Cameron v. Owens-Corning Fiberglas Corp.

695 N.E.2d 572, 296 Ill. App. 3d 978, 231 Ill. Dec. 55

Opinions

JUSTICE McCULLOUGH

delivered the opinion of the court:

In these consolidated appeals, this court allowed the petition of defendant Charter PLC (Charter) for leave to appeal the denial of its motions to dismiss for lack of personal jurisdiction. 166 111. 2d R. 306(a)(3). In No. 4 — 97—0385, the plaintiff is Marge Cameron, individually and as special administrator of the estate of J. Bernard Latta, deceased. In No. 4 — 97—0386, the plaintiff is Eleanor Price, individually and as special administrator of the estate of Floyd J. Price, deceased. Other named defendants are not involved in this appeal. The issues are whether (1) the trial court erred in ruling that in personam jurisdiction over Charter can be based on activities of alleged coconspirators; and (2) Charter did not have sufficient contacts with Illinois on which to base in personam jurisdiction. We affirm.

On March 24, 1995, Cameron filed her complaint against multiple defendants in this asbestos case. Her complaint alleged a conspiracy among the defendants and others. Count I was a wrongful death action, and count II sought damages for Latta’s injuries prior to death. Summons and complaint were served on Charter on April 5, 1995, in Jefferson County, Illinois.

On May 8, 1995, Charter filed a special and limited appearance and a motion to quash service of process. That motion, and supporting affidavits, indicated (1) Charter was a corporation organized under the laws of the United Kingdom; (2) plaintiff served “Charter Consolidated PLC, National Mine Service, Route 37 N. Mt. Vernon, Illinois,” at a warehouse facility of National Mine Service, Inc.; (3) prior to March 8, 1995, defendant indirectly owned shares of National Mine Service, but National Mine Service sold all its assets to a subsidiary of Marmon Corporation, including the warehouse in Mt. Vernon; (4) these assets were later transferred to National Mine Service, Inc., another Marmon subsidiary; (5) Charter had no affiliation with or interest in Marmon or National Mine Service, Inc.; (6) Charter indirectly continues to own shares of National Mine Service Company, which had changed its name to Distribution and Mining Equipment Company and is dormant and conducts no business in Illinois or anyplace else; and (7) Marmon, National Mine Service, Inc., and their employees are not registered agents of Charter. The trial court allowed plaintiff to depose Charter’s affiants without affecting Charter’s special and limited appearance.

On August 8, 1995, plaintiff Cameron served an alias summons and complaint on Distribution Mining and Equipment Company through CT Corporation System, Chicago, Illinois. Charter moved to quash the alias summons on the ground that Charter and Distribution Mining are separate companies; CT Corporation System is not a registered agent of Charter; and no officer, director, or employee of Distribution Mining and Equipment Company is an officer, director, or employee of Charter. The motion was supported by affidavits. The parties filed numerous documents and depositions. On October 18, 1996, the motion to quash was denied, and Charter’s special and limited appearance was overruled after the trial court found that service was proper based on the relationship of Fred 0. Clayton to both Charter and Distribution Mining and Equipment Company.

On November 14, 1996, Charter again filed a special and limited appearance and a motion to dismiss for lack of personal jurisdiction. Plaintiff Cameron moved to strike Charter’s motion on the ground that it had waived the right to challenge personal jurisdiction because of the prior motions and rulings on the motion to quash service. Plaintiff’s motion was denied. On April 28, 1997, the trial court denied Charter’s motion to dismiss the complaint for lack of jurisdiction. This appeal, No. 4 — 97—0385, followed.

On February 23, 1995, Price filed a complaint alleging multiple counts. Charter was named a defendant in counts X, XI, and XII. Count X was a conspiracy in a wrongful death action, count XI sought damages for injuries to Floyd Price prior to his death, and count XII was for loss of consortium. The procedural history of this case is essentially the same as in Cameron.

The allegations of the counts of the complaints in both cases naming Charter as a defendant are also substantially the same. The complaints name Johns-Manville Corporation; Johns-Manville Sales Company; UNARCO Industries, Inc.; and Raymark Industries, Inc.; or their corporate predecessors, as coconspirators of Charter and the other named defendants. The complaints alleged the conspirators (1) were active in the asbestos business for many years, had knowledge of manufacturing operations using asbestos, and had actual knowledge of asbestos disease and death among workers exposed to asbestos as early as the 1930s; (2) knew workers were ignorant of the hazardous propensities of asbestos; (3) knew asbestos was inherently dangerous; (4) had employees who were exposed to asbestos dust and had a duty to provide a safe workplace or to warn of the hazards; (5) knew that, if they adequately warned their employees and others whose work brought them into contact with the asbestos, the publication would cause workers to leave asbestos-using industries, reducing sales and uses of asbestos; and (6) knowingly conspired and agreed among themselves to

“a) positively assert in a manner not warranted by the information possessed by the conspirators, that which was and is not true, to wit, that it was safe for people to work with and in closed [sic] proximity to asbestos and asbestos [-]containing materials; [and] b) suppress information about the harmful effects of asbestos, including medical and scientific data, causing workers to be and to remain ignorant of that information.”

The complaints alleged, e.g., that, in furtherance of the conspiracy, the conspirators did one or more of the following acts:

“a) sold asbestos which was used at the plant without warning of the hazards known to the seller;

b) refused to warn its own employees about the hazards of asbestos known to it, including the refusal of Unarco to warn its employee, J. Bernard Latta, about the hazards of asbestos known to Unarco;

c) edited and altered the reports and drafts of publications initially prepared by Dr. Lanza concerning the hazards of asbestos during the 1930’s;

d) agreed in writing not to disclose the results of research on the effects of asbestos upon health unless the results suited their interests;

e) obtained an agreement in the 1930’s from the editors of ASBESTOS, the only trade magazine devoted exclusively to asbestos, that the magazine would never publish articles on the fact that exposure to asbestos caused disease, and sustained this agreement into the 1970’s;

f) suppressed the dissemination of a report by Dr. Gardner in 1943 which was very critical of the concept that there was a safe level of asbestos exposure;

g) through their control of the Asbestos Textile Institute (ATI), defeated further study of the health of workers when William Hemeon graphically demonstrated the need for such study and dissemination of information in the 1940’s; [and]

h) edited and altered the reports and drafts of publications regarding asbestos and health initially prepared by Dr. Vorwald during 1948-1951.”

Plaintiffs argue that the challenge to the personal jurisdiction has been “waived” since it was not raised at the time of the first special and limited appearance. Section 2 — 301 of the Code of Civil Procedure (Code) states, in relevant part:

“(a) Prior to filing any other pleading or motion, a special appearance may be made either in person or by attorney for the purpose of objecting to the jurisdiction of the court over the person of the defendant. A special appearance may be made as to an entire proceeding or as to any cause of action involved therein. Every appearance, prior to judgment, not in compliance with the foregoing is a general appearance.

(b) If the reasons for objection are not apparent from the papers on file in the case, the special appearance shall be supported by affidavit setting forth the reasons. In ruling upon the objection, the court shall consider all matters apparent from the papers on file in the case, affidavits submitted by any party, and any evidence adduced upon disputed issues of fact. No determination of any issue of fact in connection with the objection is a determination of the merits of the case or any aspect thereof. A decision adverse to the objector does not preclude the objector from making any motion or defense which he or she might otherwise have made.” 735 ILCS 5/2 — 301(a), (b) (West 1994).

Plaintiffs argue that “a special appearance” means only one may be filed. However, the article “a” is generally not used in the singular sense unless that intention is clear from the statutory language. Lindley v. Murphy, 387 Ill. 506, 517, 56 N.E.2d 832, 838 (1944).

Even though that would promote judicial economy, none of the cases cited by plaintiffs stand for that proposition. R.W. Sawant & Co. v. Allied Programs Corp., 130 Ill. App. 3d 71, 74, 473 N.E.2d 496, 498-99 (1984), held it was proper to file a special and limited appearance on a motion to quash service of summons after the entry of a default judgment. Hawes v. Hawes, 130 Ill. App. 2d 546, 547-49, 263 N.E.2d 625, 626-27 (1970), involved vacating a portion of a divorce decree following the entry of a special and limited appearance to challenge the trial court’s jurisdiction. Albers v. Martin, 316 Ill. App. 446, 45 N.E.2d 102, 102-03 (1942) (abstract of op.), is a scire facias proceeding to revive a judgment and has been published in abstract form only; such opinions are not to be cited in the briefs of litigants unless the entire text of the abstract opinion is appended to the brief (47 Ill. App. 3d R. 8), which it was not in this instance.

Section 2 — 301 of the Code provides that a special appearance can be made before filing any other pleading or motion, i.e., before a general appearance has been made. A general appearance by a defendant waives any objection to jurisdiction over that person. Duncan v. Charles, 5 Ill. (4 Scam.) 561, 569 (1842). Since the special appearance challenges jurisdiction over the party, it cannot be turned into a general appearance simply because a successive special appearance, based on a different ground, is also filed attacking jurisdiction over the same person. Section 2 — 301 of the Code does not prohibit successive special appearances as long as a general appearance has not yet been made.

The issue of whether the trial court has personal jurisdiction over Charter is a question of law, which this court considers de novo. White v. Ratcliffe, 285 Ill. App. 3d 758, 764, 674 N.E.2d 906, 911 (1996). In ruling on an objection to personal jurisdiction, “the court shall consider all matters apparent from the papers on file in the case, affidavits submitted by any party, and any evidence adduced upon disputed issues of fact.” 735 ILCS 5/2 — 301(b) (West 1996). Since no evidence on disputed facts was adduced in this case, the standard of review is the same as for a section 2 — 619 motion to dismiss, which may be supported by affidavits and opposed by counteraffidavits. See 735 ILCS 5/2 — 619 (West 1996); Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116, 619 N.E.2d 732, 735 (1993).

The Illinois long-arm statute, section 2 — 209 of the Code, provides in relevant part:

“(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:

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(2) The commission of a tortious act within this State;

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(c) A court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the" United States.” 735 ILCS 5/2 — 209(a)(2), (c) (West 1994).

In Ores v. Kennedy, 218 Ill. App. 3d 866, 872, 578 N.E.2d 1139, 1144 (1991), the court stated:

“Pursuant to the amended Illinois long-arm statute and before exercising in personam jurisdiction, due process requires that a non-resident defendant have certain minimum contacts with the forum State such that maintenance of the suit there does not offend ‘traditional notions of fair play and substantial justice.’ (International Shoe Co. v. Washington (1945), 326 U.S. 310, 316, 90 L. Ed. 95, 102, 66 S. Ct. 154, 158.) Therefore, the following three criteria must be considered to determine whether the court’s exercise of jurisdiction over Golden satisfies due process: (1) whether the nonresident defendant had ‘minimum contacts’ with the forum State such that he had ‘fair warning’ that he may be required to defend himself there; (2) whether the action arose out of or relates to the defendant’s contacts with the forum; and (3) whether it is reasonable to require the defendant to litigate in the forum State. Burger King Corp. v. Rudzewicz (1985), 471 U.S. 462, 471-78, 85 L. Ed. 2d 528, 540-44, 105 S. Ct. 2174, 2181-85.”

Federal standards are the outer limits beyond which the state may not go to acquire jurisdiction over nonresidents, and Illinois courts must look to both the federal standards and the long-arm statute. Rollins v. Ellwood, 141 Ill. 2d 244, 271, 565 N.E.2d 1302, 1314 (1990). Furthermore, the Illinois Constitution contains its own guarantees of due process (Ill. Const. 1970, art. I, § 2), separate and independent from the federal guarantees. Rollins, 141 Ill. 2d at 275, 565 N.E.2d at 1316.

“Jurisdiction is to be asserted only when it is fair, just, and reasonable to require a nonresident defendant to defend an action in Illinois, considering the quality and nature of the defendant’s acts which occur in Illinois or which affect interests located in Illinois. See People ex rel. Mangold v. Flieger (1985), 106 Ill. 2d 546, 550.” Rollins, 141 Ill. 2d at 275, 565 N.E.2d at 1316.

Charter argues that a conspiracy theory, as a basis for personal jurisdiction, has been held to be invalid. Charter relies on Green v. Advance Ross Electronics Corp., 86 Ill. 2d 431, 440-41, 427 N.E.2d 1203, 1208 (1981). Green, however, stated it did not work in that case because Illinois had jurisdiction over one alleged conspirator only because that individual elected to come to Illinois to sue the defendants. That fact did not indicate that any of the tortious acts he was charged with performing in common with his father satisfied the long-arm statute. The Illinois Supreme Court went on to state that, for all coconspirators to be subject to Illinois jurisdiction, one coconspirator must have committed a tortious act within Illinois as agent for the other coconspirators. Green did note that the conspiracy theory of jurisdiction had been questioned in Chromium Industries, Inc. v. Mirror Polishing & Plating Co., 448 F. Supp. 544, 552 (N.D. Ill. 1978). Ores stated that the legislative amendment of section 2 — 209 of the Code to add what is now subsection (c) effectively overruled the language in Green (later restated in Rollins) to the effect that a statute worded such as that in Illinois should have a fixed meaning. Ores, 218 Ill. App. 3d at 872, 578 N.E.2d at 1144. The underlying incident and the filing of the original complaint in Rollins occurred in 1986. The relevant amendment to section 2 — 209 was effective November 23, 1987. 735 ILCS Ann. 5/2 — 209, Historical and Statutory Notes (Smith-Hurd 1992). Plaintiffs suggest that the “any other basis” language in section 2 — 209(c) of the Code is a basis for obtaining jurisdiction over Charter by using it as a vehicle for incorporating the conspiracy theory of jurisdiction into Illinois law.

In Textor v. Board of Regents of Northern Illinois University, 711 F.2d 1387, 1392-93 (7th Cir. 1983), the court considered the Illinois long-arm statute. The complaint alleged the defendants (universities affiliated with the Mid-America Conference) conspired to discriminate against women’s athletics in violation of the federal constitution and statutes and, in so doing, engaged in conferences, meetings, and discussions in De Kalb, Illinois, at which directives and requests were issued regarding women’s athletics. In Textor, the seventh circuit applied the conspiracy theory of personal jurisdiction as a “time-honored notion.”

Charter points out that the conspiracy jurisdiction theory has been criticized for merging otherwise distinct questions of jurisdiction and substantive liability. In Adcock v. Brakegate, Ltd., 164 Ill. 2d 54, 62-63, 645 N.E.2d 888, 894 (1994), the Illinois Supreme Court discussed the extension of liability in tort beyond the active wrongdoer to those who have merely planned, assisted or encouraged the wrongdoer’s acts by way of a theory of civil conspiracy, and set out the elements for establishing a civil conspiracy. The Illinois long-arm statute encompasses the conspiracy theory of jurisdiction.

Charter further argues that the complaints in these cases fail to allege the existence of conspiracy with particularity and they especially do not allege agency. For this analysis, it is important to note that the agreement, although a necessary element in civil conspiracy, is not itself a tort. There must be some tortious act or acts performed in furtherance of the agreement. Adcock, 164 Ill. 2d at 62-63, 645 N.E.2d at 894. Although defendant may contest whether it is responsible for an act or omission causing an injury in Illinois or whether its contacts with the State were sufficient to satisfy due process, it may not contest whether the conduct was in fact tortious. 3 R. Michael, Illinois Practice § 6.5, at 68 (1989) (Civil Procedure Before Trial). Whether plaintiff sufficiently alleged a cause of action is properly addressed in a motion to dismiss pursuant to section 2 — 615 of the Code. 735 ILCS 5/2 — 615 (West 1996).

In the context of a motion to dismiss for failure to state a cause of action, bare allegations of conspiracy are insufficient to plead conspiracy as a matter of substantive liability. Hume & Liechty Veterinary Associates v. Hodes, 259 Ill. App. 3d 367, 369, 632 N.E.2d 46, 48 (1994). Charter argues that is also true for a conspiracy theory of personal jurisdiction. Although the complaints alleged no facts as to how the conspiracy came about, other than that the named conspirators “conspired,” the allegation is sufficient to overcome a challenge to personal jurisdiction.

Charter relies on the unrebutted affidavit of Peter Thwaite, Charter’s secretary, filed in support of Charter’s motion to dismiss for lack of personal jurisdiction. That affidavit stated that (1) Charter has never mined, processed, sold, or distributed asbestos or asbestos-containing products or engaged in any aspect of the asbestos business; (2) it has not conspired with any party to distribute asbestos or asbestos-containing products; (3) Charter conducts no business in IIlinois; has no certificate of authority to transact business in Elinois; has never entered into a contract to be performed in Elinois; has never maintained an office in Elinois; has never owned real estate in Elinois; has no director, officer or employee who ever resided in IIlinois; never maintained a post office box or telephone in Elinois; has no registered agent for service of process in Elinois; has never had a bank account in Elinois; has never advertised in Elinois; and has never paid taxes or franchise fees or commenced lawsuits in Elinois; (4) “Charter pic” is an investment holding company which, in 1993, acquired all outstanding shares of Charter Consolidated P.L.C., which was incorporated in the United Kingdom in 1964; (5) Cape PLC, formerly Cape Industries PLC, is a holding company incorporated in 1983, and it holds shares in companies engaged in, among other things, industrial construction and manufacturing of building products; (6) until June 1979, Cape indirectly owned companies that were engaged in mining and marketing asbestos; (7) in June 1979 those assets were sold to a company unaffiliated with Cape or Charter; (8) in 1965, Charter acquired the Central Mining and Investment Corporation Limited, which indirectly owned 16.86% of Cape through a subsidiary; (9) Charter, through subsidiaries, acquired an increasingly larger share of Cape over the years until it owned as much as 67.3%; (10) Charter sold all shares of Cape as of July 18, 1996; (11) Charter did nominate directors (never more than three) to Cape’s board (7 to 13 members between 1969 through 1996) and no Charter nominee or employee was an officer of Cape or responsible for management; (12) in 1969, the managing director and chairman of Cape joined Charter’s board, and he left in 1979; (13) no member of Cape’s management has been on Charter’s board; (14) the boards of Cape and Charter had always acted separately, with board meetings held at different places and times; (15) Cape and Charter always engaged in entirely different businesses with completely separate operations and Charter never participated in any management or operation decisions of Cape; (16) Charter never owned any share in Cape subsidiaries, was not involved in their operation, never had officers in common with one exception, held separate shareholder meetings, and maintained separate offices; had separate bank accounts, books, and records; and no employees of Charter were transferred to Cape or Cape’s subsidiaries, and no employees of these companies were transferred to Charter; (17) Charter never provided financing to any Cape subsidiary, including those engaged in the mining and marketing of asbestos; (18) Charter has never been consulted by Cape or its subsidiaries concerning the mining, marketing, prospecting, or sale of asbestos, or the making of long-term policy on such matters; and (19) Charter has never been consulted by any Cape subsidiary about advertising, promotion, customers, development, supply, distribution, capital expenditures, prices, or personnel. The concluding paragraph of the affidavit states:

“24. As set forth above, Charter has never engaged in any aspect of the asbestos business, nor has Charter participated in the asbestos business that at one time was carried on by subsidiaries of Cape. Accordingly, plaintiffs allegation that Charter somehow was part of a conspiracy to distribute asbestos and to suppress medical research regarding asbestos is incorrect and without any basis in fact. Charter never conspired with Cape or anyone else, nor has Cape or any of the other defendants named in the complaint ever acted as an agent of Charter.”

Well-alleged facts in an affidavit regarding jurisdiction, which are not contradicted by counteraffidavit, are taken as true notwithstanding the existence of contrary averments in the adverse party’s pleadings. Kutner v. DeMassa, 96 Ill. App. 3d 243, 248, 421 N.E.2d 231, 235 (1981). In Kutner, the counteraffidavits were determined to be insufficient. Here, plaintiffs filed no counteraffidavits alleging evidentiary facts upon which the conclusions of agency or conspiracy are based. Thwaite’s statements that the allegations of the complaint “are untrue and without foundation,” and that plaintiffs arguments “would be an incorrect interpretation of the relationship among Charter, Cape, and Cape’s former subsidiaries,” are mere conclusions, not well-alleged facts. Thwaite’s affidavit concedes that until 1979 Cape Industries PLC indirectly owned companies that were engaged in the mining and marketing of asbestos, that after 1969 Charter owned a majority interest in Cape, that Charter placed three directors on Cape’s board, that Cape’s managing director and chairman was a member of Charter’s board, and that Charter and Cape filed consolidated tax returns. Thwaite’s affidavit does not refute, except in conclusory fashion, the allegations of the complaint that for many years those in the asbestos industry knew of the dangers of asbestos, yet positively asserted that asbestos was safe and suppressed information about the harmful effects of asbestos.

In Mohn v. International Vermiculite Co., 147 Ill. App. 3d 717, 718-23, 498 N.E.2d 375, 375-79 (1986), the plaintiffs action against Charter was dismissed for lack of personal jurisdiction. The nature of Charter’s relationship to Cape was also discussed in that case. The trial court found Charter was not Cape’s alter ego, declined to pierce the corporate veil, and refused to apply collateral estoppel against Charter utilizing a Pennsylvania case. This court affirmed the order of the trial court. However, this court’s consideration in Mohn was limited to the issue of the collateral-estoppel effect of a foreign judgment, an issue not raised in this case.

Plaintiffs do not have to prove their entire case to get by a challenge to personal jurisdiction over a defendant. Plaintiffs have alleged a conspiracy with sufficient specificity to provide the circuit court with jurisdiction over Charter.

Accordingly, the order of the circuit court denying defendant’s motion to dismiss for lack of personal jurisdiction over Charter is affirmed.

Affirmed.

GREEN, J., concurs.