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Commercial Coin Laundry Systems v. Park P

November 21, 2008


The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge


This matter is before the Court on Defendant Park P, LLC's motion to dismiss for lack of personal jurisdiction or, alternatively, to transfer venue [6]. For the following reasons, the Court respectfully denies the motion [6] in its entirety.

I. Background*fn1

Plaintiff Commercial Coin Laundry Systems is an Illinois general partnership engaged in the business of installing and maintaining commercial laundry equipment in multiple-unit apartment buildings. Although Commercial Coin is headquartered in Illinois, it does business throughout the Midwest. Its collectors and maintenance personnel work substantially away from its Chicago offices. The majority of Commercial Coin's administrators, clerical staff, and sales representatives work at its Chicago offices.

On February 24, 2000, Commercial Coin, as lessee, entered into a lease agreement and rider with Cliff LeCleir, as agent for Home Apartment Development, for the purpose of installing and maintaining laundry equipment on the premises of a 254-unit apartment rental property at 1901 S. Park, Kokomo, Indiana.*fn2 The lease provided for an initial term of ten years, commencing on March 6, 2000. On April 10, 2000, Commercial Coin recorded a Lease Memorandum against the property. Paragraph 4 of the lease states that it is binding upon the lessor and all future owners of the property. Paragraph 4 further provides: "Lessor further warrants that * * * this Agreement shall be governed by the laws of the State of Illinois, with the courts of Cook County having sole and exclusive jurisdiction."

Defendant Park P, LLC is an Indiana Limited Liability Company and the current owner of the apartment complex located at 1901 S. Park Road in Kokomo.*fn3 On April 28, 2005, Defendant purchased the property on Park Road ("the property") from the prior owner. According to Plaintiff, Defendant's purchase of the property triggered the termination of the rider pursuant to Paragraph 7 of the lease agreement, which states in pertinent part:

Lessor * * * further acknowledges that any rider, addendum, or codicil to Lease shall terminate upon change of ownership or change of managing agent or change of management company or sale of property or transfer or assignment of this Lease * * * * On May 2, 2005, Defendant notified Plaintiff that it intended to close one of the laundry rooms due to mold and wanted Plaintiff to remove the laundry machines. On May 4, 2005, Plaintiff sent Defendant the following letter:

We have been told that you are the new owner or agent for the owner of [1901 S. Park Road in Kokomo, Indiana]. For the protection of our Lessors, we do not change our records or pay rent to new owners or agents unless we receive written confirmation of the change in ownership or management. Enclosed for this purpose are our standard New Lessor/Agent Verification and Tax Identification forms. Please take a moment to complete, sign, and return these forms to our office, so that we can direct all future rent payments to you.

Gabriel Naranjo filled out the attached "New Lessor/Agent Verification" and tax forms and returned both to Commercial Coin.

On June 1, 2005, Plaintiff sent Defendant a copy of the lease and stated that the "lease runs with the land and is binding upon all future owners of the property, regardless of whatever the previous owner may have informed you." On June 9, Gabriel Naranjo sent Plaintiff a letter complaining about the condition of the laundry rooms, especially the condition of the smaller laundry room. Specifically, Naranjo wrote,

It is our intention to honor the agreement that you made with the previous owner until the end of your contract. However, our impression is that the previous owner * * * ignore[ed] safety, liability, well-being, renovations, contractors, workers and residents. Our style of management is totally different and our primary concerns are liability, safety and security. We truly believe that the small laundry is nothing but a hazard. [11-7 at 2 (emphasis added).]

For approximately two years after Defendant purchased the property, Plaintiff and Defendant exchanged at least forty-three letters regarding the laundry facilities. The substance of the correspondence was as follows: (1) Plaintiff ordering Defendant to make improvements to the property and comply with the terms of the lease; (2) Defendant requesting rent payments and maintenance from Plaintiff pursuant to the terms of the lease and rider; and (3) Plaintiff refusing to make any rent payments to Defendant, citing Paragraph 3 of the lease agreement, which states that rent need not be paid when the income from the washers and dryers has not exceeded the minimum compensation requirement. Plaintiff never made any rent payments to Defendant, and Defendant never executed a new lease with Plaintiff. Additionally, on August 17, 2005, Mr. Naranjo sent a letter to Commercial Coin stating that he had "passed [the] case on to our legal department" [11-8 at 48] and then on January 23, 2006, requested that Commercial Coin direct all correspondence to Park P's legal advisor [11-8 at 56]. Finally, on July 5, 2007, Naranjo sent Commercial Coin a fax which stated, "During 25 years in the apartment management business, we have never had washers and dryers operated by us. We have never had issues that could not be resolved amicably with any laundry company." [11-8 at 62.]

On February 26, 2008, Plaintiff filed suit against Defendant for breach of contract in Cook County Circuit Court in Chicago, Illinois. That same day, Defendant filed suit against Plaintiff to quiet title and for declaratory judgment in Howard Superior Court in Howard County, Indiana. On March 31, 2008, Defendant removed the Illinois action to this Court. On April 30, 2008, Defendant filed ...

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