United States District Court, Northern District of Illinois, E.D
January 19, 1983
FELICIA, LTD., PLAINTIFF,
GULF AMERICAN BARGE, LTD., JOSEPH LARGE, KAY LARGE AND UNKNOWN PARTNERS OF GULF AMERICAN BARGE, LTD., DEFENDANTS.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Illinois corporation Felicia, Ltd. ("Felicia") brings this
breach of contract action against Florida partnership Gulf
American Barge, Ltd. ("Gulf American") and its individual
partners. Felicia contends Gulf American, by refusing to make
rental payments and provide a performance bond, violated an
agreement captioned "Bare Barge Charter Party With Option to
Purchase" (the "Agreement"). As its title suggests, the
Agreement entitled Gulf American to charter two barges from
Felicia and, at Gulf American's option, to purchase them.
Defendants now move to dismiss this action for lack of
personal jurisdiction under Fed.R.Civ.P. ("Rule") 12(b)(2) or
alternatively to transfer it to the United States District
Court for the Northern District of Florida pursuant to
28 U.S.C. § 1404(a). For the reasons stated in this memorandum
opinion and order, both motions are denied.
In the early months of 1982 Gulf American (based in Panama
City, Florida) became interested in renting barges to
transport various petroleum products on the Intercoastal
Waterway between the pan-handle area of Florida and
Brownsville, Texas. Toward the end of March 1982 Joseph Large
("Large"), one of the Gulf American partners, spotted in the
Waterways Journal a Felicia advertisement offering barges for
lease. Intrigued, Large telephoned Carmelo Aiello ("Aiello"),
a Felicia employee in its West Chicago office, to explore the
possibility of chartering Felicia barges. During the ensuing
weeks Large and Aiello had several more telephone
conversations to negotiate the specific terms of a leasing
arrangement. On June 4, 1982 a Gulf American employee met with
Aiello in Chicago to discuss the condition of the barges and
then traveled to Lemont, Illinois to inspect both vessels.
On July 1, 1982 Aiello and Kay Large, another Gulf American
partner, signed the Agreement in Panama City, Florida. Nine
days later an official of Waterways Transportation Services,
Inc. ("Waterways"), acting on behalf of both Felicia and Gulf
American,*fn2 inspected both barges in Lemont and issued a
report on their condition. Under the Agreement such a joint
inspection was required both before delivery and after
redelivery of the barges to Lemont.
At Large's request (made sometime before delivery) Felicia
customized the two barges and their equipment to conform to
the specifications given by Large. On July 18, 1982 Felicia
delivered the barges to Gulf American at Lemont — the delivery
location established by the Agreement (under the terms of which
Gulf American then became contractually obligated to make
rental payments and purchase insurance coverage). Aiello
arranged for third parties to transport the barges to Hanrahan,
where Gulf American employees first took physical
Because of its dissatisfaction with the seaworthiness of the
two barges, Gulf American returned the vessels (which are now
docked at Lemont) without paying any rent or obtaining a
performance bond. These asserted contractual breaches form the
basis of Felicia's present suit.
Exercise of personal jurisdiction over the nonresident
defendants must comply with both statutory and constitutional
standards. International Shoe Co. v. State of Washington,
326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and its progeny
define the due process constraints. Because no federal statute
prescribes the manner of service of process in diversity
actions, under Rule 4(d)(7) the Illinois long-arm statute
(Ill.Rev. Stat. ch. 110, § 2-209(a)(1), "Section 2-209(a)(1)")
furnishes the statutory predicate:
(a) 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 State as
to any cause of action arising from the doing of
any such acts:
(1) The transaction of any business within this
Because constitutional questions should not be faced unless
they must, this opinion will address the statutory test first.
1. "Transaction of Business"
Until recently it had been assumed Section 2-209's
predecessor extended jurisdiction to the outermost boundaries
permitted by the Due Process Clause. See, e.g., Nelson v.
Miller, 11 Ill.2d 378, 389, 143 N.E.2d 673, 679 (1957). Then in
Green v. Advance Ross Electronics Corp., 86 Ill.2d 431, 436-37,
56 Ill.Dec. 657, 661-62, 427 N.E.2d 1203, 1207-08 (1981), the
Illinois Supreme Court announced the statute was not
coextensive with due process requirements. See also Cook
Associates, Inc. v. Lexington United Corp., 87 Ill.2d 190, 57
Ill.Dec. 730, 429 N.E.2d 847 (1981).
But the pronouncements in Green and Cook Associates do not
signal any significant curtailment in the reach of Section
2-209. First, they merely express the unexceptionable notion
that Section 2-209 (which after all does not expressly adopt
the Due Process Clause) should be interpreted in light of the
"fixed meaning" of the actual words used by the Illinois
legislature. Second, their specific holdings are also
unremarkable, for the forum contacts they found insufficient
were tenuous and likely would not have satisfied the dictates
of due process either. See Ronco, Inc. v. Plastics, Inc.,
539 F. Supp. 391, 398-99 (N.D.Ill. 1982). Most important, it would
be inconsistent with Green and Cook Associates themselves to
read those cases as undercutting jurisdictional precepts
developed in prior Illinois case law.
Gulf American plainly transacted business in Illinois within
the meaning of Section 2-209(a)(1). All roads lead to that
First, it performed (and committed itself to perform)
substantially all its contractual obligations in Illinois
(see Ronco, 539 F. Supp. at 395 and cases cited):
1. It participated in the definitive joint
inspection of the two barges at Lemont through
the Waterways surveyor, its own representative as
well as Felicia's.
2. It took delivery of the vessels in Lemont
and was contractually responsible for returning
them to the same location (unless the parties
redelivery point or Gulf American exercised its
3. It was obligated to remit its rental
payments to Felicia's West Chicago office.*fn5
4. Had it elected to exercise its purchase
option, Gulf American's representative would have
been required to travel to Chicago to close the
Second, Gulf American's very initiation of the
specific Felicia transaction in suit is another factor that
strongly supports jurisdiction.*fn7
See Telco, 586 F.2d at 52.
Third, the contractual and practical necessities that
Felicia perform its obligations in Illinois also confirm
jurisdiction here. Under the Agreement Felicia had to deliver
and accept redelivery of the barges at Lemont. And the joint
inspection called for by the Agreement also had to be
conducted at Lemont (the only port at which Felicia ever
docked these barges) or at least somewhere in northern
Illinois (given the fact Felicia's only office is in Chicago).
This is a critically different situation from that in
Lakeside, 597 F.2d at 603, which disregarded the forum situs of
plaintiff's performance because of its absolute control over
where its contractual activities would be conducted.*fn8
As for the final factor to be considered — the place of
contract negotiations and execution — it is no worse than
neutral on the question whether Gulf American transacted
business in Illinois. Contract preliminaries involved Illinois
(where Gulf American sent its own employee to inspect the
barges), Illinois-Florida phone conversations*fn9 and Florida
(immediately before execution of the Agreement). Actual signing
of the Agreement took place in Florida. But as Lakeside, 597
F.2d at 604 emphasizes, "formalities of contract execution are
not determinative for purposes of jurisdiction." Certainly the
aggregate of these items does not negate Illinois jurisdiction.
Jurisdiction is not the same balancing concept as, say,
forum non conveniens. On the facts here it cannot seriously be
questioned that Gulf American transacted business in Illinois
for Section 2-209(a)(1) purposes.
Given the nature of general partnerships, that conclusion
carries with it jurisdiction over the Gulf American partners.
General partners as well as partnership employees or agents
are agents for all other general partners. Accordingly the
Illinois contacts that bring Gulf American into court equally
support the assertion of personal jurisdiction over each of
its general partners. See Morton v. Environmental Land Systems,
Ltd., 55 Ill. App.3d 369, 13 Ill.Dec. 79, 370 N.E.2d 1106 (1st
Dist. 1977) (affirming without discussion the exercise of
personal jurisdiction over all nonresident general partners on
basis of forum contacts by two partners).
These fundamental agency concepts are unaffected by
Ill.Rev.Stat. ch. 110, § 2-411, which simply offers the
procedural choice of suing a partnership in its firm name or
suing the individual partners. Nor does the line of case law
typified by Hurleton Whittier, Inc. v. Barda, 82 Ill. App.3d 443,
37 Ill.Dec. 838, 402 N.E.2d 840 (1st Dist. 1980) call for
a different result. Applying an Illinois version of what is
often called the "corporate shield" doctrine to corporate
officials, Hurleton Whittier said, 82 Ill. App.3d at 447, 37
Ill.Dec. at 841, 402 N.E.2d at 843 (emphasis added):
The existence of personal jurisdiction must be
established by acts of the defendant; however,
the conduct of a person in a
representative capacity cannot be relied upon to
exercise individual personal jurisdiction over that
Accord, Knorr Brake Corp. v. Harbil, Inc., 550 F. Supp. 476
(N.D.Ill. 1982). But by definition corporate officials are only
agents, while general partners are both agents and principals.
As principals they do not represent the partnership, they are
2. Due Process
International Shoe, 326 U.S. at 316, 66 S.Ct. at 158,
articulated the due process limits on assertion of personal
[D]ue process requires only that in order to
subject a defendant to a judgment in personam, if
he be not present within the territory of the
forum, he have certain minimum contacts with it
such that the maintenance of the suit does not
offend "traditional notions of fair play and
"Minimum contacts" between defendant and forum need only be
substantial enough so that the defendant might reasonably have
anticipated being haled into the courts of the forum state.
See World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). As our Court of
Appeals reminds us, "the proper inquiry is whether a
non-resident defendant can be said to have invoked, by act or
conduct, the benefits and protections of the law of the forum."
Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137
, 1144 (7th
Certainly Gulf American's forum involvement overleaps the
due process threshold. Indeed that conclusion follows
inescapably from this opinion's earlier determination that the
more stringent "transaction of business" test is satisfied.
Through the very entry into a contract requiring the bulk of
Gulf American's performance to take place in Illinois,
defendants purposefully availed themselves of "the benefits
and protections of [Illinois] law." In World Wide Volkswagen
terms, they clearly should have anticipated their
susceptibility to suit in this forum. Finally, as the next
section's evaluation will confirm, a weighing of comparative
inconveniences and equities
reinforces the constitutional propriety of requiring
defendants to defend this action here. See Met-L-Wood Corp.,
475 F. Supp. at 152 (taking such considerations into account in
its minimum contacts analysis).
Section 1404(a) Transfer
Defendants have alternatively moved to transfer this action
to the Northern District of Florida under 28 U.S.C. § 1404(a)
For the convenience of parties and witnesses, in
the interest of justice, a district court may
transfer any civil action to any other district
or division where it might have been brought.
Though it evolved from the forum non conveniens doctrine,
Section 1404(a) confers broader discretion on a district court
than its common law antecedent. See Rockwell International
Corp. v. Eltra Corp., 538 F. Supp. 700, 702 (N.D.Ill. 1982). In
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n. 6, 102 S.Ct.
252, 258 n. 6, 70 L.Ed.2d 419 (1981) (quoting Gulf Oil Corp. v.
Gilbert, 330 U.S. 501, 508, 509, 67 S.Ct. 839, 843, 91 L.Ed.
1055 (1957)), the Supreme Court enumerated the "private
interest" and "public interest" factors that should inform the
exercise of such discretion (citation omitted):
The factors pertaining to the private interests
of the litigants included the "relative ease of
access to sources of proof, availability of
compulsory process for attendance of the
unwilling, and the cost of obtaining willing,
witnesses; possibility of view of premises, if
view would be appropriate to the action; and all
other practical problems that make trial of a
case easy, expeditious, and inexpensive." . . .
The public factors bearing on the question
included the administrative difficulties flowing
from court congestion; the "local interest in
having localized controversies decided at home";
the interest in having the trial of a diversity
case in a forum that is at home with the law that
must govern the action; the avoidance of
unnecessary problems in conflict of laws, or in
the application of foreign law; and the
unfairness of burdening citizens in an unrelated
forum with jury duty.
Detailed consideration of those factors is unnecessary, for
defendants' showing in each sphere is patently inadequate.
Private interest considerations are heavily tilted against
1. Importantly, the barges themselves are
presently docked in Lemont and could be
transported to Florida only at great expense.
Location of the physical evidence is especially
important because the barges' asserted
unseaworthiness — the crux of Gulf American's
defense to Felicia's charges of contractual breach
— will probably be the decisive issue. Viewing of
that evidence by the trier of fact, rather than
being forced to decide between the expected
contradictory expert opinions without the ready
availability of the vessels if necessary, may be of
2. Though the witnesses appear to be about
evenly distributed between Illinois and Florida,
the key witness — the jointly-designated Waterways
surveyor who inspected the barges shortly before
delivery — lives in Illinois.
3. Defendants have not justified their bald
assertion that the relevant documents are
concentrated in Florida. Even were that so, their
movement would involve less expense and logistic
difficulty than moving the barges.
In short, transfer would merely shift the convenience from
defendants to Felicia. That is no basis for granting
defendants' motion, see 15 Wright & Miller, Federal Practice
and Procedure § 3848 at 246 n. 20 (1976 & Supp. 1982) (citing
cases), particularly when Gulf American's transaction-related
contacts with Illinois far surpass Felicia's fleeting
connection with Florida (including Aiello's brief visit to sign
As for the public interest, Illinois certainly is a more
interested forum state than Florida, for the transaction has
with Illinois*fn11 and the dispute involves economic injury
to an Illinois citizen, Felicia, see Ronco, 539 F. Supp. at 402.
Moreover defendants have made no showing that the docket of the
proposed transferee forum is less congested than that of this
This Court has personal jurisdiction over defendants, and
transfer of this case to the Northern District of Florida is
unwarranted. Accordingly defendants' Rule 12(b)(2) and Section
1404(a) motions are denied. Defendants are ordered to answer
the Complaint on or before January 31, 1983.