The opinion of the court was delivered by: AMY J. ST. EVE, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Grand Vehicle Works Holdings Corporation ("Grand Vehicle")
filed a seven count complaint against Defendants Thomas Frey ("Frey") and
Richard Fish ("Fish") (collectively, "Defendants") alleging breach of
contract, tortious interference with contractual relations, breach of
fiduciary duty, and unfair competition. Defendants moved to dismiss the
complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack
of personal jurisdiction. For the reasons set forth below, Defendants'
motion is denied.
Grand Vehicle is a Delaware limited liability corporation with its
principal place of business in Highland Park, Illinois. (R. 1-1, Compl.
¶ 2.) Grand Vehicle develops, markets, and sells products and
services related to the motor home industry. (Id. ¶ 8.)
Workhorse Custom Chassis ("Workhorse") is a subsidiary of Grand Vehicle
and has its principal place of business in Union City, Indiana,
(Id.) Workhorse manufactures strip chassis for the motor home
industry. (Id.) Defendants, both residents of Ohio, are former Workhorse employees who
worked in Workhorse's Union City, Indiana facility, (Id. ¶¶
3-4.) Frey served as President of Workhorse from June 1999 until January
2003, when he quit Workhorse to work for Universal Trailer Corporation
("Universal Trailer") in Cincinnati, Ohio. (Id. ¶ 10.)
Universal Trailer manufactures and sells trailers and motor homes,
(Id. ¶ 21.) Fish served as Workhorse's Vice President of
Marketing for Recreational Vehicles from October 2000 until August 2003,
when he also quit Workhorse to work for Universal Trailer. (Id.
Anthony Monda served as Workhorse's Director of Marketing from May 1999
until he left Workhorse in September 2003 to join Frey and Fish at
Universal Trailer. (Id. ¶ 25.) While the majority of
Workhorse employees were based in Union City, Indiana, Monda and several
other Workhorse employees worked in Highland Park, Illinois, (Andrew
Taitz Aff. ¶ 2.)
In May 2001, Grand Vehicle offered stock options to Defendants and
other key employees. (R. l-l, Compl. ¶ 16.) Defendants accepted the
offer and agreed to be bound by the Company's Stock Option Agreement,
(Id.) As a condition of their receipt of the stock options, Frey
and Fish each executed a Confidentiality and Non-Compete Agreement (the
"Frey Non-Compete Agreement" and the "Fish Non-Compete Agreement
associated with the Stock Option Agreement"), (Id. ¶ 17.)
Pursuant to these agreements, Defendants agreed to certain
post-employment restrictions in the event that they left Workhorse to
work for a competitor.*fn1 (Id. ¶ 1.)
In March 2002, Neville Dowell, a Grand Vehicle shareholder, agreed to
sell his Grand Vehicle stock to Fish. (Id. ¶ 18.) To consummate the
sale, Fish and Dowell executed a Share Purchase Agreement. (Id.)
Fish needed Grand Vehicle's consent before he could purchase the stock
from Dowell, (Id.) As a condition of Grand Vehicle's consent,
Grand Vehicle required Fish to execute an additional Confidentiality and
Non-Compete Agreement (the "Fish Non-Compete Agreement associated with
the Share Purchase Agreement") contemporaneously with the Share Purchase
Agreement, (Id.) The Share Purchase Agreement contained a forum
selection clause in which Fish agreed to submit to personal jurisdiction
in. Illinois for any disputes arising out of that agreement. (Share
Purchase Agreement ¶ 6(c).)
Grand Vehicle sued Defendants for a variety of claims arising out of
the Frey Non-Compete Agreement and both Fish Non-Compete Agreements.
Defendants argue that the Court lacks personal jurisdiction over them.
This is the issue currently before the Court.
When a defendant files a motion to dismiss for lack of personal
jurisdiction, the plaintiff bears the burden of demonstrating the
existence of personal jurisdiction over the defendant. RAR, Inc. v.
Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). The
plaintiff, however, "need only make out a prima facie case of
personal jurisdiction." Hyatt Int'l Corp. v. Coco, 302 F.3d 707,
715 (7th Cir. 2002). Accordingly, in determining whether personal
jurisdiction exists, "[t]he allegations in the complaint are to be taken
as true unless controverted by the defendants' affidavits; and any
conflicts in the affidavits are to be resolved in [the plaintiff's]
favor." Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987).
Because each count of a complaint is ordinarily a separate statement of a
claim, the plaintiff must establish that personal jurisdiction exists as
to each count. Beveridge v. Mid-West Mgmt., Inc., 78 F. Supp.2d 739,
744 (N.D. Ill. 1999). An Illinois federal court has personal jurisdiction over a nonresident
party "only if an Illinois state court could have such jurisdiction."
RAR, 107 F.3d at 1275. The Illinois long-arm statute permits the
Court to exercise personal jurisdiction over a party to the extent
allowed under federal due process.*fn2 See 735 Ill. Comp. Stat.
5/2-209(c); Dehmlow v. Austin Fireworks, 963 F.2d 941, 945 (7th
Cir. 1992). In addition, the Court must ensure that the due process
guarantees of the Illinois Constitution are satisfied before exercising
personal jurisdiction over a nonresident defendant. RAR, 107
F.3d at 1276; Jamik, Inc. v. Days Inn of Mount Laurel,
74 F. Supp.2d 818, 821 (N.D. Ill, 1999). Because the Seventh Circuit has held
that "there is no operative difference between the limits imposed by the
Illinois Constitution and the federal limitations on personal
jurisdiction," the Court will address a single due process inquiry.
Hyatt, 302 F.3d at 715; see also Janmark, Inc. v.
Reidy, 132 F.3d 1200, 1202 (7th Cir. 1997); Klump v.
Duffus, 71 F.3d 1368, 1371 n.4 (7th Cir. 1995).
Federal due process requires that the defendant have "certain minimum
contacts with [the state] such that the maintenance of the suit does not
offend `traditional notions of fair play and substantial justice,'"
RAR, 107 F.3d at 1277 (quoting International Shoe Co. v.
Washington, 326 U.S. 310, 316, 66 S. Ct, 154, 158 (1945)). The
minimum contacts standard varies depending on whether the plaintiff
asserts general or specific jurisdiction. This case involves specific jurisdiction.*fn3
Specific jurisdiction exists in cases "arising out of or related to the
defendant's contacts with the forum." Helicopteros Nacionales de
Columbia, S.A. v. Hall, 466 U.S. 408, 414 n.8, 104 S.Ct. 1868, 1872
n.8 (1984), In specific jurisdiction cases, a defendant's minimum
contacts with Illinois must "result from the actions by the defendant
himself that create a substantial connection with the forum state."
Burger King v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174,
2184 (1985) (citation omitted). The defendant's connection to the State
must be substantial enough that "he should reasonably anticipate being
haled into court there." World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 297, 100 S.Ct. 559, 567 (1980).
Because specific jurisdiction requires that the lawsuit "arise out of
or "be related to" a defendant's minimum contacts with the forum state,
RAR, 107 F.3d at 1277, the Court must determine whether this
lawsuit arises out of Defendants' contacts with Illinois in a manner
sufficient to warrant ...