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Royal Extrusions Limited v. Continental Window and Glass Corp.

June 23, 2004


[6] Appeal from the Circuit Court of Cook County. No. 02 L 50110. Honorable Alexander P. White, Judge Presiding.

[7] The opinion of the court was delivered by: Justice Hall

[8]  The plaintiff, Royal Extrusions Limited, obtained a judgment against the defendant, Continental Window & Glass Corporation, in Canada. Thereafter, the plaintiff registered the judgment in the circuit court of Cook County and initiated enforcement proceedings. The defendant filed a petition pursuant to section 2-1401 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-1401 (West 2000)) to vacate the registration of the judgment. The circuit court denied the petition, and the defendant filed a timely appeal.

[9]  The sole issue on appeal is whether the Canadian court had personal jurisdiction over the defendant.

[10]   By way of background, the defendant, an Illinois corporation located in Chicago, is in the business of fabricating and installing windows with plastic frames made out of polyvinyl chloride (PVC). For reasons of profitability, the defendant operates, for the most part, within a 30-mile radius of its factory location.

[11]   The plaintiff is incorporated pursuant to the laws of Ontario, Canada and is in the business of manufacturing and selling extruded building products, such as window profiles, made from PVC. These window profiles are typically used by companies, such as the defendant, to fabricate a window into a finished product. The plaintiff has no employees or offices in Illinois.

[12]   The parties had a business relationship commencing in 1994 and until 1998 or 1999. There is no dispute as to how business between them was conducted. To purchase product, the defendant would fax an order to the plaintiff in Canada. The plaintiff would ship the order accompanied by its invoice. The defendant would then remit the payment in dollars. There was no written contract between the parties other than the terms stated on the back of each invoice.

[13]   Based on the defendant's failure to pay for product it ordered and received from the plaintiff, the plaintiff sued the defendant for breach of contract in the Canadian courts. The defendant contested jurisdiction but the Master of the Superior Court of Justice - Ontario ruled against it. That ruling was upheld on appeal by the Superior Court of Justice - Ontario.

[14]   Thereafter, the defendant chose not to participate in the Canadian proceedings. The Canadian court awarded the plaintiff a judgment in the amount of $320,530.33, which included prejudgment interest.

[15]   On February 5, 2002, the plaintiff registered the Canadian judgment in the circuit court of Cook County. The plaintiff then initiated a citation to discover assets proceeding against the defendant. On May 16, 2002, the defendant filed a section 2-1401 petition to vacate the February 5, 2002, judgment order.

[16]   In the petition, the defendant asserted that it had no notice of the registration of the judgment until it was served with the citation to discover assets. It further asserted that it had a meritorious defense to recognition of the Canadian judgment. The petition was supported by the affidavit of Nick Gutu, the defendant's president, in which Mr. Gutu averred the following facts.

[17]   In 1993, Mr. Gutu met Tony Di Ginosa, a sales representative for the plaintiff, at a trade show in Stuttgart, Germany. Mr. Gutu visited the plaintiff's facility north of Toronto, Canada, where he met with Domenic Collito, the plaintiff's president. Messrs. Collito and Di Ginosa visited the defendant's facility in Chicago. Based on the discussions that took place in Chicago, Mr. Gutu agreed to begin purchasing product from the plaintiff.

[18]   In 1996, the defendant began experiencing problems with the plaintiff's products. Based on tests of the product, the plaintiff denied there was a problem. Because of customer complaints, the defendant incurred additional costs to replace windows. Mr. Gutu estimated that approximately $700,000 of the plaintiff's product was put into $2.1 million of finished product, which was sold and installed by the defendant and which is now the subject of the complaints. Mr. Gutu also claimed that the plaintiff had breached an exclusivity agreement between the parties by selling product to the defendant's competitors.

[19]   The plaintiff filed a response to the section 2-1401 petition, supported by reports of the Canadian proceedings and the affidavits of Messrs. Collitto and Di Ginosa.

[20]   In his affidavit, Mr. Collitto stated that Mr. Gutu had visited the plaintiff's facility in Canada and that he was informed that the defendant had an interest in forming a relationship with some of the Royal Group members for the purpose of purchasing product from them.*fn1 After these meetings, the plaintiff and defendant began doing business together. From 1998 through the end of 1999, the defendant continued to order product from the plaintiff but failed to pay for the product. The amount of the unpaid invoices totaled $237,965.67.

[21]   According to his affidavit, Mr. Di Ginosa averred that after the trade show in Germany, Mr. Gutu traveled to the plaintiff's facility to discuss purchasing product and that during these discussions, the parties reached an agreement to do business together. According to Mr. Di Ginosa, Mr. Gutu made an additional visit to the plaintiff's facilities in Canada prior to the parties reaching an agreement to do business together.

[22]   Following the arguments of counsel, the circuit court issued its memorandum decision and judgment denying the ...

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