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ARENA FOOTBALL LEAGUE, INC. v. ROEMER

September 10, 1996

ARENA FOOTBALL LEAGUE, INC., as licensee of Gridiron Enterprises, Inc., an Illinois corporation, Plaintiff,
v.
E. GUY ROEMER, ROEMER AND FEATHERSTONHAUGH, P.C., and JARDINE INSURANCE AGENCY-MICHIGAN, INC., Defendants.



The opinion of the court was delivered by: BUCKLO

MEMORANDUM OPINION AND ORDER

 On March 27, 1996, plaintiff, Arena Football League, Inc. ("AFLI"), filed a four count complaint against defendants, E. Guy Roemer, Roemer & Featherstonhaugh, P.C. ("R&F"), and Jardine Insurance Agency-Michigan, Inc. ("Jardine"), alleging that defendants counseled it to misrepresent facts in its application for workers' compensation insurance for its football teams that was filed in Delaware in 1993. AFLI sets forth counts for malpractice, breach of fiduciary duty, and negligent misrepresentation. All defendants have filed motions to dismiss arguing that this court lacks personal jurisdiction over them and is not the proper venue. Mr. Roemer and R&F alternatively request that I transfer this lawsuit to the Northern District of New York. For the reasons discussed below, Jardine's motion to dismiss is granted; and Mr. Roemer and R&F's motion to dismiss, or in the alternative, to transfer is denied.

 AFLI bears "the burden of establishing a prima facie case for personal jurisdiction." Michael J. Neuman & Associates, Limited v. Florabelle Flowers, Incorporated, 15 F.3d 721, 724 (7th Cir. 1994). The allegations in AFLI's complaint "are to be taken as true unless controverted by the defendants' affidavits; and any conflicts in the affidavits are to be resolved in [its] favor." Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987). I may exercise jurisdiction over the defendants if such jurisdiction satisfies the due process requirements of the United States and Illinois Constitutions. Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir. 1995), cert. denied, 135 L. Ed. 2d 1047, 116 S. Ct. 2523 (1996).

 Jardine

 The transaction underlying the complaint is the submission in Delaware of the application for workers' compensation insurance ("Application"). "When the defendant's activities in the state with respect to the transaction underlying the litigation serve as the basis for jurisdiction, the assertion of jurisdiction is said to be 'specific.'" Wilson v. Humphreys (Cayman) Limited, 916 F.2d 1239, 1244 (7th Cir. 1990), cert. denied sub nom Humphreys (Cayman) Limited v. Wilson, 499 U.S. 947, 113 L. Ed. 2d 468, 111 S. Ct. 1415 (1991). Whether I may exercise specific jurisdiction over Jardine depends on whether Jardine "purposefully availed itself of the privilege of conducting activities within [Illinois], thus invoking the benefits and protections of its laws. ... It should have reasonably anticipated being haled into court there." Id. (citations omitted).

 AFLI is a non-for-profit membership corporation organized in 1991 under the laws of Delaware. AFLI had its principal office in Des Plaines, Illinois until 1994, when it moved the office to Fort Lauderdale, Florida. Jardine, a Michigan corporation, had its principal place of business in Michigan. Jardine does not maintain offices, agents, or brokers in Illinois; has no telephone listing in Illinois; does not advertise in Illinois; and does not own property in Illinois. Balmes Aff. at PP 14-17.

 AFLI alleges that Jardine prepared the Application. Jardine disagrees, stating that "it does not complete applications for insurance, but requires that insureds complete them." Balmes Aff. at P 8. Jardine alleges that "Higley completed the Delaware [Application] and faxed it to [Mr. Balmes] in Michigan." Id. at P 9. Mr. Higley also verified the accuracy of and signed the Application. Id. at P 12. Jardine further declares that "at no time during the efforts to secure Delaware worker's compensation coverage for [AFLI] or its member teams did [Mr. Balmes] or any representative of Jardine travel to Illinois." Id. at P 13. *fn2"

 "The fact that an Illinois corporation is affected by the acts of a nonresident clearly is not sufficient to meet due process requirements." Heritage House Restaurants, Inc. v. Continental Funding Group, Inc., 906 F.2d 276, 284 (7th Cir. 1990). AFLI neither alleges in its complaint nor declares in any affidavit that Jardine reached out to AFLI in Illinois by soliciting AFLI's business, initiating telephone calls, or sending mail or telefaxes. See id. at 283-84. AFLI, therefore, has not shown that Jardine established contacts with Illinois sufficient to warrant exercising specific jurisdiction over it. Jardine's motion to dismiss is, accordingly, granted.

 Mr. Roemer and R&F

 Mr. Roemer is licensed to practice law in New York and Florida and is domiciled in New York. He was a senior partner at R&F, which was organized as a professional corporation under the laws of New York and maintained its principal office in New York. In fall, 1991, when AFLI had its principal office in Illinois, it retained Mr. Roemer as its general counsel. Mr. Roemer and R&F argue that AFLI does not establish facts indicating that I have jurisdiction over them on the basis of any connection between themselves on the one hand and Illinois on the other hand in relation to the transaction underlying the complaint, i.e., the submission of the Application in Delaware. I may, however, exercise jurisdiction over Mr. Roemer and R&F based on their overall activities in Illinois. "When the defendant's overall activity in the state, not simply its actions with respect to the underlying transaction, are the basis [for jurisdiction], the jurisdiction is said to be 'general.'" Wilson, 916 F.2d at 1244. It is proper to exercise general jurisdiction over a non-resident defendant that maintained "continuous and systematic general business contacts" in Illinois. Id. at 1245.

 As general counsel to AFLI, Mr. Roemer and R&F

 
provided numerous general legal services to [AFLI], as well as advice to [AFLI] on numerous issues. Among other things, Roemer, in late 1991, reincorporated [AFLI] as a non-for-profit corporation in Delaware; developed extensive bylaws for the new [AFLI] entity; developed agreements for the merchandising of [AFLI] products; and, drafted a new license agreement which was entered into between Gridiron *fn3" and the reincorporated [AFLI]. Additionally, between the beginning of 1992 and the fall of 1993, Roemer was appointed to [AFLI's] Ad Hoc Committee on Worker's Compensation and Roemer and R&F spent considerable time dealing with worker's compensation problems being experienced by [AFLI's] member teams.

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