Diamond v. Nicholls et al
MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 3/1/2018. Mailed notice. (mgh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
Mark Nicholls and Sid
No. 17 C 3900
MEMORANDUM OPINION AND ORDER
Nicholls) and son (Mark Nicholls) who reside in Ottawa, Canada—
defrauded and conspired to defraud investors through a scheme
Before me is defendant Sid Nicholls’s motion to dismiss for lack
of personal jurisdiction, which I deny for the following reasons.
According to the complaint, between July 2008 and January
2009, Mark Nicholls formed four related Delaware entities—Turf
Nation. Am. Compl. at ¶¶ 16-19. “At some point,” the complaint
continues, Sid Nicholls “assumed primary responsibility for and
President of Turf Nation in 2011 and 2012 and continues to serve
authority and control over the company with Sid. Id. at ¶¶ 19-20.
Turf Nation was the sole supplier of artificial turf to Turfscape
and UBU Sports, the latter of which has its principal place of
Sports’s primary business was the sale of synthetic turf surfaces
substantial quantities between 2009 and 2013 pursuant to a line
of credit from Turf Nation. Id. at ¶¶ 17-22.
In 2013, Mark formed a Georgia holdings company called Turf
Industry Holdings, LLC (“TIH”), as a vehicle for investment in
UBU Sports, Turfscape, and a third, related company. Defendants
then began marketing and selling membership interests and notes
in TIH, some of which plaintiff purchased. Plaintiff alleges that
ranging from his (Mark’s) past business experience and successes;
existence of valid pre-existing agreements to ensure, among other
things, the stability of UBU Sports’s supply chain.
Plaintiff’s most salient allegations against Sid involve his
alleged participation in the fabrication of a supply contract
between Turf Nation and UBU Sports. According to the complaint,
at the time defendants began seeking investors for TIH, there was
no written supply agreement between UBU Sports and Turf Nation.
investors, Mark and Sid created one in October of 2014, which
they backdated to January 15, 2013, and represented as having
been in force since that time. Then, in November of 2014, Sid
purported to “terminate” the fabricated contract in a letter he
sent to Mark at his home in Ontario. Sid and Mark did not inform
plaintiff, the TIH Board of Managers, or UBU Sports’s management
or employees about the putative “termination” of the fabricated
plaintiff has offered no evidence that he has relevant contacts
with the state of Illinois or that he “expressly aimed” the
alleged wrongdoing at Illinois, knowing it would harm plaintiff
in Illinois. I disagree. Plaintiff attaches to his complaint the
allegedly phony supply contract, between Turf Nation (on whose
behalf Sid signed in his capacity as a corporate officer) and UBU
attaches correspondence between Mark and Sid that on its face,
fabricated and backdated a supply contract with no intent that
the entities on whose behalf they purported to sign would perform
Sid does not dispute that he knew UBU Sports operated out of
Illinois, but he claims that because he did not know that the
supply contract between UBU Sports and Turf Nation would be used
to defraud investors located in Illinois, personal jurisdiction
is inappropriate under Mobile Anesthesiologists Chicago, LLC v.
Anesthesia Associates of Houston Metroplex, P.A., 623 F.3d 440
defendant in Mobile Anesthesiologists was an entity that operated
professional duties in Illinois. The plaintiff’s assertion of
personal jurisdiction was based exclusively on the defendant’s
others, of a name that allegedly infringed an Illinois entity’s
generally accessible website alone did not establish defendant’s
“express aiming” of tortious misconduct at Illinois. It does not
stand for the proposition that a defendant who enters into a sham
contract with an Illinois entity for the purpose of defrauding
Indeed, while a defendant’s awareness that the plaintiff
will be injured in the forum state is certainly a factor that can
support personal jurisdiction, none of Sid’s authorities suggests
that such awareness is a sine qua non of personal jurisdiction.
cause of action arises out of or relates to the defendant’s
activities in the forum state.” Mem. at 8 (quoting Andersen v.
Sportmart, Inc., 57 F. Supp. 2d 651, 656-57 (N.D. Ind. 1999)
purchasing agent for a product that caused injury in Indiana).
Illinois, and the complaint fairly alleges claims arising in part
contract with that entity.
jurisdiction because he signed the phony contract on behalf of
Turf Nation. Sid cites Club Assistance Program, Inc. v. Zukerman,
594 F. Supp. 341, 345 (N.D. Ill. 1984), for this argument, but as
undertaken on his own behalf and directed at the forum does not
trigger the “fiduciary shield” doctrine. Id. Construing all of
the complaint’s allegations in plaintiff’s favor, I conclude that
Sid’s fabrication of the supply contract was at least in part for
his own benefit, not solely for the benefit of the entity on
whose behalf he purported to sign it.
Because I conclude that Sid’s alleged participation in the
fabricated supply contract and supporting evidence are sufficient
to confer personal jurisdiction, I need not consider plaintiff’s
remaining allegations directed to Sid. The motion to dismiss is
Elaine E. Bucklo
United States District Judge
Dated: March 1, 2018
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