Motorola Mobility, Inc. v. Openwave Systems, Inc. et al

Filing 34

MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 2/2/12. (mk)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

MOTOROLA MOBILITY, INC.,
Plaintiff,
vs.
MYRIAD FRANCE SAS and MYRIAD
GROUP AG,
Defendants.

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Case No. 11 C 7373

MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
Motorola Mobility, Inc. has sued Myriad France SAS and Myriad Group AG for
breach of contract, alleging that they failed to comply with their contractual obligations to
indemnify Motorola Mobility for damages it sustained as a result of defective software
they produced. Myriad France has moved to dismiss the claims against it under
Federal Rule of Civil Procedure 12(b)(6). Myriad Group has moved to dismiss the
claims against it for lack of personal jurisdiction under Federal Rule of Civil Procedure
12(b)(2). For the reasons stated below, the Court grants Myriad France’s motion in part
and denies Myriad Group’s motion.
Background
The Court draws the following facts from the allegations in plaintiff’s complaint,
which it accepts as true for purposes of the motions to dismiss. Hallinan v. Fraternal
Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). On a Rule
12(b)(2) motion, the Court may also consider facts set forth in affidavits, resolving any

factual disputes in favor of the plaintiff. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th
Cir. 2010).
In October 1999, Motorola, Inc., and Phone.com, Inc. entered into a Master
License and Services Agreement (MSA) under which Phone.com agreed to license
messaging and browser software for use in Motorola phones. The MSA has been
amended multiple times since it was signed, including amendments substituting
Motorola Mobility (“Motorola”) for Motorola, Inc. and Openwave Systems for
Phone.com. Myriad France was later substituted for Openwave. Myriad France does
not dispute that it is bound to Phone.com’s or Openwave’s obligations under the MSA
and amendments. Rather, it disputes only what those obligations entail. Myriad Group,
which is Myriad France’s parent corporation, disputes that it has any obligations under
the MSA.
The MSA contains two provisions that are particularly relevant to the allegations
made by the parties in this case. Section 14.1, which appears in an amendment to the
original MSA, states:
[Myriad France] agrees to defend, indemnify, and hold harmless Motorola from
and against any claim, suit, or proceeding and any damages, liability, or other
expenses (including, but not limited to, reasonable attorneys’ fees and court
costs) which arise out of or result from: (i) gross negligence or wrongful acts of
employees of [Myriad France] while performing [Myriad France’s] obligations
hereunder . . . .
Myriad France Ex. 2 at 3. Section 16.2, which is entitled “Licensed Software
Warranties,” states:
[Myriad France] warrants to Motorola, and solely for the benefit of Motorola, that
for a period of ninety (90) days after delivery of each commercially released
version of the . . . Software to Motorola, such version . . . will perform in
accordance with the applicable . . . Software Specification . . . . During the above
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noted warranty period, [Myriad France’s] obligation for any breach of the
warranty shall be to remedy the breach without additional charge to Motorola.
Myriad France Ex. 1 at 3-4.
Motorola alleges that defendants have breached several terms of the MSA. In
count one of its complaint, Motorola claims that Openwave designed, developed, and
delivered a defective mobile phone browser that Motorola included in a mobile phone it
sold to Verizon. The software failed to promptly terminate browser sessions. This
resulted in the overcharging of Verizon customers, who later sued Verizon in a class
action. Motorola was contractually obligated to defend and indemnify Verizon for the
damages arising out of this action, and Motorola in turn sought defense and
indemnification from Openwave, which refused Motorola’s request. Motorola ultimately
paid a portion of the costs of settling the Verizon class action and alleges that it was
thereby damaged “in excess of $500,000.” Id. ¶ 27. Motorola now seeks
indemnification from defendants for this amount.
In counts two and three, Motorola alleges that Openwave delivered two
additional defective software products, the first in late 2008 and early 2009 and the
second in 2010. Both of these products were included in phones that Motorola was
developing for Tracfone, which discovered both defects during pre-release testing.
Motorola alleges that the first piece of defective software caused Tracfone to cancel its
purchase, damaging Motorola “in an amount exceeding $5 million.” Id. ¶ 34. Motorola
alleges that the second piece of defective software delayed release of the product,
damaging Motorola “in an amount exceeding $1.7 million.” Id. ¶ 42. Motorola claims
that its requests for indemnification for both amounts were rejected. It argues that
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defendants breached the MSA in two ways: via their gross negligence in design and
development of the defective software, and by refusing to indemnify Motorola for the
consequences.
On December 21, 2010, Motorola filed suit in Cook County Circuit Court against
Myriad France, Myriad Group, and Openwave. Motorola later agreed to dismiss
Openwave from the case, and the circuit judge entered an order to that effect on
October 6, 2011. On October 18, 2011, defendants removed the case to federal court.
I.
A.

Myriad France’s motion to dismiss

Count one
1.

Illinois Supreme Court Rule 103(b)

Myriad France argues that the Court should dismiss count one under Illinois
Supreme Court Rule 103(b), which states,
If the plaintiff fails to exercise reasonable diligence to obtain service on a
defendant prior to the expiration of the applicable statute of limitations, the action
as to that defendant may be dismissed without prejudice. If the failure to
exercise reasonable diligence to obtain service on a defendant occurs after the
expiration of the applicable statute of limitations, the dismissal shall be with
prejudice as to that defendant only and shall not bar any claim against any other
party based on vicarious liability for that dismissed defendant’s conduct.
Ill. S. Ct. R. 103(b). Although Rule 103(b) is a state procedural rule, “federal courts may
apply state procedural rules to pre-removal conduct.” Romo v. Gulf Stream Coach, Inc.,
250 F.3d 1119, 1122 (7th Cir. 2001).
Motorola first asserted count one in its state court complaint on December 21,
2010. Motorola concedes that it did not serve Myriad France until August 29, 2011.
Myriad France contends that this delay amounts to a failure of reasonable diligence. It
contends that Motorola knew Myriad France’s address, amended its complaint without
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attempting service on Myriad France, and demonstrated the ease with which it could
have served Myriad France at any time by completing service three weeks after filing
the second amended complaint.
The standard for dismissal under Rule 103(b) involves “a fact-intensive inquiry
suited to balancing, not bright lines.” Hinkle v. Henderson, 135 F.3d 521, 524 (7th Cir.
1998). The Court may consider factors including the “length of time used to obtain
service; activities of plaintiff; plaintiff's knowledge of defendant's location; ease with
which defendant's whereabouts could have been ascertained; defendant's actual
knowledge of the pendency of the action; and special circumstances which would affect
plaintiff's efforts.” Cannon v. Dini, 226 Ill. App. 3d 82, 86, 589 N.E.2d 653, 656 (1992).
Motorola does not dispute that it knew Myriad France’s location or could easily
have determined it. In fact, Motorola has provided no explanation for its delay (prior to
mid-July 2011) in serving Myriad France. It argues, however, that “special
circumstances” rendered its delay in service reasonable. In particular, Motorola asserts
that Myriad France “was aware of the software defects at issue . . . no later than
December 2006, the likelihood of a lawsuit on those issues no later than October 2010,
and the filing of the lawsuit by January 2011.” Pl.’s Resp. at 11.1 It also argues that
both Myriad France and Myriad Group moved to quash service of the first amended
complaint on “two affiliates of Myriad France,” indicating that “Myriad France was aware
of this lawsuit no later than July 11, 2011.” Id. at 12.

The citations in Part I of this opinion refer to the parties’ submissions on Myriad
France’s motion to dismiss; the citations in Part II refer to the submissions on Myriad
Group’s motion.

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Although Motorola refers to these factors as “special circumstances,” there is no
indication that they are “special circumstances which would affect plaintiff’s efforts.”
See Cannon, 226 Ill. App. 3d at 86, 589 N.E.2d at 656 (emphasis added). They are
therefore more properly analyzed as indicating “defendant’s actual knowledge of the
pendency of the action.” Id. Myriad France does not dispute the allegations regarding
what it knew when, but it contends that Motorola's delay in service was nonetheless
“unreasonable as a matter of law.” Def.’s Reply at 3. Myriad France argues that its
knowledge of a potential claim is not the same thing as knowledge of the pendency of
an action, and the earliest it could have known that an actual lawsuit was in place was
July 11, 2011. The Court agrees. Thus, the length of time that passed between filing of
the complaint and Myriad France’s knowledge of the lawsuit was about six-and-one-half
months.
Illinois courts have dismissed cases under Rule 103(b) for similar delays. See,
e.g., Hinkle, 135 F.3d at 524 (“Hinkle’s eight-month delay in this case is unreasonable
under Illinois law.”); Long v. Elborno, 376 Ill. App. 3d 970, 980, 875 N.E.2d 1127, 1134
(2007) (delay of seven months and three days); Tischer v. Jordan, 269 Ill. App. 3d 301,
308, 645 N.E.2d 991, 996 (1995) (delay of six months); Paglis v. Black, 178 Ill. App. 3d
1062, 1064, 534 N.E.2d 206, 208 (1989) (delay of five-and-one-half months without
explanation); Segal v. Sacco, 175 Ill. App. 3d 504, 507, 529 N.E.2d 1038, 1040 (1988)
(contrasting too-short four-and-one-half month period with cases of dismissal for sevenand eight-month delays); Penrod v. Sears, Roebuck & Co., 150 Ill. App. 3d 125, 129,
501 N.E.2d 367, 369 (1986) (delay of a little over eight months after filing of suit and a
little over seven months after issuance of summons).
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Illinois courts have also distinguished cases in which unsuccessful “attempts
were made to effect service” excused delays of similar lengths from cases in which
“plaintiff made no effort to serve defendant for nearly eight months.” Sinn v. Elmhurst
Med. Bldg., Ltd., 243 Ill. App. 3d 787, 791-92, 612 N.E.2d 932, 936 (1993) (emphasis in
original) (citing Cannon, 226 Ill. App. 3d at 87, 589 N.E.2d at 653); see also Dupon v.
Kaplan, 163 Ill. App. 3d 451, 455, 516 N.E.2d 727, 729 (1987) (“[Plaintiff’s three]
immediate initial attempts to serve [defendant] at his proper address establish that [she]
was diligent in her attempts to obtain service.”). Motorola does not argue that it made
any attempts to serve Myriad France or to notify it of the pendency of this lawsuit before
mid-July 2011, nearly seven months after Motorola filed its complaint. Nor does
Motorola provide any explanation for its delay prior to July 2011. The Court concludes
that this demonstrates a lack of reasonable diligence under Rule 103(b) and dismisses
count one with respect to Myriad France.
The parties disagree regarding the application of the statute of limitations, which
affects whether dismissal under Rule 103(b) is with or without prejudice. Myriad France
argues that the applicable statute of limitations for this claim is the four-year period
established by the Illinois Uniform Commercial Code for contracts involving the sale of
goods. 810 ILCS 5/2-725. Motorola does not dispute Myriad France’s contention that
the UCC applies to software transactions like this one, but it argues that its indemnity
claim is governed by the limitations period for claims involving written contracts, which
in Illinois is ten years. 735 ILCS 5/13-206. Myriad France correctly points out, however,
that the ten-year statute begins with the phrase “[e]xcept as provided in Section 2-275
of the Uniform Commercial Code.” Id. Myriad France is therefore correct that a four7

year limitations period applies to this claim.
Myriad France argues further that the claim accrued more than four years before
service (the relevant date under Rule 103(b)) because the date of its alleged refusal to
comply with Motorola’s request for indemnification was in 2006. Motorola correctly
points out, however, that the complaint does not allege the date on which this refusal
occurred and that the plaintiff is not required to anticipate or negate the affirmative
defense of limitations in the complaint. See Tregenza v. Great Am. Commc’ns Co., 12
F.3d 717, 718 (7th Cir. 1993). Motorola also disputes when the claim accrued.
Because the Court cannot determine at this stage whether the limitations period had run
before Motorola served Myriad France, its dismissal of count one against Myriad France
is without prejudice. Assuming Motorola amends to reassert the claim, the Court will
decide the statute of limitations issue, if appropriate, at a later stage of the litigation.
2.

Indemnification

Because the Court anticipates that Myriad France’s second argument for
dismissal of count one may resurface if Motorola reasserts count one, the Court
addresses the argument here. Myriad France contends that count one should be
dismissed because the claim “does not meet Section 14.1 [of the MSA’s] stated
requirement for indemnification.” Def.’s Mem. at 9. According to Myriad France, the
complaint does not state any more than a conclusory allegation of breach of contract.
Moreover, according to Myriad France, the alleged defect cannot constitute “gross
negligence” under section 14.1 because of the inclusion in section 16.3 of the MSA of
the statement that “neither party warrants that use of the licensed software will be
uninterrupted or error free,” Def. Ex. 1 at 5, and the ninety-day warranty provision
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stating that the remedy for any software error is limited to error correction without
charge.
Motorola alleges in the complaint that Openwave delivered defective software;
the defect resulted in a class action against which Motorola was obligated to defend and
indemnify Verizon; and Openwave then refused to defend and indemnify Motorola. The
Court agrees with Motorola that these constitute allegations that, if proven, could
establish that Myriad France has breached its indemnification obligations under the
terms of the MSA, entitling Motorola to relief.
Furthermore, the warranty provisions cited by Myriad France cannot foreclose
the possibility of an indemnity claim. If the only possible remedy for a software defect
leading to an indemnity claim were the free error correction described in section 16.2 of
the MSA, that would effectively render the indemnity provision superfluous. Motorola is
not seeking compensation based on the defect itself, but rather for the damages it
sustained as a result of the lawsuit based on the defect. If Motorola could not bring a
claim under section 14.1 of the MSA for lawsuits like this one, it is not clear what
purpose that provision would serve. “A court will not interpret a contract in a manner
that would nullify or render provisions meaningless.” Thompson v. Gordon, 241 Ill. 2d
428, 442, 948 N.E.2d 39, 47 (2011). For these reasons, the Court concludes that
Myriad France’s remaining arguments concerning count one would not merit dismissal
of Motorola’s claim.
B.

Counts two and three
Myriad France correctly contends that Motorola essentially makes two allegations

of breach of contract for each of counts two and three: negligence in design and
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development of the software, and failure to indemnify Motorola for the damages it has
suffered based on its transactions with Tracfone.
1.

Negligence

Myriad France argues first that the MSA does not provide a basis for the
negligence claim because it is a license agreement, not a contract to design and
develop software. The Court agrees that Motorola cannot point to a specific provision of
the MSA that has been breached by the allegedly negligent software design. Although
the complaint states that Myriad France’s negligent design was itself a breach, the
terms of the MSA itself “must prevail over the averments [in the complaint] differing
therefrom.” Ogden Martin Sys. of Indianapolis, Inc. v. Whiting Corp., 179 F.3d 523, 529
(7th Cir. 1999) (internal quotation marks and citations omitted).
Motorola argues that its claim is authorized under section 16.2, which provides a
ninety-day warranty for software defects. Myriad France points out that section 16.2
covers only the “commercially released” version of software, whereas the complaint
alleges that the alleged defects were discovered during “pre-release” testing by
Tracfone. Second Am. Compl. ¶¶ 31, 39. This fact does not conclusively establish that
the version of the software at issue was not the commercially released version. Even if,
however, the software was subject to the warranty, the only remedy for this under the
contract would be free error correction, not monetary damages. Motorola argues that
the warranty provision is rendered “toothless” if Motorola cannot seek damages for its
breach, Pl.’s Resp. at 8, but this argument is unavailing. The provision establishes a
remedy for defective software, and Motorola does not allege in its complaint that Myriad
France failed to provide this remedy. Instead, it seeks damages specifically for the
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allegedly defective design of the software, which the MSA does not authorize. The
Court therefore concludes that, to the extent that Motorola’s complaint makes separate
claims for negligence, those claims must be dismissed.
2.

Indemnification

Myriad France next argues that the Court should dismiss the indemnity claims
because – unlike in count one – Motorola does not allege in counts two and three that it
has been damaged through a third-party lawsuit arising out of defects in the software.
Instead, Motorola claims in count two that it was damaged when Tracfone cancelled its
purchase of one product and in count three that a defect caused a delay in release of
another product. Myriad France argues that section 14.1 of the MSA provides for
indemnification only for third-party claims against Motorola, not for damages sustained
directly by Motorola as a result of Myriad France’s actions.
In section 14.1 of the MSA, Myriad France “agrees to defend, indemnify, and
hold harmless Motorola from and against any claim, suit or proceeding and any
damages, liability or other expenses (including, but not limited to, reasonable attorneys’
fees and court costs) which arise out of or result from” negligence by Myriad France
employees. Def. Ex. 2 at 5. Myriad France contends that although this language may
not expressly preclude indemnification for claims other than those made by third parties,
it does not provide sufficiently clear coverage of claims between the contracting parties
to allow Motorola’s claim in this case to proceed.
The parties dispute which state’s law governs the construction of section 14.1.
Although the MSA initially provided that California law would govern its construction, it
was amended on December 1, 2008 to say that Delaware law applies. Motorola
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suggests in its brief that because the allegedly defective software at issue in count two
was delivered to Motorola in “late 2008 and early 2009,” California law may govern this
claim. The Court concludes that it need not resolve this question because the MSA
allows for Motorola’s claims under either state’s law.
In Oliver B. Cannon & Son, Inc. v. Dorr-Oliver, Inc., 394 A.2d 1160, 1165 (Del.
1978), the Delaware Supreme Court noted that “only losses which reasonably appear to
have been intended by the parties are compensable under” a contract of indemnity.
The court then found that a contract in which one party promised to hold another
“harmless from any and all claims, liabilities and causes of action . . . resulting from any
and all acts or omissions of” the first party was one that “normally contemplates the
need to defend against [third] party claims as opposed to claims among contracting
parties.” Id. Courts reached similar results in two federal cases in the District of
Delaware. See Pinkert v. Olivieri, No. Civ. A. 99-380, 2001 WL 641737, at *6 (D. Del.
May 24, 2001) (finding that agreement to “defend, indemnify, and hold Owner harmless
from and against any and all loss, cost, expense, liability, actions, and claims
whatsoever (including, without limitation, reasonable attorneys fees and court costs)”
did not cover claims between contracting parties); DRR, LLC v. Sears, Roebuck & Co.,
949 F. Supp. 1132, 1134 (D. Del. 1996) (finding that agreement to “indemnify, defend
and hold harmless Seller . . . from any claims, costs (including reasonable attorneys
fees and court and arbitration costs), expenses, direct or indirect, causes of action,
penalties, liabilities, losses and damage” did not cover claims between contracting
parties).
By contrast, a judge in this district applying Delaware law found that an
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agreement to “indemnify, defend and hold [plaintiff] harmless . . . against any and all
losses arising out of or due to a breach of any of the representations, warranties or
covenants of [defendant] contained herein” provided for indemnity regarding claims
between contracting parties. Broaddus v. Shields, No. 08 C 4220, 2010 WL 3516110,
at *5-6 (N.D. Ill. Sept. 1, 2010). The court in Broaddus cited a Delaware Supreme Court
case in which, although the issue was not specifically contested, the court upheld an
indemnity claim between the parties for “damages,” which was defined under the
relevant contract as “any and all costs, losses, liabilities, damages, lawsuits,
deficiencies, claims and expenses, including without limitation, reasonable attorneys’
fees and amounts paid in investigation, defense or settlement of any of the foregoing.”
LaPoint v. AmerisourceBergen Corp., 970 A.2d 185, 190, 197-98 (Del. 2009).
California law clearly provides that agreements of the type at issue here cover
first-party indemnity claims. In Zalkind v. Ceradyne, Inc., 194 Cal. App. 4th 1010, 1023,
124 Cal. Rptr. 3d 105, 113 (2011), a California appellate court construed an agreement
that said, “[Defendant] shall indemnify, hold harmless and defend [plaintiff] . . . from and
against any and all damages, losses incurred by [plaintiff] that arise from or are in
connection with: . . . (b) Any breach or default by [defendant] of its covenants or
agreements contained in this Agreement.” The court noted that “the California Supreme
Court has defined ‘indemnity’ as ‘the obligation resting on one party to make good a
loss or damage another party has incurred,’” a definition not limited to third-party claims.
Id. at 1025, 124 Cal. Rptr. 3d at 114 (quoting Rossmoor Sanitation, Inc. v. Pylon, Inc.,
13 Cal. 3d 622, 628, 532 P.2d 97, 100 (1975)). Citing a number of other California state
and federal cases that reached similar results, the court in Zalkind concluded that the
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provision at issue did “not expressly limit the meaning of ‘indemnify’ to third party
claims” and therefore allowed for claims between the contracting parties. Id. at 1026,
124 Cal. Rptr. 3d at 116.
Delaware law on this issue appears to construe the contractual language more
narrowly than that of California, and section 14.1 of the agreement between Motorola
and Myriad France is not worded quite as expansively as those for which the cases
cited above allowed indemnity claims. Nonetheless, the Court concludes that the MSA
allows for Motorola’s claims. Nothing in the section expressly limits indemnity to thirdparty actions. More to the point, section 14.1, which promises indemnification “against
any claim, suit or proceeding and any damages, liability or other expenses,” Def. Ex. 2
at 5 (emphasis added), separates the language referring to lawsuits from “damages,”
indicating that these are distinct obligations. Motorola’s suggested reading of the
provision is therefore the correct one: Myriad France has agreed to “indemnify . . .
Motorola . . . from . . . any damages . . . or other expenses . . . which arise out of or
result from” the negligence of Myriad France employees.
3.

Limitation of liability

The MSA includes a provision stating that neither party shall “be liable for any
indirect, special or consequential damages of any kind or nature suffered by the other
party . . . including, without limitation, lost profits, business interruptions, or other
economic loss arising out of the use of the technology.” Def. Ex. 3 at 3. Myriad France
argues that because Motorola appears to seek damages “for lost profits and economic
loss” in count two and “apparently for lost profits and business interruptions” in count
three, those claims are barred. Def.’s Mem. at 14-15.
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Motorola responds that the complaint contains none of the forbidden words and
that it has claimed only that it sustained damages as “a direct and proximate result” of
the alleged breaches. Second Am. Compl. ¶¶ 34, 42. The Court agrees. The
complaint by its terms seeks only direct damages, and the Court accepts the complaint
at face value on a Rule 12(b)(6) motion. See United States v. All Meat and Poultry
Prods. Stored at Lagrou Cold Storage, 470 F. Supp. 2d 823, 834 (N.D. Ill. 2007)
(denying a motion to strike that “assumes the plaintiffs are seeking consequential
damages even though the complaint does not ask for them, and in their brief opposing
the defendants’ motions the plaintiffs state that the damages they seek are not
consequential damages”).
For these reasons, the Court dismisses, as to Myriad France, count one and the
portions of counts two and three that seek damages for Myriad France’s alleged
negligence in design and development of software. The Court otherwise denies Myriad
France’s motion.
II.

Myriad Group’s motion to dismiss

Myriad Group argues that the Court should dismiss all of Motorola’s claims for
lack of personal jurisdiction pursuant to Federal Rule of Procedure 12(b)(2) because it
“is not a party to the contract at issue and does not conduct business in Illinois.” Def.’s
Mem. at 1. The parties discuss in their briefs three possible bases for personal
jurisdiction: general jurisdiction, specific jurisdiction, and “alter ego” or “substantial
control” jurisdiction based on Myriad Group’s ownership of Myriad France. The Court
concludes that Motorola’s allegations are sufficient to establish specific jurisdiction over
Myriad Group.
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A non-resident defendant like Myriad Group may be sued in Illinois “on any . . .
basis now or hereafter permitted by the Illinois Constitution and the Constitution of the
United States.” 735 ILCS 5/2-209(c). For specific jurisdiction to be constitutionally
permissible, a court “must decide whether a defendant has ‘purposefully established
minimum contacts with the forum State’ and consider whether, by traditional standards,
those contacts would make personal jurisdiction reasonable and fair under the
circumstances.” RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997)
(quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985)). “[I]n a breach
of contract case, it is only the dealings between the parties in regard to the disputed
contract” that are relevant to minimum contacts analysis.” Id. at 1278 (emphasis in
original).
Myriad Group focuses much of its argument on the fact that it is not a party to the
MSA. This, however, does not establish that it cannot be subject to personal
jurisdiction, a question that depends not on the viability of Motorola’s breach-of-contract
claim but on Myriad Group’s contacts with Illinois in connection with the MSA. Myriad
Group cites Hess Newmark Owens Wolf Inc. v. Owens, No. 04 C 4821, 2004 WL
2203415 (N.D. Ill. Sept. 29, 2004), to support its contention that a non-party to a
contract can never be subject to personal jurisdiction on a claim for breach, but it
overstates the holding of the case. The plaintiff in Hess asserted that the court had
jurisdiction under 735 ILCS 5/2-209(a)(7), which depends on a defendant’s making or
performing a contract in Illinois. The court specifically noted that the plaintiff was not
relying on section 2-209(c), unlike Motorola in the present case.
Motorola’s response to Myriad Group’s motion to dismiss includes an affidavit by
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Paul Doucette, a Motorola senior manager. Doucette alleges that his “primary contact
at Myriad Group was Joe Pienta,” an account executive for the company. Doucette Aff.
¶ 12. He alleges further that Pienta
communicated on a regular basis by phone and e-mail with me and other
Motorola employees in Illinois regarding performance and payment issues
relating to the SDA, the MSA, and the software developed for Motorola under
both agreements, including some of the software at issue in this case. Mr. Pienta
met in person several times a year with Motorola employees in Illinois to discuss
ongoing work being performed by Myriad Group or Myriad France for Motorola.
In 2009, Mr. Pienta participated in at least one meeting in Illinois with Motorola
and TracFone to discuss the software defects at issue in this case. Mr. Pienta
also discussed with other Motorola employees in Illinois potential ways for
Motorola and Myriad to resolve the disputes involving the software defects at
issue in this case.
Id. ¶¶ 13-14. Assuming the truth of these allegations, which are not contradicted by any
facts asserted by Myriad Group, the Court finds them sufficient to establish the requisite
minimum contacts by Myriad Group with Illinois in connection with the MSA. The Court
therefore denies Myriad Group’s motion to dismiss.
Conclusion
For the reasons stated above, the Court grants Myriad France’s motion to
dismiss in part and denies it in part [docket no. 16] and denies Myriad Group’s motion to
dismiss [docket no. 13].

________________________________
MATTHEW F. KENNELLY
United States District Judge
Date: February 2, 2012

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