Rosier v. Cascade Mountain, Inc.Rosier v. Cascade Mountain, Inc.
Wisconsin defendants Cascade Mountain, Inc., and The Walz Family Corporation bring this appeal under Supreme Court
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 compensatory damages based on allegations that the Wisconsin corporations negligently designed, constructed, maintained, monitored, оr 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 corporations did not own any real estate or other assets in Illinois, maintain any personnel, offices or business equipment in Illinois, or filе 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 section 2—209(a) of the Code of Civil Procedure, or to general in personam jurisdiction in Illinois under the doing business doctrine, which is codified in section 2—209(b)(4) of the Code of Civil Procedure.
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 fourteenth amendment to the federal constitution limits the instances in which a state may assert personal jurisdiction over a nonresident corporate defendant. Cook Associates, Inc. v. Lexington United Corp., 87 Ill. 2d 190, 197, 429 N.E.2d 847, 850 (1981). “The Due Process Clause protects an individual‘s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties or relations.’ ” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 85 L. Ed. 2d 528, 540, 105 S. Ct. 2174, 2181 (1985), quoting International Shoe Co. v. Washington, 326 U.S. 310, 319, 90 L. Ed. 95, 104, 66 S. Ct. 154, 160 (1945). Thus, the plaintiff‘s burden is to demonstrate that the out-of-state defendant has had the necessary minimum contacts with the forum state. Riemer v. KSL Recreation Corp., 348 Ill. App. 3d 26, 33-34, 807 N.E.2d 1004, 1011 (2004). The minimum contacts standard ensures that “requiring the out-of-state resident to defend in the forum does not ’ “offend traditional notions of fair play and substantial justice.” ’ ” Borden Chemicals & Plastics, L.P. v. Zehnder, 312 Ill. App. 3d 35, 41, 726 N.E.2d 73, 78 (2000), quoting International Shoe, 326 U.S. at 316, 90 L. Ed. at 102, 66 S. Ct. at 158, quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 283, 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 tо assure that a nonresident will not be haled into a forum solely as a result of 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, 85 L. Ed. 2d at 542, 105 S. Ct. at 2183.
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, 726 N.E.2d at 78.
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, 726 N.E.2d at 79. 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, 726 N.E.2d at 79, quoting International Shoe, 326 U.S. at 319, 90 L. Ed. at 104, 66 S. Ct. at 160. 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 jurisdiction over the out-of-state defendant. Borden Chemicals, 312 Ill. App. 3d at 41, 726 N.E.2d at 78. Federal standards permit a court to exercise general jurisdiction over a nonresident only where the nonresident has continuous and systematic general business contacts with the forum. Borden Chemicals, 312 Ill. App. 3d at 41, 726 N.E.2d at 78-79. In addition, Illinois limits general jurisdiction over nonresidents to instances in which the nonresident was ” ‘present and doing business’ ” in the forum. Riemer, 348 Ill. App. 3d at 34, 807 N.E.2d at 1012, quoting Braband v. Beech Aircraft Corp., 72 Ill. 2d 548, 554-55, 382 N.E.2d 252, 255 (1978). The doing business standard requires a nonresident defendant to carry on business activity in Illinois ” ‘not occasionally or casually, but with a fair measure of permаnence and continuity.’ ” Maunder v. DeHavilland Aircraft of Canada, Ltd., 102 Ill. 2d 342, 351, 466 N.E.2d 217, 221 (1984), quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267, 115 N.E. 915, 917 (1917). The doing business standard is quite high and generally “means conducting business in Illinois of such character and extent
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, 789 N.E.2d at 539-41, citing Flint v. Court Appointed Special Advocates of Du Page County, Inc., 285 Ill. App. 3d 152, 169, 674 N.E.2d 831, 834 (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, 85 L. Ed. 528, 105 S. Ct. 2174 (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 encourаged customers to maintain a continuing relationship with the Missouri gaming facility. In fact, about 64,000 individuals, which was approximately one-third of all the defendant‘s gold card holders, were from Illinois. Adams, 338 Ill. App. 3d at 748-49. In addition, the defendant provided a free, regular shuttle bus service to physically transport Illinois residents from this jurisdiction to its Missouri site. Adams, 338 Ill. App. 3d at 748-49. The defendant also directed magazine, television, radio, and telephone book ads, as well as flyers, brochures, and coupons to Illinois residents to lure them into continuing relationships. Adams, 338 Ill. App. 3d at 748-49. In light of the
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 purchаse[s]” but fails to offer evidence that the website is being used for actual purchases. This failure is significant not only because the plaintiffs bear the burden of demonstrating the necessary minimum contacts to support general
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 оrder to find jurisdiction over the corporations. 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 аny way that they were attempting to hold individual shareholders, directors, or officers personally liable for Steven‘s injuries. There were no allegations in the complaint regarding the conduct of any
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 individual no longer exist and where adherence to the fiction of a separatе corporate existence would sanction a fraud, promote injustice, or promote inequitable consequences. People v. V&M Industries, Inc., 298 Ill. App. 3d 733, 739, 700 N.E.2d 746, 750 (1998). The party seeking to disregard the corporate entity must make “a substantial showing that the corporation is really a dummy or sham for a dominating personality.” Ted Harrison Oil Co., 247 Ill. App. 3d at 796, 617 N.E.2d at 902. A trial court should be reluctant to pierce the corporate veil, and its finding will be reversed on appeal only where it is against the manifest weight of the evidence. Ted Harrison Oil Co., 247 Ill. App. 3d at 796, 617 N.E.2d at 902.
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 Illinois Environmental Protection Act (
The court determined, however, that Vernon should be held
Thе Roisers cite other instances in which corporate 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 hоmebuilder-seller corporation, its president, 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 *** adherеnce to the separate corporate 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
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. Thе defendant 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.