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Eastern Division A.L.F. Uno S.P.A, Inc. v. Gavartin

January 25, 2007

EASTERN DIVISION A.L.F. UNO S.P.A, INC., AN ITALIAN CORPORATION, PLAINTIFF,
v.
LEON GAVARTIN, AN INDIVIDUAL, IZA GAVARTIN, AN INDIVIDUAL, IMPORT ENTERPRISES OF ILLINOIS, INC., AN ILLINOIS CORPORATION, AND IMPORT ENTERPRISES, INC., A MICHIGAN CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge

MEMORANDUM OPINION AND ORDER

On May 18, 2006, Plaintiff A.L.F. Uno S.p.A. ("ALF") filed the present three-count Complaint alleging breach of contract, unjust enrichment, and account stated against Defendants Leon Gavartin, Iza Gavartin, Import Enterprises of Illinois, Inc. ("Import Illinois"), and Import Enterprises, Inc. ("Import Michigan") based on diversity jurisdiction. See 28 U.S.C. § 1332. Before the Court is Iza Gavartin's and Import Michigan's (the "Michigan Defendants") Motion to Dismiss ALF's Complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).*fn1 For the following reasons, the Court denies the Michigan Defendants' motion.

BACKGROUND

ALF is an Italian corporation with its principal place of business in Cordignana, Italy.

(R. 1-1, Compl. ¶ 2.) ALF manufacturers and sells Italian furniture to buyers worldwide. (Id.) Import Michigan is a Michigan corporation with its principal place of business in Michigan. (Id. ¶ 4.) Import Michigan specializes in the sale of furniture. (Id.) Iza Gavartin is a citizen of the State of Michigan. (Id. ¶ 6.)

Prior to 1999, Defendants began purchasing furniture from ALF pursuant to an invoicing process. (Id. ¶ 13.) In early 2002, Defendants fell behind in their payments to ALF on outstanding invoices. (Id. ¶ 14.) ALF alleges that thereafter Defendants promised that they would pay ALF's outstanding invoices. (Id.) Further, ALF alleges that based on this promise, ALF maintained its business relationship with Defendants and continued to ship merchandise to them. (Id.) From October 2003 through March 2004, ALF issued various invoices to Defendants for the sale of furniture for which Defendants did not pay. (Id. ¶¶ 15-17.) Plaintiff attached the invoices that it issued to Defendants to the Complaint, and listed them in Paragraph 16 of the Complaint. (Id. ¶ 16.) Based on these invoices, ALF alleges that Defendants owe it $836,544.00. (Id. ¶ 17.)

PROCEDURAL STANDARD

A Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction tests whether a federal court has personal jurisdiction over a defendant. See Fed.R.Civ.P. 12(b)(2). In ruling on a motion to dismiss pursuant to Rule 12(b)(2), the Court may consider matters outside of the pleadings. Purdue Research Found. v. Sanofi-Synthlabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). When the Court determines a Rule 12(b)(2) motion based on the submission of written materials without holding an evidentiary hearing, the plaintiff must make a prima facie case of personal jurisdiction. Id. at 782-83; see also Central States v. Phencorp Reinsurance Co., 440 F.3d 870, 876-77 (7th Cir. 2006). The plaintiff bears the burden of establishing that personal jurisdiction exists. Central States, 440 F.3d at 876; RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). In determining whether the plaintiff has met its burden, courts must resolve all factual disputes in plaintiff's favor. Central States, 440 F.3d at 878 (court reads complaint liberally, in its entirety, and with every inference drawn in plaintiff's favor).

PERSONAL JURISDICTION STANDARD

I. Illinois Long-Arm Statute

When the Court's subject matter jurisdiction is based on diversity of citizenship -- as in the present matter -- the Court may exercise personal jurisdiction over a defendant only if personal jurisdiction would be proper in an Illinois court. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). Accordingly, the Court looks to the Illinois long-arm statute that contains a "catch-all" provision allowing Illinois state courts to assert personal jurisdiction to the maximum extent permitted by the Illinois and United States Constitutions. See 735 ILCS 5/2-209(c); see also Hyatt, 302 F.3d at 714. While the United States and Illinois Constitutions do not contain the exact same due process guarantees, the Seventh Circuit explains that "there is no operative difference between the limits imposed by the Illinois Constitution and the federal limitations on personal jurisdiction." Hyatt, 302 F.3d at 715. As such, the Court may move directly to the federal constitutional inquiry, namely, whether exercising personal jurisdiction over the Michigan Defendants complies with federal due process protections. Id. at 714-15.

II. Minimum Contacts

The federal test for personal jurisdiction requires that a defendant 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.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citations omitted). "[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958). This "purposeful availment" standard ensures that a nonresident defendant will not be forced to litigate in a jurisdiction as a result of random contacts with the forum or the unilateral activity of the plaintiff. Burger King v. Rudzewicz, 471 U.S. 462, 474-75, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); see also Hanson, 357 U.S. at 253 ("The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State").

The Supreme Court has labeled two types of jurisdiction -- general and specific -- that minimum contacts can establish. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); see also Hyatt Int'l, 302 F.3d at 713. General jurisdiction exists when the defendant has "continuous and systematic" contacts with the forum state. Helicopteros Nacionales de Colombia, 466 U.S. at 416; Hyatt Int'l, 302 F.3d at 713. If such contacts exist, "the court may exercise personal jurisdiction over the defendant even in cases that do not arise out of and are not related to the defendant's forum contacts." Hyatt Int'l, 302 F.3d at 713. On the other hand, specific jurisdiction is a more limited assertion of jurisdiction and exists for controversies that "arise out of" or "relate to" defendants' forum contacts. Id. Here, ALF contends ...


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