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Int'l Merchandising v. Lighting Systems

OPINION FILED SEPTEMBER 8, 1978.

INTERNATIONAL MERCHANDISING ASSOCIATES, INC., PLAINTIFF-APPELLANT,

v.

LIGHTING SYSTEMS, INC., DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. LOUIS J. GILIBERTO, Judge, presiding.

MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:

Plaintiff, International Merchandising Associates, Inc., appeals from an order of the trial court granting the motion of defendant, Lighting Systems, Inc. (LSI), to quash service of process. The sole issue on appeal is whether the trial court properly found that defendant did not have sufficient contacts with the State of Illinois to be subject to the in personam jurisdiction of the Illinois courts>. We reverse. The pertinent facts follows.

Plaintiff, an Illinois corporation with its principal place of business in Illinois, specializes in the marketing, sale and distribution of various electrical and electronic equipment. Plaintiff and defendant LSI, a Pennsylvania corporation with its principal place of business there, entered into a contract dated October 1, 1974.

According to the contract, LSI, which designs and manufactures lighting equipment and electronic components, agreed that plaintiff would be LSI's "exclusive representative and distributor" of a portable fluorescent light which LSI manufactured. In return, plaintiff was to exert its best efforts in sales of the light and was to assist LSI "in all areas of marketing such as point of purchase materials, sales aids, packaging and display." Plaintiff also agreed to provide LSI with information pertaining to market research and conditions.

Plaintiff was granted the option of operating on either a commission or a direct purchase basis, and it appears from the record that plaintiff chose to work under a commission arrangement, in which LSI handled all invoicing and collections and paid plaintiff a commission specified by plaintiff and agreed to by LSI. All the lights were shipped by LSI directly to purchasers, f.o.b., Erie, Pennsylvania. The contract specified the commission to be paid by LSI at the time of execution of the contract.

The area covered in plaintiff's distributorship was the United States and all of its territories and Canada. The contract term was for one year from the date of execution and provided for automatic renewal unless terminated by either party by notifying the other party at least 30 days prior to the anniversary date of the contract.

Plaintiff alleges in its complaint that LSI sold large quantities of its light in situations in which orders were placed directly with LSI, although the orders had resulted from plaintiff's efforts, and that, in spite of requests from plaintiff, LSI has not accounted to plaintiff for such sales and has not paid commissions due to plaintiff under the contract. Plaintiff also alleges that LSI and co-defendant, Floyd Devroy, who had been vice-president of marketing for plaintiff, conspired to interfere in the contractual relationship between plaintiff and LSI, resulting in Devroy's departure from plaintiff's employ, the non-renewal of the distributorship agreement, and Devroy's subsequent representation of LSI in the sale of the portable fluorescent lights. Co-defendant Devroy is not involved in this appeal.

LSI moved to quash service of process on the grounds that there were not sufficient contacts with the State of Illinois to subject LSI to the in personam jurisdiction of the Illinois courts>.

According to the affidavits submitted by both parties pursuant to defendant's motion, LSI was never licensed to do business in any foreign State, was not listed in any Illinois telephone directory, and had no registered agent, no bank accounts and no real estate in Illinois. LSI's performance of the contract took place exclusively in Pennsylvania and plaintiff performed solely in Illinois. Plaintiff received telephone calls and correspondence from LSI and its agents, and LSI paid plaintiff by mailing checks to plaintiff's offices in Illinois. It is disputed whether defendant's president ever visited plaintiff's offices.

The parties had been operating under an oral agreement between April 29, 1974, and the date of the contract. The written agreement was prepared by plaintiff in Illinois, was sent to Pennsylvania to be signed by LSI, and was signed by plaintiff in Illinois after it had been returned by LSI. The negotiations, however, were conducted at meetings in Pennsylvania, including the April 29, 1974, meeting at which the oral agreement was made.

Following a hearing, LSI's motion to quash service of process was granted and plaintiff now appeals.

OPINION

• 1 Section 17 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 17) provides for the exercise of in personam jurisdiction over nonresident defendants. Commonly known as the "long arm statute," section 17 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, and, if an individual, his personal representative, to the jurisdiction of the courts> of this ...


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