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12/29/88 the Servicemaster Company, v. Mary Thompson Hospital

December 29, 1988

THE SERVICEMASTER COMPANY, PLAINTIFF-APPELLEE

v.

MARY THOMPSON HOSPITAL, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

532 N.E.2d 1009, 177 Ill. App. 3d 885, 127 Ill. Dec. 180 1988.IL.1910

Appeal from the Circuit Court of Du Page County; the Hon. Anthony Peccarelli, Judge, presiding.

APPELLATE Judges:

JUSTICE UNVERZAGT delivered the opinion of the court. NASH and INGLIS, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE UNVERZAGT

Defendant, Mary Thompson Hospital (the hospital), brings this interlocutory appeal pursuant to Supreme Court Rule 306 (107 Ill. 2d R. 306(a)(1)(iv)) from an order of the circuit court of Du Page County denying its motion to transfer venue from Du Page County to Cook County. The hospital contended Du Page County was a forum non conveniens and that no part of the transaction out of which the cause of action arose occurred in Du Page County.

Plaintiff, the ServiceMaster Company, in the business of supplying contract management services, filed a four-count complaint in Du Page County against the hospital for breach of contracts for its management of the hospital's housekeeping services, plant operations and maintenance, food service, and materials. At the transfer hearing, the hospital reserved its right to assert the ground of forum non conveniens at a later time, and the cause proceeded solely on the issue of transactional venue. Based on its review of the contracts and various affidavits submitted, the court found that "some of the transaction occurred in Du Page County" and denied the hospital's motion for transfer of venue.

The issue presented on this appeal is whether the court erred in finding that some part of the transaction out of which the cause of action arose occurred in Du Page County.

The parties entered into four management services agreements during the period June 1984 to June 1987. All four contracts required biweekly payments to ServiceMaster. It is undisputed that ServiceMaster's principal place of business is in Downers Grove, Du Page County, Illinois. The hospital's principal place of business at all relevant times herein was at 140 N. Ashland Avenue in Chicago, Cook County, Illinois, and it was not engaged in business in Du Page County. It is also undisputed, and this court may judicially notice (May Department Stores Co. v. Teamsters Union Local No. 473 (1976), 64 Ill. 2d 153; First State Bank v. Leffelman (1988), 167 Ill. App. 3d 362), that the hospital, an incorporated voluntary nonprofit hospital primarily serving indigents, was granted permission by the Illinois Health Facilities Planning Board on July 7, 1988, to cease all operations and close its facility on Ashland Avenue. According to its brief, the hospital is otherwise still in business and operating various facilities.

ServiceMaster filed its complaint in December 1987 upon the hospital's failure to make the payments specified in the agreements. The hospital's motion for change of venue, treated by the court as a motion to transfer venue, contended, inter alia, that no part of the transaction giving rise to the cause of action arose in Du Page County. The motion was supported by the affidavit of the hospital's chief operating officer, Steven G. Orcutt. Inter alia, Orcutt stated that the agreements were negotiated at the hospital with various officials of the ServiceMaster Corporation; that the agreements were required to be and were performed exclusively at the hospital and at no other location; and that any functions performed by ServiceMaster at any location other than the hospital relating to any of the agreements was merely preliminary to the performance of the agreements and did not constitute actual performance of any functions required by the agreements.

ServiceMaster's response alleged, inter alia, that it substantially performed its duties under the contracts at its home office in Du Page County; substantial contacts between itself and the hospital took place in Du Page County and the contracts themselves were executed by it in Du Page County. The response incorporated therein ServiceMaster's supporting memorandum of law and affidavits. It was stated in the affidavit of Ed Schmal, ServiceMaster's controller for health care operations, that he was familiar with the manner in which service contracts such as the ones between ServiceMaster and Mary Thompson Hospital are performed pursuant to normal practice and procedure at ServiceMaster; that to the best of his knowledge and belief, the Mary Thompson Hospital service contracts were performed consistently with the normal practice and procedure of ServiceMaster; financial record keeping, including review meetings records and education training records, occurs in the Du Page County offices of ServiceMaster; that record keeping relative to the issuance of the payroll to persons performing specific service functions is handled at the Du Page County office; that supplies necessary for the housekeeping contract are ordered out of the Du Page County office; that processing and payment of all procurements of food and related supplies from outside vendors occurs at the Du Page County offices by ServiceMaster's accounts payable department; and that the processing of payroll and food service procurement involves a substantial amount of work at the Du Page County offices. The affidavits of ServiceMaster's president of central management services, Kenneth W. Creasman, and ServiceDirection's president, Patrick E. Gallagher, set forth the fact that their respective signing and execution of the contracts occurred in the offices of the ServiceMaster Company located in Downers Grove.

The hospital's reply memorandum was supported by three affidavits. It was stated in the affidavit of Steven Orcutt that he was in part responsible for negotiation of the agreements between the hospital and ServiceMaster; that all negotiations required took place at the hospital between the affiant, other hospital personnel, and ServiceMaster personal sales representative Clarence Smith; and that so far as in Orcutt's personal knowledge, the contracts between ServiceMaster and the hospital were all performed exclusively at the hospital. In her affidavit, Ivette Estrada, president and chief executive officer of the hospital, stated, inter alia, that ServiceMaster, through its sales representative Clarence Smith, solicited the opportunity to provide the various contractual services later agreed upon by calling upon her and other hospital administrative persons exclusively at the hospital; that after deliberation, the hospital informed Smith that it was interested in proceeding with the agreements; that Smith delivered each of the agreements, fully signed and sealed by ServiceMaster, to the hospital; and that the agreements were then signed by the affiant and other hospital administrative officials and given to Smith when he personally visited the hospital.

It was stated in the affidavit of Jeffrey Ellis that he was responsible for the financial affairs of the hospital; that it is his duty to see to the issuance of and delivery of checks to vendors for services performed and supplies provided; that he is familiar with the hospital's practices and procedures for the payment of money to ServiceMaster under the agreements at issue; that no standard system or procedure was established for the delivery of checks to ServiceMaster for services under the agreements; that initially, early on during the terms of the agreements, payments were mailed to ServiceMaster in Du Page County; that thereafter, at the request of the ServiceMaster Company, checks were handed by the affiant to ServiceMaster employees at the hospital.

Venue is properly fixed in the county of residence of any defendant joined in good faith or in the county in which the transaction or some part hereof occurred out of which the cause of action arose. (Ill. Rev. Stat. 1987, ch. 110, par. 2-101.) When a defendant moves to transfer venue, it is the defendant's burden to prove that the plaintiff's selection of venue was improper. (Weaver v. Midwest Towing, Inc. (1987), 116 Ill. 2d 279, 285; Wilson v. Central Illinois Public Service Co. (1988), 165 Ill. App. 3d 533, 538-39; but see Peterson v. Monsanto Co. (1987), 157 Ill. App. 3d 508, 512-13.) "[The] defendant must set out specific facts, not Conclusions, and show a clear right ...


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