Chemical Waste Management, Inc. v. Sims

870 F. Supp. 870, 1994 U.S. Dist. LEXIS 17819, 1994 WL 703472
CourtDistrict Court, N.D. Illinois
DecidedDecember 12, 1994
Docket94 C 1964
StatusPublished
Cited by31 cases

This text of 870 F. Supp. 870 (Chemical Waste Management, Inc. v. Sims) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chemical Waste Management, Inc. v. Sims, 870 F. Supp. 870, 1994 U.S. Dist. LEXIS 17819, 1994 WL 703472 (N.D. Ill. 1994).

Opinion

MEMORANDUM OPINION AND ORDER

BUCKLO, District Judge.

Before this Court is defendants’ motion to dismiss this, action for lack of jurisdiction and improper venue pursuant to Fed.R.Civ.P. 12(b), or, in the alternative, to transfer the action to the Middle District of Tennessee pursuant to 28 U.S.C. § 1404(a). For the reasons stated herein, this Court denies defendants’ motion.

Facts

In deciding a motion to dismiss for lack of personal jurisdiction, a court must accept all undenied factual allegations and resolve all factual disputes in favor of the plaintiff. Diamond Mortgage Corp. of Illinois v. Sugar, 913 F.2d 1233, 1245 (7th Cir.1990), *872 ce rt. denied, 498 U.S. 1089, 111 S.Ct. 968, 112 L.Ed.2d 1054 (1991) (citing Saylor v. Dyniewski, 836 F.2d 341, 342 (7th Cir.1988); Deluxe Ice Cream Co. v. R.C.H. Tool Corp., 726 F.2d 1209, 1215 (7th Cir.1984)).

Diversified Scientific Services, Inc. (“DSSI”) is a Tennessee corporation engaged in the business of processing mixed liquid wastes and providing on-site environmental remediation services at its plant in Kingston, Tennessee. Chemical Waste Management (“CWM”) is a Delaware corporation with its headquarters and principal place of business in Oak Brook, Illinois. Chem-Nuclear Environmental Services (“ONES”) and Chem-Nuclear Systems, Inc. (“CNSI”) are CWM subsidiaries incorporated in Delaware with them principal place of business in Columbia, South Carolina.

Prior to February, 1991, CNSI officials had considered DSSI as a possible acquisition candidate and had discussed the possibility of acquisition with DSSI’s management. In February, 1991, a CNSI employee informed CWM that it should consider the acquisition of DSSI on behalf of CWM or one of its subsidiaries. On May 13,1991, Michael Lang (“Mr. Lang”), a CWM Vice President, visited the DSSI facility and informed two DSSI shareholders, James Sims and James McVey, that he was visiting DSSI on behalf of CWM and its subsidiaries about a possible acquisition. Mr. Lang reported back to CWM management that further investigation of DSSI was warranted, and recommended that CWM issue a letter of intent to seriously consider the acquisition of DSSI. On May 23,1991, CWM issued a letter of intent to the DSSI shareholders. Between May and August, 1991, employees from CWM and ONES visited DSSI to inspect its facility in Kingston, Tennessee.

During July and August 1991, CWM’s attorney, Jeffrey Everett (“Mr. Everett”) exchanged several drafts of a proposed Stock Purchase Agreement (“SPA”) with DSSI’s attorney, Alien Lentz (“Mr. Lentz”). However, despite the fact that the SPA had passed through several drafts, there was no final agreement as to several important terms of the agreement, including price, warranties, representations and indemnities. On September 4, 1991, Adam Liff (“Mr. Liff’), one of the DSSI shareholders, and Mr. Lentz met with Mr. Lang and Mr. Everett at CWM’s corporate offices in Oak Brook, Illinois to negotiate the unresolved terms of the SPA. At that meeting, the parties agreed upon a final purchase price and finalized the representations, warranties, and indemnities.

On September 6, 1991, Mr. Everett sent Mr. Lentz and Mr. Liff a revised draft of the SPA which incorporated the items agreed upon two days earlier at the Oak Brook meeting. The final SPA, dated September 19, 1991, was prepared by Mr. Everett and signed by Bruce Tobecksen, CWM’s Chief Financial Officer, in Oak Brook, and was subsequently forwarded to Mr. Lentz in Nashville for signature of the various stockholders. Under the terms of the SPA, CWM purchased one hundred percent of the issued and outstanding shares of capital stock in DSSI. On November 1, 1991, Mr. Lang and Mr. Everett visited the law offices of Mr. Lentz in Nashville for the purpose of delivering closing documents.

Since the closing, CWM has owned and managed DSSI. During this period, CWM has allegedly spent over ten million dollars to bring the DSSI facility into compliance with applicable regulations and to pay fines for non-compliance. On March 29, 1994, CWM brought this action for damages and declaratory relief against the former shareholders of DSSI, alleging that the defendants breached the express contractual warranties contained in the SPA. On May 18, 1994, defendants brought this motion to dismiss for lack of personal jurisdiction and improper venue pursuant to Fed.R.Civ.P. 12(b), or, in the alternative, for a transfer of venue to the Middle District of Tennessee pursuant to 28 U.S.C. § 1404(a). On November 3, 1994, the case was reassigned to this Court.

Analysis

For purposes of this motion, the Court accepts plaintiffs argument that Mr. Liff acted as an agent of defendant shareholders in negotiating CWM’s acquisition of DSSI. This finding is buttressed by the affidavits of defendants Elizabeth and Gary Baisley, James C. Bow, and others, all of which assert *873 that “[t]his transaction was principally negotiated by Adam J. Lift, who acted on behalf of the shareholders as Sellers’ Representative.” Affidavit of Elizabeth Baisley, p. 1, ¶ 3; Affidavit of Gary Baisley, p. 1, ¶ 3; Affidavit of James C. Bow, p. 1, ¶ 3. Although defendants’ reply brief insists that Mr. Liffs role was limited to that of a “lead negotiator,” the conflict must be resolved in plaintiffs favor for purposes of this motion. See Vena v. Western General Agency, Inc., 543 F.Supp. 779, 783 (N.D.Ill.1982). As such, defendants are subject to the personal jurisdiction of this Court to the extent that this Court may properly exercise jurisdiction over Mr. Liff. See Vena v. Western General Agency, Inc., supra, 543 F.Supp. at 783-84; Scovill Manufacturing Co. v. Dateline Electric Co., 461 F.2d 897, 900 (7th Cir.1972); Petty v. Cadwallader, 135 Ill.App.3d 695, 90 Ill.Dec. 518, 482 N.E.2d 225 (4th Dist.1985).

I. Jurisdiction

Jurisdiction in this case is based on diversity of citizenship. In a diversity action, a federal district court in Illinois has personal jurisdiction over a nonresident defendant only if an Illinois state court would have personal jurisdiction. Michael J. Neuman & Associates, Ltd. v. Florabelle Flowers, Inc., 15 F.3d 721, 724 (7th Cir.1994) (citing Dehmlow v. Austin Fireworks, 963 F.2d 941 (7th Cir.1992)).

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Bluebook (online)
870 F. Supp. 870, 1994 U.S. Dist. LEXIS 17819, 1994 WL 703472, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chemical-waste-management-inc-v-sims-ilnd-1994.