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Cook Associates v. Colonial Broach & Machine

OCTOBER 5, 1973.

COOK ASSOCIATES, INC., PLAINTIFF-APPELLEE,

v.

COLONIAL BROACH & MACHINE COMPANY, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. SAMUEL SHAMBERG and the Hon. MEYER H. GOLDSTEIN, Judges, presiding.

MR. JUSTICE ENGLISH DELIVERED THE OPINION OF THE COURT:

Defendant, a Delaware corporation doing business in Michigan, hired an employee, Dean Averbeck, who had been referred to defendant a year earlier by plaintiff, an Illinois employment agency. When plaintiff filed suit in Illinois to recover the fee for its services, defendant filed a special appearance and motion to quash service of summons alleging that the court had no jurisdiction over its person. This motion was denied, and a trial on the merits was conducted. Defendant made a motion for judgment at the close of plaintiff's evidence, and, after the jury rendered a verdict in favor of plaintiff, a post-trial motion for judgment notwithstanding the verdict, but these motions, too, were denied. Defendant now appeals from the judgment entered against it and from the denial of the three motions described. Defendant raises two issues on appeal: (1) the Circuit Court of Cook County did not have in personam jurisdiction over defendant; and (2) Michigan law, which requires that an employment agency contract be in writing, governed the agreement between the parties and, therefore the contract involved is not enforceable.

There is no dispute over the essential facts. Plaintiff is a private employment agency incorporated in Illinois with its place of business in Chicago. Plaintiff places men only in executive positions paying $15,000 or more. Personnel placement in these higher-paid positions can be very sensitive, and, at times, prospective employers can supply the employment agency with only the qualifications of the needed employee without being able to name the particular job available. With executive placements, it is not unusual for there to be a lag between the time the applicant is referred to an employer and the time he is hired by that employer. In all instances, the fee for plaintiff's referral services is paid by the prospective employer, not the applicant placed. Although plaintiff's policy was that a referral would be applicable to a placement for a two-year period, such policy was not printed on its fee schedule in effect at the time of the referral involved, but was added to the schedule April 1, 1968. Plaintiff's fee schedule is on file with the Illinois Department of Labor. It is not plaintiff's custom to have the applicant sign a contract with the agency.

In December, 1967, Dean Averbeck, a resident of Wisconsin, responded to an advertisement placed by plaintiff in "Metal Working News," a business journal in the field of machine tools. This he did by sending a resume to Robert Danon, an employment counselor and research man with plaintiff agency, and telling him that he was looking for new employment. A week later Averbeck came to plaintiff's office in Chicago for an interview with Danon. Danon explained to Averbeck that the agency would work with him, and that the agency expected to be advised by Averbeck of all interviews he had with employers to which plaintiff might refer him. Danon made out a resume which represented Averbeck as a sales manager and which contained Averbeck's personal data and educational and employment background. This "flyer" was sent to prospective employers in the machine tool industry, and by way of a large mailing, along with the resumes of 3000 other applicants, to prospective employers in the metal working industry in general. Both mailings went to companies located throughout the United States.

Defendant is a manufacturing company which, as stated above, is incorporated in Delaware, with its place of business in Michigan. Defendant is not registered as a foreign corporation in Illinois, does not maintain offices in Illinois, is not listed in the Illinois telephone directory, and none of its employees resides in Illinois.

On January 23, 1968, E.H. Jones, Executive Vice-president of defendant company, telephoned Danon and expressed an interest in the man represented by code number RD390 [Averbeck]. He asked for the man's name, the name of his employer, and his earnings at that time. Before giving this information to Jones, Danon advised him that plaintiff was licensed to operate its agency only if the employer were to pay the referral fee upon hiring the job applicant. Jones indicated that such an arrangement would be agreeable to him. According to Danon's testimony, he also told Jones that the referral was good for two years, and that the employer would have to pay the applicant's interview and relocation expenses if the applicant were hired. Jones requested a copy of Averbeck's resume and asked Danon to have Averbeck call him for an interview the next time he was in the Detroit area. In response to Danon's question as to the type of job which defendant had available, Jones said, "something in sales."

That same day, Danon called Averbeck at his home in Wisconsin and learned that Averbeck was in Lansing, Michigan looking for employment in that area. The next morning, Danon called Averbeck in Lansing and told him to call defendant and arrange an interview. Danon then called Jones to say that Averbeck was in the Detroit area and would be telephoning him later that day.

On January 25, 1968, Danon sent Averbeck's resume to Jones and enclosed a copy of plaintiff's fee schedule. On March 12, 1968, Danon called Averbeck to check various referrals with him and was told that he had not yet had an interview with defendant. On March 18, 1968, Danon called Jones, who stated that he had not yet interviewed Averbeck.

However, Averbeck had, in fact, been interviewed by defendant on January 24, 1968, but was not hired at that time. On January 18, 1969, a year later, defendant contacted Averbeck to return for another interview. Averbeck was hired on January 30, 1969, and began to work for defendant on March 3, 1969. He started in the Sales Department at $17,000 per year with the understanding that he would be made a Sales Manager at a later date. His salary was subsequently increased to $18,000 per year. He left the firm in January, 1971.

On December 9, 1969, Averbeck called Danon to inform him that he was considering a change in jobs and incidentally advised him that he had started to work for defendant on March 1, 1969, after defendant had offered him a job as a sales manager at $18,000 per year. He was unhappy with the company, however, and wanted to relocate in either Cleveland or Chicago.

Danon sent Averbeck his old resume to be updated, and when it was returned, it bore the notation in Averbeck's handwriting, "3/1/69 to present, Colonial Broach & Machine Company, Warren, Michigan, sales manager."

On January 6, 1970, Danon called Jones to say that he was glad Averbeck had been hired and that defendant must have overlooked plaintiff's fee. Jones agreed that Averbeck had been contacted, interviewed, and hired due to plaintiff's services, but that Averbeck, when interviewed, had denied being represented by plaintiff. When Danon stated that plaintiff had, indeed, represented Averbeck at the time of the referral for the original interview in January, 1968, Jones replied that he would talk to his people and call back the next day. On January 7, 1970, when Jones did not call back, Danon had an invoice prepared and sent it to defendant. Plaintiff's fee was computed on the basis of 1% per each $1000 of Averbeck's starting annual salary. Since Jones had told Danon, in their telephone conversation of January 6, 1970, that Averbeck's starting annual salary had been $16,000, the fee billed was 16% of $16,000 or $2560. The bill was never paid, and plaintiff brought suit. [It was later confirmed that Averbeck's starting annual salary had been $17,000, and the complaint was amended to state that fact and to increase the amount prayed for to 17% of $17,000 or $2890 plus interest.]

Defendant first contends that the trial court did not acquire jurisdiction over its person by way of Section 17 of the Illinois Civil Practice Act, known as the Illinois "long-arm" statute (Ill. Rev. Stat. 1969, ch. 110, par. 17), and that, therefore, Judge Shamberg first erred in denying its motion to quash service of process and dismiss the suit, and Judge Goldstein erred again in denying its subsequent motion for judgment in its favor.

The "long-arm" statute provides, in pertinent part, that a non-Illinois resident submits himself to the jurisdiction of the Illinois court by "the transaction of any business within this State." (Ill. Rev. Stat. 1969, ch. 110, par. 17(1)(a).) Defendant asserts that by merely telephoning plaintiff in response to an unrequested solicitation sent to it in Michigan by plaintiff, its conduct did not amount to a "transaction of any business" within the meaning of the statute, ...


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