GARY ROISER et al., Indiv. and as Parents and Next Friends of Steven Roiser, a Disabled Minor, Plaintiffs-Appellees, v. CASCADE MOUNTAIN, INC., et al., Defendants-Appellants
No. 1-05-3457
First District (1st Division)
September 11, 2006
367 Ill. App. 3d 559
unbroken course of negligent treatment and were so related as to constitute one continuing wrong. Those are questions for a jury to decide. Thus, summary judgment was improper.
For the reasons stated, we reverse the trial court‘s judgment and remand for further proceedings.
Reversed and remanded.
KNECHT and COOK, JJ., concur.
Robert Marc Chemers, Edward H. Nielsen, Belle L. Katubig, and Scott L. Howie, all of Pretzel & Stouffer, Chtrd., of Chicago, for appellants.
Wisconsin defendants Cascade Mountain, Inc., and The Walz Family Corporation bring this appeal under
Illinois residents Gary and Sharon Roiser, individually and as next friends of their minor son Steven, filed this negligence action in Illinois after Steven was injured on March 3, 2003, while attempting to snowboard over the “J.J.” tabletop jump at the defendants’ Cascade Mountain ski and snowboard facility in Portage, Wisconsin. The plaintiffs sought a minimum of $50,000 in compensаtory damages based on allegations that the Wisconsin corporations negligently designed, constructed, maintained, monitored, or supervised the tabletop jump and/or negligently failed to timely respond to Steven‘s injuries.
The plaintiffs served the defendants in Wisconsin.
In conjunction with their motion to quash service of summons and dismiss the case, the Wisconsin corporations filed the affidavit of their president and director, Phil Walz. The affidavit indicated the сorporations did not own any real estate or other assets in Illinois, maintain any personnel, offices or business equipment in Illinois, or file tax returns in Illinois. The affidavit further specified the corporations contracted with an Illinois telecommunications provider for an Illinois telephone number through which callers could listen to a prerecorded Wisconsin snow report, and that the corporations had secured a loan and a line of credit with an Illinois bank to fund chairlift and snowmaking improvements at Cascade Mountain. The Wisconsin entities argued these contacts were insufficient to subject them to specific in personam jurisdiction in Illinois pursuant to the long-arm statute, which is set out in
The Roisers did not file any affidavits rebutting Phil Walz‘s sworn statement1 or otherwise respond directly to the Wisconsin defendants’ contentions about sections 2-209(a) and (b)(4) of the Code. Instead, the Roisers argued Cascade Mountain‘s local telephone number, local marketing, and interactive website evidenced sufficient contacts with Illinois to justify its courts’ assertion of general jurisdiction over both Wisconsin defendants under the catchall provision of the Illinois long-arm statute. The catchall provision provides: “A court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution
When the circuit court decides a jurisdictional question solely on the basis of documentary evidence, as it did in this case, the question is addressed de novo on appeal. Spartan Motors, Inc. v. Lube Power, Inc., 337 Ill. App. 3d 556, 559-60, 786 N.E.2d 613, 616 (2003). The plaintiff bears the burden of establishing a prima facie basis upon which jurisdiction over an out-of-state resident may be exercised. Khan v. Van Remmen, Inc., 325 Ill. App. 3d 49, 53, 756 N.E.2d 902, 907 (2001). The due process clause of the
61 S. Ct. 339, 343 (1940). The minimum contacts analysis must be based on some act by which the defendant purposefully availed itself of the privilege of conducting activities within the forum state, in order to assure that a nonresident will not be haled into a forum solely as a result оf random, fortuitous, or attenuated contacts with the forum or the unilateral acts of a consumer or some other third person. Burger King, 471 U.S. at 475.
The meaning of the minimum contacts standard depends on whether a court is asserting general jurisdiction or specific jurisdiction over the out-of-state defendant. Borden Chemicals, 312 Ill. App. 3d at 41.
A court may potentially assert specific jurisdiction over an out-of-state resident if the lawsuit arises out of or is connected to the defendant‘s purportedly wrongful activities within the forum state. Borden Chemicals, 312 Ill. App. 3d at 41. When a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protections of that state, and so requiring it to respond to a suit in that state concerning those specific activities ” ‘can, in most instances, hardly be said to be undue.’ ” Borden Chemicals, 312 Ill. App. 3d at 42, quoting International Shoe, 326 U.S. at 319. The Roisers’ lawsuit is not based on any activity within Illinois; therefore, specific jurisdiction principles are not relevant to their appeal.
When a suit neither arises from nor relates to a defendant‘s activities within the state where suit has been filed, the court is limited to exercising general
that it may be inferred that the defendant has subjected itself to the jurisdiction and laws of this state and is bound to appear when properly served.” Riemer, 348 Ill. App. 3d at 35. “In effect, the foreign corporation has taken up residence in Illinois and, therefore, may be sued on causes of action both related and unrelated to its activities in Illinois.” Riemer, 348 Ill. App. 3d at 35.
The Roisers rely primarily on Adams v. Harrah‘s Maryland Heights Corp., 338 Ill. App. 3d 745, 789 N.E.2d 436 (2003), to sustain their burden of establishing that general jurisdiction is properly asserted over the nonresident corporations. We do not find Adams’ analysis particularly persuasive because it relied primarily on specific jurisdiction case law and principles to determine whether general jurisdiction was properly asserted over a Missouri defendant. See Adams, 338 Ill. App. 3d at 747-50, citing Flint v. Court Appointed Special Advocates of Du Page County, Inc., 285 Ill. App. 3d 152, 169, 674 N.E.2d 831, 834 (1996) (finding “[defendant] NCASAA‘s contacts within Illinois are sufficiently related to the cause of action against them and, at least in part, gave rise to it“); Allerion, Inc. v. Nueva Icacos, S.A. de C.V., 283 Ill. App. 3d 40, 52, 669 N.E.2d 1158, 1166 (1996) (finding it was “not unfair to bring [the defendant] ‘into an Illinois court to enforce the [contractual] obligations [the defendant] knowingly undertook’ “); Burger King Corp., 471 U.S. 462 (finding contract negotiation, contemplated future consequences, terms of contract, and course of dealing justified bringing Michigan residents to Florida to answer breach of franchise contract); Rollins v. Ellwood, 141 Ill. 2d 244, 275, 565 N.E.2d 1302, 1316 (1990) (finding Missouri police officer could not be haled into Illinois on the basis of his allegedly tortious act in Illinois).
Nevertheless, the Wisconsin defendants’ contacts with Illinois are substantially less than those described in Adams. The defendant in Adams, a Missouri casino, maintained a “gold card holder” program (Adams, 338 Ill. App. 3d at 748-49), which presumably encouraged customers to maintain a continuing relationship with the Missouri gaming facility. In fact, about 64,000 individuаls, which was approximately one-third of all the defendant‘s gold card holders, were from Illinois.
“continuous and systematic business contacts” directed at the Illinois marketplace, the volume of Illinois customers, and the shuttle service from Illinois to Missouri, the court concluded it was reasonable for Illinois courts to exercise jurisdiction over the Missouri defendant. Adams, 338 Ill. App. 3d at 749. While the record indicates the Wisconsin defendants advertise in Illinois, sometimes appear at Illinois trade shows, maintain an Illinois tеlephone number, and derive some revenue from the residents of this state, these contacts amount to mere solicitation to do business in Wisconsin, which is an insufficient basis for inferring that the Wisconsin defendants have subjected themselves to the jurisdiction of the Illinois courts. Maintaining an Illinois telephone number is not enough to sustain jurisdiction. Radosta v. Devil‘s Head Ski Lodge, 172 Ill. App. 3d 289, 295, 526 N.E.2d 561, 565 (1988). Nor is soliciting Illinois residents to transact business in Wisconsin, through a booth at a trade show, magazine advertisements, and radio broadcasts. Radosta, 172 Ill. App. 3d at 295; Dal Ponte v. Northern Manitoba Native Lodges, Inc., 220 Ill. App. 3d 878, 884, 581 N.E.2d 329, 333 (1991). Furthermore, the Wisconsin defendants do not continuously and systematically physically transport Illinois residents from Illinois to their Portage, Wisconsin, ski and snowboarding facilities and, thus, are not comparable to the Missouri defendant in Adams. Adams, 338 Ill. App. 3d at 748-49.
The Roisers also argue that Cascade Mountain‘s presence on the Internet is significant for the purposes of acquiring jurisdiction over a nonresident defendant and support this argument with discussion of Euromarket Designs, Inc. v. Crate & Barrel, Ltd., 96 F. Supp. 2d 824 (N.D. Ill. 2000), and George S. May International Co. v. Xcentric Ventures, LLC, 409 F. Supp. 2d 1052 (N.D Ill. 2006). The Roisers contend individuals may use the Cascade Mountain website to subscribe to e-mail bulletins from the defendants and that the site “provides for online purchase of gift certificates, season passes, insurance and equipment rental” and that these items range in price “from $5 to $999.” We find the e-mail bulletins are analogous to other advertising mediums the defendants use in this jurisdiction, such as radio and magazine advertising, and that the e-mail messages at most solicit Illinois residents to transact business in Wisconsin and are not a basis for exercising jurisdiction in this forum. In addition, the Roisers overlook dispositive distinctions in Euromarket Designs and George S. May International. The Roisers contend the Cascade Mountain website “provide[s] for online purchase[s]” but fails to offer evidence that the website is being used for aсtual purchases. This failure is significant not only because the plaintiffs bear the burden of demonstrating the necessary minimum contacts to support general
jurisdiction, but also because in Euromarket Designs, the court remarked that generally a defendant‘s “mere maintenance of an Internet website is not sufficient
We also reject the Roisers’ contention that the trial court should have “pierced the corporate veil” of the Cascade Mountain and Walz Family corporations in order to find jurisdiction over the corporatiоns. The Roisers are referring to an equitable remedy under which a court may find a corporation‘s shareholders, directors, or officers—who are not as a general rule liable for any corporate debts and obligations—personally liable for the corporation‘s debts and obligations. Ted Harrison Oil Co. v. Dokka, 247 Ill. App. 3d 791, 795, 617 N.E.2d 898, 901 (1993). We emphasize that the Roisers’ complaint did not suggest in any way that they were attempting to hold individual shаreholders, directors, or officers personally liable for Steven‘s injuries. There were no allegations in the complaint regarding the conduct of any
individual. The Roisers, however, argued the corporate veil theory was an alternate means for the trial court to acquire jurisdiction over the defendant Wisconsin corporations, and that if the court found the Roisers’ evidence was lacking, it should permit the Roisers to pursue additional discovery on the issue. The written order on appeal does not specify the trial court‘s reason or reasons for finding it had general personal jurisdiction over the Wisconsin defendants, and neither side has tendered a transcript of the hearing. Nevertheless, the Roisers’ appellate brief suggests the court indicated in some way that it did not find the corporate veil theory persuasive.
The remedy of disregarding or piercing the corporate veil in order to get to assets held by an individual will be employed where there is such unity of interest and ownership that the separate personalities of the corporation and the
One of the cases the Roisers’ rely upon, V&M Industries, illustrates the proper application of the concept. In that case, the State sought injunctive relief and civil penalties under the
The court determined, however, that Vernon should be held
personally liable for the corporation‘s debt beсause each of the eight relevant factors was present. V&M Industries, 298 Ill. App. 3d at 740. A party seeking to rely on the corporate veil theory need not prevail on all eight factors, and no single factor is dispositive, but a court should take all of the variables into consideration. See, e.g., V&M Industries, 298 Ill. App. 3d at 740. The court found (1) the corporation was undercapitalized for the transactions that needed to be performed, such as buying real estate to be leased to others and contracting for property maintenance, (2) the corporation was insolvent when the court considered the factors, (3) no stock was ever issued, (4) no shareholder dividends were paid, (5) corporate formalities such as regular meetings and minute taking were never observed, (6) there was an absence of corporate records, and (7) other than the dominant shareholder, Vernon, none of the corporate officers and directors functioned in their roles. Finally, (8) the corporation was a “mere facade for the operation of the dominant shareholder, Vernon,” and “Vernon is *** V&M,” as evidenced in part by the fact that checks owed to the corporation totaling $100,000 were made payable tо Vernon, personally, and vice versa. V&M Industries, 298 Ill. App. 3d at 740-42. These facts led the court to conclude, “[t]he circumstances in this case are overwhelming to the point that adherence to the fiction of a separate corporate existence would indeed sanction a fraud, promote injustice, and promote inequitable consequences.
The Roisers cite other instances in which cоrporate status has been disregarded and individuals associated with the corporation have been held personally liable for judgments. See Falcon Associates, Inc. v. Cox, 298 Ill. App. 3d 652, 664, 699 N.E.2d 203, 211 (1998) (relevant factors including no stock issuance, no dividend payments, and transfer of all corporate assets to a second corporation after dispute arose supported conclusion that homebuilder-seller corporation, its рresident, and second corporation should be treated as “but one single entity” for purposes of liability); Washington Courte Condominium Ass‘n-Four v. Washington-Gulf Corp., 267 Ill. App. 3d 790, 816-17, 643 N.E.2d 199, 217 (1994) (in dispute over condominium sale, court indicated, “[t]he record shows such a unity of interest and ownership that the separate personalities of the corporation and the individual no longer existed and *** adherence to the separate сorporate existence would sanction a fraud, promote injustice and promote inequitable consequences“).
Thus, the Roisers have demonstrated there are circumstances under which a court may and will find corporate shareholders, direc-
tors, or officers personally liable for corporate obligations. The Roisers have not, however, offered any legal authоrity or any reasoned argument indicating a court may scrutinize the local contacts of a foreign corporation‘s shareholders, directors, or officers in order to find that the foreign corporation is subject to the court‘s personal jurisdiction. Accordingly, we find the Roisers have waived consideration of their contention that the corporate veil theory is a means or should be a means of exerting general personal jurisdiction over a nonresident defendant.
In summary, all that defendants have done in this forum is solicit business, absorb some of the expenses associated with accessing a prerecorded announcement of snow conditions, and borrow money. The dеfendant or defendants have created a website which is a potential means for transacting business in Illinois, but the record does not disclose any transactions with Illinois residents. The Roisers chose to initiate contact with the non-Illinois defendants and chose to travel to Portage, Wisconsin, to make use of the defendants’ ski and snowboarding facilities. It would not be consistent with due process to require the Wisconsin defendants to litigate the resulting dispute in Illinois. The contacts the defendants have with Illinois are not sufficient for its courts to exercise general personal jurisdiction over the Wisconsin entities. The Roisers’ alternative argument that piercing the corporate veil is an appropriate means of acquiring jurisdiction over a non-Illinois corporation is not supported by adequate legal reasoning and citation to supporting authority, and therefore did not merit our consideration. Because the plaintiff Roisers did not meet their burden of proving that in personam jurisdiction exists over the nonresident defendants, we reverse the trial court‘s order denying the motion to quash service and dismiss the complaint.
Reversed.
CAHILL and JOSEPH GORDON, JJ., concur.