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SKY VALLEY L.P. v. ATX SKY VALLEY

October 28, 1991

SKY VALLEY LIMITED PARTNERSHIP, an Illinois limited partnership, Plaintiff,
v.
ATX SKY VALLEY, LTD, a Texas limited partnership, Defendants



The opinion of the court was delivered by: BUA

 NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE

 For reasons stated herein, ATX's motion to dismiss this complaint for lack of personal jurisdiction is denied. ATX's motion to transfer this case to the Northern District of California is granted.

 I. FACTS

 The plaintiff, Sky Valley Limited Partnership ("Sky Valley") is a limited partnership formed solely to acquire and develop the Sky Valley Project ("the project"), a massive real estate acquisition and development project located in Vallejo, California. It is an Illinois corporation with its offices in Elk Grove Village, Illinois. Its sole limited partner is Tang, Industries, Inc. ("Tang, Industries"), an Illinois corporation.

 The defendant, ATX Sky Valley, Ltd ("ATX") is a limited partnership formed solely to manage and develop the project. It is a Texas corporation but does the bulk of its business in California in connection with the project.

 The following facts are assumed to be true for the purposes of this motion. ATX initiated a discussion with Tang, Industries for the purpose of soliciting it to fund the purchase of the Sky Valley project which ATX would manage and develop. At least four discussions during the negotiations process took place between agents of ATX and agents of Tang, Industries in Elk Grove Village, Illinois. These occurred on May 9, 1989, July 7, 1989, July 19, 1989, and July 25, 1989. The substance of many of these meeting involved negotiations on and tentative agreements to many of the terms ultimately incorporated into the final agreement ("the Agreement") which was executed on September 7, 1989.

 Problems eventually arose concerning the project which prompted the filing of at least four lawsuits by third parties against ATX and Sky Valley as codefendants ("the California Suits"). These suits are all pending in California.

 Sky Valley filed this lawsuit against ATX alleging that ATX has ceased performing its obligations under the Agreement and, that there is an actual controversy concerning the rights of the parties under the Agreement. Sky Valley asks for both declaratory relief and damages. ATX filed a countersuit against Sky Valley in the Northern District of California alleging breach of the Agreement and alleging promissory fraud and tortious interference with contract. ATX filed a motion to dismiss this action for lack of personal jurisdiction or in the alternative, to transfer this motion to the Northern District of California.

 II. DISCUSSION

 A. Motion to Dismiss For Lack of Personal Jurisdiction

 A federal court will only have personal jurisdiction over a party if the forum state court could exercise personal jurisdiction over the party. Young v. Colgate-Palmolive Co., 790 F.2d 567, 569 (7th Cir. 1986); Lakeside Bridge & Steel Co. v. Mountain State Construction Co., Inc., 597 F.2d 596, 598 (7th Cir. 1979), cert denied, 445 U.S. 907, 63 L. Ed. 2d 325, 100 S. Ct. 1087 S.C t. 1087 (1980). Thus, this court must consider whether an Illinois court could exercise jurisdiction over ATX according to Illinois law.

 In Illinois, the party seeking to establish personal jurisdiction over a nonresident defendant must satisfy a two-part test. He must show that personal jurisdiction is proper under the Illinois long-arm statute, Ill.Rev.Stat. ch. 110, para. 2-209 (1989) and that the exercise of jurisdiction would be proper under the due process requirements of the United States Constitution.

 In order to sustain its burden of proof, a plaintiff must make a prima facie showing that personal jurisdiction over the defendant is proper. O'Hare Int'l Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971). In deciding a motion to dismiss for lack of personal jurisdiction, the court may consider any affidavits submitted by either side but all factual disputes are to be resolved in favor of the party seeking jurisdiction. Saylor v. Dyniewski, 836 F.2d 341, 342 (7th Cir. 1988); Deluxe Ice Cream Co. v. R.C.H. ...


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