Cafe Real Estate llc et al v. VSP North America LLC et al
MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 3/1/2017. Mailed notice. (mgh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
Café Real Estate LLC, and
VSP North America LLC, VSP
Florida LLC, John Von Stach,
and Ryan Walker,
No. 16 C 6150
MEMORANDUM OPINION AND ORDER
In this action, plaintiffs allege that defendants committed
securities fraud and common law fraud, violated the Illinois
Consumer Fraud and Deceptive Practices Act, and breached their
contracts with plaintiffs by selling plaintiffs VSP’s discounted
accounts receivables, knowing that the receivables would not be
paid. Before me is defendants’ motion to dismiss for lack of
personal jurisdiction, which I deny for the following reasons.
Defendants Von Stach, a Canadian citizen who lives in Ontario,
Michigan, are, or were, principals of the corporate defendants.1
The complaint alleges that defendants placed an advertisement in
receivables at a discount. Cmplt. ¶ 12. Plaintiffs’ corporate
representative responded to the ad by email, and over the course
of a subsequent email exchange, Von Stach explained that the
offer was for investors to purchase one or more receivables from
VSP at a twenty-percent discount, after which VSP would assign
receivables were fully insured; that they were for product sales
consignment sales, nor could the products be returned to VSP by
the dealers; and that each receivable was due within 90 days.
purchased a number of accounts receivables from VSP-FL, only to
discover that defendants never shipped any products to several
of the dealers from whom plaintiffs expected to receive payment;
that defendants had shipped products on consignment to several
Walker was allegedly the sole member of VSP-FL, a Florida
limited liability company that was involuntarily dissolved on
September 11, 2015, for failure to file its annual reports.
Cmplt. at ¶ 4.
other dealers; and that they had made only a partial shipment to
shipped, so the receivables were similarly without substance.
Plaintiffs assert that Von Stach and Walker knew at the
time they made the representations on which plaintiffs based
their decision to enter into these transactions that (1) VSP had
no accounts receivable; (2) the VSP-FL accounts transferred to
lacked sufficient capital and inventory to fulfill the orders
products that were shipped were sold on consignment.
conclusively establish that personal jurisdiction over them is
personal jurisdiction over a defendant to the extent that a
court of the state in which it sits—Illinois in this case—would
have such jurisdiction. Philos Techs., Inc. v. Philos & D, Inc.,
645 F.3d 851, 855 n. 2 (7th Cir. 2011). Because Illinois allows
for personal jurisdiction to the full extent consistent with due
inquiries merge. See Tamburo v. Dworkin, 601 F.3d 693, 700 (7th
personal jurisdiction, and where, as here, the issue is raised
by a motion to dismiss and decided on the basis of written
materials rather than an evidentiary hearing, the plaintiff need
only make a prima facie showing of jurisdictional facts.” Id.
Accordingly, I “take as true all well-pleaded facts alleged in
the complaint and resolve any factual disputes in the affidavits
in favor of the plaintiff.” Id.
specific jurisdiction is at issue here. Specific jurisdiction
defendants purposefully availed themselves of the privilege of
conducting business in Illinois, or purposefully directed their
activities at Illinois; 2) that the alleged injury arose from
defendants’ forum-related activities; and 3) that the exercise
of jurisdiction comports with traditional notions of fair play
and substantial justice. Felland v. Clifton, 682 F.3d 665, 673
(7th Cir. 2012).
submitted the affidavit of Barry Edmonson, who states he is the
controller for plaintiff Bellaboom and an agent of plaintiff
dispute the facts set forth in the Edmonson affidavit. Instead,
they argue that the facts asserted are insufficient to support
jurisdiction a matter of law. I disagree.
In his affidavit, Edmonson states that over an eighteenmonth period, he and his colleague, Joseph Canfora, exchanged
numerous emails with Von Stach in which Von Stach explained the
terms of the offer and made the representations described above.
Exhibits attached to the affidavit show that both Canfora’s and
Ridge, Illinois. Edmonson also states that beginning in February
of 2015, plaintiffs made multiple wire transfers from their bank
Stach’s instructions. Exhibits attached to the affidavit also
show that when defendants assigned invoices to plaintiffs, they
provided their dealers with plaintiffs’ Illinois bank account
information for payment of the invoices.
In addition, Edmonson states that Von Stach and Walker met
with plaintiffs twice in Burr Ridge, Illinois: once on July 8,
2015, and again on February 14, 2016. Around the time of the
several times in July of 2015, but only once in Illinois), the
parties discussed several other deals, one of which contemplated
jointly forming an Illinois limited liability company. Another
involved further investment by plaintiffs in VSP invoices and a
plan for repayment of the VSP entities’ outstanding obligations
to plaintiffs. Neither of these deals closed, but the parties
continued to work together until at least February 14, 2016.
As noted, defendants do not dispute any of the above facts,
which I conclude satisfy all three requirements for personal
jurisdiction. In their reply, defendants point, in succession,
to the various types of case-related forum contacts the Edmonson
appreciate, however, that defendants’ case-related contacts with
Illinois must be viewed in the aggregate. Accordingly, their
arguments that: 1) injuries felt in the forum state alone are
plaintiffs alone are insufficient, id., at 3; and 3) defendants’
two meetings with plaintiffs in Illinois alone are insufficient,
defendants rely are factually distinct and did not address the
kinds of ongoing conduct directed to the forum that the Edmonson
Advanced Tactical Ordnance Systems
LLC v. Real Action Paintball, Inc., 751 F.3d 799 (7th Cir. 2014)
fulfillment of orders placed by forum residents, and maintenance
jurisdiction); United Airlines, Inc. v. Zaman, 152 F. Supp. 3d
plaintiff published on defendant’s website and communications
primarily initiated by plaintiff insufficient).
The facts set forth in the Edmonson affidavit are closer to
those at issue in Felland, where the plaintiffs invested in a
defendants made over the course of years. In addition, Felland
makes clear that in cases such as this, where the plaintiffs’
claims include an intentional tort such as fraud, communications
“expressly aimed at the forum state” that contain intentional
misrepresentations can support jurisdiction. 682 F.3d at 674-75
plaintiffs’ injury would be felt in Illinois, as that is where
the bank accounts from which payments were made to defendants
Finally, defendants argue that personal jurisdiction over
Von Stach and Walker is inappropriate because they cannot be
held personally liable on a veil-piercing theory. But whether
veil-piercing is appropriate is a separate issue from personal
jurisdiction, and, indeed, none of the cases they cite in this
connection addresses personal jurisdiction.
For the foregoing reasons, defendants’ motion to dismiss
for lack of personal jurisdiction is denied.
Elaine E. Bucklo
United States District Judge
Dated: March 1, 2017
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