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Hab Carriers, Inc v. Arrow Truck Sales

January 25, 2011

HAB CARRIERS, INC., PLAINTIFF,
v.
ARROW TRUCK SALES, INC., MACK TRUCKS, INC.,
SCOTT TAYLOR, AND RICK MOORE, DEFENDANTS.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff HAB Carriers, Inc. ("HAB") sued Arrow Truck Sales, Inc. ("Arrow"), Arrow employees Scott Taylor ("Taylor") and Rick Moore ("Moore") (collectively "the Arrow Defendants"), and Mack Trucks, Inc. ("Mack")*fn1 in the Circuit Court of Cook County, Illinois over a dispute regarding the sale of twenty Mack trucks. Specifically, HAB alleges that: (1) the Arrow Defendants committed common law fraud (Count I); (2) the Arrow Defendants violated the Illinois Consumer Fraud and Deceptive Business Practices Act ("the Consumer Fraud Act" or "the Act") (Count II); (3) Arrow breached its contract with HAB (Count III); (4) Arrow breached its warranty (Count IV); (5) Arrow and Mack breached their warranty (Count V); and (6) Mack breached a third-party beneficiary contract (Count VI). Having removed the case to this Court, the Arrow Defendants move for summary judgment solely on Count II claiming that the alleged fraud did not occur primarily and substantially in the State of Illinois. Other motions for summary judgment on other grounds are currently pending and under consideration by the Court. Because the Court finds that the alleged fraud did not primarily and substantially occur in Illinois, the Arrow Defendants' Motion is granted.

STATEMENT OF FACTS*fn2

HAB, a for-hire motor carrier, is a corporation organized under Illinois law with its principal place of business in Willow Springs, Illinois. (Pl. 56.1 Resp. ¶ 1; Compl ¶ 1.) Arrow, a company that sells used trucks, is a Missouri corporation registered as a foreign corporation in Illinois. (Def. 56.1 Resp. ¶ 13; Compl. ¶ 2.) From approximately February of 2004 through April of 2006, HAB maintained an office at 1270 E. 12th Street in Dubuque, Iowa ("Iowa office"). (Pl. 56.1 Resp. ¶ 2.) HAB's Iowa office was in the upper level of a building that also housed a company called Quad Cities Thermo-King ("Thermo-King"). (Pl. 56.1 Resp. ¶ 3.)

I. Todd Avery's Position with HAB

HAB leased its employees through Complete Personnel Logistics, a division of Minuteman Temporary Services ("Complete Personnel"). (Pl. 56.1 Resp. ¶ 5.) Complete Personnel is located in Chicago, Illinois. (Pl. 56.1 Resp. ¶¶ 4-5.) Todd Avery ("Avery") was employed by Complete Personnel and served as General Manager of HAB from approximately January of 2004 through May of 2006. (Pl. 56.1 Resp. ¶ 6.) Since HAB's inception in 2003, Avery has been a minority owner of the company. (Pl. 56.1 Resp. ¶ 7.) During the events at issue here, Avery worked in HAB's Iowa office on weekdays, although he lived in Elizabeth, Illinois. (Pl. 56.1 Resp. ¶ 8; Def. 56.1 Resp. ¶ 1.) While Avery would spend a day on each weekend working in HAB's Willow Spring, Illinois office, the Iowa office was Avery's main place of employment and he spent the vast majority of his time working there. (Pl. 56.1 Resp. ¶ 9; Def. 56.1 Resp. ¶ 1.)

II. Avery's Initial Contact with Arrow

On April 7, 2004, Avery traveled to Kansas City, Missouri to meet with representatives of K.C. Crane, a Missouri used truck seller. (Pl. 56.1 Resp. ¶ 10.) While there, he personally inspected and test-drove three trucks. (Pl. 56.1 Resp. ¶ 11.) Although not material here, the parties dispute whether the three trucks Avery test-drove were among the twenty trucks that HAB ultimately purchased from Arrow and the trucks at issue here ("the trucks"). (Def. 56.1 Ex. C at 150:16-151:4, 158:23-159:5.; Pl. 56.1 Resp. ¶ 11.) After leaving Kansas City, Avery spoke with Rick Krueger ("Krueger") and John Dietrich ("Dietrich") of Thermo-King about his visit to Kansas City. (Pl. 56.1 Resp. ¶ 12.) On April 9, 2004, Avery drove to Thermo-King's office in Milan, Illinois and, with Dietrich and Krueger, contacted Arrow's employee and Defendant here, Scott Taylor, in Kansas City, Missouri by telephone to inquire about HAB's potential purchase of the trucks. (Pl. 56.1 Resp. ¶ 14.)*fn3 A few days later, on April 13, 2004, Avery and Taylor spoke by telephone and Avery told Taylor, who was located in Kansas City, that HAB had decided to purchase the trucks. (Pl. 56.1 Resp. ¶ 15; Compl. ¶ 33.) The parties dispute whether Avery was in Iowa or Illinois during this conversation. (Def. 56.1 Ex. D ¶ 15; Pl. 56.1 Resp. ¶ 15.) Avery was the only person who ever negotiated with Arrow on behalf of HAB about HAB's purchase of the trucks. (Pl. 56.1 Resp. ¶ 16.)

He was also the only HAB representative who ever dealt with Arrow about any issues relating to the condition of the trucks after HAB purchased them. (Pl. 56.1 Resp. ¶ 23.)

III. The trucks

The trucks HAB agreed to purchase were originally owed by PAM Transport, Inc. ("PAM").

(Pl. 56.1 Resp. ¶ 29.) PAM had purchased the trucks from Mack when the trucks were brand new. (Pl. 56.1 Resp. ¶ 29.) In that transaction, the trucks had been delivered to PAM in Tontitown, Arkansas. (Pl. 56.1 Resp. ¶ 30.) In late Summer of 2003, PAM transferred title to the trucks back to Mack, and Mack registered the trucks in the State of Pennsylvania. (Pl. 56.1 Resp. ¶ 31.) From late Summer of 2003 until approximately February of 2004, the trucks were stored at a Mack dealership in Arkansas. (Pl. 56.1 Resp. ¶ 32.) In February of 2004, after Arrow purchased the trucks from Mack, Mack transferred title to the trucks to Arrow and they were brought to Arrow's facility in Kansas City, Missouri. (Pl. 56.1 Resp. ¶¶ 33-34.)

At HAB's specific request, Arrow delivered each of the trucks from Kansas City to Thermo King's facility in Dubuque, Iowa. (Pl. 56.1 Resp. ¶ 17.) Arrow delivered the trucks in separate groups, with the first two trucks being delivered on May 12, 2004. (Pl. 56.1 Resp. ¶ 18.) Arrow delivered the rest of the trucks between May and August of 2004. (Pl. 56.1 Resp. ¶ 18.) Upon Arrow's sale of the trucks to HAB, Arrow transferred the trucks' titles to HAB and listed HAB's Dubuque, Iowa address on the titles. (Pl. 56.1 Resp. ¶ 35.) HAB subsequently registered the trucks in Iowa and obtained Iowa titles for each of them. (Pl. 56.1 Resp. ¶ 36.) HAB registered the trucks in Iowa because, according to Avery, "[t]hat's where they [the trucks] were domiciled mostly" and because "[i]t's a little bit less expensive in taxes" than in Illinois. (Pl. 56.1 Resp. ¶ 37.)

Thermo-King inspected each Truck upon its delivery to Thermo-King's facility in Iowa. (Pl. 56.1 Resp. ¶ 19.) Based on the inspection, HAB and Thermo-King discovered that Arrow had allegedly misrepresented the condition of the trucks. (Pl. 56.1 Resp. ¶ 20.) At Avery's request, Defendant Rick Moore, another Arrow employee, sent a copy of the trade terms ...


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