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BASIC v. FITZROY ENG'G

December 5, 1996

JOHN N. BASIC, SR., Plaintiff,
v.
FITZROY ENGINEERING, LTD., Defendant.



The opinion of the court was delivered by: NORGLE

 CHARLES R. NORGLE, SR., District Judge:

 Before the court is Defendant's motion to dismiss Plaintiff's Complaint for Declaratory Judgment. For the following reasons, the motion is granted.

 Plaintiff John N. Basic, Sr. ("Basic") is an Illinois resident. Defendant Fitzroy Engineering, Ltd. ("Fitzroy") is a foreign company incorporated in New Zealand. In his Complaint, Basic requests that this court make a variety of declarations, all of which will be discussed below.

 Fitzroy, a construction and engineering company, entered into a construction contract with Auckland (New Zealand) International Airport to construct a "quarantine waste incinerator." Fitzroy then negotiated and contracted with Basic's company, known on the date of the contract as Basic Environmental Engineering, Inc. ("BEE") (now known as Flame Engineering, Inc.), to design, manufacture, and supervise the installation of a single incinerator unit.

 However, a dispute arose between BEE and Fitzroy. Fitzroy claimed that BEE failed properly to perform portions of the parties' contract. Pursuant to the original contract between them, BEE and Fitzroy entered into an arbitration agreement. The arbitrator, bound by New Zealand civil procedure rules, entered a default order against BEE because of BEE's failure to appear at the arbitration hearing. The arbitrator entered an award in the amount of N.Z. $ 2,057,296.08 against BEE. United States District Judge Ann Claire Williams confirmed the arbitration award, pursuant to her authority under 9 U.S.C. § 207, in Fitzroy Eng'g Ltd. v. Flame Eng'g, Inc. f/k/a Basic Envtl. Eng'g, Inc., 1994 U.S. Dist. LEXIS 17781, No. 94 C 2029, 1994 WL 700173 (N.D. Ill. Dec. 4, 1994). The confirmed amount equates to an amount in excess of U.S. $ 1,345,362.

 In October of last year, Fitzroy filed a lawsuit in a New Zealand court against Basic ("NZ action"). Though the Statement of Claim (known in the U.S. as a complaint) alleges that Basic transferred the assets of BEE to another company so that he could defeat enforcement of the judgment entered by both the arbitrator and Judge Williams, the document makes clear that Fitzroy's claim does not rest on the illegal transfer. Rather, Fitzroy bases the NZ action on the negligent misrepresentations made to Fitzroy which induced Fitzroy to enter into the contract with Basic and BEE.

 On January 26, 1996, Basic entered an "Appearance Under Protest of Jurisdiction" in the NZ action. In the protest, Basic argued that the New Zealand court lacked personal jurisdiction over him. Alternatively, Basic contended that Fitzroy's action should have been dismissed based on the forum non conveniens doctrine. Three days after Basic entered the "Appearance Under Protest," Fitzroy moved to strike it. On March 20, 1996, the High Court of New Zealand entertained argument concerning both the jurisdiction and forum non conveniens issues.

 On March 22, 1996, Basic filed the instant Complaint. Basic requests that this court enter an order making six declarations. Among the sought-after declarations are: (1) that, because of issue and claim preclusion doctrines, the confirmed arbitration award against Basic and BEE/Flame Engineering, Inc. bars Fitzroy from filing the NZ lawsuit; (2) that New Zealand lacks personal jurisdiction over Basic; (3) that Illinois law provides no liability for negligent misstatements of facts by corporate officers; (4) that Fitzroy should have raised the alleged misstatements during the arbitration proceeding; (5) that Basic did not transfer assets to defeat enforcement of the confirmed arbitration award; and (6) that the NZ action is contrary to American public policy.

 On April 19, 1996, Basic informed the High Court of New Zealand of the instant action, and requested the High Court to consider this action as evidence that New Zealand was an inconvenient forum. On May 14, 1996, the High Court of New Zealand granted Fitzroy's motion to strike Basic's "Appearance Under Protest" stating, in relevant part,

 On May 21, 1996, Basic applied for a review of the High Court's May 14 ruling.

 Fitzroy now moves to dismiss Basic's Complaint for declaratory judgment on two grounds. First, Fitzroy argues that Section 2-619(a)(3) of the Illinois Code of Civil Procedure requires that the court dismiss the instant action because "there is another action pending between the same parties for the same cause." 735 ILCS 5/2-619(a)(3). Second, Fitzroy contends that the court should decline to exercise jurisdiction over the subject matter of the instant Complaint. The court will discuss each of these arguments in turn.

 II.

 A. Applicability of Section ...


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