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03/16/95 E.A. COX COMPANY v. ROAD SAVERS

March 16, 1995

E.A. COX COMPANY, AN ILLINOIS CORPORATION, PLAINTIFF-APPELLEE,
v.
ROAD SAVERS INTERNATIONAL CORPORATION, A MICHIGAN CORPORATION, DEFENDANT-APPELLANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE KENNETH L. GILLIS, JUDGE PRESIDING.

Released for Publication April 13, 1995.

Presiding Justice Hoffman delivered the opinion of the court: Cahill and Theis, JJ., concur.

The opinion of the court was delivered by: Hoffman

PRESIDING JUSTICE HOFFMAN delivered the opinion of the court:

On June 1, 1993, the plaintiff, E.A. Cox Company, an Illinois corporation, filed a two-count complaint against the defendant, Road Savers International Corporation, a Michigan corporation, in the circuit court of Cook County. Count I of that complaint sought damages for breach of contract and count II sought damages for breach of implied warranty. Upon being served in Almont, Michigan, the defendant responded by filing a special appearance and a motion to quash service of summons contesting the court's in personam jurisdiction. On September 23, 1993, the trial court denied the defendant's motion to quash service. On October 29, 1993, the defendant filed its answer to the plaintiff's complaint along with what it characterized as seven "affirmative" defenses. On November 18, 1993, the plaintiff filed its motion seeking a summary judgment in the sum of $366,000 plus prejudgment interest. The defendant filed its response to the plaintiff's motion, the plaintiff filed a reply in further support, and the motion was heard on January 20, 1994. The trial court struck four of the defendant's affirmative defenses and entered a summary judgment in favor of the plaintiff on count I of its complaint in the sum of $366,000. On February 2, 1994, pursuant to the plaintiff's motion, the trial court entered an order permitting the plaintiff to voluntarily dismiss count II of its complaint. On February 17, 1994, the defendant filed its motion seeking a reconsideration of the order of January 20, 1994 and requesting that the court deny the plaintiff's motion for summary judgment. On March 1, 1994, the trial court denied the defendant's motion to reconsider and this appeal followed. The defendant has placed in issue the propriety of: (1) the trial court's order denying its motion to quash service of summons; and (2) the summary judgment entered against it. We will address each order separately.

In urging that the trial court's ruling on jurisdiction should be reversed, the defendant argues that the courts of Illinois lack in personam jurisdiction over it because: (1) the plaintiff's complaint fails to allege sufficient facts to establish jurisdiction; (2) the defendant did not "transact business" in Illinois within the meaning of section 2-209(a)(1) of the Code of Civil Procedure (735 ILCS 5/2-209(a)(1) (West 1992)); (3) the contract in issue lacked any substantial connection with Illinois as required under section 2-209(a)(7) of the Code of Civil procedure (735 ILCS 5/2-209(a)(7) (West 1992)); and (4) the exercise of jurisdiction over it would violate the due process clause of the fourteenth amendment of the United States Constitution. We disagree with each of the defendant's contentions on this issue.

At the time that the trial court ruled on the defendant's jurisdictional motion, it had before it the plaintiff's complaint, the defendant's motion supported by the affidavit of its president, Patrick L. O'Connor, and the plaintiff's response to the motion supported by the affidavit of its vice-president, John Cox. We summarize only the factual matters contained in those pleadings and affidavits which are pertinent to resolving the issues presented by this appeal.

The defendant is a Michigan corporation engaged in the sale of road construction equipment and maintains its principal place of business in Almont, Michigan. In late April and early May 1993, representatives of the plaintiff telephoned the defendant and requested quotes for the purchase of two pieces of road repaving equipment, a 1993 Road Master repaver and a 1993 Heat Master pre-heater, to be used by the plaintiff if it was the successful bidder on a certain repaving contract with the City of Chicago (City). The plaintiff faxed the contract specifications to the defendant and received quotes for the equipment. On May 4, 1993, the City announced that the plaintiff was the low bidder for the repaving contract but advised the plaintiff that it required an immediate inspection and testing of the repaving equipment prior to awarding the contract to determine if the equipment met its contract specifications. On May 5, 1993, the plaintiff's employees telephoned the defendant stating that the plaintiff had been the successful bidder for the repaving contract with the City and indicating that the plaintiff wished to send its representatives to Michigan to see the equipment that it was interested in purchasing. On May 7, 1993, four of the plaintiff's employees traveled to Almont, Michigan and witnessed a demonstration of the Road Master.

Following the demonstration, the plaintiff and the defendant executed an agreement in Almont, Michigan, a copy of which is attached to the plaintiff's complaint and forms the basis of the instant action. That document, dated April 29, 1993, provided, inter alia, that: the plaintiff purchased the Road Master and the Heat Master for the sum of $470,000 with a $94,000 deposit; the estimated completion dates for the equipment would be 30 days for the Heat Master and 90 days for the Road Master; the price included technicians from the defendantworking on the job site for two full weeks to familiarize the plaintiff's operators with the machines and the routine maintenance that they require; and the agreement was based upon both machines meeting the specifications of the City and in the event that they did not, the plaintiff would receive a full refund of its deposit.

On May 10, 1993, the plaintiff wire transferred its $94,000 deposit to the defendant in Michigan. On May 12, 1993, John Cox informed the defendant of the City's requirement that the equipment be inspected and tested prior to accepting the plaintiff's bid and awarding it the repaving contract. On May 12 or 14, 1993, the plaintiff wire transferred an additional $272,000 to the defendant in Michigan. On May 14 or 15, 1993, the plaintiff picked up the Road Master from the defendant in Michigan. Because the defendant did not have a Heat Master in stock, it borrowed a 1987 Heat Master from one of its other customers for demonstration purposes and delivered the machine to the plaintiff in Chicago on May 16, 1993.

On May 19, 1993, representatives of the defendant arrived at the plaintiff's premises in Chicago to perform repairs on the borrowed Heat Master to prepare for the City's inspection and testing of the equipment which was scheduled for May 24, 1993. On May 24, 1993, the City tested both pieces of equipment in Chicago. Representatives of the defendant drove the equipment from the plaintiff's premises to the test site and operated both pieces of equipment during the test. After the test, the City officials informed representatives of both the plaintiff and the defendant that the equipment failed to meet contract specifications. The defendant's representative requested that he be allowed to make certain modifications to the equipment and that it be re-tested. The City agreed.

The defendant's employees drove the equipment back to the plaintiff's premises where they performed repairs to both machines. On May 25, 1993, the defendant's employees drove the machines back to the test site and operated the equipment during the second test. After the second test, a City official notified the representatives of the plaintiff and the defendant that the equipment had again failed.

On May 27, 1993, the plaintiff received a copy of a letter from the commissioner of the City's Department of Transportation to its purchasing agent indicating that the equipment had failed to meet the City's specifications and requesting that the purchasing agent deem the plaintiff's bid non-responsive to the contract specifications and award the contract to the next lowest bidder. The plaintiff demanded that the defendant return its money, but the defendant refused and the instant action was commenced.

From the unrebutted facts alleged in O'Connor's affidavit, it is clear that the defendant is a nonresident subject to the in personam jurisdiction of the Illinois courts only through our long-arm statute in section 2-209. (735 ILCS 5/2-209 (West 1992).) Consequently, the plaintiff bore the burden of establishing a prima facie valid basis upon which jurisdiction over the defendant could be exercised. ( R.W. Sawant & Co. v. Allied Programs Corp. (1986), 111 Ill. 2d 304, 489 N.E.2d 1360, 95 Ill. Dec. 496.) In considering a challenge to personal jurisdiction, conflicts between the defendant's affidavits and the plaintiff's pleadings and affidavits will be resolved in favor of the plaintiff for purposes of determining whether a prima facie case for in personam jurisdiction has been made. ( Professional Group Travel, Ltd. v. Professional Seminar Consultants, Inc. (1985), 136 Ill. App. 3d 1084, 483 N.E.2d 1291, 91 Ill. Dec. 656; Kutner v. DeMassa (1981), 96 Ill. App. 3d 243, 421 N.E.2d 231, 51 Ill. Dec. 723.) ...


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