Aumann Auctions Inc v. Fletcher

Filing 13

OPINION entered by U.S. Magistrate Judge Tom Schanzle-Haskins. Defendant Conrad Fletcher's Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) 5 is DENIED. See written order. Defendant Fletcher is ordered to answer the Complaint 2 by August 28, 2018. (LB, ilcd)

E-FILED

Tuesday, 07 August, 2018 09:58:27 AM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS SPRINGFIELD DIVISION
AUMANN AUCTIONS, INC.,
Plaintiff,
v.
CONRAD FLETCHER,
Defendant.

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Case No. 17-CV-3156

OPINION
TOM SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE:
This matter comes before the Court on Defendant Conrad Fletcher’s
Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2)
(d/e 5) (Motion). The parties consented to proceed before this Court.
Consent to the Exercise of Jurisdiction by a United States Magistrate Judge
and Reference Order entered July 20, 2018 (d/e 12). For the reasons set
forth below, the Motion is DENIED.
STATEMENT OF FACTS
Plaintiff Aumann Auctions, Inc. (Aumann Auctions), is an Illinois
corporation with its principal place of business located in Nokomis, Illinois,
and Defendant Conrad Fletcher is a resident of Golden, Colorado.
Complaint (d/e 2), ¶¶ 4-5. On January 3, 2017, Fletcher’s representative,
Bob Sullivan, telephoned Kurt Aumann, the President of Aumann Auctions.
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Sullivan told Aumann that Fletcher wanted to sell some of his antique
tractors and wanted to inquire about the cost of shipping them to Illinois for
Aumann Auctions to sell at an upcoming auction. Sullivan sent Aumann
photographs of the tractors. Aumann advised Sullivan that shipping the
tractors would not be cost-efficient and suggested some advertising
websites for Fletcher to use. Aumann also offered to provide additional
assistance to Fletcher. Plaintiff’s Response to Defendant’s “Motion to
Dismiss Claim for Lack of Subject Matter Jurisdiction” (d/e 8) (Response),
Exhibit A Affidavit in Support of Plaintiff’s Response to Defendant’s “Motion
to Dismiss Claim for Lack of Subject Matter Jurisdiction (Aumann Affidavit)
¶¶ 1-4.
On January 11, 2017, Sullivan sent an email to Aumann on behalf of
Fletcher. Sullivan asked Aumann about auctioning off most of Fletcher’s
collection of cars, tractors, signs, and more (Collection) at an on-site
auction. Sullivan asked Aumann to call to discuss his inquiry. Aumann
Affidavit ¶ 5.
Between January 11, 2017 and January 19, 2017, Sullivan
telephoned Aumann. Both Fletcher and Sullivan participated in the call.
Fletcher ask Aumann to come to Fletcher’s home on January 19,, 2017 to
view the items in the Collection. Next, Fletcher contacted the Aumann to
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notify him that the appointment to view the Collection would be put on hold
because Fletcher’s wife passed away on January 12, 2017. Aumann
Affidavit ¶¶ 6-7.
In March 2017, Sullivan contacted Aumann and indicated that
Fletcher wanted to proceed with the sale of the Collection. Sullivan also
informed Aumann that Aumann Auctions was one of several auctioning
companies Fletcher was considering. On March 30, 2017, Aumann flew to
Golden, Colorado to view Fletcher’s Collection. When Aumann returned
home, Sullivan called Aumann at Fletcher’s direction to notify Aumann that
Fletcher wanted Aumann Auctions to sell the Collection for him. Aumann
Affidavit ¶¶ 8-9.
Aumann prepared the Online Auction Contract dated April 3, 2017.
Aumann and Fletcher negotiated the terms of the Online Auction Contract
from their respective locations, Colorado and Illinois. The Online Auction
Contract stated that the online auction (Auction) would occur September 15
and 16, 2017. Aumann Auctions agreed to perform “[a]ll aspects of the
execution of the promotion, marketing, cataloging, photography, set up and
duties the day of the auction.” Fletcher retained the right to approve the
budget for marketing and promotional expenses, estimated to be $15,000
to $20,000. Aumann Auctions could decide how to spend the budget and
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could make additions or deletions of budgeted items as long as the budget
was maintained. The Online Auction Contract further stated: “This contract
is subject, written and agreed upon under the laws of the State of Illinois.”
Complaint, Exhibit A, Online Auction Contract.1
Aumann mailed the Online Auction Contract from Illinois to Fletcher in
Colorado. Fletcher signed the document and returned it to Aumann in
Illinois. When Aumann received the signed Contract, he contacted Fletcher
to schedule a time for Aumann to inventory and photograph the items in the
Collection in Colorado. Aumann would use that information to prepare for
the Auction. Aumann Affidavit ¶¶ 10-11;
Between March 30, 2017 and June 7, 2017, Fletcher called Aumann
and told him that he had some individuals assisting him with the
preparation of the Collection. In the same period, Fletcher contacted
Aumann to schedule a date for Aumann to travel to Colorado and
photograph the Collection. Fletcher chose the dates June 12, 2017
through June 14, 2017. On June 7, 2017, Fletcher called Aumann and
informed him that he would no longer honor the signed contract. Fletcher
or his representatives, including Sullivan, contacted Aumann in Illinois by

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The copy of the Online Auction Contract is attached to the original Complaint (d/e 1). The Court
required Aumann Auctions to refile the Complaint because the electronic signature of the attorney on the
document did not match the log-in and password used to file the document in the Court’s CM/ECF
system. Text Order entered July 21, 2017.

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telephone, email, and regular mail approximately 15 times. Aumann
Affidavit ¶¶ 12-13.
ANALYSIS
Aumann Auctions alleges claims against Fletcher for specific
performance, injunctive relief, and breach of contract. Fletcher filed this
Motion to dismiss the Complaint based on a lack of personal jurisdiction.
The Court may consider matters outside the pleadings to determine
personal jurisdiction. Aumann Auctions has the burden to “make out a
prima facie case of personal jurisdiction” over Fletcher. Purdue Research
Foundation v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 779 (7th Cir. 2003)
(quoting Hyatt International Corp. v. Coco, 302 F.3d 707, 713 (7th Cir.
2002). In determining whether Aumann Auctions has made a prima facie
case, this Court must resolve all factual disputes in the record in favor of
Aumann Auctions. Purdue Research Foundation, 338 F.3d at 782.
A federal court sitting “in diversity has personal jurisdiction over a
non-resident defendant only if a court of the state in which it sits would
have jurisdiction.” Purdue Research Foundation, 338 F.3d at 779. Illinois
courts can establish personal jurisdiction for any of the enumerated causes
of action under 735 ILCS 5/2-209 et seq. or for any basis permitted under
the Illinois and United States Constitutions. 735 ILCS 5/2-209 (c). No court
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has yet identified any differences in Illinois and United States Constitution
in the due process requirements for personal jurisdiction. This Court,
therefore, will apply federal constitutional principles of due process to
determine whether this Court has personal jurisdiction over Fletcher. See
Citadel Group Ltd. v. Washington Regional Medical Center, 536 F.3d 757,
761 (7th Cir. 2008); RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 127677 (7th Cir. 1997); see also KM Enterprises, Inc. v. Global Traffic
Technologies, Inc., 725 F.3d 718, 732 (7th Cir. 2013).
The Court has personal jurisdiction over Fletcher if he “purposely
established minimum contacts” with Illinois. Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474 (1985) (internal quotation marks omitted).
To establish minimum contacts with a forum, a defendant must “reasonably
anticipate being haled into court there.” World Wide Volkswagen Corp. v.
Woodson, 444 U.S. 386, 295 (1980); see Tamburo v. Dworkin, 601 F3d
693, 701 (7th Cir. 2010).
Personal jurisdiction may be either general or specific. A person is
subject to the general personal jurisdiction of the forum for any type of case
if the person has sufficient continuous and systematic contacts with the
jurisdiction, such that the person is effectively “at home” in the forum.
Daimler AG v. Bauman, 571 U.S. 117, 127 (2014); see Tamburo, 601 F.3d
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at 701. A person is subject to this Court’s specific personal jurisdiction for
a particular action if the person had sufficient contacts with the forum with
respect to the transaction that forms the basis of the particular action. See
Tamburo, 601 F.3d at 702. Aumann Auctions asserts only specific
personal jurisdiction over Fletcher in this case. General personal
jurisdiction is not at issue. See Response, at 7.
To establish specific personal jurisdiction, Aumann Auctions must
show that (1) Fletcher “purposefully availed itself of the privileges of
conducting activities within [Illinois] . . . invoking the benefits and
protections of its laws;” (2) Aumann Auctions’ alleged injuries arose from
Fletcher’s forum related activities; and (3) the exercise of jurisdiction
comports with traditional notions of fair play and substantial justice. See
Burger King, 471 U.S. at 472; Hanson v. Denckla, 357 U.S. 235, 253-54
(1958); International Shoe Co. v. State of Washington, Office of
Unemployment Compensation and Placement, 326 U.S. 310, 316 (1945).
Whether a defendant purposefully availed itself of the privileges of
conducting business in the state depends on “the quality and nature of the
defendant’s activity[.]” Hanson, 357 U.S. at 253. A resident plaintiff’s
unilateral activity directed at a nonresident defendant is not enough to
satisfy the minimum contacts. See Hanson, 357 U.S. at 253. In the
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context of claims arising under a contractual dispute, the Court must
consider the “prior negotiations and the contemplated future
consequences, along with the terms of the contract and the parties’ actual
course of dealing.” Burger King, 471 U.S. at 479. The existence of a
contract with an Illinois resident alone is not sufficient. Id. at 478.
Aumann Auctions makes out a prima facie showing of personal
jurisdiction. For purposes of this Motion, the Aumann Affidavit establishes
that Fletcher sought out Aumann Auctions in Illinois to sell his Collection.
Fletcher’s agent Sullivan made unsolicited contact with Aumann Auctions’
President Aumann by telephone and email in Illinois. Fletcher put the sale
on hold due to the death of his wife, but then again solicited Aumann
Auctions services by contacting Aumann again in Illinois. Fletcher agreed
to the Online Auction Contract. Fletcher thereby agreed that Aumann
Auctions would perform “[a]ll aspects of the execution of the promotion,
marketing, cataloging, photography, set up and duties the day of the
auction.” Aumann Auctions would spend $15,000 to $20,000 to market and
promote the auction. Aumann Auctions is located in Illinois and so the
parties contemplated that Aumann Auctions would perform these services
primarily in Illinois. Fletcher or his representatives further contacted
Aumann approximately 15 times in Illinois. The Online Auction Contract
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further stated that the agreement was governed by the laws of Illinois. The
evidence shows that Fletcher purposely availed himself of the privilege of
engaging in business in Illinois and securing services performed in Illinois.
In this circumstance, Fletcher should reasonably have anticipated that he
could be haled into court in Illinois. See Citadel Group Ltd., 536 F.3d at
764 (Arkansas entity was subject to personal jurisdiction in Illinois because
it availed the privileges of doing business in Illinois by soliciting services of
an Illinois resident and entering into ongoing contractual relationship with
resident). Aumann Auctions has made out a prima facie case that Fletcher
engaged in purposeful minimum contacts with Illinois with respect to his
dealings with Aumann Auctions in connection with the Online Auction
Contract.
Aumann Auctions’ alleged injuries arose from Fletcher’s alleged
breach of the Online Auction Contract. The injuries, therefore, are directly
related to Fletcher’s forum-related activities of soliciting Aumann Auctions’
services and entering into a contractual relationship to conduct the Auction.
Finally, the exercise of personal jurisdiction over Fletcher is
consistent with traditional notions of fair play and substantial justice.
Aumann Auctions has an interest in obtaining relief in its home forum. The
state of Illinois has a “manifest interest” in providing a forum for litigating its
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residents’ claims. See Burger King, 471 U.S. at 474. Fletcher further
solicited services to be performed in Illinois. Fletcher thereby “purposefully
derived benefit from [his] interstate activities.” Id. In such circumstance,
“[I]t may well be unfair to allow [him] to escape having to account in other
States for consequences that arise proximately from such activities; the
Due Process Clause may not readily be wielded as a territorial shield to
avoid interstate obligations that have been voluntarily assumed.” Id. The
Online Auction Contract put Fletcher on notice that the agreement was
governed by Illinois law. Under these circumstances, requiring Fletcher to
defend in Illinois was consistent with substantial justice and fair play. See
Citadel Group Limited, 536 F.3d at 764.
Fletcher cites the opinion by the Third Circuit Court of Appeals in
Vetrotex Certainteed Corp. v. Consolidated Fiber Glass Products Co., 75
F.3d 147 (3d Cir. 1996), for the proposition that executing a contract with an
Illinois resident is not sufficient to establish purposeful minimum contacts.
In Vetrotex Certainteed Corp., the resident plaintiff sought out the business
from the nonresident defendant. The nonresident did not actively seek
services of a person in the plaintiff’s forum. The nonresident also did not
initiate repeated contacts with the resident plaintiff. The contract did not
contemplate any work to be performed in the forum state nor that the
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defendant would sent any payment to the forum state. See Vetrotex
Certainteed Corp., 75 F.3fd at 151-52. Here, Fletcher actively sought out
services of an Illinois resident to be performed in Illinois. Fletcher further
affirmatively initiated repeated contacts with Aumann in Illinois. The
Vetrotex Certainteed Corp. opinion, therefore, does not apply here.
Aumann Auctions has made out a prima facie case of personal jurisdiction.
THEREFORE, IT IS ORDERED that Defendant Conrad Fletcher’s
Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2)
(d/e 5) is DENIED. Fletcher is ordered to answer the Complaint (d/e 2) by
August 28, 2018.
ENTER: August 7, 2018

s/ Tom Schanzle-Haskins

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TOM SCHANZLE-HASKINS
UNITED STATES MAGISTRATE JUDGE

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