United States District Court, Northern District of Illinois, E.D
January 10, 1973
LIBERTY LEASING CO., INC., PLAINTIFF,
MILKY WAY STORES, INC., ET AL., DEFENDANTS.
The opinion of the court was delivered by: Will, District Judge.
Plaintiff, a Delaware corporation with its principal place
of business in Illinois, has brought this action against Milky
Way Stores, Inc. ("Milky Way"), a Utah corporation with its
principal place of business in that state, for collection of
a balance due and owing on a lease agreement between plaintiff
and Milky Way which the latter is alleged to have breached.
Also named as defendants are Robert L. Muirbrook, a citizen of
Utah, and Hi-Land Securities Corp., Inc. ("Hi-Land") a Utah
corporation with its principal place of business in that
state, as separate guarantors of this lease agreement. Hi-Land
alone has responded to this complaint and has filed a motion
under Rule 12(b)(2), Fed.R.Civ.P., to dismiss the complaint
against it for lack of personal jurisdiction. The motion to
dismiss will be granted.
In accordance with Rule 4(d)(7), Fed.R.Civ.P., which allows
service of process in the manner prescribed by the law of the
state in which the Court sits, Hi-Land was served pursuant to
the Illinois long-arm statute, Ill.Rev.Stat. ch. 110 §§ 16 and
17. The applicable operative portion of that statute provides
in pertinent part:
Any person, whether or not a citizen or
resident of this State, who in person or through
an agent does any of the acts hereinafter
thereby submits such person, and, if an
individual, his personal representative, to the
jurisdiction of the courts of this State as to
any cause of action arising from the doing of
(a) The transaction of any business within this
. . . Ill.Rev.Stat. ch. 110, § 17(1)(a).
This section has been interpreted to expand personal
jurisdiction to the limits permitted by the due process clause
of the United States Constitution. See, Nelson v. Miller,
11 Ill.2d 378, 389, 143 N.E.2d 673, 679 (1957). The Supreme Court
in its most definitive enunciation of the limits to a state's
personal jurisdiction imposed by due process has held that a
state may exercise jurisdiction over a defendant who is not
present in the forum only if "he have certain minimum contacts
with it [the forum] such that the maintenance of the suit does
not offend `traditional notions of fair play and substantial
justice.'" International Shoe Co. v. Washington, 326 U.S. 310,
316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). See also, Hanson v.
Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958);
McGee v. International Life Insurance Co., 355 U.S. 220, 78
S.Ct. 199, 2 L.Ed.2d 223 (1957).
The only issue in the instant case is whether it will offend
traditional notions of fair play and substantial justice to
hold Hi-Land amenable to suit in this jurisdiction. Hi-Land is
not qualified to do business in Illinois; it does not maintain
any office, branch, plant, or telephone listing in Illinois;
it has no employee or agent in Illinois, nor has it sent an
employee or agent into Illinois; it does not own any real or
personal property in Illinois; and it has not solicited or
conducted any business in Illinois. The only contact it has
had with Illinois is to have been guarantor on a lease
agreement executed in Utah between a Utah company and an
Illinois leasing company. The performance of this leasing
agreement was to be in Utah, and the lease was to be governed
by Utah law.
Plaintiff has cited no case which would support a finding of
personal jurisdiction over such a guarantor as Hi-Land. In a
recent case, the Seventh Circuit held that thirteen
non-resident guarantors were amenable to suit by virtue of the
Illinois long-arm statute. See, O'Hare International Bank v.
Hampton, 437 F.2d 1173 (7 Cir. 1971). However, the contacts
which the defendants had with Illinois in that case were
substantially more significant than the contacts of Hi-Land in
the instant case. In O'Hare, negotiations for the lease were
commenced by one of the defendants by telephoning the
plaintiff's office in Illinois. In addition, subsequent
discussions concerning the lease took place in Illinois.
Finally, the lease provided that the lease should be construed
according to the law of Illinois.
No case has been brought to our attention, nor has our
independent research uncovered any case, which goes farther
than O'Hare in support of jurisdiction over non-resident
contract guarantors. We must conclude, therefore, that due to
the total lack of contacts which Hi-Land has had with Illinois
to hold it amenable to suit in Illinois would violate due
process. Consequently, Hi-Land's motion to dismiss for lack of
personal jurisdiction must be granted.
An order will enter dismissing defendant Hi-Land Securities
Corp. without prejudice and without costs.
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