Kreisman Law Offices Professional Corporation
This is a case in which the U.S. Court of Appeals for the 7th Circuit in Chicago found that the defendant had contracted with an out-of-state buyer. The court found that the buyer performed all contractual obligations in his own state; however, the required sufficient minimum contacts were not found to establish personal jurisdiction in the plaintiff’s state of Wisconsin.
Marvin Greving was a Wisconsin resident who lived and ran a farm in Walworth County, Wis., since April 1971. Greving and his wife conducted their personal and business matters only in Wisconsin. Greving has a Wisconsin driver’s license, Wisconsin insurance and pays taxes in that state. In addition, Greving purchased all of his supplies for his farm from Wisconsin vendors.
In 2003, Greving attended a meeting at an insurance agency in Rochelle, Ill. At that meeting, Greving met Tom Wilson, a grain originator from Northern Grain LLC. Northern Grain is organized under Delaware law, but is located in Harmon, Ill.
Northern Grain buys and markets grain. Wilson’s job included making contacts with farmers in order to purchase grain from them.
Wilson and Greving kept up their contacts after the meeting. Eventually, Greving agreed to sell grain to Northern Grain. For the next 9 years, Greving and Northern Grain, through Wilson, contracted for the sale of grain. All of the meetings to confirm the contracts were held in Wisconsin, and Greving delivered his grain to grain elevators in Wisconsin.
Northern Grain paid Greving with checks drawn on Illinois banks. Northern Grain alleged in this lawsuit that Greving backed out of several contracts for the sale of grain between December 2010 and December 2012. Greving alleged that he had never signed the contracts and in fact had rebuffed efforts by Wilson to get him to commit to selling more grain than his farm usually produced.
Each of the grain contracts that Greving refused to sign contained provisions that the agreement was subject to arbitration by the National Grain and Feed Association and that Greving would be obliged to cover the cost of Northern Grain’s efforts to enforce the terms of the contract.
In November 2011, Greving received a copy of an arbitration complaint that Northern Grain had filed. Greving refused to submit himself to arbitration. In February 2012, Northern Grain filed a lawsuit in the U.S. District Court in Rockford, Ill., to compel arbitration and also sought nearly $1 million in damages.
After being served by Northern Grain in the lawsuit, Greving moved to dismiss the suit based on lack of personal jurisdiction. The district court judge agreed and dismissed the case. Northern Grain appealed to the U.S. Court of Appeals.
The panel reviewing the appeal first noted that simply by contracting with an out-of-state party alone does not automatically establish minimum contacts in the other party’s home forum.
Rather, the appellate justices’ opinion stated, the defendant must purposefully direct its actions at residents of the forum state in order for personal jurisdiction to be found. The court cited Madison Consulting Group v. South Carolina, 752 F.2d 1193. The panel stated that the question of which party initiated the contractual relationship is an important consideration in assessing the constitutional propriety of personal jurisdiction.
The appellate court stated that there are no facts that show that Greving initiated business with Northern Grain. The panel reasoned that because Greving had attended the seed-corn meeting without the intention to solicit business, it was not clear that his attendance at that meeting impacted the personal jurisdiction analysis.
The appeals panel also stated that focusing on the course of dealings prior to the contracts also undermined Northern Grain’s case. All of the meetings related to the formation of contracts took place in Wisconsin, not in Illinois. And last, the panel resolved that Greving had not actively marketed his products to buyers in Illinois and thus, he did not purposely avail himself to the privilege of doing business in Illinois.Accordingly, the court of appeals affirmed the district court’s decision dismissing the case.
Northern Grain Marketing, LLC v. Marvin Greving, No. 12-2653 (7th U.S. Circuit Court of Appeals).
Kreisman Law Offices has been successfully handling business contract disputes, corporation contracts, arbitration matters and commercial litigation for individuals and businesses for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Des Plaines, Libertyville, Mundelein, Mount Prospect, Prospect Heights, Highwood, Rosemont, RIverwoods and Oak Forest, Ill.
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