Kalata v. Healy, No. 1-99-0653

1st District, March 31, 2000

FIFTH DIVISION

JUSTICE QUINN delivered the opinion of the court:

Plaintiff, Patricia Kalata filed a breach of contract action against defendant Darlene Healy, seeking to recover $100,000 plaintiff placed in an alleged joint bank account for the purpose of partially funding a joint venture with defendant. Defendant allegedly misappropriated the funds and refused to return the money to plaintiff. Defendant filed a motion to quash service of process and to dismiss plaintiff's complaint for lack of personal jurisdiction. The trial court granted defendant's motion. Plaintiff now appeals. The sole issue for our review is whether the trial court erred in dismissing the cause for lack of personal jurisdiction pursuant to section 2-209 of the Code of Civil Procedure (735 ILCS 5/2-209 (West 1996)). For the reasons that follow, we reverse and remand.

Plaintiff, an Illinois resident, filed a complaint against defendant, alleging breach of contract, quasi-contract and fraud. Defendant resides in California. Plaintiff and defendant had been friends since approximately 1994. According to plaintiff, in the spring of 1997, defendant called her from California in an attempt to persuade her to form a joint venture to invest money in various projects. Plaintiff claimed that the oral agreement provided that: (1) the parties would form a joint venture to invest money in real estate, including the purchase of a residence in California which plaintiff and defendant would share and which would be the property of the joint venture; (2) each party would contribute $100,000 to the joint venture; (3) defendant would open a joint account at a California bank into which the parties would deposit the joint venture funds; and (4) defendant would make investments for the joint venture. Plaintiff alleged that after many discussions and several telephone calls initiated by defendant, she agreed to the joint venture.

Plaintiff claimed that between May 22, 1997, and June 25, 1997, defendant sent plaintiff bank documents which defendant indicated were necessary to open a joint bank account or escrow account at a California bank. All joint venture funds would be deposited into this account. Plaintiff signed the bank documents and returned them to defendant.

On or about May 22, 1997, plaintiff sent defendant a cashier's check in the amount of $65,000 as partial payment of her share of the joint venture funds. On June 25, 1997, plaintiff wired $35,000 into the bank account as the second payment of her share of the joint venture funds. Plaintiff alleged that she received numerous assurances from defendant that the joint venture would "happen soon."

In June or July 1997, plaintiff discovered that defendant had withdrawn all of the funds from the joint venture account. Plaintiff further discovered that the account was not in her name or in the name of the joint venture, but in defendant's name only. Plaintiff's repeated demands upon defendant for the return of the money were unsuccessful and, consequently, she filed suit.

Counsel for defendant filed a limited and special appearance and a motion to quash service. Defendant argued that the court lacked personal jurisdiction over her. Defendant claimed that she and plaintiff had a romantic relationship which began in 1994 and that the agreement to purchase a residence together was a result of their personal relationship. Therefore, defendant was not transacting business in Illinois and this state could not submit defendant to in personam jurisdiction. In support of her motion, defendant submitted an affidavit in which she averred that she had not been in Illinois since 1994. Defendant further averred that she and plaintiff were very close friends at one time and that in January 1997 plaintiff visited defendant in California and stayed with her for several weeks. During plaintiff's visit, the two women discussed the joint venture agreement and planned to purchase a residence and live together. Defendant denied that she transacted business in Illinois.

Defendant's affidavit was supported by three exhibits. Defendant submitted a letter that plaintiff allegedly sent her, which expressed plaintiff's affection for defendant. The affidavit was also supported by a copy of an airline ticket plaintiff used to travel to California and a registration card for a vehicle plaintiff rented while she stayed with defendant in California in 1997.

Plaintiff filed a memorandum in opposition to defendant's motion to quash service and contended that defendant purposefully directed her fraudulent activities towards plaintiff and received a substantial benefit from these activities. In support of the memorandum, plaintiff filed an affidavit in which she averred that all telephone conversations between the parties regarding the joint venture were initiated by defendant and that from April 1997 to October 1997, plaintiff received approximately 20 telephone calls from defendant. Plaintiff also averred that during her trip to California in 1995 and early 1997, she did not discuss any matters pertaining to the joint venture with defendant and that the joint venture arrangement was raised for the first time in April 1997.

On September 16, 1998, the trial court granted defendant's motion to dismiss and found that defendant had insufficient contact with Illinois to sustain the exercise of personal jurisdiction over her. Plaintiff filed a motion to reconsider and submitted the affidavit of her attorney, who averred that defendant was actively transacting business on a regular basis in Illinois. He claimed that defendant was challenging plaintiff's status as the independent administrator of the estate of defendant's father. In response, defendant submitted the affidavit of her attorney, who averred that defendant had not traveled to Illinois with regard to the probate of her father's estate nor had she actively litigated the matter. The trial court subsequently denied plaintiff's motion to reconsider and this timely appeal followed.

Plaintiff contends that the trial court erred in dismissing the lawsuit for lack of personal jurisdiction. A plaintiff has the burden of establishing a valid basis for jurisdiction over a nonresident defendant. G.M. Signs, Inc. v. Kirn Signs, Inc., 231 Ill. App. 3d 339, 341, 596 N.E.2d 212 (1992). In examining whether the trial court had personal jurisdiction over a defendant, conflicts between the parties' affidavits will be resolved in favor of the plaintiff for purposes of determining whether a prima facie case for in personam jurisdiction has been made. International Business Machines Corp. v. Martin Property & Casualty Insurance Agency, Inc., 281 Ill. App. 3d 854, 858, 666 N.E.2d 866 (1996).

We note that TCA International, Inc. v. B&B Custom Auto, Inc., 299 Ill. App. 3d 522, 701 N.E.2d 105 (1998), held that if a plaintiff has made a prima facie case for in personam jurisdiction over a defendant, a court of review must then determine whether the defendant's affidavits present grounds for finding that personal jurisdiction does not exist. TCA, 299 Ill. App. 3d at 532-33. If a defendant's affidavits present grounds that would preclude a finding of personal jurisdiction, then this court must remand the case to the circuit court for an evidentiary hearing. TCA, 299 Ill. App. 3d at 532; Ruprecht Company v. Sysco Food Services of Seattle, Inc., No. . Plaintiff relies on TCA in urging us to remand this cause for an evidentiary hearing if we find that defendant's affidavits presented grounds which would preclude a finding of personal jurisdiction. As we find that defendant's affidavits did not present such grounds, no evidentiary hearing on this issue is needed.

A two-step analysis is applied to determine whether the court acquires personal jurisdiction pursuant to the long-arm statute. R. W. Sawant & Co. v. Allied Programs Corp., 111 Ill. 2d 304, 311, 489 N.E.2d 1360 (1986). The first step is to determine if jurisdiction is proper under the specific language used by section 2-209. If the answer is no, the inquiry ends; but if jurisdiction is found to be proper under the statute, then we reach the second step and determine whether the exercise of jurisdiction comports with due process of law. IBM, 281 Ill. App. 3d at 858.

Plaintiff argues that personal jurisdiction over defendant is predicated upon section 2-209(a) of the Illinois long-arm statute, and asserts that defendant committed three of the acts enumerated therein, any one of which would provide a basis to find personal jurisdiction. Section 2-209(a) provides in pertinent part:

"(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:

(1) The transaction of any business within this State;

(2) The commission of a tortious act within this State;

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(7) The making or performance of any contract or promise substantially connected with this State." 735 ILCS 5/2-209(a) (West 1996).

Where jurisdiction is predicated upon subsection (a), only causes of action arising from the enumerated acts may be asserted against a nonresident defendant. 735 ILCS 5/2-209(f) (West 1996). Plaintiff asserts that the exercise of personal jurisdiction over defendant is proper because the joint venture agreement was "[t]he making or performance of a contract or promise substantially connected with this State." 735 ILCS 5/2-209(a)(7) (West 1996). We should point out that defendant's appellate brief does not address section 2-209(a)(7). In fact, defendant concedes that a contract was entered into between the parties. Defendant initiated telephone calls with plaintiff in order to negotiate the joint venture agreement. Defendant also mailed plaintiff bank documents from California which plaintiff relied on in sending $100,000 to defendant. Based on these allegations, we hold that plaintiff has made a prima facie case that defendant entered into a contract substantially connected with Illinois and therefore personal jurisdiction is established under section 2-209(a)(7).

Plaintiff next argues that jurisdiction over defendant is proper because defendant committed fraud, a tortious act within the state pursuant to section 2-209(a)(2). 735 ILCS 5/2-209(a)(2) (West 1996). Defendant argues that if any fraud was committed, it took place in California and therefore section 2-209(a)(2) does not apply. In determining whether a tortious act has been committed, our focus "is not on the ultimate question of whether the defendant's acts or omissions were tortious but, rather, on whether the plaintiff has alleged that the defendant 'is the author of the acts or omissions within the State.' " IBM, 281 Ill. App. 3d at 859, quoting Nelson v. Miller, 11 Ill. 2d 378, 393, 143 N.E.2d 673 (1957). In IBM, the court held that the jurisdictional requirement is satisfied if the defendant performs an act or omission that causes an injury in Illinois and the plaintiff alleges the act was tortious in nature. IBM, 281 Ill. App. 3d at 89, citing 3 R. Michael, Illinois Practice