Illinois court‘s lack of subject matter 

jurisdiction. Rather, NP focuses more on the court‘s lack of venue, which we addressed 

above. Regardless, it is clear that the Circuit Court of Cook County in Illinois had 

subject matter jurisdiction over the claim at issue. The Illinois Constitution provides that 

―Circuit Courts shall have original jurisdiction of all justiciable matters except when the 

Supreme Court has original and exclusive jurisdiction relating to redistricting of the 

General Assembly and to the ability of the Governor to serve or resume office.‖ Ill. 

Const. art. VI, § 9. ―  ̳[I]n order to invoke the subject matter jurisdiction of the circuit 

court, a plaintiff's case, as framed by the complaint or petition, must [merely] present a 

justiciable matter.‘ ‖ Nationstar Mortg., LLC v. Canale, 10 N.E.3d 229, 233 (Ill. App. 

Ct. 2014) (quoting Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 770 

N.E.2d 177, 182 (Ill. 2002)) (brackets in original). Because this is a breach of contract 

action, this is a justiciable matter. It clearly does not fall within the exceptions to the 

circuit court‘s general subject matter jurisdiction. We hold that the Illinois judgment is 

not invalid on the basis that the Illinois court lacked subject matter jurisdiction over the 

claim. 

C.

i.

In addition to the Illinois court‘s subject matter jurisdiction, NP attacks Illinois‘s

personal jurisdiction over it. It asserts that ―[t]he contract between the parties specifies 
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jurisdiction . . . to be in the Tennessee courts.‖1 The Illinois Appellate Court has held, 

however, that ―[a] valid forum selection clause does not  ̳ ―oust‖ ‘ a court of its inherent 

jurisdiction to review a given case but rather presents a  ̳legitimate reason to refrain from 

exercising that jurisdiction.‘ ‖ Putnam Energy, LLC v. Superior Well Servs., Inc., 2013 

IL App (5th) 120422-U, 2013 WL 3487386 at *4 (Ill. App. Ct., filed July 9, 2013). Thus, 

the forum selection clause alone does not void the Illinois court‘s judgment based on lack 

of personal jurisdiction.

Illinois‘s long-arm statute provides three bases relevant to this case on which an 

Illinois court could rely in asserting jurisdiction over NP. A party submits to jurisdiction 

in Illinois when (1) the cause of action arises from that party‘s transaction of business 

within the state, (2) when the parties make or perform a contract substantially connected 

with the state, or (3) because the party was doing business within the state. 735 ILL.

COMP. STAT. 5/2-209(a)(1), (a)(7), (b)(4).

ii.

When the cause of action is based on the transaction of business within Illinois, a 

party may bring a cause of action against the defendant on the basis of the specific 

transaction at issue. 735 ILL. COMP. STAT. 5/2-209(a)(1). To determine whether this 

transactional test has been met, ―a plaintiff must show that (1) the defendant transacted 

business in Illinois; (2) the cause of action arose from this transaction of business; and (3) 

personal jurisdiction was consistent with due process.‖ Liaquat Khan v. Van Remmen, 

Inc., 756 N.E.2d 902, 910 (Ill. App. Ct. 2001). ―The purpose of the statutory phrase 

 ̳arising from‘ is to ensure that there is a close relationship between the cause of action 

against a nonresident defendant and [its] jurisdictional activities.‖ Gaidar v. Tippecanoe 

Distribution Service, Inc., 702 N.E.2d 316, 323 (Ill. App. Ct. 1998). ―It is settled that a

nonresident defendant can  ̳transact business‘ in Illinois without being physically present 

. . . .‖ Volkswagen Ins. Co. v. Whittington, 374 N.E.2d 954, 957 (Ill. App. Ct. 1978).

In this case, it is clear that NP transacted business in Illinois and that transaction 

led to the Plaintiffs‘ cause of action. NP transacted business in Illinois by engaging in 

negotiations with and finalizing the terms of its agreement with the Plaintiffs located in 

Illinois. The relationship between the parties regarding the transaction at issue took place 

 

1 A separate Terms of Sale Agreement that was not part of the contract provides as 

follows:

The validity, interpretation and enforcement of this Agreement and 

all other instruments and documents executed in connection with 

this transaction shall be governed by Tennessee law. 

Notwithstanding anything contained herein to the contrary, each 

party shall have the right to institute judicial proceedings if 

necessary. Venue for any court proceedings pursuant hereto shall 

be in Knox County, Tennessee.
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over the span of years. The parties first started negotiating the terms of the contract and 

agreed to the initial terms of the contract in June 2011. In August 2013, the parties 

agreed to modify the terms of the contract. In September 2013, the Plaintiffs filed their 

complaint. For a period of over two years, the parties maintained a business relationship. 

NP entered into a contract with the Illinois plaintiffs that would result in a potential 

payment to it in excess of $100,000. NP clearly established a business relationship with 

the Illinois Plaintiffs and transacted business in the state. 

NP‘s transaction of business with the Plaintiffs in Illinois involves the specific 

contract that led to the case before us. The parties entered into a contract under which the 

Plaintiffs paid NP a deposit of $60,000. The cause of action in this case arose from NP‘s 

transaction of business in the state of Illinois. 

Finally, Illinois‘s personal jurisdiction over NP is consistent with due process. NP 

had sufficient contacts with Illinois that it could foresee being haled into court in Illinois. 

It entered into a contract involving a substantial amount of money and accepted a deposit

in the amount of $60,000 from the Illinois Plaintiffs. NP maintained a business 

relationship in the state for over two years based upon the transaction at issue. It was 

foreseeable that NP could be required to defend a lawsuit in Illinois involving the 

transaction before us. We find that, because NP transacted business in Illinois, Illinois 

properly asserted jurisdiction over NP.

iii.

Illinois may also assert personal jurisdiction over an out-of-state defendant on the 

basis that the party made or performed a contract substantially connected with Illinois. 

735 ILL. COMP. STAT. 5/2-209(a)(7). In determining whether a defendant sufficiently 

availed itself of the benefits of Illinois law in forming a contract with an Illinois resident, 

the court should consider the following: (1) who initiated the contract; (2) where the 

contract was negotiated; (3) where the contract was formed; and (4) where performance 

of the contract was to take place.‖ Estate of Isringhausen ex rel. Isringhausen v. Prime 

Contractors & Assocs., Inc., 883 N.E.2d 594, 600-01 (Ill. App. Ct. 2008). ―The location 

of the actual parties in a transaction or to a contract and the formation of the relevant 

contract are rarely dispositive of whether a defendant indeed transacted business in 

Illinois, seeing as much of modern business is transacted by mail and electronic 

communications across state lines.‖ Illinois Commerce Comm’n v. Entergy-Koch 

Trading, LP, 841 N.E.2d 27, 34 (Ill. App. Ct. 2005) (citing Burger King Corp. v. 

Rudzewicz, 471 U.S. 462, 476 (1985)). 

As discussed above, there was a contractual relationship between the Plaintiffs and 

NP that endured for over two years. In the transaction at issue, it is not clear which party 

initiated the contract. Both sides assert that the other party made the phone call initiating 

the contract. The initial contract was negotiated and formed by the parties via email. 
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Thus, where the parties negotiated the contract and where it was formed do not weigh in 

favor of either party. Rao Murukurthy, on behalf of the Plaintiffs, met in person with 

representatives from NP in regard to the modification agreement. The new agreement, 

however, was memorialized via email. In regard to the place of performance, NP was to 

manufacture the components and ship them to Africa, and the Plaintiffs would submit 

payment under the contract from Illinois to NP in Tennessee. Thus, performance of the 

contract would be from the parties‘ respective businesses. It was not as if the contract 

was to be performed exclusively in one location. Accordingly, none of these facts 

indicate that contract was not substantially connected to Illinois. As noted by the Illinois 

Appellate Court, ―much of modern business is transacted by mail or electronic 

communications across state lines.‖ Id. That is the case before us. The Plaintiffs were 

harmed in Illinois by NP‘s breach of contract. Furthermore, they rendered their part of 

the performance and negotiated the contract, all in the state of Illinois. 

It cannot be persuasively argued that the breach of a contract with the Illinois 

Plaintiffs, resulting in damages to them in the amount of $60,000, was not a contract 

substantially connected with Illinois. NP should bear the burden of defending itself in a 

lawsuit based upon its breach to the Illinois Plaintiffs. We find that Illinois has personal 

jurisdiction over NP on the basis that it made and was to perform a contract that was 

substantially connected with Illinois. 

iv.

In addition to exercising specific jurisdiction over the transaction or contract, an 

Illinois court can also exercise jurisdiction over a corporation when it is ―doing business 

within th[e] state.‖ 735 ILL. COMP. STAT. 5/2-209(b)(4). When a defendant ―has 

indulged in the benefits of doing business in Illinois with an Illinois corporation[, it] 

should be required to defend the lawsuit that resulted from such business ventures.‖ 

Swissland Packing Co. v. Cox, 627 N.E.2d 686, 688 (Ill. App. Ct. 1994). Doing business 

in the state will subject the defendant to jurisdiction in Illinois. The Illinois Appellate 

Court has previously found the following: 

[I]t is in no way unfair to submit to the jurisdiction of an 

Illinois court a defendant who sold goods to an Illinois 

corporation on two prior occasions and has contracted to 

deliver goods to such corporation‘s place of business in 

Illinois. When the defendant ―purposefully avails [him]self 

of the privileges of conducting activities within the forum 

State, thus invoking the benefits and protections of its laws,‖

the defendant is properly subject to personal jurisdiction in 

the forum state.

Id. (citing Hanson v. Denkla, 357 U.S. 235, 253 (1968)) (brackets in original). 
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In this case, it is clear that NP was, in fact, ―doing business‖ within Illinois. It did 

business, not just with the Plaintiffs, but also with many other customers in Illinois. 

While the Plaintiffs‘ specific transaction at issue did not involve delivery of good in 

Illinois, many of NP‘s business transactions within the state have involved delivery of 

goods within the state of Illinois. From June 30, 2009 through October 1, 2013, NP did 

business with Illinois customers resulting in 158 total jobs and $1,155,441 in sales to 

Illinois customers with delivery to be in Illinois. 

In addition to those transactions with other customers, NP previously engaged in 

business with the Plaintiffs. NP completed one job for RDI and accepted payment in the 

amount of $18,834.37. NP also completed three prior jobs for APT.2 The first occurred 

on January 1, 2006 and resulted in payment to NP in the amount of $12,545. On October 

13, 2006, another transaction occurred, resulting in a sale and payment to NP in the 

amount of $2,744.23. Finally, APT again conducted business with NP on June 7, 2007 

and paid NP $17,034.16 for this sale. Thus, it is clear that NP conducted business within 

the state of Illinois, not just with the Plaintiffs but with many other customers. We hold

that the Illinois court properly exercised personal jurisdiction over NP due to the fact that

NP did business in the state. We hold that the Illinois judgment is not invalid on the basis 

that the court lacked personal jurisdiction over NP. 

D.

NP also challenges the Plaintiffs‘ notice of motion for default. NP alleges that 

―[t]he notice of hearing on the motion for default would not have been sufficient under 

the Tennessee Rules of Civil Procedure.‖ To support its argument, it merely asserts that 

―Tennessee law should control.‖ NP does not cite any authority for its argument that the 

Tennessee Rules of Civil Procedure should apply to the notice of hearing on the motion 

for default filed in Illinois. Because the Plaintiffs brought their action in Illinois, the 

Tennessee Rules of Civil Procedure did not control the procedural issue of the Plaintiffs‘ 

notice. 

E.

Because we find no reason to hold that the Illinois judgment is invalid, we must 

give it Full Faith and Credit. As previously noted, the United States Constitution 

mandates that ―Full Faith and Credit shall be given in each state to the . . . judicial 

Proceedings of every other State.‖ U.S. Const. art. IV, § 1. ―The very purpose of the 

full-faith and credit clause was to alter the status of the several states as independent 

foreign sovereignties, each free to ignore obligations created under the laws or by the 

judicial proceedings of the others, and to make them integral parts of a single nation 

 

2

The first two jobs were completed by National Partitions and Interiors, Inc. before it 

was acquired by and merged with NP.
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throughout which a remedy upon a just obligation might be demanded as of right, 

irrespective of the state of its origin.‖ Milwaukee Cty. v. M.E. White Co., 296 U.S. 268, 

277 (1935). We must honor the mandate of the Constitution as interpreted by the U.S. 

Supreme Court. Because we do not find grounds to hold that the Illinois judgment is 

invalid, we hold, as a matter of law, that the Plaintiffs have the right to enroll their Illinois 

judgment in Tennessee.

VI.

In addition to challenging enrollment of the judgment, NP also challenges the trial 

court‘s decision to bar its counterclaim on the basis of res judicata. On appeal, NP asserts 

that ―Tennessee Courts have found that counterclaims may be filed in actions to register 

foreign judgments.‖ While counterclaims may be filed in actions to enroll foreign 

judgments, that does not give NP the unconditional right to file its counterclaim in this 

case. In this case, NP‘s counterclaim is an attempt to litigate issues already determined 

and seek damages already awarded in the prior Illinois case. 

―The full faith and credit clause requires that the common law doctrine of res 

judicata be applied in one state to a judgment rendered in another state to the same extent 

that it applied in the state of its rendition.‖ Coastcom, Inc. v. Cruzen, 981 S.W.2d 179, 

181 (Tenn. Ct. App. 1998). In Illinois, ―[f]or the doctrine of res judicata to apply, three 

requirements must be met: (1) there was a final judgment on the merits rendered by a 

court of competent jurisdiction; (2) there was an identity of cause of action; and (3) there 

was an identity of parties or their privies.‖ Rein v. David A. Noyes & Co., 665 N.E.2d 

1199, 1204 (Ill. 1996). A default judgment in Illinois ―is entitled to the same preclusive 

effect under the doctrine of res judicata as any other judgment. . . . [D]efault judgments 

are always res judicata on the ultimate claim or demand presented in the complaint.‖ 

Hous. Auth. for La Salle Cty. v. Young Men’s Christian Ass’n of Ottawa, 461 N.E.2d 

959, 963 (Ill. App. Ct. 1984) (emphasis in original). 

NP asserts that the Illinois Code of Civil Procedure does not provide for 

mandatory counterclaims and that its counterclaim is, therefore, not barred by res 

judicata. We disagree. NP relies on the Illinois rule providing that ―any claim by one or 

more defendants against one or more plaintiffs . . . may be pleaded as a cross claim in any 

action, and when so pleaded shall be called a counterclaim.‖ 735 ILL. COMP. STAT. 5/2-

608(a). NP claims that the rule‘s language makes its counterclaim in this case permissive

and that it should be allowed to raise it now. Illinois courts, however, have made clear 

that a counterclaim must be pleaded in certain situations or will be barred. The Illinois 

Appellate Court has provided as follows:

In Illinois, counterclaims are generally permissive rather than 

mandatory. Therefore, a defendant generally may raise his or 

her claim against the plaintiff by way of a counterclaim or by 
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way of a separate action. Yet, res judicata bars the separate 

action if successful prosecution of that action would in effect 

nullify the judgment entered in the prior litigation. More 

particularly, if the defendant‘s claim involves the same 

operative facts as the plaintiff‘s claim, res judicata may bar 

the defendant from raising his or her claim in a subsequent 

action.

Fuller Family Holdings, LLC v. Northern Trust Co., 863 N.E.2d 605, 617 (Ill. App. Ct. 

2007) (emphasis in original). ―If defendant‘s claim against plaintiff constitutes a separate 

cause of action, the claim may be asserted in a subsequent independent action. However, 

if the claim involves the same operative facts, the doctrine of Res Judicata may operate to 

bar subsequent action.‖ Block & Co., Inc. v. Storm Printing Co., 351 N.E.2d 271, 274 

(Ill. App. Ct. 1976) (reversed on other grounds).

Thus, Illinois precedent makes it clear that, while counterclaims are generally 

permissive, counterclaims may be mandatory and barred by res judicata when the 

counterclaim relies on the same operative facts as a prior action. Illinois clearly applies 

res judicata to counterclaims when allowing the defendant to bring the claim in a 

subsequent action would nullify the prior judgment. Fuller Family Holdings, LLC v. 

Northern Trust Co., 863 N.E.2d at 617. 

Here, NP is attempting to bring its counterclaim in a subsequent action. The 

Plaintiffs‘ action to enroll its Illinois judgment in Tennessee is a separate action from its 

breach of contract action in Illinois. If we allow NP‘s counterclaim to proceed and find 

in favor of NP on the claim, we would effectively nullify the Illinois judgment. If that 

finding were made, there would be an Illinois judgment ordering NP to pay the Plaintiffs 

damages in the amount of $60,000 and a separate Tennessee judgment ordering the 

Plaintiffs to pay NP damages. This would result in two contradictory judgments in effect 

nullifying the initial Illinois judgment. That result would not afford the Illinois judgment 

the full faith and credit to which it is entitled under the Constitution.

NP‘s counterclaim clearly arises out of the same operative facts that the Plaintiffs‘ 

original case involve. The counterclaim involves the exact transaction upon which the 

original case was based. NP, however, asserts that it was the Plaintiffs who breached the 

contract and that it is the party entitled to damages. NP could have made the decision to 

assert its claim in the Illinois action but made the decision not to do so. In the original

action, either NP breached the contract or the Plaintiffs breached the contract. The same 

operative facts are needed to determine which party was the breaching party. Thus, the 

initial Illinois cause of action involves the same operative facts that NP‘s counterclaim 

involves. Because NP‘s cause of action involves these same operative facts, NP was 

required to bring its counterclaim in the initial action. Because NP did not bring its

counterclaim in the initial action and its counterclaim involves the same operative facts, 
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we hold, as a matter of law, that its claim is barred by res judicata.

VII.

The judgment of the trial court is affirmed. The costs on appeal are assessed to the 

appellant, National Partitions, Inc. This case is remanded for enforcement of the trial 

court‘s judgment and for collection of costs assessed below. 

________________________________

CHARLES D. SUSANO, JR., JUDGE