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Performance Network Solutions, Inc., Corporation, Counterweight, Inc., Corporation, Eric S. Perkins, William v. Cyberklix Us

February 17, 2012

PERFORMANCE NETWORK SOLUTIONS, INC., CORPORATION, COUNTERWEIGHT, INC., CORPORATION, ERIC S. PERKINS, WILLIAM
PERKINS, AND JESSE KORN, PLAINTIFFS-APPELLANTS,
v.
CYBERKLIX US, INC., A DELAWARE CORPORATION, CYBERKLIX, INC., A FOREIGN CORPORATION, AND JOHN MENEZES,
DEFENDANTS-APPELLEES.



Appeal from the an Illinois Circuit Court of an Illinois Cook County. No. 09 L 007948 Honorable Jennifer Duncan-Brice, Judge Presiding.

The opinion of the court was delivered by: Robert E. Gordon

PRESIDING JUSTICE ROBERT E. GORDON delivered the judgment of the court, with opinion.

Justices Garcia and Palmer concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiffs, Performance Network Solutions, Inc. (PNS), Counterweight, Inc., both Illinois corporations, and three individuals Eric Perkins, William Perkins, and Jesse Korn (collectively the Illinois plaintiffs), filed a three-count complaint in the circuit court of Cook County against defendants, Cyberklix US, Inc., a Delaware corporation, Cyberklix, a Canadian corporation, and an individual, John Menezes. The complaint alleges breach of contract and seeks a declaratory judgment and injunctive relief. Defendants filed a motion to quash service and dismiss the complaint pursuant to section 2-619(a)(3) of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(3) (West 2008)), claiming that they had filed an earlier action in a Canadian court involving the same parties and that the claims arose out of the same transactions. The trial court granted defendants' motion.

¶ 2 On appeal, the Illinois plaintiffs claim that the trial court erred in dismissing their complaint under section 2-619(a)(3) of the Code, which allows dismissal when "there is another action pending between the same parties for the same cause" (735 ILCS 5/2-619(a)(3) (West 2008)), because they were not properly served with process in the Canadian court, and as a result there was no prior action pending. The Illinois plaintiffs do not claim that a section 2-619(a)(3) motion to dismiss does not apply to a Canadian court proceeding. We affirm.

¶ 3 I. BACKGROUND

¶ 4 A. The Parties

¶ 5 Plaintiff PSN is an Illinois corporation that designs computer security software with its principal place of business in Chicago. Plaintiff Eric Perkins, a resident of the State of Wisconsin, is the president of PNS. Plaintiffs William Perkins and Jesse Korn are residents of the State of Illinois and employees of PNS. Plaintiff Counterweight, Inc., is an Illinois corporation, whose shareholders and employees include Eric, William and Jesse.

¶ 6 Defendant Cyberklix US, Inc., is a Delaware corporation with its principal place of business in Chicago. Cyberklix US is a wholly owned subsidiary of Cyberklix, Inc., a Canadian corporation with its principal place of business in Ontario, Canada. Cyberklix US and Cyberklix also design computer security software. Defendant John Menezes, is the president and chief operating officer of Cyberklix.

¶ 7 B. Procedural History

¶ 8 1. The Canadian Lawsuit

¶ 9 On June 1, 2009, Cyberklix US and Cyberklix filed a "Statement of Claim" (Claim) in the superior court of justice located in Ontario, Canada, against the Illinois plaintiffs. According to the Claim, on May 21, 2008, Cyberklix US, PNS, and Eric entered into an "asset sales agreement" (Agreement) in the State of Illinois whereby Cyberklix US agreed to buy, and PNS agreed to sell to Cyberklix US, certain assets of PNS. A copy of the notice of the Claim, dated June 1, 2009, is included in the record and addressed to PNS, Counterweight, Eric, William and Jesse.

¶ 10 Pursuant to the Agreement, Cyberklix agreed to pay an initial sum in the amount of $700,000 to PNS on a specified "closing date," defined in the Agreement as May 27, 2008. Cyberklix also agreed to pay a second and final sum in the amount of $300,000 by the first anniversary of the closing date. PNS and Eric agreed to non-competition and confidentiality provisions, prohibiting them from disclosing or using confidential information developed by PNS and Eric, and prohibiting them from engaging in competition with Cyberklix US or Cyberklix for a period of four years commencing May 21, 2008.

¶ 11 Also pursuant to the Agreement, Eric agreed to enter into an employment agreement with Cyberklix US, in which he was to be employed for a period of two years as a chief technical officer unless otherwise terminated. The Agreement also provided that Cyberklix was obligated to offer William and Jesse employment positions with Cyberklix US, as office manager and director of application delivery, respectively.

¶ 12 According to the Claim, Cyberklix paid the initial sum of $700,000. William and Jesse were both hired by Cyberklix US on May 27, 2008. Eric terminated his employment on February 5, 2009. William terminated his employment with Cyberklix US on February 27, 2009, and Jesse terminated his employment on March 27, 2009. Counterweight was incorporated in the State of Illinois on February 24, 2009. After its incorporation, Eric, William, and Jesse became shareholders and employees of Counterweight.

ΒΆ 13 Also according to the Claim, before the first anniversary of the closing date and before Cyberklix paid the second and final sum of $300,000, Cyberklix alleges that Counterweight was in direct competition with Cyberklix. In response, Cyberklix US and Cyberklix filed their Canadian lawsuit against ...


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