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United States District Court, Northern District of Illinois, E.D

September 20, 1984


The opinion of the court was delivered by: Shadur, District Judge.


James Figley ("Figley") and Leonard Wright ("Wright") move for reconsideration of this Court's August 27, 1984 oral bench ruling denying their motion to dismiss for want of personal jurisdiction.*fn1 For the reasons briefly stated in this memorandum opinion and order (and more extensively outlined in Club Assistance Program, Inc. v. Zuckerman, 594 F. Supp. 341), their motion is denied.

First, the fact that the guaranty in O'Hare International Bank v. Hampton, 437 F.2d 1173 (7th Cir. 1971) contained its own stipulation for applicability of Illinois law, while the guaranty here rather guaranteed obligations under a contract that contained a like stipulation, is a distinction without a difference. There is a tendency in these long-arm cases to announce the end result of personal jurisdiction vel non as a substitute for reasoning. And as the remaining discussion will reflect, reasoning supports jurisdiction here.

Second, reliance on the place of "execution" of the guaranty — where the last pen was put to paper — employs the same kind of wooden and artificial recital of facts as a substitute for analysis. Again the issue should be decided in terms of the meaningful relationships (or lack of relationships) of the guarantors with Illinois.

When this Court ruled initially, it was of course well aware of its colleague Judge Hart's thoughtful decision in Northern Trust Company v. Dillon, 558 F. Supp. 1118 (N.D.Ill. 1983), including his reliance on Telco Leasing v. Marshall County Hospital, 586 F.2d 49 (7th Cir. 1978). But the relevant contrasts between those cases and this one are dramatic. Most significantly, in Northern Trust the guaranty by the non-resident was of a contract (an equipment lease of a computer system), and in Telco the defendant Hospital had signed a contract (a lease of medical equipment), each to be performed wholly outside Illinois. In each case the only way Illinois even arguably stood to be affected was by a potential economic impact on the Illinois lessor company in case of nonpayment of the principal obligation.*fn2 In this case, though, the guaranty was of performance of a wholly Illinois contract — construction of a multi-million dollar permanent structure in this state.*fn3 Little wonder Illinois law was chosen by the parties to be applicable.

Just last week this Court had occasion to essay reconciliation of the welter of Illinois cases in this area of law. Club Assistance Program, Inc. v. Zuckerman, (1984) 594 F. Supp. 341. Club Assistance found the common thread of reason that runs through the decisions is whether the conduct of the party now challenging personal jurisdiction had been intended to affect interests in Illinois (in which case jurisdiction would lie) or not (in which case it would not).

Here Figley and Wright executed a personal guaranty as a specific inducement to the other contracting party to award Figley's and Wright's own corporation a major contract (construction of a $4 million roller coaster), to be carried out entirely in this state. As the corporate shareholders, directors and officers, Figley and Wright stood to derive the entire benefit of that bargain — the large fee for services in construction of the project. It would be difficult to characterize their conduct otherwise than as directly intended to affect Illinois rights — or to repeat the conclusory phrase that permeates O'Hare and so many of the other decisions in this field, their own action to obtain the Illinois contract for their corporation (a contract governed by Illinois law) was "conduct by which [they] may be said to have invoked the benefits and protections of the law of the forum." In the equally familiar language of World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980) Figley and Wright surely could "reasonably anticipate being haled into court" here if their corporation breached — necessarily in Illinois, for its performance took place only here — the obligation they had guaranteed.*fn4

Figley's and Wright's motion for reconsideration is denied. They still remain in the case.

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