United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Honorable Marvin E. Aspen, United States District Judge.
Tianjin Universal Link Enterprises, Ltd.
(“Plaintiff” or “Tianjin”) filed this
breach of contract action to recover on several contracts for
the purchase of vehicles it sought to import to China.
Presently before us is Defendant Alsapo Enterprises,
Ltd.'s (“Alsapo”) motion to dismiss Counts
II, III, and IV for lack of personal jurisdiction. (Dkt. No.
35.) For the reasons stated below, we grant Alsapo's
purposes of a motion to dismiss, we accept all well-pleaded
factual allegations as true and draw all inferences in the
plaintiff's favor. Katz-Crank v. Haskett, 843
F.3d 641, 646 (7th Cir. 2016). Defendant Alsapo, a
corporation organized under the laws of Cyprus, has been
engaged in the business of exporting luxury vehicles to
markets in Asia since at least 1984. (Am. Compl. (Dkt. No.
33) ¶ 6.) In early 2015, Alsapo sought to sell
American-made vehicles to clients in China, and to that end,
began discussions with a potential supplier, Mega World
Builder Corp. (“Mega World”). (Id.
¶¶ 7-8.) After Mega World advised Alsapo that there
“could be problems with financing of the transactions
due to new bank regulations, ” Alsapo contacted
Defendant Midwest Contracting Concepts, Inc.
(“Midwest”), an Illinois corporation with its
principal place of business in Illinois, with whom it had a
“pre-existing, personal relationship.”
(Id. ¶¶ 9-10.) Following discussions to
determine whether Midwest's involvement could
“solve the financing issue, ” Alsapo and Midwest
entered into an agreement to form a joint enterprise whereby
they would sell vehicles overseas to China. (Id.
¶¶ 3, 10-11, 84, 89, 97, 102, 116, 121, 135, 140.)
alleges that “[u]nder the terms of the agreement and as
evidenced by their later course of dealing, ” Alsapo
was responsible for managing the day-to-day aspects of the
purchase and shipment of vehicles, including but not limited
to, directly communicating with suppliers, collecting and
processing paperwork necessary to facilitate shipments,
monitoring progress of shipments, and updating customers.
(Id. ¶¶ 12, 85.) Meanwhile, Midwest was
responsible for securing financing for the transactions and
other tasks, such as inspecting vehicles prior to shipment on
an as-needed basis. (Id. ¶¶ 13, 86.) In
consideration for their respective contributions “of
money, effort, skill and knowledge, ” Alsapo and
Midwest agreed to divide the profits and losses from the
operation of their joint enterprise. (Id.
¶¶ 14, 87.)
2015, Plaintiff entered into several written agreements with
Alsapo for the purchase of vehicles for import into China.
(Id. ¶¶ 15, 46, 56, 66.) Plaintiff is a
Chinese corporation engaged in international trade, including
the import of new automobiles from the United States and
Europe for sale in China. (Id. ¶ 1.) On June
30, 2015, Plaintiff entered into a written agreement with
Alsapo and Midwest for the purchase of 27 new 2016 Ford
Explorers (the “Explorer Agreement”).
(Id. ¶ 15; see also id., Exh. 1 (Dkt.
No. 33-1).) On October 30, 2015, Plaintiff alleges it
executed three separate written agreements for the purchase
of 30 Range Rovers each (the “Range Rover
Agreements”). (Id. ¶¶ 46, 56, 66;
see also id., Exhs. 7-9 (Dkt. Nos. 33-7, 33-8,
33-9).) Plaintiff alleges all four of the agreements fell
through after Alsapo and Midwest failed to hold up their end
of the bargain.
respect to the first of the agreements, Alsapo and Midwest
worked together to negotiate an agreement with Mega World for
the purchase of the Ford Explorers and to secure financing
for the deal. (Am. Compl. ¶ 22.) Alsapo's President,
George Samaha, traveled to Illinois on September 25, 2015 to
meet with the owner of Mega World and the owner of Midwest in
order to finalize the terms of the purchase agreement and to
discuss other details of the transaction. (Id.
¶ 23.) Alsapo and Midwest performed a “last-minute
background check” on Mega World and executed the
purchase agreement on September 29, 2015. (Id.
¶¶ 24-25.) On October 2, 2015, Alsapo and Midwest
issued an invoice for the Explorers to Plaintiff.
(Id. ¶ 28.) Plaintiff subsequently provided
“the required Letter of Credit pursuant to the terms of
the Explorer Agreement” on October 9, 2015 based on the
defendants' assurance that the vehicles were being
prepared for shipment, and Alsapo and Midwest provided
Plaintiff with a packing list indicating that each of the 27
Explorers had been loaded into nine sealed and numbered
shipping containers scheduled to be shipped from Houston to a
port in Fuzhou, China. (Id. ¶¶ 29-31.)
Midwest's owner, George Stathopoulos, executed the bills
of lading sent by Mega World, and Mega World provided the
defendants with an inspection report from SGS America, Inc.
(“SGS”), which purported to show that the
vehicles had been placed into the containers. (Id.
¶¶ 21, 32-33.) Between October and December 2015,
Alsapo managed day-to-day aspects of the purchase and
shipment, and Midwest worked on securing the financing for
the transaction. (Id. ¶¶ 34-35.)
November 2015, Alsapo and Midwest advised Plaintiff that the
shipment of Explorers would be delayed “due to certain
logistical issues, ” but it was scheduled to arrive in
Fuzhou, China on or around January 25, 2016. (Id.
¶ 36.) On December 21, 2015, corporate counsel for SGS
“advised Alsapo and Midwest that the SGS inspection
report which Mega World had produced in October could not be
authenticated and was possibly a forgery.”
(Id. ¶ 37.) Neither of the defendants advised
Plaintiff of this fact, nor did they tell Plaintiff that they
had been unable to verify whether any of the vehicles had
actually been shipped. (Id. ¶ 38.)
shipment never arrived in Fuzhou, China. (Id. ¶
40.) Instead, in March 2016, Plaintiff learned that the nine
sealed shipping containers had arrived at a different port in
Hong Kong and they were being held in a bonded warehouse
awaiting customs. (Id. ¶ 41.) Plaintiff gained
access to the shipment on March 19, 2016 and discovered that
rather than the agreed-upon 27 Ford Explorers, the containers
were loaded with 18 trailers and no Explorers. (Id.
¶ 42.) Plaintiff rejected the shipment, notified the
defendants, and demanded a return of all funds it had paid
pursuant to the terms of the agreement. (Id.
before the Explorer Agreement fell apart, Plaintiff alleges
it entered into three separate written agreements with Alsapo
and Midwest for the purchase of 30 Range Rovers each.
(Id. ¶¶ 46, 56, 65.) Each agreement
required Plaintiff to provide 10 percent down payment by wire
transfer and to provide a 90 percent irrevocable letter of
credit within 12 days of Alsapo and Midwest providing the
vehicle identification numbers (“VINs”) for each
vehicle to be purchased. (Id. ¶¶ 48, 58,
68.) Upon issuance and acceptance of the letter of credit,
the agreements required Alsapo to initiate shipment of the
vehicles within a set period of time. (Id.
¶¶ 49, 59, 69.) On November 5, 2015, Plaintiff paid
the 10 percent down payment, but Alsapo and Midwest failed to
provide the VINs as required. (Id. ¶¶
50-51, 60-61, 70-71.) Plaintiff alleges it made repeated
demands to Alsapo and Midwest for the VINs, and in February
2016, an Alsapo representative conceded that it had no
vehicles to ship and could not fulfill the terms of the
agreement. (Id. ¶¶ 52-53, 62-63, 72-73.)
On April 1, 2016, Plaintiff issued a demand for the return of
its down payment. (Id. ¶¶ 54, 64, 74.)
Plaintiff alleges it never obtained the vehicles, nor did it
receive the return of its down payment. (Id.
¶¶ 55, 65, 75.)
alleges Alsapo and Midwest filed a complaint in Texas state
court against Mega World and others, alleging they jointly
negotiated and entered into contracts to purchase the
Explorers and “other vehicles” from Mega World.
(Id. ¶¶ 76-77; see also Dkt. No.
30-3 ¶¶ 12-15, 56-59.) In addition, Plaintiff filed
its complaint in this case against Alsapo and Midwest on
August 25, 2016. Plaintiff asserted four claims for breach of
contract based on the alleged breach of the Explorer
Agreement (Count I) and the three Range Rover Agreements
(Counts II through IV). After Alsapo moved to dismiss Counts
II through IV for lack of personal jurisdiction over it as to
the Range Rover Agreements, we granted Plaintiff's motion
to amend its complaint. (Dkt. No. 32.) Plaintiff filed an
amended complaint on May 17, 2017 asserting the same four
claims, and Alsapo again moved to dismiss the counts,
contending the claims for breach of contract based on the
three Range Rover Agreements must be dismissed for lack of
personal jurisdiction. (Dkt. Nos. 33, 35.)
court lacks personal jurisdiction over a party to an action,
it must dismiss the case as to that party. Fed.R.Civ.P.
12(b)(2). A complaint need not include facts alleging
personal jurisdiction, but when a defendant moves to dismiss
under Rule 12(b)(2), the plaintiff has the burden of
demonstrating personal jurisdiction over the defendant.
N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491
(7th Cir. 2014); Purdue Research Found. v. Sanofi-
Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The
court may consider affidavits or other evidence in opposition
to or in support of the exercise of jurisdiction.
Id. at 783. Where personal jurisdiction is
challenged and material facts are in dispute, the court
“must hold an evidentiary hearing to resolve
them.” Hyatt Int'l Corp. v. Coco, 302 F.3d
707, 713 (7th Cir. 2002). “Until such a hearing takes
place, the party asserting personal jurisdiction need only
make out a prima facie case of personal
jurisdiction.” Id. “In evaluating
whether the prima facie standard has been satisfied, the
plaintiff ‘is entitled to the resolution in its favor
of all disputes concerning relevant facts presented in the
record.'” Purdue Research Found., ...