Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Sears Bank & Trust Co. v. Luckman

OPINION FILED JUNE 7, 1978.

SEARS BANK AND TRUST COMPANY, PLAINTIFF-APPELLEE,

v.

SID LUCKMAN ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. PAUL F. ELWARD, Judge, presiding.

MR. JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:

This is an interlocutory appeal taken by defendants First Los Angeles Bank and the Federal Reserve Bank of San Francisco from the trial court's order denying their motions to quash service of summons. The trial court found that its order involves a question of law as to which there is substantial ground for difference of opinion and certified the order for immediate appeal. We permitted prosecution of the appeal pursuant to Supreme Court Rule 308. (Ill. Rev. Stat. 1975, ch. 110A, par. 308.) The sole issue to be determined is whether the court properly exercised in personam jurisdiction over the nonresident defendant banks pursuant to the Illinois long-arm statute. Ill. Rev. Stat. 1975, ch. 110, par. 17(1).

Plaintiff, Sears Bank and Trust Company, is an Illinois banking corporation. In its amended complaint Sears Bank alleges that on or about December 9, 1975, Barry Marlin, a citizen of California, delivered to it a check dated December 4, 1975, in the amount of $25,000 which he drew upon his account at First Los Angeles Bank in Los Angeles, California, payable to "Sears Bank & Trust Co." The check was issued to discharge an alleged indebtedness due plaintiff. Upon receipt of the check, Sears Bank allegedly transmitted it to First National Bank of Chicago for collection. First National allegedly forwarded the check to Bank of America National Trust and Savings Association in San Francisco whereupon the check was sent to the Federal Reserve Bank of San Francisco. The Federal Reserve Bank transmitted the item to First Los Angeles Bank for payment. First Los Angeles Bank dishonored the check because of insufficient funds.

Sears Bank alleges that it did not receive notice of the dishonor until January 8, 1976. Believing the check had been honored, it returned the note which secured the underlying obligation of the drawer of the check. Sears Bank further charges that defendant banks negligently mishandled the check during the collection process so that it was not timely delivered to First Los Angeles for payment nor was it timely honored by First Los Angeles. Sears Bank further charges defendant banks with mishandling of the check after it was dishonored so that plaintiff was not afforded timely notice of its dishonor.

In support of the Federal Reserve Bank's motion to quash service of summons, R.L. Rasmussen, administrative services officer of the Los Angeles branch of the Federal Reserve Bank, filed his affidavit concerning the handling of the check by the Federal Reserve Bank of San Francisco. He stated that the Federal Reserve Bank of San Francisco operates solely within the geographical limits of its territory which includes California, Oregon, Idaho, Washington, Utah, Nevada, Arizona, Alaska, and Hawaii. The Federal Reserve Bank processes checks, some of which have been deposited in Illinois banks and some of which are payable to Illinois banks. All processing of checks, however, takes place within the Federal Reserve Bank's geographical district. Rasmussen further stated that the Federal Reserve Bank first received the check in question as a cash item from Bank of America-Los Angeles on December 12, 1975. That same day, the Federal Reserve Bank stamped its endorsement on the check and transmitted it to First Los Angeles, the drawee. At 8:50 a.m. on December 17, an employee of First Los Angeles, identified only as Steve, telephoned a check clerk, Joan Gedeon, at Federal Reserve Bank. Steve told her that a $25,000 item was being returned because of insufficient funds. Steve informed Gedeon that the prior endorser was Bank of America-Los Angeles and that the item was payable to Sears Bank. Gedeon recorded the information and relayed the information by telephone to an employee of Bank of America-Los Angeles. That same day the Federal Reserve Bank received the check as a return item and forwarded it to Bank of America-Los Angeles.

On December 30, 1975, the Federal Reserve Bank received the check as part of a "low speed" cash letter from Bank of America-Los Angeles. The Federal Reserve Bank processed the check and transmitted it to First Los Angeles on January 5, 1976. On the afternoon of January 7, a First Los Angeles employee telephoned a check clerk at the Federal Reserve Bank about the check and on the following morning the clerk relayed the information about the check to an employee at Bank of America-Los Angeles. That same day the Federal Reserve Bank received the item from First Los Angeles and sent it to Bank of America-Los Angeles.

Thomas J. Kempf, executive vice-president of First Los Angeles, executed an affidavit in its behalf. In it he stated that First Los Angeles has never maintained an office or place of business in Illinois and has never employed an officer or agent in Illinois. The bank maintained only two offices, one in Los Angeles and the other in Beverly Hills, California.

The two banks each moved to quash service of summons issued pursuant to the Illinois long-arm statute. (Ill. Rev. Stat. 1975, ch. 110, par. 17(2).) The banks contend that Sears Bank failed to allege facts sufficient to render them amenable to the jurisdiction of Illinois courts>.

The long-arm statute provides in pertinent part:

"(1) 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 enumerated, thereby submits such person * * * to the jurisdiction of the courts> of this State as to any cause of action arising from the doing of such acts:

(a) The transaction of any business within this State;

(b) The commission of a tortious act within this State;

(3) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him is based upon this Section."

• 1, 2 In International Shoe Co. v. Washington (1945), 326 U.S. 310, 90 L.Ed. 95, 66 S.Ct. 154, the Supreme Court set out the requirements which must be satisfied in order for a state to exercise personal jurisdiction over a non-resident defendant. The court held that due process demands a defendant to "have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" (326 U.S. 310, 316, 90 L.Ed. 95, 102, 66 S.Ct. 154.) In Hanson v. Denckla (1958), 357 U.S. 235, 253, 2 L.Ed.2d 1283, 1298, 78 S.Ct. 1228, the court reaffirmed its International Shoe holding, stating that "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Whether the type of activity conducted within Illinois is adequate to satisfy due process requirements, however, depends upon the facts in the particular case. (Gray v. American Radiator & Standard Sanitary Corp. (1961), 22 Ill.2d 432, 176 N.E.2d 761.) It is the nature and quality of defendant's conduct which must be assessed when determining whether in personam jurisdiction ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.