United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Virginia M. Kendall Judge
International Precision Components Corporation (IPCC) filed
suit against Greenpath Recovery West, Inc. and Joseph Castro
(collectively, Defendants) in the Circuit Court of Lake
County, Illinois alleging one claim for breach of contract.
(See Dkt. No. 1). On December 21, 2017, Defendants
removed the case to federal court (id.) and, on
February 5, 2018, filed a Motion to Dismiss Plaintiff's
Complaint for lack of personal jurisdiction pursuant to Rule
12(b)(2) and, in the alternative, for improper venue based on
the existence of a forum selection clause pursuant to Rule
12(b)(3) and for failure to state a claim based on the
doctrine of res judicata pursuant to Rule 12(b)(6).
(Dkt. No. 19). For the following reasons, the Court grants
Defendants' Motion to Dismiss  without prejudice for
lack of personal jurisdiction pursuant to Rule 12(b)(2).
following facts are based on the allegations in the Complaint
and the statements provided in the affidavits submitted by
both parties that controvert or supplement the
Plaintiff's allegations. To determine a motion to dismiss
for lack of personal jurisdiction, the Court “take[s]
as true all well-pleaded facts alleged in the complaint and
resolve[s] any factual disputes in the affidavits in favor of
the plaintiff.” Tamburo v. Dworkin, 601 F.3d
693, 700 (7th Cir. 2010) (citing Purdue Res. Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
an Illinois corporation with its sole offices located in Lake
County, Illinois that specializes in injection molding
plastic products. (Dkt. No. 31, Ex. A at ¶¶ 2-3
(“Stolzman Aff.”)). To create its products, IPCC
purchases resin from various suppliers who then deliver the
resin to one of IPCC's manufacturers. (Id.).
Greenpath, a Nevada corporation with its principal place of
business in Colton, California, is a commercial recycler that
sells recycled resin for use in manufacturing. (Dkt. No. 20-1
at ¶¶ 2-3 (“Castro Decl.”)).
22, 2014, Matt Ebbin of IPCC emailed a representative of
Greenpath following up on a previous phone conversation and
providing the representative information about a request for
bids that IPCC was issuing to its resin suppliers. (Dkt. No.
32-1 at ¶ 3, Ex. A). At some point in time, the owner of
one of IPCC's manufacturers referred IPCC to Joseph
Castro, the principal officer and owner of Greenpath.
(Stolzman Aff. at ¶ 5). In or around September 2014,
Castro contacted IPCC for the purpose of soliciting business
and, thereafter, IPCC began to purchase resin from Greenpath.
(Id. at ¶¶ 4, 6).
to the Complaint, IPCC placed multiple purchase orders of
resin with Greenpath between November 2014 and June 2015.
(Dkt. No. 1, Ex. A at ¶ 1 (“Compl.”)). The
orders totaled 355, 720 pounds of resin for $172, 361.10 and
were to be delivered to IPCC manufacturers in California.
(Id. at ¶¶ 1-3). Greenpath issued fifteen
invoices in connection with these purchase orders.
(Id. at ¶ 3, Ex. A). According to Greenpath,
each of the purchase orders were delivered and signed for by
IPCC agents in California. (Castro Decl. 2 at ¶ 5). IPCC
paid the invoices in full but later discovered Greenpath
never delivered the resin it purchased. (Id. at 4;
Stolzman Aff. at ¶ 11).
early 2016, IPCC fell behind on payments to Greenpath for
certain purchase orders. (Stolzman Aff. at ¶ 12). In
February 2016, Greenpath issued a demand letter alleging IPCC
owed it $161, 734.59. (Id. at ¶ 13). After some
negotiation, the parties agreed on the amount due and, on
July 14, 2016, executed a Promissory Note and Confession of
Judgment Statement whereby IPCC agreed to pay Greenpath $130,
344.80 by December 4, 2017 according to a schedule set forth
in the Note, admitted to liability for the amount due, agreed
Greenpath was entitled to judgment against it upon default of
the Note, and waived all defenses to any enforcement of
judgment. (Id. at ¶¶ 14-15, Ex. A-2, A-3).
IPCC's attorney also executed a Declaration in Support of
Statement Confessing Judgment confirming he advised IPCC with
respect to the waiver of rights and defenses under the
confession of judgment procedure. (Id. at ¶ 16,
Promissory Note also included a forum selection clause
requiring that “all actions or proceedings arising in
connection with this note shall be tried and determined only
in the state and federal courts located in the State of
California.” (Id. at Ex. A-2). The parties
dispute whether there is any overlap between the invoices at
issue in Plaintiff's Complaint and the unpaid invoices
giving rise to the Promissory Note and, therefore, whether
the Complaint is an “action or proceeding arising in
connection with” the Note. (See Dkt. No. 20 at
2-3; Dkt. No. 31 at 8-9; Dkt. No. 32 at 3-5).
April 2017, the balance due on the Promissory Note was $67,
895.10. (Stolzman Aff. at ¶ 17). In April 2017, IPCC
discovered through an internal audit that Greenpath had
failed to deliver any of the above-mentioned resin IPCC had
purchased between November 2014 and June 2015 to IPCC
manufacturers. (Compl. at ¶ 5; Stolzman Aff. at ¶
18). IPCC discontinued payments under the Promissory Note
and, in June 2017, demanded that Greenpath deliver the
non-delivered resin or refund the $172, 361.10 paid for the
non-delivered resin by crediting $67, 895.10 of that amount
toward IPCC's outstanding balance with Greenpath and
paying IPCC the $104, 466.00 difference. (Compl. at ¶ 6;
Stolzman Aff. at ¶¶ 22-24). Greenpath refused to do
either and instead demanded IPCC pay the balance due on the
Note, which Greenpath claimed was $76, 581.56. (Stolzman Aff.
at ¶¶ 25-26).
August 2017, Greenpath filed an Enforcement of Judgment
action against IPCC in the Superior Court of San Bernadino
County, California for IPCC's defaulting on the Note.
(Id. at ¶ 27). On October 12, 2017, Greenpath
notified IPCC that judgment had been entered against it in
the amount of $128, 915.88. (Id. at ¶ 29). IPCC
filed the Complaint against Greenpath in Lake County,
Illinois on October 4, 2017 and Greenpath was served on
November 21, 2017. (See Dkt. No. 1 at ¶¶
has its main office in Colton, California and another office
in Reno, Nevada. (Castro Decl. at ¶ 2). Its operations
are solely within the state of California and each of the
orders placed by IPCC was processed in California, shipped in
California and delivered in California. (Id. at
¶¶ 3, 7). Greenpath has never provided recycling
services in Illinois, advertised in Illinois or solicited
business in Illinois, except for the solicitation call Castro
made to IPCC in September 2014. (Id. at ¶ 4).
Greenpath has never had an office, employee, contractor,
property or bank account in Illinois. (Id.). It is
not registered to conduct business in Illinois and has no
agent for service of process in Illinois. (Id.). The
same is true for Castro. (Id. at ¶ 5). In fact,
Castro's only interactions with IPCC were as a
representative of Greenpath and while he was in the state of
sole offices are in Lake County, Illinois; it is not licensed
to do business in California and has no offices in