Court Opinion

ID: 3143415
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:59:13.775091+00
Date Added: 2024-06-11T12:08:07.627738
License: Public Domain

NO. 4-07-0345        Filed 1/29/08

                         IN THE APPELLATE COURT

                              OF ILLINOIS

                            FOURTH DISTRICT

THE ESTATE OF LEE R. ISRINGHAUSEN, by   )    Appeal from
SUSAN ISRINGHAUSEN, Executrix,          )    Circuit Court of
          Plaintiff-Appellant,          )    Sangamon County
          v.                            )    No. 06LM1235
PRIME CONTRACTORS AND ASSOCIATES,       )
INC., d/b/a APM CUSTOM HOMES,           )    Honorable
          Defendant-Appellee.           )    Roger W. Holmes,
                                        )    Judge Presiding.
_________________________________________________________________

            JUSTICE COOK delivered the opinion of the court:

            Prior to Lee R. Isringhausen's death, he had entered

into a contract with APM Custom Homes (APM), a Florida corpora-

tion, to build a custom home in Marco Island, Florida.      Lee

provided APM with a $100,000 deposit.       Although APM returned some

of the deposit following Lee's death, APM retained $42,500 for

its construction-management fee.     Susan Isringhausen, as the

executrix of Lee's estate, filed a breach-of-contract claim

against APM for the sum of $42,500.     The trial court dismissed

Susan's complaint for lack of personal jurisdiction.      Susan

appeals.    We affirm.

                             I. BACKGROUND

                A. Correspondence Between the Parties

            Lee Isringhausen was a resident of Sangamon County,

Illinois.    APM is a Florida corporation.    According to the

affidavit of APM's president, Todd Schneider, Lee Isringhausen

owned several properties in Marco Island and was interested in

further development.     Dan Wilmath had been Isringhausen's long-
time realtor in Marco Island and helped Isringhausen purchase the

land at 1460 Salvadore Court, where the residence at issue in

this case was to be built.    Wilmath also served as Isringhausen's

property manager and groundskeeper.     After three years as

Isringhausen's realtor, Wilmath gained employment with APM.

During the time in question, Wilmath was working both as

Isringhausen's realtor and also for APM.     Wilmath put

Isringhausen in contact with APM.    Isringhausen then met with

Schneider for the first time in Marco Island, Florida, at one of

APM's model homes to discuss the possibility of constructing a

residence.

          According to the affidavit of Lee's attorney, Almon

Manson, on November 21, 2005, and December 1, 2005, Wilmath,

acting on behalf of APM, forwarded from Florida to Isringhausen's

Springfield office several documents, information, and blueprints

regarding the proposed construction at 1460 Salvadore Court.      On

December 12, 2005, APM president Schneider contacted Isringhausen

by telephone at Isringhausen's Springfield, Illinois, office.

Schneider told Isringhausen that he would deliver via facsimile

the contract for the construction of the custom home.

Isringhausen conferred with Manson on the terms of the contract.

On December 19, 2005, Isringhausen signed the contract and

returned it to Schneider.    Additionally, as evidenced by a

document prepared by APM entitled "Isringhausen Accounting,"

which APM attached to its motion to dismiss, APM sent correspon-

dence to Isringhausen in Springfield on four other occasions:

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November 29, 2005, December 6, 2005, January 10, 2006, and

January 17, 2006.

            The facts regarding the parties' correspondence and

contract formation are slightly different according to Schnei-

der's affidavit.    Schneider attests that all discussions relative

to the construction of the custom home took place in Marco

Island, Florida.    Schneider states he never spoke with

Isringhausen over the phone.    APM delivered the contract to

Isringhausen in Marco Island, Florida.    Schneider had no knowl-

edge of the documents, information, and blueprints allegedly

forwarded by Wilmath.    Schneider attested that APM had nothing to

do with the blueprints.    Rather, the blueprints were from

Isringhausen's Florida architect, WHJ Architects and Associates

(WHJ).    Wilmath sent Isringhausen the blueprints in the capacity

of Isringhausen's realtor and independent contractor.      Wilmath

sought out and orchestrated Isringhausen's relationships with

both WHJ and APM.

         B. Terms of the Contract and the Underlying Lawsuit

            The terms of the contract state that "the [c]ontract

shall be governed by the law of the place where the project is

located."    In addition to the choice-of-law provision, the

contract also included a payment schedule as an attachment.      The

ultimate cost of the home was to be $1,942,588.    Upon execution

of the contract and prior to the start of work, Isringhausen was

to pay $97,129.40 (referred to by the parties as the $100,000

deposit).    Upon issuance of a building permit, Isringhausen was

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to pay another $97,129.40.    Upon completion of the foundation

work, Isringhausen was to pay another $291,388.20, and so on.

There were nine payments scheduled in all.      However, Isringhausen

passed away after making the initial $100,000 deposit and the

project came to a halt.

            On April 7, 2006, APM sent attorney Manson a refund

check in the amount of $23,855.61.      APM contends $23,855.61 is

the amount due from Isringhausen's initial deposit of $100,000.

According to the "Isringhausen Accounting" document, APM kept

$42,500 as a construction-management fee, $19,135 for payments to

WHJ architects, $2,500 for payments made to a lumber company, and

several thousand dollars on a series of smaller expenses, includ-

ing the shipment of the aforementioned blueprints.      It is unclear

whether this was an expense incurred by APM, Wilmath, or WHJ.

Susan, as executrix of Lee's estate, disputes only the $42,500

construction-management fee.    As stated in attachments to the

contract, the total projected cost over the scope of the project

for construction management was going to be $170,000.      APM

estimated that, for the three months it apparently proceeded with

the project, the construction-management fee should be $42,500.

            On July 6, 2006, Susan filed a complaint against APM in

Sangamon County circuit court, apparently alleging breach of

contract.    Susan argued that a valid contract existed between APM

and Isringhausen and that Isringhausen performed all of his

duties under the contract.    Susan further argued that construc-

tion ceased and the contract was terminated in January 2006, upon

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Lee's passing.    Susan contends that nothing in the nine-step

payment schedule, which was based on services completed, indi-

cated that APM was due $42,500 for construction-management

services.    Susan requests damages in the amount of $42,500.

            On July 31, 2006, APM filed a motion to dismiss for

lack of personal jurisdiction.    APM argued that Illinois courts

lacked both general and specific jurisdiction over it.    On

February 27, 2007, Susan filed a response to APM's motion to

dismiss.    Susan argued that Illinois had specific jurisdiction

over APM under sections 209(a)(7) and 2-209(c) of the Code of

Civil Procedure (735 ILCS 5/2-209(a)(7), 2-209(c) (West 2004),

that is, the Illinois long-arm statute (735 ILCS 5/2-209 (West

2004)).

            On March 22, 2007, the trial court entered a written

memorandum of opinion, granting APM's motion to dismiss for lack

of personal jurisdiction.    The trial court stated that the issue

was whether "[APM] has sufficient minimum contacts with [Illi-

nois] to require [APM] to defend itself in Sangamon County,

Illinois."    The trial court quoted an excerpt from Roiser v.

Cascade Mountain, Inc., 367 Ill. App. 3d 559, 855 N.E.2d 243

(2006), which discussed the standard for establishing general

jurisdiction over the person.    Immediately following the excerpt,

the court then stated that performance on the subject of the

contract for the construction of a home in Florida was not

"substantially connected" to the State of Illinois, a phrase

typically used in reference to specific jurisdiction under the

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long-arm statute.    735 ILCS 5/2-209(a)(7) (West 2004).    This

appeal followed.    APM did not file a brief on appeal.

                           II. ANALYSIS

           Susan appeals the trial court's dismissal of her

complaint for lack of personal jurisdiction.      When the trial

court decides the issue of personal jurisdiction solely on the

basis of documentary evidence, as it did here, we review the

trial court's dismissal for lack of personal jurisdiction de

novo.   Roiser, 367 Ill. App. 3d at 561, 855 N.E.2d at 247.        The

plaintiff has the burden of establishing a prima facie case for

jurisdiction over the nonresident defendant.      Roiser, 367 Ill.

App. 3d at 561, 855 N.E.2d at 247.      Conflicts between the par-

ties' affidavits will be resolved in favor of the plaintiff for

the purposes of establishing a prima facie case for personal

jurisdiction over the defendant.     Kalata v. Healy, 312 Ill. App.
3d 761, 765, 728 N.E.2d 648, 652 (2000).

           Personal jurisdiction may be specific or general.       If

the lawsuit "arises out of or is connected to the defendant's

purportedly wrongful activities within the forum state," Illinois

courts may potentially assert specific jurisdiction over a

nonresident defendant.    Roiser, 367 Ill. App. 3d at 562, 855

N.E.2d at 247.   "'"The focus is on the defendant's activities

within the forum state, and not on those of the plaintiff."'"

Bolger v. Nautica International, Inc., 369 Ill. App. 3d 947, 952,

861 N.E.2d 666, 672 (2007), quoting Campbell v. Mills, 262 Ill.

App. 3d 624, 627, 634 N.E.2d 41, 44 (1994), quoting Sackett

                                - 6 -
Enterprises, Inc. v. Staren, 211 Ill. App. 3d 997, 1004, 570
N.E.2d 702, 706 (1991).

           If the underlying lawsuit or claim does not "arise out

of or relate to a defendant's activities" in Illinois, the trial

court is limited to determining whether it has general jurisdic-

tion over the nonresident defendant.    Roiser, 367 Ill. App. 3d at

562, 855 N.E.2d at 247-48.   Section 2-209(b), which addresses

general jurisdiction under the long-arm statute, states that an

Illinois court may exercise jurisdiction over any action (as

opposed to an action "arising out of" the nonresident defendant's

activities in Illinois) if the nonresident defendant is a (1)

natural person present in Illinois when served; (2) natural

person domiciled or resident in Illinois when the cause of action

arose, the action commenced, or process was served; (3) corpora-

tion organized under the laws of Illinois; or (4) a natural

person or a corporation doing business within Illinois.   735 ILCS

5/2-209(b) (West 2004).   The trial court quoted the "doing

business" standard extensively in its written memorandum of

opinion.   The "doing business" standard is quite high.   Roiser,
367 Ill. App. 3d at 562, 855 N.E.2d at 248.   The nonresident

defendant must have "continuous and systematic" business contacts

with Illinois.   Roiser, 367 Ill. App. 3d at 562, 855 N.E.2d at

248.   The nonresident must conduct business in Illinois "'"not

occasionally or casually, but with a fair measure of permanence

and continuity."'   [Citations.]"   Roiser, 367 Ill. App. 3d at

562, 855 N.E.2d at 248.   The nonresident corporation has in

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effect taken up residence in Illinois and therefore may be sued

on causes of action both related and unrelated to its activities

in Illinois.    Roiser, 367 Ill. App. 3d at 563, 855 N.E.2d at 248.

          Susan argues that the trial court erred in applying the

higher general jurisdiction standard to the instant case, i.e.,

"continuous and systematic business contacts," and in failing to

evaluate whether Illinois had specific jurisdiction over APM.

Susan concedes that Illinois does not have general jurisdiction

over APM but contends that Illinois does have specific jurisdic-

tion over APM under sections 2-209(a)(7) and 2-209(c) of the

Illinois long-arm statute.   Section 2-209(a)(7) states that

jurisdiction over a nonresident defendant is proper in causes of

action arising from "the making or performance" of a contract

that is "substantially connected" to Illinois.   735 ILCS 5/2-

209(a)(7) (West 2004).   Section 2-209(c) is known as the catchall

provision of the long-arm statute and states that "[a] court may

also exercise jurisdiction on any *** basis now or hereafter

permitted by the Illinois Constitution and the Constitution of

the United States."   735 ILCS 5/2-209(c) (West 2004).

          We agree with Susan that the trial court's citations to

general-jurisdiction precedent and the "doing business" standard

set forth in Roiser are inapplicable to the issue of specific

jurisdiction.   However, we must make our determination of juris-

diction based on a de novo review of the documents on record.

See Rosier, 367 Ill. App. 3d at 561, 855 N.E.2d at 247.   There-

fore, any apparent failure on the part of the trial court to

                                - 8 -
consider the question of specific jurisdiction in its written

memorandum of opinion does not mandate a reversal.      Rather, we

must take it upon ourselves to examine the question of specific

jurisdiction.

          In determining whether jurisdiction is proper over a

nonresident defendant, we must evaluate the following:      (1)

whether jurisdiction is proper under the specific language of the

long-arm statute; and (2) whether jurisdiction is permissible

under the notions of due process.       Illinois Commerce Comm'n v.

Entergy-Koch Trading, LP, 362 Ill. App. 3d 790, 796, 841 N.E.2d
27, 33 (2005), citing Rollins v. Elwood, 141 Ill. 2d 244, 271,

565 N.E.2d 1302, 1314 (1990).   An exercise of personal jurisdic-

tion under the provisions of the long-arm statute (in this case

sections 2-209(a)(7) and 2-209(c)) must comport with the due-

process clause of the United States Constitution.       Commercial

Coin Laundry Systems v. Loon Investments, LLC, 375 Ill. App. 3d
26, 29-30, 871 N.E.2d 898, 901 (2007).

          To exercise jurisdiction, due process requires that the

defendant has "certain minimum contacts with [the state] such

that *** maintenance of the suit does not offend 'traditional

notions of fair play and substantial justice.' [Citation.]"

International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L.

Ed. 95, 102, 66 S. Ct. 154, 158 (1945).      To satisfy the minimum-

contacts standard, there must be some act by which the defendant

purposefully availed himself of the privilege of conducting

business in the forum state, in order to assure that a nonresi-

                                - 9 -
dent will not be called into a forum solely as a result of

random, fortuitous, or attenuated contacts with the forum or the

unilateral acts of a consumer or some other third person.

Roiser, 367 Ill. App. 3d at 562, 855 N.E.2d at 247, citing Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d 528,

542, 105 S. Ct. 2174, 2183 (1985).      In determining whether the

federal due-process standard has been satisfied so as to warrant

Illinois jurisdiction, we consider whether (1) the nonresident

defendant had "minimum contact" with Illinois such that there was

"fair warning" that the nonresident defendant may be haled into

an Illinois court; (2) the action arose out of or related to the

defendant's contacts with Illinois; and (3) it is reasonable to

require the defendant to litigate in Illinois.      Ores v. Kennedy,

218 Ill. App. 3d 866, 872, 578 N.E.2d 1139, 1144 (1991).      The

defendant should be able to anticipate or foresee being called

into an Illinois court.    Burger King, 471 U.S. at 474, 85 L. Ed.
2d at 542, 105 S. Ct. at 2183.

          As stated above, Susan argues that jurisdiction is

proper under section 2-209(a)(7) of the long-arm statute, regard-

ing the making or performance of a contract that is substantially

connected to Illinois.    However, a nonresident's contract with an

Illinois resident does not necessarily establish the minimum

contacts required by the principles of due process.      Nautica

International, 369 Ill. App. 3d at 952, 861 N.E.2d at 671.      In

determining whether the defendant sufficiently availed itself of

the benefits of Illinois law in forming the contract with the

                               - 10 -
Illinois resident, the court should consider the following:       (1)

who initiated the transaction; (2) where the contract was negoti-

ated; (3) where the contract was formed; and (4) where perfor-

mance of the contract was to take place.     Nautica International,
369 Ill. App. 3d at 952, 861 N.E.2d at 671, citing     Viktron Ltd.

Partnership v. Program Data, Inc., 326 Ill. App. 3d 111, 117-18,

759 N.E.2d 186, 193-94 (2001).   Additionally, a choice-of-law

provision in the contract is a relevant, though not a determi-

nant, factor in establishing jurisdiction.     Nautica Interna-

tional, 369 Ill. App. 3d at 952, 861 N.E.2d at 671.    Presumably,

the choice-of-law provision is relevant because foreseeability on

the defendant's part is central to the determination of whether

personal jurisdiction would be reasonable and fair under the

circumstances.   See Burger King, 471 U.S. at 474, 85 L. Ed. 2d at

542, 105 S. Ct. at 2183.

            In Nautica International, a third-party yacht manufac-

turer put plaintiff Bolger, an Illinois resident, in contact with

defendant Nautica International (Nautica), a Florida corporation

that manufactured custom inflatable boats suitable for use on

yachts.   Nautica International, 369 Ill. App. 3d at 948, 861

N.E.2d at 668.   Bolger told Nautica that he would be traveling to

Florida to see examples of Nautica's boats at an upcoming boat

show.   Nautica then e-mailed price quotes to Bolger's office in

Illinois.   Upon returning from the boat show in Florida, Bolger

sent a fax to Nautica inquiring about shipping options.    Nautica

sent a return fax addressing Bolger's questions.    Bolger signed

                               - 11 -
Nautica's price quote and faxed it from Illinois to Florida.

Nautica then mailed a copy of the contract with all its terms to

Bolger at his home in Illinois.   The contract stated:    "[t]his

agreement shall be deemed executed in Miami-Dade County,

Florida[,] and shall be construed and interpreted according to

the laws of the State of Florida."     Nautica International, 369
Ill. App. 3d at 947, 861 N.E.2d at 668.    Bolger later terminated

the purchase of the boat because it allegedly failed to meet his

size and weight specifications, making it unsuitable for instal-

lation on his yacht.   The parties communicated via e-mail and fax

for several months, attempting to come to a resolution, but

Bolger ultimately filed a breach-of-contract claim.      Nautica

International, 369 Ill. App. 3d at 948-49, 861 N.E.2d at 667-68.

           Nautica moved to dismiss for lack of personal jurisdic-

tion.   Nautica International, 369 Ill. App. 3d at 949, 861 N.E.2d

at 668.   Bolger argued at the trial court and on appeal that

Illinois courts had jurisdiction over Nautica because Nautica

entered into a contract with a known Illinois resident and sent

numerous pieces of correspondence to Illinois.    The court held

this was not enough to establish specific jurisdiction.      Nautica

International, 369 Ill. App. 3d at 954, 861 N.E.2d at 672.      In

its due-process analysis, the court reasoned that, despite the

various communications sent by both parties between Illinois and

Florida, Nautica did not "reach into Illinois and purposefully

avail itself of the benefits and protections of its laws."

Nautica International, 369 Ill. App. 3d at 954, 861 N.E.2d at

                              - 12 -
672.    Bolger initiated the purchase of the boat, traveled to the

Florida boat show in furtherance of making a purchase, and chose

to enter into a contract with a Florida choice-of-law provision.

Nautica International, 369 Ill. App. 3d at 954, 861 N.E.2d at

672.    Further, the contract contemplated performance in Florida,

Nautica International did not maintain a physical presence in

Illinois, and the contract did not contemplate it would ever do

so.    Nautica International, 369 Ill. App. 3d at 954, 861 N.E.2d

at 672.

            The circumstances in the instant case are nearly

identical to those in Nautica International.    Isringhausen was

put into contact with APM through a third party, Dan Wilmath.

Isringhausen went down to Florida to examine one of APM's model

homes and initiated negotiations for the purchase of the custom

home.    According to Isringhausen, the parties then proceeded to

communicate telephonically, through fax, and through mail between

Illinois and Florida.    APM sent Isringhausen a copy of the

contract to sign, just as Nautica International sent Bolger a

copy of the contract to sign.    Isringhausen signed and returned

the contract, which contained a choice-of-law provision that

stated: "the [c]ontract shall be governed by the law of the place

where the project is located."    The contract contemplated perfor-

mance (i.e., building the home) in Florida.    APM never had a

physical presence in Illinois, nor did the contract contemplate

one.    For all of these reasons, we find that APM did not purpose-

fully avail itself to the benefit of Illinois law such that it

                                - 13 -
could reasonably anticipate being haled to court in Illinois.

           Though our above reasoning is dispositive, we take time

to distinguish some of the cases cited by Susan.   Susan cited two

cases in support of her argument that the court should exercise

specific jurisdiction under section 2-209(a)(7): Kalata, 312 Ill.

App. 3d 761, 728 N.E.2d 648, and Celozzi v. Boot, No. 00 C 3285

(N.D. Ill. August 11, 2000) (2000 WL 1141568) (not reported in F.

Supp. 2d).   In Kalata, the court held that the existence of an

oral contract and the exchange of funds between parties, formed

as a result of negotiations over the phone between a party

residing in California and a party residing in Illinois, was

sufficient to create a prima facie case that there existed a

contract substantially connected to Illinois to establish per-

sonal jurisdiction under section 2-209(a)(7).   Kalata, 312 Ill.

App. 3d at 766, 728 N.E.2d at 652-53 (involving an oral agreement

to enter into a joint venture to purchase real estate, the terms

of which involved the Illinois resident's placement of funds into

a joint account in California).   Similarly, in Celozzi, the court

held that the requirements for asserting jurisdiction in Illinois

were satisfied under section 2-209(a)(7) of the Illinois long-arm

statute because the breached agreement had been formed as a

result of negotiations over the phone between Illinois and

California, as well as negotiations that took place in Califor-

nia.   Celozzi, slip op. at 3 (involving a contract for a Califor-

nia corporation's production and distribution of an Illinois

corporation's film).   The instant case is similar to Kalata and

                              - 14 -
Celozzi in that it too involved negotiations and correspondence

between an Illinois resident and a nonresident defendant that

culminated in a contract.

          However, unlike APM, the nonresident defendants in

Kalata and Celozzi should have anticipated being haled to court

in Illinois.   For one, the contracts in Kalata and Celozzi did

not involve a choice-of-law provision specifying a jurisdiction

other than Illinois.    Moreover, in Kalata, the nonresident

defendant specifically sought out the Illinois plaintiff for

participation in a joint endeavor and later dissipated all funds

in the joint account.    Kalata, 312 Ill. App. 3d at 763, 728
N.E.2d at 651.   Illinois would have a strong interest in adjudi-

cating a dispute where an Illinois resident was specifically

targeted and allegedly victimized, as compared to the situation

in our case where APM did not seek out and target Isringhausen.

See Illinois Commerce, 362 Ill. App. 3d at 800, 841 N.E.2d at 36

(indicating Illinois' interest in adjudicating the dispute as a

factor in a due-process analysis).

          In Celozzi, the court found it "most revealing" that

the California corporation asked the Illinois corporation to

establish a bank account in Illinois, over which both corpora-

tions would maintain some control, for the receipt and disburse-

ment of funds for the movie.    Celozzi, slip op. at 4.   In our

case, money may have been wired from Illinois, but it is not as

though Isringhausen and APM shared a joint account in Illinois.

Finally, the contract in Celozzi contemplated distribution of the

                               - 15 -
movie in Illinois, whereas, in our case, all of the performance

on the contract was to be in Florida.    Celozzi, slip op. at 2.

            In sum, despite the formation of a contract between

Isringhausen and APM, APM did not have sufficient minimum con-

tacts with Illinois such that it could reasonably anticipate

being hailed into an Illinois court.    Personal jurisdiction over

APM would not comport with the principles of due process.

                           III. CONCLUSION

            For the foregoing reasons, we affirm the trial court's

judgment.

            Affirmed.

            McCULLOUGH and STEIGMANN, JJ., concur.

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