The opinion of the court was delivered by: HOLDERMAN
JAMES F. HOLDERMAN, UNITED STATES DISTRICT JUDGE
On November 30, 1989 the court dismissed this case for lack of in personam jurisdiction over defendants Essex Financial Services, Inc. ("Essex") and Raymond R. Kramer. (See Opinion at 8-9; 1989 U.S. Dist. LEXIS 14361.) The court deferred ruling on defendants' request for sanctions under Federal Rule of Civil Procedure 11. (Opinion at 8.) Defendants now have brought a separate motion for Rule 11 sanctions, to which plaintiff Phoenix Airway Inn Associates ("Phoenix") has filed a 27-page response, complete with supporting affidavits.
Rule 11 states in relevant part:
Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record. . . . The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.
Fed. R. Civ. P. 11 (emphasis added).
Plaintiff's attorney, Emil P. Caliendo, signed the complaint filed in this case. (See Complaint at 4.) Thus, Rule 11 is concerned with Mr. Caliendo's behavior -- whether before filing the complaint he made reasonable inquiry into the facts and law supporting the complaint's allegations of jurisdiction. (See Complaint, paras. 5-6.) The evidence before this court demonstrates that plaintiff's attorney failed to make such pre-filing inquiry.
First, the complaint itself contains no indication that, before filing, plaintiff's counsel reasonably investigated whether this court had in personam jurisdiction over defendants. Nowhere does the complaint allege facts supporting this court's in personam jurisdiction: the complaint mentions no travel by defendants to Illinois, no business solicitation by defendants in Illinois, no phone calls placed or mail sent by defendants to Illinois, and no contract consummated or performed in Illinois.
Although such detailed allegations in the complaint may not be necessary to withstand a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), their presence would have been strong evidence of counsel's pre-filing inquiry into the relevant jurisdictional facts of this case.
After counsel's filing of the complaint defendants moved to dismiss it for this court's lack of in personam jurisdiction. It is certain that had plaintiff's counsel properly investigated the facts relevant to this court's jurisdiction prior to filing the complaint, the facts would not have been difficult to marshall and to present in response to defendants' motion.
Instead, in response to a motion that threatened to end this litigation before this court, counsel submitted a memorandum supported by a single affidavit -- the affidavit of Peter Fricano, plaintiff's sole general partner. (See Fricano Aff. para. 1, attached to Response to Motion to Dismiss ("First Fricano Aff.").) As detailed more fully in this court's previous opinion, in his affidavit Mr. Fricano offered no facts supporting assertion of this court's in personam jurisdiction over defendants: he never stated that defendants initiated in any way the contract at issue or that the contract either was formed or was to be performed in Illinois. (See Opinion at 5-6; First Fricano Aff.)
Although Mr. Fricano stated that "many crucial communications between plaintiff and defendants occurred between Illinois and Texas, including negotiations pertaining to the amount of the loan," he did not state that defendants initiated these communications -- e.g., by telephoning or mailing information to plaintiff in Illinois. (See Opinion at 6-7; First Fricano Aff. para. 5.) If plaintiff's counsel had reasonably investigated Illinois law he would have known that determination of who called or mailed information to whom would be critical to this court's resolution of whether it had in personam jurisdiction over defendants. (See Opinion at 6-7.) If before filing the complaint in this case plaintiff's counsel had properly investigated the necessary facts and relevant law supporting the jurisdictional allegations of the complaint, he undoubtedly would have presented them to the court in response to defendants' properly supported motion to dismiss.
Now, over a year after filing the complaint and over nine months after responding to defendants' motion to dismiss, in response to defendants' motion for sanctions counsel for plaintiff finally comes forward with affidavits which he claims demonstrate that this court had in personam jurisdiction over defendants all along. Specifically, counsel presents to this court a second affidavit by Mr. Fricano, and an affidavit from a new party -- Jerry Del Giudice, attorney for Centrum Financial Group, the business entity which apparently referred plaintiff's loan package to defendant Essex in Texas, precipitating this lawsuit.
Most of the statements in these affidavits, however, are either vague or irrelevant, further convincing this court that plaintiff's counsel failed to make reasonable inquiry before filing the complaint.
Other statements, however, might have been relevant to this court in ruling on defendants' motion to dismiss eight months ago.