APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION
March 31, 1997
ARONBERG GOLDGEHN DAVIS GARMISA, AN ILLINOIS GENERAL PARTNERSHIP, PLAINTIFF/COUNTER-DEFENDANT,
FEDERAL TELECOM INCORPORATED, AN ILLINOIS CORPORATION; JOHN S. MIDDLEBROOK; AND BEVERLY D. MIDDLEBROOK; DEFENDANTS/COUNTER-PLAINTIFFS, ARONBERG GOLDGEHN DAVIS GARMISA, AN ILLINOIS GENERAL PARTNERSHIP, THIRD-PARTY PLAINTIFF/APPELLANT, V. REID, PRICE CAMERON, P.A., A FLORIDA PROFESSIONAL ASSOCIATION, F/K/A REID, PRICE, CAMERON & HAFELE, P.A. AND REID, RICCA & RIGELL, P.A., A FLORIDA PROFESSIONAL ASSOCIATION, THIRD-PARTY DEFENDANTS/APPELLEES.
Appeal from the Circuit Court of Cook County. No. 94 L 02158. Honorable David G. Lichtenstein, Judge Presiding.
Zwick, J., with Greiman, P.j., and Theis, J., concurring.
Plaintiff is the law firm of Aronberg Goldgehn Davis & Garmisa, an Illinois general partnership. It appeals from an order of the circuit court of Cook County dismissing its third-party complaint against Reid, Price & Cameron, P.A., a Florida professional association, formerly known as Reid, Price, Cameron & Hafele, P.A., and Reid, Ricca & Rigell, P.A. ("the Reid firms") for lack of personal jurisdiction. Plaintiff contends that the trial court erred in determining that the Reid firms did not have sufficient contacts with Illinois to satisfy the requirements of the Illinois "long-arm" statute. 735 ILCS 5/2-209 (West 1994).
The record establishes that on August 1, 1991, plaintiff was retained by defendants, Florida residents John and Beverly Middlebrook, to file a lawsuit against a real estate developer in Florida. According to plaintiff, all legal bills pertaining to the lawsuit were to be paid by defendant Federal Telecom Incorporated ("FTI"), an Illinois corporation of which John Middlebrook was the president. Plaintiff agreed to participate as counsel as long as local Florida counsel was also retained to assist in the litigation. According to plaintiff's third-party complaint, in January 1992 the Middlebrooks retained the firm of Reid, Ricca & Rigell, P.A., as local counsel, and in January 1993 they retained Reid, Price & Cameron, P.A. Justis Reid was the managing partner of both firms. The Reid firms' responsive pleadings also confirm these facts. However, a note in plaintiff's brief claims that the parties are not in agreement as to who actually retained either law firm to represent the Middlebrooks, and in the Middlebrooks' counterclaim the Middlebrooks assert that plaintiff retained the Reid firms on their behalf. In November 1992, plaintiff decided that it would no longer act as lead counsel and recommended that Justis Reid assume the role of lead counsel. Ultimately, the Reid firms won the case. After the litigation was completed, the Middlebrooks refused to pay plaintiff for a portion of the legal services that it had provided.
In February 1994, plaintiff filed a complaint against the Middlebrooks and FTI to recover its unpaid fees. In August 1995, the Middlebrooks filed a counterclaim against plaintiff alleging professional negligence and overbilling. As part of their counterclaim, they alleged that in January 1992 plaintiff retained the Reid firms on their behalf to act as local counsel in Florida. Then, in November 1992, after continued representation by plaintiff in the Florida matter, Attorney William Yotis, employed by plaintiff, and Attorney John Riccione, employed by one of the Reid firms, advised the Middlebrooks that plaintiff was withdrawing as lead counsel and recommended that Justis Reid assume responsibility for the case. At the same time, Riccione left the Reid firms and moved to Illinois to work for plaintiff, thereby leaving Reid without anyone who was familiar with the case. In December 1995, plaintiff filed a third-party contribution action against the Reid firms.
On January 12, 1996, the Reid firms appeared specially for the limited purpose of contesting the jurisdiction of the Illinois courts and filed a motion to quash service of process and dismiss plaintiff's third-party complaint pursuant to section 2-301 of the Code of Civil Procedure. 735 ILCS 5/2-301 (West 1994). The motion asserted that because the Reid firms had no contact with the State of Illinois other than making several telephone calls and sending bills for services rendered in Florida to plaintiff, Illinois had no jurisdiction over the Reid firms.
Plaintiff responded that the Reid firms had more than minimum contacts with Illinois when they actively marketed their services in Illinois for the very purpose of being hired by plaintiff. Plaintiff claimed that it was because of the Reid firms' self-promotion that plaintiff referred the Middlebrooks to them. Plaintiff explained that in January 1992 it had hired Attorney William Yotis, who prior to that time had an ongoing business relationship with John Riccione, a Florida attorney employed by one of the Reid firms. Through his relationship with Yotis, Riccione actively promoted the Reid firms' services to plaintiff and, as a direct result, plaintiff referred the Middlebrooks to them. In December 1992, Riccione moved to Illinois where he was hired by plaintiff. He continued to work with the Reid firms as co-counsel on the Middlebrooks' case, receiving assignments from Justis Reid and instruction as to when he should return to Florida to assist with the trial. Riccione's affidavit attesting to these facts was attached to plaintiff's response. Plaintiff's response also directed the court's attention to the fact that during the Florida lawsuit, the Reid firms sent correspondence and bills and made numerous telephone calls to plaintiff. Plaintiff also noted that it paid the Reid bills with checks drawn on an Illinois bank as a disbursement on behalf of FTI.
Citing Ores v. Kennedy, 218 Ill. App. 3d 866, 161 Ill. Dec. 493, 578 N.E.2d 1139 (1991) and Culligan International v. Wallace, Ross & Sims, 273 Ill. App. 3d 230, 208 Ill. Dec. 871, 650 N.E.2d 565 (1995), plaintiff contends that because the Reid firms actively solicited business from plaintiff, sent numerous bills to plaintiff, received payments from plaintiff drawn on Illinois banks, and frequently consulted plaintiff by telephone or correspondence about the management of the Florida litigation, the Reid firms had submitted themselves to Illinois jurisdiction.
The Illinois "long-arm" statute provides that an individual who is not a resident or citizen of Illinois submits himself to Illinois jurisdiction if he transacts any business within the State, commits a tortious act within the State or makes or performs any contract or promise substantially connected with the State. 735 ILCS 5/2-209(a) (West 1994). The statute also provides that Illinois courts may exercise jurisdiction "on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States." 735 ILCS 5/2-209(c) (West 1994). The Culligan court summarized the criteria utilized in determining whether a trial court's assertion of jurisdiction over a nonresident satisfies due process as follows:
"(1) whether the nonresident defendant had 'minimum contacts' with the forum State such that it had 'fair warning' that it may be required to defend there; (2) whether the action arose out of or relates to the defendant's contacts with the forum; and (3) whether it is reasonable to require the defendant to litigate in the forum State." Culligan, 273 Ill. App. 3d at 231, citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-78, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985).
The first criterion is satisfied. The Reid firms had sufficient "minimum contacts" with Illinois such that they had "fair warning" that they may be required to defend themselves here. The "fair warning" requirement is satisfied if a defendant:
"'purposefully directed' his activities at Illinois residents; reached out beyond one state to create continuing relationships and obligations with citizens of another state; or purposefully derived benefit from his interstate activities." Ores, 218 Ill. App. 3d at 872.
Riccione's affidavit established that as an employee of one of the Reid firms, he actively marketed their services to plaintiff for the purpose of obtaining business for the Florida firms. The record indicates that after obtaining the Middlebrooks as clients, the Reid firms continually communicated with plaintiff about the status of the case and were required to submit all bills to plaintiff. These bills were then paid by FTI, an Illinois corporation. Clearly, the Reid firms purposefully derived financial benefit from their activities with plaintiff. The fact that the Middlebrooks, as Florida residents, were technically the employers of both law firms, does not change our analysis. If it were not for the Reid firms' solicitation of business from plaintiff, they would never have represented the Middlebrooks. This fact is supported by the Middlebrooks' assertion in their counterclaim that it was plaintiff which had retained the Reid firms to represent them.
With respect to the second criterion, we find that as in Ores, the "essence" of the third-party plaintiff's complaint arose out of the Reid firms' contacts with Illinois, that is, the origin of their employment by the Middlebrooks, their ongoing relationship with plaintiff during the litigation, and the nature and quality of their activities as local counsel while plaintiff acted as lead counsel. Ores, 218 Ill. App. 3d at 873-74. Further, the Middlebrooks' counterclaim specifically asserted that the Reid firms' fees were increased by reason of plaintiff's misconduct.
Once "purposeful availment" has been shown, the exercise of Illinois jurisdiction is presumptively reasonable and it becomes the nonresident's burden to present compelling reasons as to why the exercise of jurisdiction is unreasonable. Culligan, 273 Ill. App. 3d at 232.
To determine reasonableness, a court must consider Illinois' interest in resolving the controversy, the plaintiff's interest in obtaining relief and the interests of the States involved in the efficient judicial resolution of the dispute. Culligan, 273 Ill. App. 3d at 232-33. Public policy in Illinois favors contribution and the litigating of contribution actions in the same proceeding as the injured party's claim. Ores, 218 Ill. App. 3d at 874. We find that here, as in Ores, Illinois has a substantial interest in resolving plaintiff's contribution action which arose from the claim of plaintiff, an Illinois law firm, for attorney fees and the Middlebrooks' counterclaim alleging that plaintiff had committed malpractice. Ores, 218 Ill. App. 3d at 874. Further, in light of the common facts, parties and witnesses, including employees of the Reid firms who will be called to testify in the litigation of the counterclaim against plaintiff, we find that the Reid firms have presented no compelling reasons for concluding that the exercise of jurisdiction in Illinois is unreasonable.
Accordingly, the order of the circuit court of Cook County is reversed and the cause remanded for further proceedings.
Reversed and remanded.
Zwick, J., with Greiman, P.J., and Theis, J., concurring.
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