into contact with the Illinois plaintiff through the actions of
the nonresident agents of the Illinois plaintiff. These agents
sent copies of the leases to the nonresident defendant who signed
the leases outside of Illinois. At no time did any agent of the
defendant in Telco Leasing ever enter Illinois in connection with
the lease agreements.
The Seventh Circuit found the nonresident defendant's contacts
with Illinois to be insufficient to meet the "minimum contacts"
requirements of the due process clause. The court also stated
that a choice of law provision in a lease did not serve as a
basis for jurisdiction. Further, the court refused to accept the
argument that making payments by mail to the plaintiff's Chicago
office constituted activity within the state of Illinois.
Finally, the court rejected the argument that the nonresident
defendant's communication by phone with the plaintiff in Illinois
gave an Illinois court jurisdiction over the non-resident
The facts and circumstances surrounding the transaction in the
instant case are analogous to the situation presented in Telco
Leasing. The defendants' only contact with Illinois was the
sending of lease payments to Unilease's office in Illinois. It is
settled, however, that the sending of lease payments to Illinois
does not suffice to confer personal jurisdiction over a
nonresident defendant. Lakeside Bridge, supra; Telco Leasing,
supra. See also Met-L-Wood Corp. v. Lifetime Pools, Inc.,
475 F. Supp. 149 (N.D.Ill. 1979). Furthermore, all negotiations
concerning the transaction occurred in California. Neither
Randolph nor any agent of Dillon, Inc. ever entered Illinois for
the purpose of negotiating the instant transaction.
However, Northern Trust contends that Coburn acted as agent for
Dillon, Inc. when Coburn arranged the financing of Dillon, Inc.'s
lease agreement with Unilease. In support of its position,
Northern Trust points to the fact that Dillon, Inc. could have
obtained the financing on its own, but instead chose to rely on
Coburn to arrange the financing. Therefore, argues Northern
Trust, since Dillon, Inc., through its agent Coburn, initiated a
transaction with an Illinois citizen, it is subject to personal
jurisdiction in Illinois.
This argument must be rejected. Save for the naked assertion in
Northern Trust's brief, there is no indication that Coburn was in
fact serving as an agent for Dillon, Inc. Indeed, the more
plausible explanation is that Coburn obtained the financing of
the agreement for Dillon, Inc., in furtherance of its
relationship with Unilease. But even if the Court were to assume
that Coburn was serving as an agent of Dillon, Inc. in arranging
the financing, there is no indication that even Coburn entered
Illinois in order to obtain the financing or that Coburn even
dealt with Unilease's Illinois office. Neither Dillon nor any
alleged agent of Dillon, Inc. has had sufficient contacts with
Illinois to support the assertion of personal jurisdiction. Cf.
Wisconsin Electrical Mfg. Co., Inc. v. Pennant Products, Inc.,
619 F.2d 676 (7th Cir. 1980) (court asserted jurisdiction over
nonresident defendant because defendant's agents entered state
for the purpose of negotiations which were significant to the
formation of the contract with resident plaintiff).
Similarly, a clause in the lease agreement and guaranty which
states that Illinois law will govern is not sufficient to confer
jurisdiction over a nonresident defendant. Telco Leasing, supra;
Lakeside Bridge, supra. Parties to an agreement may elect to have
a particular state's law govern the terms of an agreement for any
number of reasons. For example, the commercial law of one
jurisdiction may be incorporated merely as a contract "gap
filler." While the parties may have expressed an intent to abide
by the substantive law of one state, such a clause evidences no
intent or agreement to be sued and to be forced to defend in that
same state. Further, to hold that the existence of a governing
law clause in an agreement confers upon a court the power to
assert jurisdiction over a nonresident is tantamount to holding
that choice of
law equals consent to personal jurisdiction. Cf. The Bremen v.
Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513
(1972) (consent to personal jurisdiction possible); Comprehensive
March. Cat., Inc. v. Madison Sales Corp., 521 F.2d 1210 (7th Cir.
1975). The two concepts are distinct. A holding that choice of
law is equivalent to consent to personal jurisdiction might even
raise problems as to the constitutionality of a waiver of due
process rights. In the absence of additional circumstances
evidencing that the nonresident purposefully availed itself of
the benefits and protections of the forum, a choice of law
provision is not enough to warrant the assertion of personal
jurisdiction over a nonresident defendant.
THEREFORE IT IS ORDERED that
(1) Defendants' motion to dismiss for lack of personal
jurisdiction is granted.
(2) This action is dismissed.