Opinion ID: 2998126
Heading Depth: 1
Heading Rank: 1

Heading: Alice Mae Flegle’s Personal Guaranty

Text: We begin with a discussion of whether Alice Mae Flegle has submitted to personal jurisdiction in Illinois. We review de novo the district court’s decision regarding personal 1 The breakdown of the total award is as follows: $77,149.27 in damages; $5,143.28 in prejudgment interest; $50,374.50 in attorneys’ fees; and $10,879.72 in costs. 4 No. 04-3819 jurisdiction. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). Ms. Flegle argues that the court below should have granted her motion to dismiss because TruServ could not prove that she had the requisite “minimum contacts” with Illinois, and thus haling her into an Illinois court would offend traditional notions of fair play and substantial justice. See Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). It is true that Ms. Flegle had limited contact with Illinois during her dealings with TruServ. It is also true that simply contracting with a party based in Illinois is not enough to establish the required minimum contacts. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985). However, another very important consideration in this analysis is that “personal jurisdiction is waivable and that parties can, through forum selection clauses and the like, easily contract around any rule we promulgate.” RAR, 107 F.3d at 1280 (citing Burger King, 471 U.S. at 472 n.14). Ms. Flegle signed a personal guaranty agreement promising to “guarantee absolutely and unconditionally, at all times, the payment unto you of any indebtedness or balance of any past, present or future indebtedness, from [Flegles].” The guaranty goes on to state that “[t]his guaranty is made under the laws of the State of Illinois and shall be controlled by and interpreted according to the laws of said state. If suit becomes necessary [TruServ is] authorized to file suit against [Alice Mae Flegle] in any court of competent jurisdiction in the State of Illinois.” Ms. Flegle argues that there is no “court of competent jurisdiction” in Illinois because she does not have sufficient minimum contacts with the state. We find this argument to be meritless. Ms. Flegle signed a valid forum selection clause, and “[o]bviously, a valid forum-selection clause, even standing alone, can confer personal jurisdiction.” Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1292 n.4 No. 04-3819 5 (7th Cir. 1989). Ms. Flegle is deemed to have waived her objection to personal jurisdiction. See Northwestern Nat’l Ins. Co. v. Donovan, 916 F.2d 372, 375 (7th Cir. 1990). Next, Ms. Flegle claims that there is a material issue of fact as to whether the guaranty agreement covered the entire debt owed by Flegles. The agreement mentions “goods, wares and merchandise” and discusses “credits.” Loans, Ms. Flegle argues, are not included in the agreement and thus are not personally secured. The personal guaranty agreement as a whole, however, makes it very clear that Ms. Flegle is personally liable for “any indebtedness or balance of any past, present or future indebtedness.” The agreement specifically states that “[i]t is the intention of this guaranty to assure [TruServ] of payment, in full, for any amount due” from Flegles. The fact that Mark Flegle refused to execute a new personal guaranty in 1991 does nothing to change this analysis. The guaranty signed by Ms. Flegle “may only be revoked upon written notice.” In fact, the personal guaranty continues in effect even upon the death of Ms. Flegle. Neither party alleges that the guaranty was revoked by written notice. Therefore, the guaranty is still in effect and Ms. Flegle is personally liable for the entire debt owed by Flegles to TruServ. We briefly address the claim raised by Flegles that because TruServ refused to exercise certain setoff rights, it failed to mitigate its damages. Flegles owned TruServ stock at the time its membership was terminated, and it argues that TruServ should have set off the value of the stock against Flegles’s account as it was contractually permitted to do. Flegles claims that there is a material issue of fact as to whether TruServ breached its duty of good faith and fair dealing with respect to this issue and that granting summary judgment was therefore improper. We find that although TruServ had a right to set off, it was not obligated 6 No. 04-3819 to do so. A contract between the parties explicitly stated: “In addition to all rights of TruServ under such membership agreement, [Flegles] agrees that TruServ may, but is not required to, set off any obligations hereunder against any stock or notes issued or to be issued to [Flegles] by TruServ.” There is no material issue of fact here.