United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
M. ROWLAND United States Magistrate Judge.
Li Gear, Inc., filed a single-count complaint for breach of
contract against Defendant Kerr Machine Co. Li Gear seeks
$630, 000 in damages for goods ordered by Kerr for which it
has failed and refused to pay. The parties have consented to
the jurisdiction of the United States Magistrate Judge
pursuant to 28 U.S.C. § 636(c).
August 30, 2016, Defendant moved for Summary Judgment based
on lack of personal jurisdiction. For the reasons set forth
below, the Motion is denied.
is an Illinois corporation with its principal place of
business in Illinois. (Compl. ¶ 1). It manufactures and
sells gears and gearboxes. (Id.). Kerr is an
Oklahoma corporation with its principal place of business in
Oklahoma. (Dkt. 19, Ex. 1 (Nowell Decl.) ¶¶ 3, 6).
Kerr manufactures, sells, and services various pumps and pump
parts. (Id. ¶ 4). Li Gear's personnel have
reached out to Kerr in Oklahoma and in other states to
solicit sales of Li Gear's products to Kerr.
(Id. ¶ 16). Kerr's personnel have not been
to Li Gear's place of business in Illinois. (Id.
parties first became aware of each other during oil-and-gas
industry trade shows attended by both companies, typically in
Texas, from 2012 through 2014. (Dkt. 32-1 (Li Decl.) ¶
6). On January 10, 2014, Mike May, Kerr's Vice President
of Engineering, sent an email to Li Gear, requesting that Li
Gear submit a quote for the sale of industrial gears:
“Our primary Gear supplier has let us down so this
would be an excellent opportinity [sic] to help us
make quick Delivery if your Price is good. Attached are the
drawing PDF files [for] your records.” (Id.
¶ 7 & Ex. A). On January 13, Kerr sent a follow-up
email to Li Gear asking, “What can you do to help us on
this? Please contact me or Jake at your earliest
convenience.” (Id. ¶¶ 7-10 & Ex.
A). Over the next few weeks, the vice presidents of both
companies participated in phone conferences discussing the
gears to be built and the price ranges for those products,
culminating in a February 7 email from Li Gear to Kerr, which
included a sales quote for the requested gears. (Id.
¶¶ 11-13 & Ex. A). The sales quote also states:
All sales and sales quotes, including this quote, as well as
all other estimates, proposals, and/or offers to sell,
including samples, are subject to Li Gear's standard
Terms and Conditions of Sale, and it's Standard Warranty,
which can be found at our company website or by requesting a
copy from the Company. All acceptances of quotes and/or
purchase orders are deemed to have included, by reference to
this quote, Li Gear's Standard Terms and Conditions.
(Id. ¶¶ 12-13 & Ex. B). Paragraph
13(e) of the Li Gear Terms and Conditions of Sale states:
This agreement and any sale of products to Purchaser shall be
deemed to have been made in and governed by the substantive
laws of the State of Illinois, without regard to the choice
of law provisions. Seller and Purchaser irrevocably consent
to the exclusive jurisdiction of the Court of the State of
Illinois (and the Federal Courts having jurisdiction in the
State of Illinois) for purposes of any judicial proceedings
that may be instituted in connection with any matter arising
out of or relating to these terms or any sales pursuant
(Id. ¶ 16 & Ex. C). The quote was valid for
15 days. (Id. Ex. B). Kerr did not issue a purchase
order for the gears offered in this sales quote.
(Id. ¶ 18 & Ex. C).
parties next met at a May 2014 trade show in Texas. (Li Dec.
¶ 21). While they dispute who initiated the request to
submit a quote for gearboxes, several days later Li Gear sent
Kerr a second sales quote for the requested items.
(Id. ¶ 21 & Ex. D). The quote, which was
valid for 15 days, again referenced Li Gear's standard
Terms and Conditions. (Id. ¶ 21 & Ex. D).
On May 23, Kerr issued a purchase order for the gearboxes
quoted by Li Gear the day before. (Id. ¶ 21
& Ex. E). The gearboxes were subsequently delivered to
Kerr's facilities in Oklahoma, and Kerr paid Li
Gear's invoice. (Id. ¶¶ 23-24 &
September 18, 2014, after oral communications between the
parties, Kerr issued a second purchase order to Li Gear for
45 gearboxes at a total price of $630, 000, which included
the same Order Terms and Conditions as its May 23 purchase
order. (Compl. Ex. A; Nowell Decl. ¶ 18). The parties
disagree as to the substance of the surrounding oral
communications. Li Gear asserts that Kerr inquired whether it
could purchase a large quantity of the same gearboxes and at
the same price it had purchased in May. (Li Decl. ¶ 26).
Li Gear responded that its prior quote, which included Li
Gear's standard Terms and Conditions, was still
effective. (Id.). Kerr contends, on the other hand,
that the September 2014 purchase order was issued only after
Li Gear “pleaded” with Kerr “to provide
projections of the number of gearboxes that Kerr expected to
need in the future.” (Nowell Decl. ¶ 19). In any
event, Kerr argues that the May 2014 quote expired by its own
terms in June 2014 and does not apply to the September 2014
stand-alone transaction. (Id. ¶¶ 20-21
& Ex. 2; Compl. Ex. A).
September purchase order gave rise to the lawsuit-Li Gear
alleges that Kerr refused to take delivery of these gearboxes
and has not paid for them. (Compl. ¶¶ 5-7). Kerr
contends that it timely modified and later cancelled the
purchase order before Li Gear delivered any of the gearboxes.
(Answer ¶ 6).