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Sargents Equipment & Repair Services, Inc. v. USA M Recycling, LLC

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

October 15, 2014



JOHN W. DARRAH, District Judge.

Plaintiff Sargents Equipment & Repair Services Inc., ("SERS") filed a three-count Complaint against USA M Recycling, LLC ("UMR"), alleging breach of contract, account stated, and quantum meruit. UMR has moved to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(2). For the reasons explained below, UMR's Motion [7] is denied.


The following facts are taken from the Complaint, submitted exhibits, and affidavits. UMR is a limited liability company registered in Arkansas. (Def.'s Mot. to Dismiss, Ex. B ¶ 3.) At all times relevant to this action, UMR did business in Arkansas, Missouri, and Oklahoma. ( Id. ¶ 4.) UMR has no offices, employees, or designated agents in Illinois. ( Id. ¶¶ 5-7.) Tom Smith is UMR's Chief Operating Officer. ( Id. ¶ 2.) SERS is an Illinois corporation with a principal place of business in South Chicago Heights, Illinois. (Compl. ¶ 1.) Mike Sargent is the president of SERS. (Pl.'s Response, Ex. B1 ¶ 1.)

In August 2013, UMR[1] contacted Sargent inquiring about the possibility of SERS repairing one of UMR's "shredders."[2] ( Id. ¶ 4.) On August 20, 2013, Sargent met with Smith at UMR's facility in Lowell, Arkansas, to provide a price quote for SERS to perform work on UMR's shredder. (Def.'s Mot. to Dismiss, Ex. B ¶ 9.) On the same day, at UMR's request, Sargent sent an email from Illinois to UMR containing the quote. (Pl.'s Response, Ex. B1 ¶ 5.) UMR did not travel to Illinois to negotiate or enter into a contract with SERS. (Def.'s Mot. to Dismiss, Ex. B ¶ 10.) On August 21, 2013, UMR sent Sargent an email accepting the terms of the quote and requested that SERS's employees travel to Arkansas to begin work. (Pl.'s Response, Ex. B1 ¶¶ 6-7.)

Subsequent to receiving UMR's email, Sargent, while in Illinois, directed SERS's employees to begin performing work for UMR. ( Id. ¶ 8.) This work initially required meetings, planning, collecting supplies, and ordering parts to be used to perform the services under the contract; all of which was chargeable to UMR under the contract. ( Id. ¶¶ 9-10.) From August 2013 through November 2013, Sargent regularly communicated with UMR requesting payment and discussing services. ( Id. ¶ 11.) All of these communications took place while Sargent was in Illinois and UMR was in Arkansas. ( Id. ; Def.'s Mot. to Dismiss, Ex. B ¶ 12.)

Between September 9, 2013, and November 12, 2013, SERS sent UMR seven invoices. (Compl. ¶ 6.) UMR has paid only three of these invoices. (Pl.'s Response, Ex. B1 ¶ 12.)


A federal court may exercise personal jurisdiction over a defendant only if personal jurisdiction would be proper in the forum state's court. Citadel Grp. Ltd. v. Wash. Reg'l Med. Ctr., 536 F.3d 757, 760 (7th Cir. 2008). In Illinois, personal jurisdiction over a non-resident defendant is subject to the requirements of the Illinois Long-Arm Statute, the Illinois Constitution, and the United States Constitution. Brandon Apparel Grp., Inc. v. Quitman Mfg., Co., 42 F.Supp.2d 821, 828 (N.D. Ill. 1999). The Illinois Long-Arm Statute permits personal jurisdiction on any basis permitted by the due process clauses of the Illinois and United States Constitutions. 735 Ill. Comp. Stat. 5/2-209(c). Due to the lack of meaningful distinction between Illinois and federal due process standards, only a single due process analysis is required, Illinois v. Hemi Grp. LLC, 622 F.3d 754, 757 (7th Cir. 2010); specifically, whether the defendant has "sufficient minimum contacts with Illinois such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Tamburo v. Dworkin, 601 F.3d 693, 700-01 (7th Cir. 2010) (quoting Int'l Shoe Co. v. Wash, 326 U.S. 310, 316 (1945)). Such minimum contacts require a showing of defendant's "purpose[ful] establish[ment] of minimum contacts such that he or she should reasonably anticipate being haled into court." Tamburo, 601 F.3d at 701. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)).

Personal jurisdiction may be general or specific. Felland v. Clifton, 682 F.3d 665, 673 (7th Cir. 2012). The exercise of general personal jurisdiction is warranted where a defendant has "continuous and systematic" contacts with the forum state. Id. In contrast, specific jurisdiction is applicable where: "(1) the defendant has purposefully directed his activities at the forum state or purposefully availed himself of the privilege of conducting business in that state, (2) the alleged injury arises out of the defendant's forum related activities, and (3) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice." Id .; See also Tamburo, 601 F.3d at 702. Defendant's contact with the forum state must not be "random, fortuitous, or attenuated, " but instead must be purposeful and substantial enough to establish a relationship with the forum, particularly with respect to the transaction in dispute. N. Grain Mkt., LLC v. Greving, 743 F.3d 487, 492-93 (7th Cir. 2014) (quoting Burger King, 471 U.S. at 474).

In determining whether personal jurisdiction exists, affidavits and other materials outside of the pleadings may be considered. Purdue Res. Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The plaintiff bears the burden of demonstrating personal jurisdiction. Abbott Labs., Inc. v. BioValve Techs., Inc., 543 F.Supp.2d 913, 918 (N.D. Ill. 2013). However, where no evidentiary hearing is held, as is the case here, the plaintiff need only make a prima facie showing of personal jurisdiction. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). All non-material disputes regarding relevant facts in the record are resolved in favor of the plaintiff. Clover Techs. Grp., LLC v. Oxford Aviation, Inc., 993 F.Supp.2d 872, 876 (N.D. Ill. 2013). Additionally, facts included in the defendant's materials that are not refuted by the plaintiff's submissions will be accepted as true. Swanson v. City of Hammond, 411 F.App'x 913, 915 (7th Cir. 2011).


It is undisputed that UMR is not subject to general personal jurisdiction. Instead, SERS argues only that UMR's conduct subjects it to specific jurisdiction. SERS's argument is based on four facts: UMR made initial contact with SERS, all email exchanges occurred while Sargent was in Illinois, SERS ordered supplies and otherwise prepared for the contracted work while in Illinois, and UMR sent three payments to SERS in Illinois. UMR does not dispute any of these facts, but contends that they are insufficient as minimum contacts with Illinois.

In contract disputes, the mere act of contracting with an out-of-state party, without more, does not constitute sufficient minimum contacts. N. Grain Mktg., 743 F.3d at 493. Indeed, the "analysis looks to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there." Walden v. Fiore, 134 S.Ct. 1115, 1122 (citations omitted). The minimum contacts analysis, as it relates to contract disputes, is context-specific and requires an examination of "prior negotiations, contemplated future consequences, the terms of the contract, and parties' course of actual dealing with each other." N. Grain Mktg., 743 F.3d at 493 (quoting Purdue Res. Found., 338 F.3d at 781). With such context in mind, many courts within this district look to four factors: "which party initiated the transaction, where the negotiations were conducted, where the parties executed the contract, and where performance would have or did occur." Corus Int'l Trading Ltd. v. Eregli Demir ve Celik Fabrikalari, T.A.S. 765 ...

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