The opinion of the court was delivered by: BUCKLO
In 1972, Puerto Rico Franchising Corporation ("Puerto Rico") was operating several McDonald's restaurants in El Salvador pursuant to a license from McDonald's. Puerto Rico, in turn, sub-licensed Servipronto to operate the restaurants. Mr. Bukele was an employee and officer of Servipronto. He travelled to Illinois on several occasions to meet with McDonald's representatives and discuss issues surrounding the operation and physical design of the restaurants. He also attended McDonald's Hamburger University, located in Illinois, for training.
In 1978, Servipronto became McDonald's direct licensee for the operation of three El Salvador restaurants. The three license agreements were negotiated and executed in El Salvador and were written originally in Spanish. In 1981, subsequent to the completion of those agreements, Mr. Bukele again travelled to Oakbrook to meet with McDonald's executives regarding royalty delinquencies and the difficult political situation prevalent in El Salvador at that time. As a result of this meeting, McDonald's and Mr. Bukele, personally and on behalf of the corporation, agreed to a temporary reduction in royalty payments, forgiveness of some past due royalties, and other operational issues. During the 1980's, Mr. Bukele continued to have periodic contact by phone and mail with individuals at McDonald's offices in Oakbrook regarding various operational and payment issues.
Mr. Bukele concluded additional agreements with McDonald's in the 1980's and 1990's. In 1985 and again in 1987, Mr. Bukele, personally and on behalf of the corporation, signed promissory notes to McDonald's for loans and delinquent royalty payments. Furthermore, in 1989, Mr. Bukele, again personally as well as on behalf of the corporation, signed a letter agreement (the "1989 agreement") with McDonald's which permitted him to change the location of one of his restaurants and required that Mr. Bukele and Servipronto be in full compliance with all the terms of the licenses. In 1993, Mr. Bukele once again came to Illinois to discuss the extension or renewal of Servipronto's license agreements. Following that meeting, two agreements were reached involving Servipronto, Bukele, and McDonald's. In April 1994, McDonald's and Mr. Bukele signed a letter agreement
(the "1994 agreement") providing for the renewal of the restaurant licenses on the condition that the restaurants' physical appearances and facilities were upgraded. McDonald's also agreed to loan $ 1,000,000 to Mr. Bukele for the purposes of remodeling the restaurants. Finally, McDonald's gave Mr. Bukele interim approval to develop three additional restaurants in San Salvador if certain conditions were satisfied. Shortly thereafter, Mr. Bukele, individually, and McDonald's entered into a license agreement in November, 1994 for a restaurant in San Salvador located at La Calle Poniente y La Avenida Sur, Frente a Parque San Jose (the "San Jose restaurant"). The San Jose restaurant, however, ceased operations and was closed in June 1996.
In December 1995, McDonald's sent a letter to Mr. Bukele informing him that he had not complied with the requirements of the 1994 agreement. Therefore, McDonald's did not re-write the licenses for the three restaurants, but it did agree to extend the licenses until June 30, 1996 in an effort to provide Mr. Bukele and Servipronto with one last opportunity to bring those restaurants into compliance. The letter warned that McDonald's would enforce all of its rights unless the conditions set forth in the 1994 agreement were satisfied. McDonald's subsequently concluded that these conditions had not been met, and it instituted this diversity action against Mr. Bukele and Servipronto in this Court in July, 1996. McDonald's seeks an injunction prohibiting the defendants from the continued use of McDonald's systems, trademarks, service marks, and trade names and the return of all McDonald's proprietary information. It also seeks damages and a disgorgement of profits for the unauthorized use of McDonald's commercial name, trademarks, and service marks.
II. Personal Jurisdiction
On a motion to dismiss for lack of personal jurisdiction, the party asserting jurisdiction, the plaintiff in this case, bears the burden of making a prima facie showing that jurisdiction is proper. Chemical Waste Management v. Sims, 870 F. Supp. 870, 873 (N.D. Ill. 1994). When deciding such a motion, a court may accept affidavits submitted by both parties, but all factual disputes must be resolved in favor of the plaintiff. Saylor v. Dyniewski, 836 F.2d 341, 342 (7th Cir. 1988).
B. Illinois Long-Arm Statute and Due Process Considerations
In a diversity action,
a federal district court in Illinois has personal jurisdiction over a party if an Illinois state court would have personal jurisdiction. Heritage House Restaurants, Inc. v. Continental Funding Group, Inc., 906 F.2d 276, 279 (7th Cir. 1990). Under the Illinois long-arm statute, non-residents are subject to the jurisdiction of the Illinois courts if their conduct falls into one of several categories. The relevant provisions of the statute state:
(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person . . . to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any such acts:
(1) The transaction of any business within this State;
(7) The making or performance of any contract or promise substantially connected with this State;
(f) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him or her is based upon subsection (a).
735 ILCS 5/2-209(a)(1)(7)&(f). Moreover, even if jurisdiction exists under the long-arm statute, a court must determine whether the exercise of personal jurisdiction would meet the requirements of constitutional due process. Heritage House, 906 F.2d at ...