The opinion of the court was delivered by: JAMES HOLDERMAN, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff GMAC Real Estate, LLC ("GMAC"),*fn1 invoking
this court's diversity jurisdiction pursuant to 28 U.S.C. § 1332,
filed a one count first amended complaint on February 18, 2005
alleging breach of contract against defendants Canyonside Realty,
Inc., and Canyonside Reality, Inc.'s owners and principles Bonny
J. Ross, Daniel A. Suhr, and Wanda Foster (collectively
"Canyonside"). (Dkt. No. 8). On March 15, 2005, Canyonside filed
its current motion to dismiss for lack of personal jurisdiction
and improper venue, pursuant to Rule 12(b)(2) and 12(b)(3) of the
Federal Rules of Civil Procedure ("Rules"), or in the alternative
to transfer this case, pursuant to 28 U.S.C. § 1404 or
28 U.S.C. § 1406, to the venue of the United States District Court for the
District of Idaho. (Dkt. No. 15). For the reasons set forth
below, Canyonside's motion to dismiss for lack of personal
jurisdiction and improper venue, or in the alternative to
transfer venue, is denied. BACKGROUND
According to its first amended complaint, GMAC sells franchises
to residential real estate brokerage offices throughout the
United States. (Dkt. No. 8 at ¶ 1). Under the franchise
agreement, the franchisee is allowed to use GMAC's trade and
service marks. (Id.) In return, the franchisee pays GMAC
transaction and advertising fees based on the commissions and fee
income produced by the franchisee. (Id. at ¶ 12). The agreement
provides GMAC with a right to inspect and audit the franchisee's
accounting records and books in order to determine whether the
franchisee is making the appropriate fee payment to GMAC. (Id.
at ¶ 13).
GMAC is currently a limited liability company existing under
the laws of the State of Delaware having its principle place of
business in Illinois.*fn2 (Id. at ¶ 1). Canyonside is an
Idaho company with its principle place of business in Idaho
(Id. at ¶ 3), and the individual defendants are all Idaho
citizens and residents. (Id. at ¶¶ 4-6). GMAC and Canyonside
entered into a franchise agreement in 1999 that allowed
Canyonside to operate GMAC franchises in Idaho. The individual
defendants also personally guaranteed Canyonside's obligations
for the first eighteen months following the consummation of the
1999 agreement up to a total liability of $15,000. (Id. at ¶
When GMAC and Canyonside entered into the franchise agreement
at dispute in this case in 1999, GMAC had its principle place of
business in New Jersey. The parties' briefs disagree as to when GMAC moved its offices to Illinois, GMAC stating February
4, 2002 (Dkt. No. 21 at pg. 7), Canyonside saying it was in early
2003. (Dkt. No. 16 at pg. 5).
GMAC alleges that upon auditing Canyonside's books and records,
it determined that Canyonside owed GMAC an additional $86,230.21
due to under reporting by Canyonside. (Dkt. No. 8 at ¶ 15-17).
GMAC alleges that Canyonside abandoned its contract instead of
paying GMAC so the total sum now due to GMAC is $132,906.11.
(Id. at ¶ 23).
Canyonside argues for dismissal or transfer to Idaho because it
is an Idaho business run by Idaho residents who have never
engaged in any type of contact with Illinois. It states that it
has no assets, property or bank accounts in Illinois, that all
communications creating the franchise agreement occurred between
Idaho and New Jersey, its owners and employees never traveled to
Illinois in connection with the franchise agreement, that no
payments under the agreements have ever been sent to Illinois,
all reports were created in Idaho, the audit that resulted in the
alleged under reporting of fees occurred in Idaho and it has
never sent any emails or made any telephone calls to Illinois.
(Dkt. No. 16 at pg. 6-7).
GMAC counters that this is an Illinois case because Canyonside
is attempting to break its contract with an Illinois company.
According to GMAC, Canyonside has had a series of on going
communications with GMAC when GMAC was located in Illinois
including financial reports and requests for reimbursements.
GMAC's position is that Canyonside has been doing business with
an Illinois company over an extended period of time, so
Canyonside should not be surprised when it is sued in an Illinois
court. STANDARD OF REVIEW
GMAC, as the plaintiff, "bears the burden of demonstrating the
existence of personal jurisdiction" over Canyonside. Waldock ex
rel. John H. Waldock Trust v. M.J. Select Global, Ltd., No. 03 C
5293, 2004 WL 2278549, at *2 (N.D. Ill. Oct. 7, 2004) (citing
Jennings v. AC Hydraulic A/S, 383 F.3d 546, 549 (7th Cir.
2004); RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276
(7th Cir. 1997)). "A plaintiff need only make a prima facie
showing that jurisdiction over a defendant is proper." Budget
Rent a Car Corp. v. Crescent Ace Hardware, No. 03 C 930, 2003 WL
21673932, at *2 (N.D. Ill. July 16, 2003) (citing Michael J.
Neuman & Assoc., Ltd. v. Florabelle Flowers, Inc., 15 F.3d 721,
724-25 (7th Cir. 1994)). "The court may receive and consider
affidavits from both parties" on the question of jurisdiction.
Interlease Aviation Investors II v. Vanguard Airlines, Inc.,
254 F. Supp. 2d 1028, 1031 (N.D. Ill. 2003) (citing Greenberg v.
Miami Children's Hosp. Research Inst., Inc.,
208 F. Supp. 2d 918, 922 (N.D. Ill. 2002)). The "court must also resolve all
factual disputes in the plaintiff's favor and accept as true all
uncontroverted allegations made by both plaintiffs and
defendants." Softee Mfg., LLC v. Mazner, No. 03 C 3367, 2003 WL
23521295, at *2 (N.D. Ill. Dec. 18, 2003) (citing Saylor v.
Dyniewski, 836 F.2d 341, 342 (7th Cir. 1988); Turnock v. Cope,
816 F.2d 332, 333 (7th Cir. 1987); Allman v. McGann, No. 02 C
7442, 2003 WL 1811531, at *2 (N.D. Ill. Apr. 4, 2003)).
"A Federal District Court in Illinois has personal jurisdiction
over a party involved in a diversity action only if Illinois
courts would have personal jurisdiction." Michael J. Neuman &
Assocs., Ltd. v. Florabelle Flowers, Inc., 15 F.3d 721, 724 (7th
Cir. 1994). "An Illinois state court has personal jurisdiction when the Illinois long-arm
statute, the Illinois state constitution and the due process
clause of the federal constitution authorize it." Joy v. Hay
Group, Inc., No. 02 C 4989, 2003 WL 22118930, at *3 (N.D. Ill.
Sept. 11, 2003) (citing Central States, Southeast and Southwest
Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934,
939 (7th Cir. 2000); Quantum Color Graphics, LLC v. Fan Ass'n
Event Photo GmhH, 185 F. Supp. 2d 897, 902 (N.D. Ill. 2002);
Jones v. Sabis Educ. Sys., Inc., 52 F. Supp. 2d 868, 883 (N.D.
The "Illinois long-arm statute authorizes personal jurisdiction
to the constitutional limits," so the analysis of the Illinois
long-arm statute collapses into the constitutional analysis.
Mitchell v. Shiffermiller, No. 03 C 4794, 2004 WL 178188, at *2
(N.D. Ill. Jan. 14, 2004) (citations omitted); see
735 ILCS 5/2-209(c) (proving the long-arm statute to assert jurisdiction
to the constitutional limit). Furthermore, although the Illinois
Supreme Court has made clear to note that the Illinois
constitutional due process requirement is distinct from the
federal requirement, see Rollins v. Ellwood, 565 N.E.2d 1302,
1316 (Ill. 1990), "the Seventh Circuit has suggested that since
there is no operative difference between the limits imposed by
the Illinois Constitution and the federal limitations on personal
jurisdiction . . . the two constitutional analysis blend
together." One Point Solutions, Inc. v. Webb et al., No. 04 C
3850, slip op. at 4-5 (N.D. Ill. Jan. 5, 2005) (citing Wasendorf
v. DBH Brokerhaus AG, No. 04 C 1904, 2004 WL 2872763, at *2
(N.D. Ill. Dec. 13, 2004) (internal citations omitted)).
Personal jurisdiction under the federal due process clause
requires that "the defendants must have minimum contacts with the
forum state such that the maintenance of the suit does not offend
`traditional notions of fair play and substantial justice.'"
Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 716 (7th Cir. 2002)
(quoting International Shoe Co. v. Washington, 326 U.S. 310,
316 (1945) (citations omitted)). Minimum contacts sufficient to
support the exercise of personal jurisdiction is established when
the defendants' contacts with the forum demonstrate that the
"defendants purposefully avail themselves of the privileges of
conducting activities within the forum state," Wasendorf, No.
04 C 1904, 2004 WL 2872763, at *3 (citing Hanson v. Denckla,