United States District Court, Northern District of Illinois, E.D
April 28, 1982
CAICOS PETROLEUM SERVICE CORP., PLAINTIFF,
ROBERT BRIAN HUNSAKER, DEFENDANT.
The opinion of the court was delivered by: Moran, District Judge.
MEMORANDUM AND ORDER
Plaintiff, Caicos Petroleum Service, Corp., ("Caicos"), brought
this action for breach of contract and conversion against Robert
Hunsaker in federal district court pursuant to this court's
diversity of citizenship jurisdiction. 28 U.S.C. § 1332.
Plaintiff is a New Mexico corporation with its principal place of
business in Illinois, and defendant is a citizen of Texas.
Hunsaker has been a resident of Providenciales, Turks and Caicos
Islands in the British West Indies since December 1978. Defendant
has filed a motion to dismiss plaintiff's claim on the grounds
that the court lacks personal jurisdiction over him.
In a suit based on diversity of citizenship, a federal court
has personal jurisdiction only if the forum state court would
have jurisdiction had the suit been brought there. Fed.R.Civ.P.
4(d)(7), Lakeside Bridge & Steel Co. v. Mountain State
Construction Co., Inc., 597 F.2d 596, 598 (7th Cir. 1979), cert.
denied, 445 U.S. 907, 100 S.Ct. 1087, 63 L.Ed.2d 325 (1980). In
Illinois the state courts can assert personal jurisdiction over
a non-resident defendant "as to any cause of action arising
from . . . (a) the transaction of any business within this State;
or (b) the commission of a tortious act within this State."
Ill.Rev.Stat. 1979, ch. 110, § 17(1). Illinois courts will have
jurisdiction only if the non-resident defendant's conduct falls
within the language of the long arm statute. Cook Associates,
Inc. v. Lexington United Corp., 87 Ill.2d 190, 197, 57 Ill.Dec.
730, 733, 429 N.E.2d 847, 850 (1981); Green v. Advance Ross
Electronic Corp., 86 Ill.2d 431, 436, 56 Ill.Dec. 657, 660,
427 N.E.2d 1203, 1206 (1981).
On a motion to dismiss for lack of personal jurisdiction the
plaintiff has the burden of providing sufficient evidence to
support jurisdiction and the concurrent advantage of having all
factual disputes resolved in its favor. Captain International
Industries, Inc. v. Westbury, Chicago, Inc., 416 F. Supp. 721, 722
(N.D.Ill. 1975). The court may consider affidavits submitted by
the parties on the issue of jurisdiction. O'Hare International
Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971); Kutner v.
DeMassa, 96 Ill. App.3d 243, 51 Ill.Dec. 723, 421 N.E.2d 231 (1st
Dist. 1981). "[I]f a defendant's affidavit contesting
jurisdiction is not refuted by a counter-affidavit filed by the
plaintiff, the facts alleged in the defendant's affidavit are
taken as true." Kutner v. DeMassa, supra, 421 N.E.2d at 235; Oddi
v. Mariner Denver, Inc., 461 F. Supp. 306, 310 (S.D.Ind. 1978).
Plaintiff asserts that this court has jurisdiction over
defendant based on the following facts: (1) defendant initiated
the sale of an airplane to plaintiff, an Illinois corporation;
(2) the contract of sale was negotiated by plaintiff, in Chicago,
and defendant, in Providenciales, over long-distance telephone
and telex; (3) defendant was an employee of plaintiff and knew
that plaintiff was an Illinois-based corporation; and (4)
plaintiff paid for the airplane with a check drawn on an Illinois
Although the Illinois Supreme Court's recent contraction of the
reach of the long arm statute*fn1 has left the standard for
determining personal jurisdiction uncertain, Adair v. Hunt
International Resources Corp., 526 F. Supp. 736 at 739 (N.D.Ill.
February 22, 1982), under the statute the jurisdictional facts
must show that defendant either transacted business within
Illinois, or committed a tortious act within the state, and that
the cause of action arises out of such conduct. Ill.Rev.Stat.
1979, ch. 110 § 17. Although plaintiff in its complaint has
included a count for tortious conversion of property, the parties
have addressed the question of jurisdiction solely under the
"transaction of business" section of the long arm statute. The
court will thus first determine whether the defendant's acts fall
within the meaning of that section.
Plaintiff has cited cases wherein Illinois courts have asserted
personal jurisdiction over a non-resident based on a single
business transaction. Although these cases used, at least in
part, a broader due process analysis under International Shoe Co.
v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and
its progeny, they provide an analytical framework for
interpreting the meaning of "the transaction of business within
this State." The relevant factual inquiries are: who initiated
the transaction and where did the transaction take place.
Plaintiff's general and rather vague statements concerning the
initiation of and negotiations for the sale of the airplane are
clarified rather than disputed by defendant's affidavits.
Defendant states that he was approached in Providenciales by an
agent of Caicos, a Mr. Jack Karstrom, and that Karstrom expressed
an interest in leasing the airplane. Although the affidavits
conflict as to who suggested the sale, and thus the court accepts
plaintiff's assertion that defendant "initiated" the sale,
Coghlin Aff. ¶ 3, it is uncontested that the initial contact was
made in a face-to-face meeting in the West Indies.*fn2 Defendant
specifies that the offer of sale was made on or about April 15,
1980, and that plaintiff's agent informed him approximately two
weeks later that his company had agreed to purchase the airplane.
It is not clear from the affidavits what conversation ensued, but
from the complaint and plaintiff's affidavits it appears that
subsequent negotiations took place over long-distance telephone
and telex, and that final terms were settled on or about
September 15, 1980. Thereafter, plaintiff began making payments
to defendant according to the terms agreed upon. Comp., Count II,
Illinois courts make a clear distinction between contacts
initiated in Illinois by an agent of a non-resident defendant and
contacts made by an agent of the plaintiff in the non-resident
defendant's state. In the former situation the defendant has
entered the state and contacted the plaintiff here, and
consequently the courts have found jurisdiction. United Air
Lines, Inc. v. Conduction Corp., 69 Ill. App.3d 847, 26 Ill.Dec.
344, 387 N.E.2d 1272 (1st Dist. 1979); Scovill Manufacturing Co.
v. Dateline Electric Co., 461 F.2d 897 (7th Cir. 1972); Morton v.
Environmental Land Systems, Inc., 55 Ill. App.3d 369
13 Ill.Dec. 79, 370 N.E.2d 1106 (1st Dist. 1977). Where the
plaintiff's agent has gone into a foreign jurisdiction to initiate
or obtain a sale, however, the courts have found no jurisdiction
absent other significant contacts. Wessel Co., Inc. v. Yoffee &
Beitman Management, 457 F. Supp. 939 (N.D.Ill. 1978); Telco
Leasing, Inc. v. Marshall County Hospital, 586 F.2d 49 (7th
Cir. 1978); Geneva Industries Co. v. Copeland, 312 F. Supp. 186
(N.D.Ill. 1970). The courts in the latter group of cases found
insufficient jurisdictional contacts under the broader due
process analysis, which delineates the outer reaches of
constitutionally permissible assertions of personal jurisdiction.
The same contacts initiated outside the state would necessarily
be insufficient under the stricter approach now used by the
Illinois courts in applying the Illinois long arm statute.
In Artoe v. Mann, 36 Ill. App.3d 204, 343 N.E.2d 647 (1st Dist.
1976), the Illinois plaintiff had visited the office of the
defendant in California in an attempt to sell his product, and
subsequent telephone calls were initiated by both the defendant
and the plaintiff. In plaintiff's breach of contract action the
court noted that defendant's calls into Illinois did not show an
intent to benefit from Illinois law, especially when coupled with
the fact that his performance of the contract took place outside
the state. Rather, it was the Illinois plaintiff who transacted
business in California. In another Illinois case the court found
no personal jurisdiction over the defendant because the
transaction was initiated by the plaintiff both by telephone and
by a personal visit to the defendant's office in Georgia, and
because the defendant's entire performance took place out of
state. "[T]he exchange of phone calls and correspondence are not
enough to support jurisdiction," it concluded. Woodfield Ford,
Inc. v. Akins Ford Corp., 77 Ill. App.3d 343, 349, 32 Ill.Dec.
750, 755, 395 N.E.2d 1131, 1136 (1st Dist. 1979).
Plaintiff's agent in the West Indies expressed to defendant the
need for an airplane, and thus invited an offer to sell by
defendant. Regardless of whether plaintiff was an Illinois-based
corporation or a local West Indian corporation (see Coghlan Aff.
¶ 6) defendant was contacted in the place of his residence.
Plaintiff states that "numerous conversations took place between
defendant and officers and employees of plaintiff . . . by way of
telex and long-distance telephone," Coghlan Aff. ¶ 4, but does
not indicate who initiated those communications. Such an exchange
of phone calls is not enough to support jurisdiction, especially
when the calls were made pursuant to a contract initially sought
in defendant's state. "To label these telephone calls and
letters . . . significant contacts with Illinois would be to
destroy the distinction between the transaction of business in
Illinois and the transaction of business with an Illinois
corporation. Only the former constitutes grounds for exercising
in personam jurisdiction over a foreign defendant, but only the
latter is involved here." Wessel Co., Inc. v. Yoffee & Beitman
Management, 457 F. Supp. 939, 941 (N.D.Ill. 1978). Indeed, were
the mere use of interstate telephone systems sufficient to
support jurisdiction, any state into which a phone call was
directed would be capable of asserting personal jurisdiction over
the caller. Lakeside Bridge & Steel Co. v. Mountain State
Construction Co., Inc., supra, 597 F.2d 596, 604.
The second factor that Illinois courts have examined when
asserting jurisdiction over an absent defendant is where the
contract or transaction was performed. Plaintiff cites Ward v.
Formex, 27 Ill. App.3d 22, 325 N.E.2d 812 (2d Dist. 1975), in
which the court found sufficient basis for asserting personal
jurisdiction over a nonresident defendant in a case arising from
the breach of a single contract between a Nevada corporation and
an Illinois filmmaker. The parties had made initial contact in
Kentucky, and the defendant had never entered Illinois. The court
based jurisdiction on the fact that the contract required that a
major portion of the plaintiff's work in producing a film for the
defendant, i.e., processing, editing, rework, mounting and
printing, take place in Illinois. Similarly, in Cook Associates,
Inc. v. Colonial Broach & Machine
Co., 14 Ill. App.3d 965, 304 N.E.2d 27 (1st Dist. 1973) and Colony
Press, Inc. v. Fleeman, 17 Ill. App.3d 14, 308 N.E.2d 78 (1st
Dist. 1974), where single telephone transactions were found
sufficient to support jurisdiction, the "defendants knew or
should have known that the completion of the agreement would be
performed exclusively in Illinois."*fn3 Artoe v. Mann, 36 Ill. App.3d 204,
206, 343 N.E.2d 647, 649 (1st Dist. 1976).
The facts as stated by plaintiff do not show that the contract
at issue required the performance of any acts in Illinois.
Plaintiff fails to indicate where the airplane is located and
thus defendant's statement that it is presently in Florida is
taken as true. Additionally, plaintiff has not asserted that at
any time relevant to the sale the plane was in Illinois, e.g.,
for repair or inspection by plaintiff. The only aspect of
plaintiff's performance in Illinois was that it "paid
Defendant . . . by checks drawn on Illinois banks." Coghlin Aff.
¶ 7. This single act, however, does not constitute the
"continuing performance by plaintiff in Illinois for defendant's
benefit" necessary to support the exercise of jurisdiction absent
affirmative acts by the defendant in Illinois. Woodfield Ford,
Inc. v. Akins Ford Corp., 77 Ill. App.3d 343, 350, 32 Ill.Dec.
750, 756, 395 N.E.2d 1131, 1137 (1st Dist. 1979).
Turning to defendant's conduct, it is clear that he never
performed any acts under the contract in Illinois. He was never
present in Illinois, nor is there any indication that he was
obligated to enter Illinois under the contract of sale. Defendant
did not transact business within Illinois by accepting checks
which had to clear an Illinois bank, for defendant's performance
occurred in Providenciales or Florida when he accepted the
payments and presumably deposited them there. Woodfield Ford,
Inc. v. Akins Ford Corp., supra. As plaintiff alleges no other
acts by defendant in Illinois, the court concludes that defendant
has not performed acts within Illinois sufficient to justify the
exercise of jurisdiction over him.
Plaintiff also states that defendant is its employee and that
he was aware that Caicos did business in Illinois. Coghlan Aff.
¶ 6. Defendant denies that he was an employee of plaintiff, and
states that he was an independent contractor for a subsidiary of
plaintiff. Hunsaker Aff. of May 4, 1981, ¶ 12. Resolving this
conflict in favor of plaintiff, the fact that a defendant is an
employee of an Illinois corporation does not in itself establish
sufficient facts to support jurisdiction. This is especially true
when the defendant performed his duties outside the state and the
substance of the plaintiff's claim is based on a dispute which
arose outside the state. Green v. Advance Ross Electronics Corp.,
86 Ill.2d 431, 435, 56 Ill.Dec. 657, 659, 427 N.E.2d 1203, 1205
Caicos' complaint, in addition to alleging a breach of
contract, alleges that defendant converted for his own use the
airplane purportedly purchased by plaintiff. Although neither
party has suggested that jurisdiction should be premised on the
"commission of a tortious act within this State," Ill.Rev.Stat.
1979, ch. 110 § 17(1)(b), this court holds that the facts of this
case fail to support a finding of jurisdiction under this
section. Defendant states that the object of the alleged
conversion, the 1960 Beechcraft airplane, is located in Florida
and there is no indication in the record that the aircraft was
ever in Illinois.
In determining where a tortious act occurs, Illinois courts
hold that "the place of the wrong is where the last event takes
place which is necessary to render the actor liable." Wiedemann
v. Cunard Line, Inc.,
63 Ill. App.3d 1023, 1033, 20 Ill.Dec. 723, 731, 380 N.E.2d 932,
940 (1st Dist. 1978) quoting Gray v. American Radiator & Standard
Sanitary Corp., 22 Ill.2d 432, 435, 176 N.E.2d 761, 762 (1961).
Conversion is the "unauthorized assumption of the right to
possession or ownership. The essence of conversion is not the
acquisition of the property by the wrongdoer, but a wrongful
deprivation of the owner thereof." Dickson v. Riebling,
30 Ill. App.3d 965, 967, 333 N.E.2d 646, 648 (3d Dist. 1975).
In this case the defendant allegedly has control over the
aircraft in Florida, and plaintiff was deprived of the use of the
plane because of defendant's failure to transfer the plane to it.
The aircraft was never within Illinois so plaintiff could not
have been deprived of its use in Illinois.*fn4 Defendant's act of
possessing or exercising control over the plane in Florida was
the act constituting the wrong to the plaintiff, and that act
took place in Florida. Because the conversion occurred in Florida
it cannot constitute the commission of a tortious act within
Illinois under Ill.Rev.Stat. 1979, ch. 110, § 17(1)(b). Therefore
the court finds no basis for asserting personal jurisdiction over
defendant under that section of the long arm statute.
Based on the complaint and the affidavits of the parties, the
court concludes that the assertion of personal jurisdiction over
Robert Hunsaker, a resident of Providenciales, Turks and Caicos
Islands, British West Indies, is not warranted under the Illinois
long arm statute. Plaintiff relies on facts which demonstrate its
own contacts with Providenciales, but fails to allege specific
facts indicating that the defendant initiated the transaction of
business within Illinois, performed its contractual obligations
in Illinois, or intended the plaintiff to perform its obligations
in Illinois for defendant's benefit. Hunsaker has never been to
Illinois and his contact with plaintiff in Providenciales is too
indirect a link to Illinois to support a finding of jurisdiction.
Additionally, the plaintiff's allegation that defendant converted
an airplane now located in Florida is insufficient to base
personal jurisdiction on the commission of a tortious act within
Illinois. Therefore, defendant's motion to dismiss for lack of
personal jurisdiction is granted.