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Cook Assoc., Inc. v. Lexington United Corp.

OPINION FILED DECEMBER 4, 1981.

COOK ASSOCIATES, INC., APPELLANT,

v.

LEXINGTON UNITED CORPORATION ET AL., APPELLEES.



Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Thomas J. O'Brien, Judge, presiding.

MR. JUSTICE WARD DELIVERED THE OPINION OF THE COURT:

This appeal arises out of an action for breach of contract brought in the circuit court of Cook County. The plaintiff, Cook Associates, an Illinois corporation, brought the action against Lexington United Corporation, a Delaware corporation not licensed to do business in Illinois. Lexington is a dinnerware manufacturer whose principal place of business is St. Louis, Missouri. Lexington filed a special appearance to contest the court's in personam jurisdiction (Ill. Rev. Stat. 1977, ch. 110, par. 20), but its motion to quash service of process was denied. Thereafter, Lexington answered, discovery was taken, and subsequently summary judgment was granted in favor of Cook. The appellate court reversed the judgment (86 Ill. App.3d 909), holding that the circuit court lacked personal jurisdiction over Lexington. Because of the disposition it made, the appellate court did not consider the propriety of the summary judgment. We granted Cook's petition for leave to appeal.

Cook is an employment agency whose offices are in Chicago. From July 1973 to July 1976, it also maintained a branch office in Massachusetts, which was operated by Edith McIntosh. Cook specializes in the placement of executive and professional employees with employers who pay Cook a fee if a person referred by Cook is hired. On May 12, 1976, Joseph Runza, a Lexington executive, phoned McIntosh, with whom he had done business before, at Cook's Massachusetts office. He requested assistance in filling a sales management position at Lexington. The record is unclear as to the title of the position discussed. It appears that Runza had first described it as "national sales manager" but later changed the description to "field sales manager."

On May 13, 1976, McIntosh sent Runza the names and resumes of some prospective employees, one of whom was Gregg Hoegemeir. Her accompanying letter stated: "As you know from our previous correspondence, these men, like all of our candidates, are being submitted to you upon the understanding that if they are employed, our fee will be paid by you in accordance with the enclosed schedule." Cook's fee schedule indicated its Chicago address on the letterhead, and stated that the fee would be 20% of one year's salary for positions paying $15,000 per year or more. The schedule also stated: "A fee will be due from you as to any applicant you hire within two years of our disclosure of his identity, or of our submission or referral of him, to you."

Runza communicated with Hoegemeir and arranged to meet him in Chicago. Hoegemeir's resume discloses that he was then a regional sales manager for a Chicago manufacturer and that he resided in Ballwin, Missouri. At the meeting, Runza offered Hoegemeir the position of "field sales manager" at an annual salary of $22,000. Hoegemeir rejected the offer, and the record reflects that there were no further contacts between Lexington and him for several months.

McIntosh's employment by Cook terminated in July 1976. About three months later, she opened her own employment search and placement service in Massachusetts. It appears that soon thereafter, Runza communicated with McIntosh at her home and advised he was seeking a sales manager for Lexington. This time, it appears, the position would be that of "national sales manager" at a salary in excess of $22,000. McIntosh, acting for her own agency, submitted the names of a number of candidates, including that of Hoegemeir. After several interviews with Hoegemeir, Runza offered him the position at a salary of $25,000 and Hoegemeir accepted. The record does not show whether any of the negotiations which led to Hoegemeir's employment took place in Illinois, nor does it make clear where the contract for his employment was made.

Hoegemeir began working for Lexington in December 1976, and Lexington paid McIntosh a $5,000 fee for her services. Cook later became aware of the hiring of Hoegemeir, and it demanded a $5,000 fee, representing 20% of Hoegemeir's starting salary. When Lexington refused to pay the commission, Cook filed the action for breach of contract in July 1977.

Process was served on Lexington's president, Frank Ivitch, when he was attending a trade show in Chicago. Ivitch and several other company officials were appearing in a week-long housewares exhibit of Lexington. Exhibitors were prohibited from selling merchandise at the exhibition. Less than $50,000 in orders was taken by Lexington at the exhibit, according to the answer to an interrogatory, and were later accepted at Lexington's St. Louis office. Officials of Lexington had attended two other trade shows in Chicago in 1976 and 1977. At each of them, a similar volume of orders was received and later accepted.

Lexington's other contacts with Illinois were listed in an affidavit of Ivitch, and in Lexington's answers to interrogatories. Lexington did not have an office or an employee in this State. It had no Illinois telephone number. It did not advertise in Illinois, except in connection with the trade shows held in Chicago. Lexington merchandise was sold by an independent manufacturer's representative in Illinois to his Illinois accounts. The record does not reflect the volume of those sales. The representative sold merchandise of other manufacturers as well. Working strictly on a commission basis, he received no salary from Lexington. In the year preceding the filing of this action an employee of Lexington accompanied the representative on three or four occasions, but the employee did not make any sales.

The appellate court held, on due process grounds, that the circuit court of Cook County lacked personal jurisdiction over Lexington.

When arguing before the appellate court the parties were not in agreement as to the test or standard to be applied for determining whether there was personal jurisdiction. Lexington submitted that our long-arm statute provides the only means of acquiring jurisdiction over a nonresident corporate defendant. That statute provides in 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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