FIRST DIVISION

										March 29, 2004

1-01-4347

MARILYN L. RIEMER and GEORGE RIEMER,

	Plaintiffs-Appellees,

		v.

KSL RECREATION CORPORATION,

	Defendant-Appellant.

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Appeal from 

the Circuit Court 

of Cook County

00 L 12141

Honorable

Susan F. Zwick, 

Judge Presiding

	JUSTICE McBRIDE delivered the opinion of the court:

	Illinois residents Marilyn L. Riemer and George Riemer filed this suit on October 20,

2000, seeking damages for personal injuries and loss of consortium, after Marilyn was allegedly

struck and injured when a mirror fell from a wall on August 5, 1999, while the Riemers were

guests at the Claremont Resort & Spa in California.  The sole issue on appeal is whether the

circuit court of Cook County correctly determined that the only defendant named in the Riemers'

suit, a nonresident corporation, is subject to personal jurisdiction in Illinois because it was "doing

business" in Illinois through the sales activities of a subsidiary to a subsidiary corporation.  The

"doing business" doctrine is codified in section 2-209(b)(4) of the Code of Civil Procedure.  735

ILCS 5/2-209(b)(4) (West 2000).  Under the doctrine, a foreign corporation that engages in a

continuous and systematic course of business in Illinois becomes subject to the general jurisdiction

of its courts, and may be called upon to defend suits in the forum even when those suits have no

connection with the corporation's activities in Illinois.  The circuit court denied defendant's section

2-301 motion to quash service of process and dismiss plaintiffs' cause of action based upon lack of personal jurisdiction.  735 ILCS 5/2-301 (West 2000).  This court, however, granted defendant's interlocutory petition for leave to appeal pursuant to Supreme Court Rule 306(a)(3) (166 Ill. 2d

R. 306(a)(3)), and we now address its contention that it lacked sufficient business contacts with

Illinois to invoke the general jurisdiction of its courts.

	Discovery on the issue of jurisdiction revealed the following facts.  Defendant KSL

Recreation Corporation is a Delaware corporation with its primary place of business in La Quinta,

California.  Defendant corporation, formed in 1992, specializes in identifying and purchasing

resort properties and then selling them to sub-subsidiary or "indirect subsidiary" corporations

which operate and manage the properties.  In 1993, defendant acquired the Doral Golf Resort &

Spa in Miami, Florida, and the La Quinta Resort & Club and PGA West in La Quinta, California. 

In 1996, defendant acquired the Lake Lanier Islands Resort near Atlanta, Georgia.  In 1997,

defendant acquired the Grand Traverse Resort & Spa in northwest Michigan near Traverse City,

Michigan.  In 1998, defendant acquired the Claremont Resort & Spa near Berkeley, California,

and the Grand Wailea Resort Hotel & Spa in Wailea, Maui, Hawai'i.  Finally, in 2000, defendant

acquired the Arizona Biltmore Resort & Spa in Phoenix, Arizona.  None of the resort properties are owned, operated, or managed by the defendant corporation, and none of them are located in

Illinois.  Further, defendant does not own or lease any property in Illinois, it maintains no offices, mailing address, telephone number, or employees in Illinois, it is not licensed to do business in

Illinois, and it does not have a registered agent for service of process in Illinois.  One of

defendant's wholly owned direct subsidiary corporations is KSL Recreation Group.

	Direct subsidiary KSL Recreation Group is also a Delaware corporation, which in turn wholly owns at least 26 other Delaware corporations.  The sub-subsidiaries include:  (a) KSL

Claremont Resort, which, since 1998, has owned and operated the facility where Marilyn Riemer

is alleged to have been injured in 1999; (b) various corporations which own and operate the five 

other resort properties and develop and sell surrounding real estate; and (c) KSL Resorts Group,

which solicits business for the six resorts.  Operating the resorts includes providing lodging,

conference services, food and beverages, golf and spa facilities, club memberships, entertainment,

and athletic-focused special events.

	The sub-subsidiary soliciting business for all of the resorts, KSL Resorts Group, is based

in Reston, Virginia, but has regional United States offices, including a midwest location, near

Chicago, in Arlington Heights, Illinois.

	Defendant's only contacts with Illinois were through the activities of its sub-subsidiary's

Illinois office.  However, plaintiffs were never solicited by the Illinois office and their stay at the

California resort was unrelated to any activity in Illinois.  Nevertheless, they served process in

December of 2000, on the only employee of the sub-subsidiary's Illinois office, Laura Jean

Gydesen.

	At a discovery deposition taken on July 19, 2001, Gydesen stated that her employer had

existed for about three years and had maintained an Illinois office during that time frame. 

Gydesen had been in Illinois for approximately 18 months, working as the sub-subsidiary's

director of Midwest sales.  The Midwest office had been located in Des Plaines, Illinois, but was

currently located in her residence in a high-rise apartment building in Arlington Heights, and its

mailing address was at an Arlington Heights Mailboxes Etc. location.  Her territory included the midwestern states of Illinois, Minnesota, Wisconsin, Nebraska, Iowa, North Dakota, and South

Dakota.

	Gydesen specified that the only business her employer conducted was soliciting sales for

the six  resorts and that her only duties were to solicit sales to groups and meetings.  She never

solicited individual bookings.  She performed her duties through direct contacts, phone

campaigns, and trade shows.  She did not use telemarketing or advertise through radio or

television.  She relied on her knowledge of potential clients, and most of her sales efforts went

into direct sales calls and trade shows.  Two of the four trade shows she attended were in Illinois.

	According to defendant's answers to the Riemers' interrogatories, Gydesen had booked a

total of 18 events for the six resorts, including one for the Claremont Resort & Spa in April 2001. 

Gydesen also stated during her deposition that she had generated about $6 million in business for

the six resorts during her 18 months in Illinois (between approximately January 2000 and July

2001).  The record also includes a Form 10-K Annual Report filed for the fiscal year ending

October 321, 2000, by the sales corporation's parent, KSL Recreation Group.  The Form 10-K

Annual Report indicated that income generated from operating the resorts totaled $69.5 million

for the fiscal year ending on October 31, 1999, and $80.1 million for the fiscal year ending on

October 31, 2000.  It also disclosed that 96% of the revenue derived in fiscal 2000 by

intermediate subsidiary KSL Recreation Group "together with its subsidiaries" was attributable to

their ownership and management of the resorts, and the remaining 4% of their revenue was

attributable to their development and sale of real estate in and around the resorts.  The

intermediate subsidiary listed its 26 subsidiaries by name, including the sales subsidiary at issue here and multiple subsidiaries associated with each of the six resorts.  For example, there were

four subsidiaries associated with the hospitality operations and real estate holdings in Michigan,

and others associated with the Claremont operations.  In the text of its Form 10-K filing, the

intermediate subsidiary repeatedly referred to itself and its subsidiaries in the collective, as "the

Company," and all of the financial figures disclosed in the Form 10-K were aggregated for "the

Company," rather than being broken out by the specific corporations.  In the Form 10-K filing, the

intermediate subsidiary also made references to the defendant parent corporation, but consistently

referred to the defendant parent corporation either by name or as "the Parent," distinguishing it

from all of the other KSL corporate entities.  Despite these clear and repeated distinctions, the

Riemers erroneously suggest to this court, "All of the corporations, parent and subsidiary, are

referred to collectively in this [Form 10-K] filing as the 'Company,' " and "The SEC filing lists the

corporate officers and directors of the Company (which comprises all the corporate entities) ***." 

It is apparent, however, that the Riemers' assertions about "the Company" are incorrect.  The

Form 10-K report filed with the Securities and Exchange Commission by the intermediate

subsidiary, KSL Recreation Group, does not suggest in any way that the defendant parent

corporation, KSL Recreation Corporation, is part of "the Company."

	Gydesen also said that sometimes she took part in negotiating room rates or special

considerations for a particular group, but that she never executed any contracts.  The hotel would

send a standard 12- to 15-page contract directly to the client or to Gydesen for delivery to the

client, and the hotel would execute the contract and any contract amendments.  Further, before

Gydesen became the Midwest sales director, she worked at the La Quinta and Grand Wailea resorts, and in those capacities she had executed contracts.  No one at KSL Resorts executed

contracts.

	Gydesen also related that accommodations could be booked through one of the regional

sales offices, such as her Midwest office, or directly with a hotel’s on-property staff, but if a client

booked through the hotel’s website, Gydesen would not receive a sales incentive.  She had

nothing to do with sales over the Internet.

	Gydesen was asked about a trade publication which appears to have been the July/August

2000 edition of "Medical Meetings," in which it was reported that Gydesen had been named

"director of sales, Midwest" for defendant KSL Recreation Corporation, rather than for sub-

subsidiary KSL Resorts Group.  The publisher, Adams Business Media, also reported on the

appointments and promotions of other individuals in the meeting sales field.  Gydesen stated that

if a publication had listed her as a director of sales for KSL Recreation Corporation, the

publication was incorrect.

	Larry E. Lichliter, the "L" in the various KSL corporations, swore in an affidavit that sub-

subsidiary KSL Claremont Resort -- rather than parent KSL Recreation Corporation -- directly

owned and operated the Claremont Resort and Spa in California.  Lichliter also provided details

about the sub-subsidiary responsible for sales for all the resorts, KSL Resorts Group.  He swore it

had its own corporate charter, maintained its own bank accounts, corporate books and financial

statements, had its own tax identification number, and paid its own taxes.  He also swore that

defendant parent KSL Recreation Corporation did not "exhibit any amount of control" over the

internal affairs of sub-subsidiary KSL Resorts Group.  Further, sub-subsidiary KSL Resorts Group retained sufficient operating capital, it did not rely on defendant KSL Recreation

Corporation to keep its business in operation, and none of its obligations had been guaranteed or

co-signed by defendant KSL Recreation Corporation.

	In addition to disclosing the intermediate subsidiary's sources of income, the Form 10-K

referenced above also indicated that the various corporations had substantially the same directors

and key executive officers.  Lichliter, for example, was a founding stockholder of the parent

corporation, defendant KSL Recreation Corporation, and had served as a director and its

executive vice president since its inception.  He was also serving as the chief financial officer and

treasurer of the intermediate subsidiary, KSL Recreation Group, and was a director and either

president or executive vice president of each of the sub-subsidiaries, including sub-subsidiary KSL

Resorts Group.

	The intermediate subsidiary's Form 10-K also included a written expense allocation

agreement that the intermediate subsidiary and defendant parent corporation had entered into on

April 30, 1997.  According to agreement, if requested, defendant would provide general business,

financial, legal, and tax advice to the intermediate subsidiary and its subsidiaries, and would be

compensated for its advice.  The agreement had an initial term of one year, but automatically

renewed unless terminated on 30 days' notice by either party.  There is no indication in the record

on appeal that the agreement was ever terminated, and in fact, the Form 10-K disclosed that "the

Company," meaning the intermediate subsidiary KSL Recreation Group and its 26 subsidiaries,

had expended $9.8 million in expense allocation agreement fees in 1999, and $10.7 million in

2000.  As noted above, however, all of the financial figures in the Form 10-K were aggregated for "the Company," and thus the report did not disclose which specific KSL entity or entities had

received the defendant parent corporation's advice and paid the resulting fees  to the defendant

parent corporation.

	The intermediate subsidiary's Form 10-K also disclosed that "the Company" had entered

into a "tax sharing" agreement with the defendant parent corporation, providing for the parent,

the intermediate subsidiary, and the 26 sub-subsidiaries to share current and deferred income tax

expenses and benefits.  The parent corporation filed consolidated federal and combined state

income tax returns which included the subsidiary and sub-subsidiaries.  If the defendant parent

corporation utilized tax losses of the intermediate subsidiary and sub-subsidiaries, it would

compensate them.

	The intermediate subsidiary's Form 10-K also made disclosures about its liquidity and

capital resources.  It indicated that "historically," the intermediate subsidiary and its 26

subsidiaries (or "the Company") had funded their capital and operating requirements with a

combination of operating cash flow and borrowing, and equity investments from the defendant

parent corporation.  It was expected, however, that they would fund their future capital and

operating requirements through a combination of borrowing and cash generated from operations.

	Finally, discovery also disclosed that some of the corporate entities had Internet addresses. 

According to Gydesen and pages printed from the Internet, the sub-subsidiary responsible for

sales, KSL Resorts Group, maintained a website at kslresorts.com.  This site provided information

about the resorts it was promoting, and links to (a) the resorts' websites, (b) the "Sales Team,"

and (c) the parent corporation's website at kslrecreation.com.  Gydesen's statements about the Internet indicated that the sales team link connected potential clients with hotel on-site staff,

rather than with regional sales office personnel such as herself.

	After discovery closed, the parties filed written briefs which included the defendant

parent's interrogatory answers, Lichliter's affidavit, the intermediate subsidiary's Form 10-K

Annual Report, the transcript of Gydesen's deposition, and the printouts from the sub-subsidiary's

website.  On November 26, 2001, after considering the written briefs and oral arguments, the trial

judge found defendant was "doing business" in Illinois.  The judge stated there was "no issue" the

defendant's sub-subsidiary KSL Resorts Group was "actively 'doing business'  in Illinois," because

the sub-subsidiary had maintained a sales office in Illinois for three years, Gydesen's position was

permanent, Gydesen had generated $6 million in sales, and Gydesen had negotiated sales

contracts involving Illinois residents and booked events for the California resort where plaintiff

Marilyn Riemer was injured.  The judge also stated the only issue to be decided was whether the

sub-subsidiary and its California-based parent were insufficiently separate so as to make the parent

amenable to suit in Illinois.   The judge characterized the relationship between the two

corporations as "synergistic," and concluded that based on the six "Cannon" factors (Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333, 69 L. Ed.634, 45 S. Ct. 250 (1925)) stated in Graco, Inc. v. Kremlin, Inc., 558 F. Supp. 188 (N.D. Ill. 1982), there were sufficient factual ties between the two entities to warrant exerting personal jurisdiction in Illinois over the

parent.

	The following legal principles are pertinent to KSL Recreation Corporation's appeal from

that ruling.  A determination of personal jurisdiction based upon only documentary evidence is reviewed de novo.  Alderson v. Southern Co., 321 Ill. App. 3d 832, 846, 747 N.E.2d 926, 938 (2001).   The plaintiff bears the burden of establishing a prima facie basis for exercising personal jurisdiction over a defendant.  Alderson, 321 Ill. App. 3d at 846, 747 N.E.2d at 938.  However, the plaintiff's prima facie case may be overcome by uncontradicted evidence which defeats jurisdiction.  Alderson, 321 Ill. App. 3d at 846, 747 N.E.2d at 938.

	The United States Supreme Court has determined that a state's power to invoke personal

jurisdiction over a nonresident defendant is limited by the due process clause of the fourteenth

amendment (U.S. Const., amend. XIV).  Maunder v. DeHavilland Aircraft of Canada, Ltd., 102 Ill. 2d 342, 348, 466 N.E.2d 217, 220 (1984).  Due process requires that if a defendant is not

present within the territory, he must have " 'certain minimum contacts with it such that the

maintenance of the suit does not offend "traditional notions of fair play and substantial justice." ' " 

Braband v. Beech Aircraft Corp., 72 Ill. 2d 548, 553-54, 382 N.E.2d 252, 254 (1978) ("Beech Aircraft"), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102, 66 S. Ct. 154, 158 (1945).  The defendant's business contacts with the State must be "continuous

and systematic" before its courts may exert jurisdiction.  Maunder, 102 Ill. 2d at 349, 466 N.E.2d at 221, citing Helicopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 80 L. Ed. 404, 104 S. Ct. 1868 (1984).  Instead of conducting a mechanical or quantitative assessment of a

corporation's activities within the state, a court evaluates the quality and nature of the

corporation's activities within the state, to determine whether it is reasonable to require the

corporation to defend a particular suit within that forum.  Beech Aircraft, 72 Ill.2d at 554, 382 N.E.2d at 255, citing Shaffer v. Heitner, 433 U.S. 186, 203-04, 53 L.Ed. 683, 697, 97 S.Ct. 2569, 2580 (1977).

		" '[T]o the extent that a corporation exercises the privilege of

conducting activities within a state, it enjoys the benefits and

protection of the laws of that state. The exercise of that privilege

may give rise to obligations, and, so far as those obligations arise

out of or are connected with the activities within the state, a

procedure which requires the corporation to respond to a suit

brought to enforce them can, in most instances, hardly be said to be

undue.' "  Maunder, 102 Ill. 2d at 348-49, 466 N.E.2d at 220, quoting International Shoe, 326 U.S. at 319, 90 L. Ed. at 104, 66 S. Ct. at 160.

	In addition, in Illinois, a court's assertion of personal jurisdiction over a foreign

corporation requires a determination that the corporation was " 'present and doing business' "

within Illinois.  Beech Aircraft, 72 Ill. 2d at 554-55, 382 N.E.2d at 255.  The Illinois Supreme Court has repeatedly indicated that there is no precise test for a court to determine whether a

foreign corporation is doing business in Illinois and that each case turns on its unique facts.  Beech Aircraft, 72 Ill. 2d at 555-56, 382 N.E.2d at 255; Cook Associates, Inc. v. Lexington United Corp., 87 Ill. 2d 190, 201, 429 N.E.2d 847, 852 (1981); Maunder, 102 Ill. 2d at 351, 466 N.E.2d at 221.  The "doing business" standard is quite high (Alderson, 321 Ill. App. 3d at 848, 747 N.E.2d at 940; Rokeby-Johnson v. Derek Bryant Insurance Brokers, Ltd., 230 Ill. App. 3d 308, 318, 594 N.E.2d 1190, 1197 (1992)),  and the defendant must carry on business activity within the State " ' "not occasionally or casually, but with a fair measure of permanence and 

continuity." ' " Alderson, 321 Ill. App. 3d at 849, 747 N.E.2d at 940, quoting Cook Associates, 87 Ill. 2d at 203, 429 N.E.2d at 853; Maunder, 102 Ill.2d at 351, 466 N.E.2d at 221.  In other words, there must be a " 'course of business or "regularity of activities" as opposed to isolated or

sporadic acts.' "  Alderson, 321 Ill. App. 3d at 849, 747 N.E.2d at 940, quoting Radosta v. Devil's Head Ski Lodge, 172 Ill. App. 3d 289, 294, 566 N.E.2d 561, 564 (1988).  In general, "doing business" means conducting business in Illinois of such a character and to such an extent that it

may be inferred that the defendant has subjected itself to the jurisdiction and laws of this state and

is bound to appear when properly served.  Alderson, 321 Ill. App. 3d at 848, 747 N.E.2d at 940; Cook Associates, 87 Ill. 2d at 201, 429 N.E.2d at 853.  The foreign corporation is considered to be constructively present in Illinois and its assent to service on an agent in Illinois is implied, even

for causes of action unrelated to its transactions in Illinois.  Colletti v. Crudele, 169 Ill. App. 3d 1068, 1078-79, 523 N.E.2d 1222, 1229 (1988), citing Cook Associates, 87 Ill. 2d at 199-200, 429 N.E.2d at 851-52.  In effect, the foreign corporation has taken up residence in Illinois and,

therefore, may be sued on causes of action both related and unrelated to its activities in Illinois. 

Alderson, 321 Ill. App. 3d at 849, 747 N.E.2d at 940.  In this regard, the "doing business" doctrine is distinguishable from the long arm statute, which is not at issue here.  The long arm

statute subjects a nonresident to jurisdiction in Illinois if the nonresident has taken certain

enumerated acts, such as the transaction of business or the commission of a tortious act in Illinois,

and the plaintiff’s claim arises from that specific act.  735 ILCS 5/2-209 (a), (f) (West 2000). 

Another way of distinguishing these two concepts is to consider that the "doing business" doctrine results in the assertion of "general" jurisdiction over a corporation, and the long arm statute

results in the assertion of "specific" jurisdiction over a corporation.  Spartan Motors, Inc. v. Lube Power, Inc., 337 Ill. App. 3d 556, 561, 786 N.E.2d 613, 618 (2003); Alderson, 321 Ill. App. 3d at 857, 747 N.E.2d at 947.

	In order to determine whether a foreign corporation has established a permanent and

continuing relationship with Illinois, a court reviews its contacts with the forum over a continuous

period of time rather than a specific, fixed point in time.  Reeves v. Baltimore & Ohio R.R. Co., 171 Ill. App. 3d 1021, 1027, 526 N.E.2d 404, 407 (1988).  The relevant time period to be

reviewed begins approximately when the claim arose and it extends to when suit was filed and

service of process was attempted.  Reeves, 171 Ill. App. 3d at 1027, 526 N.E.2d at 408.  A court should review the contacts over this entire time period; however, the critical point of inquiry is the

time the defendant was made a party to the suit and was served.  Reeves, 171 Ill. App. 3d at 1027, 526 N.E.2d at 408.

	Although there is no fixed "doing business" test, most Illinois courts finding personal

jurisdiction over foreign corporations have based their determinations on facts such as whether

the defendant has maintained offices or engaged in sales activities in Illinois.  Huck v. Northern Indiana Public Services Co., 117 Ill. App. 3d 837, 840, 453 N.E.2d 1365, 1368 (1983).  Notably, mere advertisement, even through the Internet, participation in trade shows, or solicitation by an

employee or agent who lacks authority to do more have not been enough to sustain personal

jurisdiction in Illinois.  Cook Associates, 87 Ill. 2d 190, 429 N.E.2d 847 (trade shows); Radosta, 172 Ill. App. 3d 289, 526 N.E.2d 561 (trade show and various advertising); Forrester v. Seven Seventeen HB St. Louis Redevelopment Corp., 336 Ill. App. 3d 572, 784 N.E.2d 834 (2002) (telephone book and website advertising); Kadala v. Cunard Lines, Ltd., 226 Ill. App. 3d 302, 315, 589 N.E.2d 802, 810 (1992) (newspaper ads, travel brochures, and solicitation by travel

agents); Dal Ponte v. Northern Manitoba Native Lodges, Inc., 220 Ill. App. 3d 878, 581 N.E.2d 329 (1991) (trade shows through agent).  Since deriving revenue from Illinois may simply be a

consequence of successful solicitation in the forum, even substantial earnings from this state have

not been considered indicative of whether a corporation has established a permanent and continuing relationship with the forum.  Hulsey v. Scheidt, 258 Ill. App. 3d 567, 572-73, 639 N.E.2d 905, 909 (1994) (no court has held revenue is the dispositive variable); Rokeby-Johnson, 230 Ill. App. 3d at 319, 594 N.E.2d at 1198 (substantial revenue from sales is not enough to

satisfy "doing business" in a contract action); Kadala, 226 Ill. App. 3d at 315, 589 N.E.2d at 810 (revenue is a natural result of successful solicitation).  Compare Connelly v. Uniroyal, 75 Ill. 2d 393, 389 N.E.2d 155 (1979) (products liability action).  However, when a foreign corporation

engages in more than mere solicitation through its own staff (St. Louis-San Francisco Ry. Co. v. Gitchoff, 68 Ill. 2d 38, 369 N.E.2d 52 (1977)), a subsidiary corporation (Maunder, 102 Ill. 2d 342, 466 N.E.2d 217), or even an unrelated company (Beech Aircraft, 72 Ill. 2d 548, 382 N.E.2d 252), the nature and quality of its contacts with Illinois may be considered significant enough to

invoke the jurisdiction of this forum's courts.

	Since the present dispute involves subsidiary corporations, the most relevant Illinois case

is Maunder, in which it was argued that a Canadian corporation was doing business in Illinois through a wholly owned subsidiary officed outside Chicago, in Rosemont, Illinois.  Maunder, 102 Ill. 2d at 345, 466 N.E.2d at 219.  The Canadian parent designed and manufactured aircraft, and

established the Rosemont subsidiary to sell and distribute parts for its planes.  Maunder, 102 Ill. 2d at 345, 466 N.E.2d at 218-19.  The subsidiary's sole function was to sell and distribute those

parts.  Maunder v. DeHavilland Aircraft of Canada, Ltd, 112 Ill. App. 3d 879, 882, 445 N.E.2d 1303, 1306 (1983), aff'd, 102 Ill. 2d 342, 466 N.E.2d 217 (1984).  In addition, the parent distributed an illustrated parts catalog indicating that its United States customers should send

parts orders to the subsidiary in Rosemont, and whenever the parent received parts orders

directly, it forwarded them to Rosemont.  Maunder, 112 Ill. App. 3d at 882, 445 N.E.2d at 1306.  The record also showed that print ads which the Canadian parent placed in American aviation

journals touted its aircrafts' reliability and simple maintenance, and the availability of parts and

service in Rosemont.  Maunder, 102 Ill. 2d at 347, 466 N.E.2d at 219.  The Canadian company not only set up the Illinois subsidiary as its American supply depot, but it also owned all its stock,

paid its directors, and guaranteed its lease.  Maunder, 102 Ill. 2d at 346, 466 N.E.2d at 219.  Further, one person was president of both corporations, and all the corporate officers and the

manager of the Rosemont facility were accountable to that one individual.  Maunder, 112 Ill. App. 3d at 883, 445 N.E.2d at 1306.  A company manual even stated that the subsidiary was

controlled by the Canadian parent, and the record showed the subsidiary's staff placed an average

of eight telephone calls per day to the Canadian office.  Maunder, 102 Ill. 2d at 346, 466 N.E.2d at 219.

	When one of the Canadian-made planes crashed in Central Africa, personal injury and

wrongful death suits were filed in Cook County and the papers were served on a Rosemont employee.  Maunder, 102 Ill. 2d at 345, 455 N.E.2d at 218-19.  The circuit court was persuaded to dismiss the tort suits for lack of personal jurisdiction, but the appellate court reviewed the

Canadian defendant's activities in Illinois and found that jurisdiction was properly exerted. 

Maunder, 112 Ill. App. 3d at 883, 445 N.E.2d at 1306.  The court remarked upon the great extent to which the parent controlled the subsidiary and upon the parent's own activities at

promoting the sale of its products in Illinois, and concluded that the Canadian company had been

"actively and systematically doing business in Illinois" through its Illinois subsidiary. Maunder, 112 Ill. App. 3d at 883, 445 N.E.2d at 1306.  The supreme court agreed with this assessment

(Maunder, 102 Ill. 2d at 346, 466 N.E.2d at 219), characterizing the Rosemont office as an "essential component" of the Canadian parent's business activities in Illinois.  Maunder, 102 Ill. 2d at 350, 466 N.E.2d at 221.

	Maunder figured prominently in a subsequent court's analysis of whether Delaware corporations that which which were principally officed in Georgia were doing business in Illinois through the

activities of a subsidiary corporation which, at least on paper, owned and operated a coal-fired

electric power plant at the Indiana/Illinois border.  Alderson, 321 Ill. App. 3d 832, 747 N.E.2d. 926.  In Alderson, the court commented:

			"The theory underlying Maunder is that, if a subsidiary corporation is acting as the parent corporation's Illinois agent in the

sense of conducting the parent's business rather than its own, then it

is appropriate to assert jurisdiction over the parent.  Parents of

wholly-owned subsidiaries necessarily control, direct, and supervise subsidiaries to some extent.  If, however, the subsidiary is

conducting its own business, then an Illinois court may not assert in personam jurisdiction over the parent simply because it is the parent. [Citation.]  Also, standing alone, the existence of common

officers or directors serving corporations is not sufficient to confer

jurisdiction over a nonresident parent corporation. [Citation.] " 

Alderson, 321 Ill. App. 3d at 854, 747 N.E.2d at 944. 

	The court considered the activities of the various defendant corporations and concluded

that the local subsidiary was simply a conduit through which the higher corporate entities were

selling electricity, or "doing business," in Illinois.  Alderson, 321 Ill. App. 3d at 849-55, 747 N.E.2d at 940-46.  The evidence disclosed that the most senior corporation was "merely a holding

company that has established many subsidiaries to carry out its business" (emphasis added) and that the intermediate corporations held the assets, and managed and oversaw day-to-day

operations at the power-generating facility.  Alderson, 321 Ill. App. 3d at 855, 747 N.E.2d at 945.  The court emphasized that corporations should not be able to insulate themselves from

jurisdiction in a state in which they do business by simply establishing multiple subsidiary

corporations.  Alderson, 321 Ill. App. 3d at 855, 747 N.E.2d at 946.  Because the evidence showed the senior corporations actually controlled the power plant, the court concluded they

were doing business in Illinois through that local facility and were appropriately subjected to

jurisdiction in this forum.  Alderson, 321 Ill. App. 3d at 855, 747 N.E.2d at 945-46.

	Before applying these legal principles to the present dispute, we point out that none of the cases cited above, particularly Maunder and Alderson, which specifically involve parent and subsidiary corporations, endorse the analytical approach which the trial judge here employed of

first determining whether the local subsidiary was doing business in Illinois.  When a court

determines whether a foreign corporation is doing business in this state, the question is not

whether its local affiliate is doing business in the jurisdiction, but whether the foreign parent is

doing business in the jurisdiction through its local affiliate.  We reiterate the pertinent portions of those cases.  In the first Maunder appeal, the court indicated that although there is no "all- inclusive test" for determining whether a foreign corporation is doing business in this state, the

finding "generally requires that the corporation conducts business in Illinois of such a character

and extent as to warrant the inference that it has subjected itself to the jurisdiction and laws of

Illinois."  Maunder, 112 Ill. App. 3d at 882, 445 N.E.2d at 1305.  After the supreme court granted leave to appeal, it independently evaluated the "business contacts between Ltd. [the Canadian parent] and the State of Illinois" (Maunder, 102 Ill. 2d at 350, 466 N.E.2d at 221) and concluded, "Clearly Ltd. [the Canadian parent] through Inc. [the Rosemont subsidiary] was doing

business in Illinois."  Maunder, 102 Ill. 2d at 352, 466 N.E.2d at 222.  Finally, in Alderson, the court considered whether multiple parent corporations were doing business in Illinois through the

local power plant, and concluded the power plant was a " ' conduit ' through which [the parent

corporations] did business [in Illinois.]"  Alderson, 321 Ill. App. 3d at 855, 747 N.E.2d at 946.  In these cases, the dispositive inquiry was the extent to which the foreign parent was controlling, and

thus, doing business in Illinois through a local subordinate entity.

	The two Maunder opinions are also significant here because both courts discredited the Cannon rationale, which was at the heart of the trial judge's determination that there were sufficient ties between the Illinois and California KSL entities to exert personal jurisdiction over

the California parent.  See Graco, 558 F. Supp. at 190-91, citing Cannon, 267 U.S. 333, 69 L. Ed.634, 45 S. Ct. 250.  The appellate court indicated that despite the defendant's urging, it would not rely on Cannon, because that case "was decided more than 20 years prior to International Shoe [citation], the decision in which the focus of the [United States Supreme Court] on jurisdictional questions shifted from a defendant's 'presence' in the forum State to his 'minimum

contacts' therewith."  Maunder, 112 Ill. App. 3d at 883, 445 N.E.2d at 1306.  "Consequently, Cannon merely purports to hold that conducting business through a wholly owned subsidiary does not necessarily render the parent corporation amenable to process in the State where the

subsidiary does business."  Maunder, 112 Ill. App. 3d at 883- 84, 445 N.E.2d at 1306.  The supreme court remarked, "Although Cannon has not been expressly overruled, its vitality has been limited by the subsequent decisions in International Shoe and its progeny. [Citations.]  Many commentators have noted that the Cannon opinion is no longer followed in an era when the United States Supreme Court focuses on 'contacts' rather than 'physical presence' in determining

the scope of State court jurisdiction over nonresident defendants. [Citations.]"  Maunder, 102 Ill. 2d at 353, 466 N.E.2d at 222.  Furthermore, this was not the first time the Illinois Supreme Court

indicated that Illinois courts do not rely on Cannon or its progeny.  Six years earlier, in Beech Aircraft, the court remarked that the United States Supreme Court had recently reviewed the pertinent authorities dating as far back as 1878, a date well before the 1925 Cannon decision or 1945's International Shoe, and had "concluded that the standards elucidated in International Shoe *** continue[] to be the test of a State's jurisdiction over a foreign corporation."  Beech Aircraft, 72 Ill. 2d at 553, citing Shaffer, 433 U.S. 186, 53 L.Ed.2d 683, 97 S.Ct. 2569.  Even Graco acknowledged that some courts have criticized the Cannon analysis and prefer to rely on state statutes and constitutional due process to determine whether jurisdiction exists over a nonresident

parent corporation. Graco, 558 F. Supp. at 191.  In fact, after applying the Cannon factors (Graco, 558 F. Supp. at 190-91), the Graco court engaged in a separate analysis of its defendant's activities under the "doing business" doctrine as stated in Cook Associates, 87 Ill. 2d 190, 429 N.E.2d 847, a case cited extensively above, and another Illinois case that is specific to products

liability.  Graco, 558 F. Supp. at 192-93.  We also note that Graco, 558 F. Supp 188, is a lower federal court case.  It was presented by the Riemers in opposition to the motion to quash service

and dismiss based on lack of personal jurisdiction.  However, lower federal court decisions are at

best persuasive rather than binding on Illinois state courts (People ex rel. Ryan v. World Church of the Creator, 198 Ill. 2d 115, 127, 760 N.E.2d 953, 960 (2001)), and as discussed above, Illinois has declined to adopt a precise test for determining whether a foreign corporation is doing

business in Illinois.  For these reasons, the trial judge's almost exclusive reliance on the Cannon factors was misplaced.  For these same reasons, we decline to address the extensive written and

oral arguments the parties offer this court regarding Cannon's application to their dispute.

	Finally, our de novo review of the business contacts between defendant and the State of Illinois leads us to conclude that defendant did not have sufficient contacts to warrant invocation

of personal jurisdiction by an Illinois court.  The contacts to be reviewed span between August

1999, when Marilyn Riemer was purportedly struck and injured in California by the resort's falling mirror, and the last three months of 2000, when suit was filed and service was accomplished in

Illinois.  The record discloses that the California parent was not engaged in a pattern of permanent

and continuous activities in Illinois during that time frame.  Its only contacts with Illinois were

through the presence of Gydesen, an Illinois resident, and Internet webpages that were accessible

in Illinois.  Gydesen was an employee of one of defendant's sub-subsidiary corporations, the

Virginia-based KSL Resorts Group, which functioned strictly as a solicitation arm for the six out-

of-state resorts.  She worked from her private residence, rather than from an office open to the

public, and she initiated contacts with Midwest business groups or associations through targeted

means such as direct calls and trade shows rather than to the general public through radio and

television broadcasts, newspapers, or telemarketing.  Only two of the four trade shows she

attended were in Illinois.  Her permanent base in Illinois made her presence more significant than

the transient trade show attendance in cases such as Cook Associates (87 Ill. 2d 190, 429 N.E.2d 847), Radosta (172 Ill. App. 3d 289, 526 N.E.2d 561), and Dal Ponte (220 Ill. App. 3d 878, 581 N.E.2d 329); however, she merely solicited potential clients to enter into contracts with

representatives of the six out-of-state resorts.  She did not execute any contracts, nor, for that

matter, did anyone else who worked for the Virginia-based sub-subsidiary that employed her.  The

agreements were executed by resort personnel outside Illinois and the agreed-upon services were

provided by resort personnel outside Illinois.  The Internet sites maintained by her Virginia-based

employer and the six out-of-state resorts were simply additional means of enticing potential clients

to contract with resort personnel outside of Illinois.  Forrester, 336 Ill. App. 3d at 581, 784 N.E.2d at 840.  In other words, Gydesen's activities and the webpages were mere solicitation comparable to or even less than the advertising and trade show attendance that was considered

insufficient in the four cases just cited to establish that foreign entities were doing business in Illinois.  We could end our analysis here with the conclusion that the quality and nature of the

activities in Illinois -- mere solicitation -- were not enough to constitute doing business in the

forum.  However, in addition to the very limited quality and nature of the activity in Illinois, there

is absolutely no suggestion that it amounted to doing the business of the California parent.  

	In contrast to Maunder or Alderson, there is no evidence that Gydesen's activities or the Internet sites were essential components of the California parent's business or were controlled by

the California parent.  The record shows the parent specialized in acquiring resort properties and

the surrounding real estate, but after it acquired these assets, it relinquished their direct ownership

and operation by selling the properties to other KSL corporations.  The subsidiary KSL

Recreation Group and the sub-subsidiaries, such as the one running the Claremont, were in the

business of owning and operating the six resorts.  Gydesen worked for a separate sub-subsidiary

that solicited business for all of the resorts.  It appears then that her solicitation activities

benefitted and were on behalf of the various sub-subsidiaries that actually owned and operated the

facilities and the subsidiary that claimed the resulting income in its Form 10-K Annual Report,

KSL Recreation Group.  Arguably her efforts were a component of the business at that

intermediate level.  It is questionable, however, whether her solicitation efforts were an "essential

component" of business at that intermediate level.  More important, we cannot conclude

Gydesen's efforts in Illinois to solicit convention groups to stay at the various out-of-state resort

properties were essential to the California parent's business of acquiring the properties.  In fact, the record does not show that any of the activity at the sub-subsidiary level, whether it was

Gydesen's in-person, telephone, trade show, or mail solicitation, Internet solicitation, or

ownership and operation of the properties, was essential to the parent's business of acquiring the

properties.  The record also fails to show that the parent exerted any control over Gydesen's

solicitation activities.  In other words, in contrast to both Maunder and Alderson, there is no evidence that the local office was conducting the parent's business, or put another way, that the

parent was doing business through the local office.  Facts that the Riemers now rely upon do not

indicate that the local sub-subsidiary or even the intermediate subsidiary was controlled by the

parent corporation.  The Riemers couch these facts in terms of the Cannon factors.  Nevertheless, to the extent they rely on these facts as indications that the parent was doing business in Illinois,

we conclude that their reliance is misplaced.  The Riemers point out, for example, that the

intermediate subsidiary's Form 10-K disclosed the various KSL corporations were part of a tax-

sharing agreement and that they consolidated their tax returns in order to take advantage of

certain tax laws.  Although the Riemers consider this fact significant, we do not, because

combining financial data for tax purposes is not an indication that the defendant parent

corporation managed or oversaw the day-to-day operations in Illinois.  Furthermore, it did not

negate or contradict Lichliter's specific sworn assertions that the local sub-subsidiary kept

independent financial records, paid its own taxes, and was not controlled by the defendant parent

corporation.  The Riemers also point out that the Form 10-K itself provided "Consolidated

Statements of Operations" and that an explanatory note in the report indicated that "intercompany

transactions and balances have been eliminated" in those statements.  As summarized above, the report filed by the intermediate subsidiary may have blurred the distinctions between itself and its

26 subsidiaries but it consistently distinguished the parent corporation as a separate and distinct

entity.  We do not read the intermediate subsidiary's actions or remarks about itself and its various

subsidiaries as indicators that its parent corporation subsumed any subentity into any of its own

financial records.  Neither the multicorporation tax sharing arrangement nor the intermediate subsidiary's Form 10-K filing refuted the sworn statement that the sub-subsidiary at issue

maintained a distinct financial identity from the parent corporation and was not controlled by the

parent.  The Riemers also attach great significance to the expense allocation agreement between

the defendant parent and the intermediate subsidiary KSL Recreation Group, indicating that, if

requested, the parent would provide any of the various subsidiaries with management and advice

and use of the parent's resources.  The fact that there was an agreement to that effect tells us

nothing about the actual relationship between the California and Illinois entities.  Although not

argued by the Riemers, the Form 10-K specified that a substantial amount of fees had been paid to

the parent during the relevant time period as a result of this agreement -- $9.8 million in 1999, and

$10.7 million in 2000.  However, as noted earlier, the Form 10-K  did not specify whether the

intermediate subsidiary, one of its 26 sub-subsidiaries, or a combination of those 27 entities, had

obtained the parent's assistance.  Furthermore, any general inference that might have been drawn

in favor of the Riemers on the basis of this information was negated by Lichliter's specific sworn

statement that the California parent did not control the Illinois office.  The Riemers also point to

the fact that the California parent and Virginia sales sub-subsidiary had substantially the same

directors and key executive officers.  This fact alone does not demonstrate that the California parent controlled the activities in Illinois and it is not enough to confer jurisdiction over the

nonresident parent.  Alderson, 321 Ill. App. 3d at 854, 747 N.E.2d at 944.  Furthermore, even in the aggregate, the facts emphasized by the Riemers do not demonstrate the local activities were

controlled by the defendant parent corporation.

	We conclude that the defendant parent corporation's contacts with Illinois were limited to

mere solicitation by a sub-subsidiary that was officed in Illinios and sub-subsidiaries' Internet sites

that were accessible in Illinois, which were not controlled by the defendant parent corporation. 

These contacts were an insufficient basis for concluding that defendant was doing business in

Illinois through any sub-subsidiary and therefore subject to the personal jurisdiction of our courts. 

We find, accordingly, that defendant's motion to quash service of process and dismiss plaintiffs'

complaint based on lack of personal jurisdiction should have been granted, and we reverse the

trial judge's order denying the motion.

	Reversed.

	CAHILL ndand GARCIA, JJ., concurring..