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Clover Techs. Group, LLC v. Oxford Aviation, Inc.

United States District Court, N.D. Illinois, Eastern Division

November 13, 2013

CLOVER TECHNOLOGIES GROUP, LLC, Plaintiff,
v.
OXFORD AVIATION, INC. and JAMES L. HOROWITZ, Defendants

Page 873

For Clover Technologies Group, LLC, Plaintiff: David A Argay, Mark Edward Wilson, Kerns, Frost & Perlman L.L.C., Chicago, IL.

For Oxford Aviation, Inc., James L Horowitz, Defendants: Alex Herran, John Scott Hoff, LEAD ATTORNEYS, Jeffrey Ford Clement, Hoff & Herran, Chicago, IL.

Page 874

MEMORANDUM OPINION AND ORDER

Ruben Castillo, Chief United States District Judge.

Plaintiff Clover Technologies Group, LLC (" Clover" ) brings this diversity action against Defendants Oxford Aviation, Inc. (" Oxford Aviation" ) and James L. Horowitz (collectively, " Defendants" ) alleging breach of contract, breach of implied warranty, common law fraud, and fraud in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (the " Consumer Fraud Act" ), 815 Ill. Comp. Stat. 505/10a(a). Presently before the Court is Defendants' motion to dismiss Clover's complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3), and for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, Defendants' motion to dismiss is granted.

RELEVANT FACTS

Clover is a Delaware limited liability company that is organized under the laws of Illinois and is headquartered in Ottawa, Illinois. (R. 1, Compl. ¶ ¶ 1, 4.) Oxford Aviation is a certified repair station under Federal Aviation Administration regulations that is organized under the laws of Maine with its principal place of business in Maine. ( Id. ¶ ¶ 2, 5.) Oxford Aviation does not have a place of business in Illinois, and it does not have any employees working within Illinois; rather, Oxford Aviation's only facility is in Oxford, Maine. (R. 14, Ex. 1, Horowitz Aff. ¶ ¶ 5-7.) Oxford Aviation's sole presence in Illinois consists of a website which is viewable in Illinois, marketing materials sent to potential Illinois customers upon their request, and contracts it enters into with Illinois citizens. ( Id. ¶ ¶ 8-25.) Oxford Aviation personnel do not travel to Illinois for business purposes. ( Id. ¶ 15.) Oxford Aviation does not directly solicit Illinois customers. ( Id. ¶ 25.) All services Oxford Aviation provides to customers are performed in Maine. ( Id. ) Horowitz is Oxford Aviation's president and a citizen and resident of Maine. (R. 1, Compl. ¶ ¶ 2, 6.) All of Horowitz's communications with Clover were made while he was physically present in Maine. (R. 14, Ex. 1, Horowitz Aff. ¶ 31.)

Page 875

Clover contacted Defendants to discuss refurbishing work Clover sought for its aircraft. (R. 1, Compl. ¶ 2.) Clover's pilot, Nate Elliott, identified Oxford Aviation as a potential service provider through its website, which lists specific attributes of the services Oxford Aviation provides. (R. 25, Ex. 1, Elliott Aff. ¶ 4.) Elliott initiated contact by e-mailing a " Web Quote Request" to Oxford Aviation. (R. 14, Ex. 1, Horowitz Aff. ¶ 30.) Horowitz responded to the request by making a phone call to Elliott. (R. 25, Ex. 1, Elliott Aff. ¶ 5.) Elliott later contacted Horowitz by phone on behalf of Clover. ( Id. ) Oxford Aviation mailed materials to Clover and delivered to Clover oral sales pitches over the telephone. (R. 1, Compl. ¶ 10.) As part of these marketing materials and sales pitches, Horowitz represented to Clover that the refurbishing work would be excellent. ( Id. ¶ ¶ 10-14.) Convinced of Oxford Aviation's ability to complete the work, Clover engaged Oxford Aviation to refurbish Clover's aircraft. ( Id. ¶ 15.) Throughout these negotiations, Oxford Aviation and its personnel--including Horowitz--remained in Maine while Clover remained in Illinois. (R. 14, Ex. 1, Horowitz Aff. ¶ 25.)

After the parties entered into an oral agreement, Clover delivered the subject aircraft to Oxford Aviation in Maine. ( Id. ¶ 35; R. 25, Ex. 1, Elliott Aff. ¶ 10.) Oxford Aviation provided refurbishing services on the aircraft at its facility in Maine. (R. 14, Ex. 1, Horowitz Aff. ¶ ¶ 35-36.) When Clover retrieved its aircraft from Oxford Aviation, the repairs allegedly contained significant defects, which were allegedly caused by Oxford Aviation's faulty work. (R. 1, Compl. ¶ 18.) Clover and Oxford Aviation were unable to negotiate a solution to their dispute, so Clover hired another mechanic to repair the defects Oxford Aviation allegedly caused. ( Id. ¶ 26.) Clover seeks compensatory damages in excess of $250,000 and punitive damages in excess of $500,000, plus attorney's fees and other costs. ( Id. at 9.)

PROCEDURAL HISTORY

Clover filed its four-count complaint on March 5, 2013. (R. 1, Compl.) Count I alleges that Defendants are liable for fraud because they made intentionally fraudulent written and oral representations that Oxford Aviation could perform appropriate refurbishing work, Clover reasonably relied on those representations, and Clover was damaged thereby. ( Id. ¶ ¶ 27-30.) Count II alleges that Defendants violated the Consumer Fraud Act by engaging in a " deceptive business practice" in the course of trade or commerce with the intent that Clover would rely on their deception, and because Oxford Aviation's deception proximately caused Clover damage. ( Id. ¶ ¶ 31-36.) Count III alleges breach of contract against Oxford Aviation based on its " faulty and substandard" refurbishing work. ( Id. ¶ ¶ 37-43.) Finally, Count IV alleges breach of warranty against Oxford Aviation premised on its promises that the refurbishing work would be of a superior quality. ( Id. ¶ ¶ 44-47.)

On May 2, 2013, Defendants filed a motion to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3), and to dismiss Counts I and II of the complaint and Plaintiff's prayer for punitive damages and attorney's fees pursuant to Federal Rule of Civil Procedure 12(b)(6). (R. 13, Defs.' Mot. at 1.) Defendants attached the affidavit of Horowitz to the memorandum in support of their motion to dismiss. (R. 14, Ex. 1, Horowitz Aff.) Clover responded to the motion on June 20, 2013, ...


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