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06/07/96 INTERNATIONAL BUSINESS MACHINES CORP. v.

June 7, 1996

INTERNATIONAL BUSINESS MACHINES CORP., AND SCRIBCOR, INC., PLAINTIFFS-APPELLANTS,
v.
MARTIN PROPERTY & CASUALTY INSURANCE AGENCY, INC., AN ILLINOIS CORPORATION; ARNOLD SKOLLER, AN INDIVIDUAL; ERNIE SKOLLER, AN INDIVIDUAL; AND JACK EBERT, AN INDIVIDUAL, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. Honorable John A. McElligott, Judge Presiding.

Presiding Justice Zwick delivered the opinion of the court: McNAMARA, J. and Rakowski, J., concur.

The opinion of the court was delivered by: Zwick

PRESIDING JUSTICE ZWICK delivered the opinion of the court:

This case presents the question of whether Illinois courts may exercise personal jurisdiction over a director and officer of an Illinois corporation who resides outside the State. The trial court ruled that such a person is not subject to jurisdiction in Illinois with regard to his official corporate duties pursuant to the so-called "fiduciary shield doctrine." We now reverse.

Plaintiff, International Business Machines, Inc. (IBM), owns One IBM Plaza, a high-rise building located in Chicago. Plaintiff, Scribcor, Inc., manages One IBM Plaza on behalf of IBM. Defendant, the Martin Property & Casualty Insurance Agency, Inc. (the Martin Agency), was formed in 1992 as an Illinois business corporation. Defendant, Arnold Skoller (Skoller), was the president and a director of that corporation. The remaining defendants are no longer part of this appeal.

Plaintiffs' complaint alleges that, in March of 1992, Skoller met in Chicago with James Lannon, the general manager of Scribcor, to discuss the Martin Agency's rental of space in One IBM Plaza. On or about April 3, 1992, IBM entered into an agreement to lease Suite 2616 to the Martin Agency. The term of the lease began May 1, 1992, and continued through April 30, 1997. The annual rent was agreed to be $18,066.24. Skoller signed the lease as president on behalf of the Martin Agency. The Martin Agency subsequently took possession of the premises. Plaintiffs' complaint alleges that, in January or February of 1993, while the property was still under lease, Skoller and the other individual defendants dissolved the Martin Agency and surreptitiously removed corporate assets from the leased premises, including furnishings and equipment. On May 1, 1993, the Illinois Secretary of State dissolved the Martin Agency because the company failed to file its first annual report. Plaintiffs allege, in part, that Skoller and the other individual defendants wrongfully dissolved the Martin Agency by failing to give them statutory notice of the corporation's dissolution. They also allege that the individual defendants distributed the Martin Agency's assets to themselves, to the detriment of the corporation's creditors.

On March 11, 1993, plaintiffs filed their complaint in the circuit court seeking possession of the premises, past and future rent payments and damages for the individual defendant's alleged violations of the Business Corporation Act of 1983. 805 ILCS 5/8.65(a) (West 1994). The defendants failed to appear in the circuit court to answer the claims brought against them. The trial court entered default judgments on November 9, 1993.

On July 6, 1994, Skoller, together with the other individual defendants, filed a petition to vacate the judgments pursuant to the terms of section 2-1401 (735 ILCS 5/2-1401 (West 1994)), and to dismiss the case. The petition and its supporting documents asserted that the judgments against the individual defendants were void because the court lacked personal jurisdiction over them. In support of their position, the defendants invoked the fiduciary shield doctrine, claiming that their only contact with Illinois was as a result of their affiliation with the Martin Agency and that, as such, they were beyond the fair reach of Illinois courts.

The trial court granted the individual defendants' section 2-1401 motion and dismissed the plaintiffs' claims against the individual defendants. While plaintiffs have not contested the court's ruling with respect to defendants Ernie Skoller and Jack Ebert, plaintiffs seek reversal of the court's decision with regard to defendant Arnold Skoller.

We begin our analysis by noting that Skoller's motion challenging jurisdiction was timely filed. It is a well-settled principal of the common law that a void judgment can be attacked at any time, directly or collaterally. Vulcan Materials Co. v. Bee Construction Co., 96 Ill. 2d 159, 449 N.E.2d 812, 70 Ill. Dec. 465 (1983); Lakeview Trust & Savings Bank v. Estrada, 134 Ill. App. 3d 792, 480 N.E.2d 1312, 89 Ill. Dec. 569 (1985).

From the facts alleged, it is clear that the defendant is a nonresident who may be subjected to the in personam jurisdiction of the Illinois courts only through the State's long-arm statute. 735 ILCS 5/2-209 (West 1992). It is the plaintiffs who carry the burden of establishing a prima facie basis upon which jurisdiction over the defendant can be exercised. R.W. Sawant & Co. v. Allied Programs Corp., 111 Ill. 2d 304, 489 N.E.2d 1360, 95 Ill. Dec. 496 (1986). In considering a challenge to personal jurisdiction, conflicts between a 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., 136 Ill. App. 3d 1084, 483 N.E.2d 1291, 91 Ill. Dec. 656 (1985); Kutner v. DeMassa, 96 Ill. App. 3d 243, 421 N.E.2d 231, 51 Ill. Dec. 723 (1981). Since the trial court did not hold an evidentiary hearing on the defendant's motion attacking its jurisdiction, our review of the issue is de novo. Mandalay Associates Ltd. Partnership v. Hoffman, 141 Ill. App. 3d 891, 491 N.E.2d 39, 96 Ill. Dec. 225 (1986).

We apply a two-step analysis to determine whether the court acquires personal jurisdiction pursuant the long-arm statute. R.W. Sawant & Co., 111 Ill. 2d at 311. The first step is to determine if jurisdiction is proper under the specific language used by section 2-209. If the answer is no, the inquiry ends; but if jurisdiction is found to be proper under the statute, then we reach the second step and determine whether the exercise of jurisdiction comports with due process of law. E.A. Cox Co. v. Road Savers Int'l Corp., 271 Ill. App. 3d 144, 148, 648 N.E.2d 271, 207 Ill. Dec. 815 (1995).

Subsection 2-209(a) of the long-arm statute lists activities which may trigger personal jurisdiction in Illinois. Plaintiffs rely upon the following relevant statutory language:

"Any person, whether or not a citizen or resident of this State, who in person or through an agent does any acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State ...


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