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Aasonn, LLC v. Mary J. Delaney and Performance Management Strategies

December 2, 2011

AASONN, LLC,
PLAINTIFF-APPELLANT,
v.
MARY J. DELANEY AND PERFORMANCE MANAGEMENT STRATEGIES, LLC, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County. No. 09-L-797 Honorable John T. Elsner, Judge, Presiding.

The opinion of the court was delivered by: Justice Zenoff

JUSTICE ZENOFF delivered the judgment of the court, with opinion. Justices Bowman and Hutchinson concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiff, Aasonn, LLC, appeals from the trial court's order granting the motion by defendants, Mary J. Delaney and Performance Management Strategies, LLC, to dismiss its third amended complaint for lack of personal jurisdiction. For the following reasons, we reverse and remand for further proceedings.

¶ 2 BACKGROUND

¶ 3 Aasonn sued defendants for breach of contract and fraud. Defendants moved to dismiss for lack of personal jurisdiction, pursuant to section 2-301 of the Code of Civil Procedure (Code) (735 ILCS 5/2-301 (West 2010)). The trial court initially found that it did not have jurisdiction over defendants on the breach of contract claims. With respect to the fraud claims, the court found that the pleading, though conclusory, would be a sufficient basis upon which to assert personal jurisdiction. The court granted Aasonn leave to replead three times. The operative pleading is Aasonn's third amended complaint for breach of contract and fraud.

¶ 4 We derive the following facts from the third amended complaint and the affidavits and exhibits in the record. Aasonn was an Illinois limited liability company. Delaney was a New York resident and the president of Delaney Consulting Services, LLC. Aasonn and Delaney Consulting Services-now known as Performance Management Strategies, LLC, a New York limited liability company-entered into a "Strategic Alliance Agreement" (Agreement). Pursuant to the Agreement, defendants performed consulting and implementation services related to the computer software business of SuccessFactors, Inc., a Delaware corporation with its principal place of business in California. SuccessFactors had previously contracted directly with its consultants, including Delaney, but at some point prior to March 2007, it terminated those relationships. SuccessFactors told its consultants that if they wanted to continue providing their services, they would have to contract with one of its business partners. Several of SuccessFactors' business partners made presentations to Delaney and the other consultants.

¶ 5 In particular, SuccessFactors referred Delaney to Aasonn, one of its business partners, by arranging an online meeting between Aasonn's president, Allen Peterson, and nine of SuccessFactors' consultants, including Delaney. Peterson then scheduled a "WebEx conference" with the consultants and sent the meeting information to them at their e-mail addresses, which SuccessFactors had provided to him. Following the meeting, Peterson, in Illinois, negotiated the Agreement terms with Delaney, in New York, by telephone, e-mail, and Internet conferencing. In the negotiations, Delaney apparently also took a leading role on behalf of the other eight consultants. Aasonn sought an individual contract with each of the nine consultants, but it made each contract contingent on the acceptance of the other eight consultants. Peterson sent a final copy of the Agreement, unexecuted, to Delaney on March 20, 2007. Two days later, Delaney e-mailed Peterson that she had executed the Agreement and returned it to Aasonn. She requested that Peterson execute the Agreement and send her a copy. According to Peterson, when he received the Agreement in Illinois, he "concluded the contracting process on behalf of Aasonn and sent a confirmation to Delaney."

¶ 6 Pursuant to the terms of the Agreement, Aasonn and defendants created a "strategic alliance to perform certain complementary consulting services." The initial term of the Agreement was two years, and it would be automatically renewed for successive one-year periods unless either party gave written notice of termination at least 30 days prior to the date of expiration. During the term of the Agreement, defendants were prohibited from engaging in "any business that is competitive with the types and kinds of business" conducted by Aasonn. Defendants were further restricted from using any acquired confidential information other than for the benefit of Aasonn. Aasonn acted either as a subcontractor for SuccessFactors (which referred clients to Aasonn) or as a prime contractor for clients that Aasonn or defendants secured.*fn1 Aasonn then offered assignments to defendants through "statements of work" (the record contains "new project assignment forms") setting forth the number of hours allocated toward the completion of each project and the rate of compensation. It was defendants' responsibility to manage their consulting activities within the scope of the statements of work, but any change in that scope required advance approval from Aasonn. Defendants were also required to obtain advance approval from Aasonn for any hours of work in excess of those allotted in the statements of work. Defendants were not permitted to use employees, contractors, or other agents to fulfill their contractual obligations unless Aasonn approved of such in advance. The Agreement required defendants to submit to Aasonn itemized monthly invoices, which Aasonn was to pay within 30 days of receipt. In turn, Aasonn directly billed the clients. The Agreement contained an Illinois choice-of-law provision.

¶ 7 From March 2007 through May 2009, Aasonn directed in excess of 20 projects to defendants, involving clients in New Jersey, Connecticut, New York, Texas, California, and Abu Dhabi (United Arab Emirates). Aasonn was in regular contact with defendants, and work product and communications were exchanged and reviewed by and between the parties via telephone, facsimile, e-mail, Internet messaging, and Internet connections. Defendants submitted to Aasonn, via e-mail, monthly invoices for work performed, and they contemporaneously entered into Aasonn's online project management system the details of hours worked on each project. Once Aasonn verified the number of hours invoiced with the hours entered into the project management system, Aasonn submitted to defendants electronic payment from its Illinois bank account. Defendants allegedly submitted to Aasonn false billing statements for work they did not perform on five of the projects.

¶ 8 Defendants moved to dismiss Aasonn's third amended complaint for lack of personal jurisdiction. After hearing argument, the trial court granted the motion. Aasonn timely appealed.

¶ 9 ANALYSIS

¶ 10 Aasonn argues that the trial court erred in dismissing its complaint for lack of personal jurisdiction. The plaintiff bears the burden of proving a prima facie case for jurisdiction over a nonresident defendant. MacNeil v. Trambert, 401 Ill. App. 3d 1077, 1080 (2010). Conflicts in the affidavits and pleadings are resolved in the plaintiff's favor. MacNeil, 401 Ill. App. 3d at 1080. A plaintiff's prima facie case for jurisdiction can be overcome by a defendant's uncontradicted evidence that defeats jurisdiction. MacNeil, 401 Ill. App. 3d at 1080. When, as here, the trial court decides the issue of personal jurisdiction based solely on documentary evidence, our review is de novo. MacNeil, 401 Ill. App. 3d at 1080.

¶ 11 Illinois courts may assert personal jurisdiction over a nonresident defendant only if the assertion comports with section 2-209 of the Code (735 ILCS 5/2-209 (West 2010)), known as Illinois's long-arm statute, and with the due process guarantees of both the Illinois and the United States Constitutions. Viktron Ltd. Partnership v. Program Data, Inc., 326 Ill. App. 3d 111, 117 (2001). The long-arm statute provides, in relevant part:

"(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:

(1) The transaction of any business within this State;

(2) The commission of a tortious act within ...


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