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A.e. Staley Mfg. Co. v. Swift & Co.





APPEAL from the Circuit Court of Macon County; the Hon. DONALD W. MORTHLAND, Judge, presiding. MR. JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:

Rehearing denied December 5, 1978.

Staley filed $39 million dollar breach of contract action.

Swift moved to dismiss on forum non conveniens.

Trial judge denied.

Interlocutory appeal allowed (2-1 vote).

Trial court is affirmed.

Staley Manufacturing Company and Swift & Company contracted on March 1, 1976, for the sale by Swift to Staley of four soybean processing plants for $45,000,000. The written agreement stated that Staley was to retain (and did retain) 10% of the purchase price pending completed construction of one plant, located in Iowa. Swift covenanted that it would be liable for completing the construction of the unfinished Des Moines plant in accordance with certain attached plans and specifications. Swift also agreed to make its best efforts to start up the plant and have it be in operational status by a date certain and indemnified Staley against any mechanic liens that would be put against the Des Moines plant. Swift promised to build the plant in compliance with all applicable government regulations. Both sides agreed that "time was of the essence" in the performance of the contract and the agreement specifically stated Illinois contract law would govern regarding the interpretation and performance of the contract.

Problems arose between Swift and Staley over the completion of the Des Moines plant. On Monday, September 12, 1977, Staley filed the instant breach of contract action in Macon County circuit court. Alleged breaches of the March 1, 1976, agreement included: (1) Swift had not timely performed parts of the contract; (2) Swift had deviated from the plans and specifications in some manners (leaving things out or putting in defective parts); (3) Swift did not meet certain operational standards set forth in the contract; and (4) Swift failed to meet certain State and Federal regulations. Staley further alleged that Swift abandoned the contract. Staley sought damages of $39,800,000 plus costs and interest, and demanded a jury.

On October 3, 1977, Swift filed a motion to dismiss based on forum non conveniens or, in the alternative, for a stay pending disposition of a suit filed in Iowa. The motion stated that on Monday, September 12, 1977, Swift initiated an action in Des Moines, Iowa, based on the same contract. The complaint, attached to the motion, alleged that Swift completed substantial performance of the contract, and that Swift had incurred certain expenses in obeying Federal regulations and, although the Des Moines plant did not meet certain contract process guarantees, the fault was on Staley for providing substandard beans rather than on any breach by Swift. The suit seeks recovery of the $4,500,000 retainage. Swift alleges that the Illinois forum is inconvenient because it cannot assert possible indemnity claims in Illinois against certain Iowa subcontractors and that proper access to proof and witnesses would be in Des Moines, even though the contract was signed in Chicago. Affidavits of Swift filed in support of the motion list a number of subcontractors, most of them residing in Iowa, which Swift feels would be important to the ultimate determination of any questions arising out of the contract. Staley's affidavit in opposition to the motion lists many corporate officers residing in Decatur and Chicago whom it feels would be pertinent witnesses to any determination of contract breach.

On November 15, 1977, the trial court, after thorough briefing and argument, denied the motion to dismiss on forum non conveniens stating that both parties were residents of Illinois (both have their principal place of business in Illinois) and that the contract law of Illinois would control the dispute between the parties. The court felt that Illinois law should be handled in an Illinois court and that the granting of a forum non conveniens motion was not a normal occurrence. In addition, the court said his ruling is nothing more than what the parties assumed would occur when they signed the contract regarding any litigation about the contract (i.e., that it would be in an Illinois court). Judge Morthland continued:

"I would like to [grant the forum non conveniens motion] because this case is a mess, has been a mess, and will continue to be a mess, and I would save myself and the people who are sitting here way beyond quitting time a lot of trouble by granting the motion. But the motion is denied."

Between September 12 and the November 15 decision, the court had heard extraordinary motions relating to discovery of documents and depositions of parties which not only consumed much court time but also saw rather childish and overly picky sniping displayed by counsel for both parties.

On February 8, 1978, the trial court entered an order comporting with Supreme Court Rule 308 (Ill. Rev. Stat. 1977, ch. 110A, par. 308). The order found that the action was for breach of contract in the construction of a Des Moines manufacturing plant, Illinois law would govern under the contract, and that Swift and Staley's principal offices were in Illinois. The question certified was:

"Should an action brought by Plaintiff-Buyer in Macon County, Illinois, where the principal office of the plaintiff is located, against Defendant-Seller, regarding the purchase from the Defendant of a facility located in Des Moines, Iowa, which was in the process of being constructed, and wherein both the plaintiff and the defendant are corporations with their principal offices in the State of Illinois, and wherein the contract provides that Illinois law will govern, be dismissed pursuant to the doctrine of forum non conveniens, when the subject matter of the ...

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