International Profit Associates v. Linus Alarm
971 N.E.2d 1183
Ill. App. Ct.2012Background
- IPA and ITA sued Linus Alarm for breach of contract and fraud.
- Linus counterclaimed for contract breaches and two Consumer Fraud Act claims.
- Counts IV and V alleged misrepresentations about services and deceptive practices.
- Contracts contained choice-of-law and forum-selection clauses favoring Illinois.
- Trial court dismissed Counts IV and V under Avery’s territorial limitation on the Act.
- Court held that choice-of-law/forum clauses do not automatically apply the Act; Illinois law only where transactions occur primarily in Illinois.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Avery bar applying the Act extraterritorially? | Avery excludes extraterritorial application; Florida conduct not Illinois. | Choice-of-law/forum clauses require Illinois law and Act application. | No automatic application; must show Illinois-centric conduct. |
| Do choice-of-law and forum clauses trump territorial limits? | Clauses do not preserve extraterritorial reach of the Act. | Clauses mandate Illinois law and forum for disputes. | Not dispositive; territorial limits apply; cannot automatically compel Illinois Act. |
| Were the disputed transactions primarily in Illinois? | Illinois ties predominate via headquarters, invoicing, and counsel. | Most facts occurred in Florida; acts centered there. | Most circumstances occurred in Florida; Act does not apply. |
| Should Illinois substantive law apply to Consumer Fraud Act claims here? | Illinois law applies due to contract provisions. | Extrinsic territorial limitations limit Act to Illinois-based conduct. | Avery controls; Act applies only where transactions occur primarily in Illinois; here they did not. |
Key Cases Cited
- Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill.2d 100 (2005) (territorial limitation; Act not extraterritorial; cannot base Act on breach of contract)
- Martin v. Heinold Commodities, Inc., 117 Ill.2d 67 (1987) (class certification; Illinois law may apply where claims implicate Illinois interests)
- Barbara’s Sales, Inc. v. Intel Corp., 227 Ill.2d 45 (2007) (Avery preserved; limit class to Illinois consumers; territorial limits apply)
- Hall v. Sprint Spectrum L.P., 376 Ill.App.3d 822 (2007) (choice-of-law provisions do not automatically apply; contract-based reasoning)
- Morrison v. YTB International, Inc., 649 F.3d 533 (7th Cir. 2011) (Avery not dispositive; consider contractual choice-of-law alongside territorial limits)
- Cromeens, Holloman, Sibert, Inc. v. AB Volvo, 349 F.3d 376 (7th Cir. 2003) (territorial limits constrain application of state law despite choice-of-law clause)
- Potomac Leasing Co. v. Chuck’s Pub, Inc., 156 Ill.App.3d 755 (1986) (contractual incorporation of other statutes; not dispositive for Act)
- Landau v. CNA Financial Corp., 381 Ill.App.3d 61 (2008) (HQ activities and choice-of-law factors considered in territorial analysis)
- Davis v. Miller, - (-) (cited for choice-of-law framework (no official reporter cited in text))