Cohn v. Gnippe

415 N.E.2d 528, 91 Ill. App. 3d 995, 47 Ill. Dec. 523, 1980 Ill. App. LEXIS 4128
CourtAppellate Court of Illinois
DecidedDecember 18, 1980
DocketNo. 79-292
StatusPublished

This text of 415 N.E.2d 528 (Cohn v. Gnippe) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cohn v. Gnippe, 415 N.E.2d 528, 91 Ill. App. 3d 995, 47 Ill. Dec. 523, 1980 Ill. App. LEXIS 4128 (Ill. Ct. App. 1980).

Opinion

Mr. JUSTICE JOHNSON

delivered the opinion of the court:

This appeal arises from an action brought pursuant to the Uniform Enforcement of Foreign Judgments Act (Ill. Rev. Stat. 1977, ch. 77, par. 88 et seq.) to register in Illinois a default judgment entered against defendants, Erwin Gnippe and Edith Gnippe, by the Supreme Court of New York. On December 13, 1978, the circuit court of Cook County found defendants failed to prove that the New York court lacked jurisdiction or that they had satisfied the New York judgment. The court entered an order making the judgment personally binding on defendants.

The issues presented for review are (1) whether Illinois defendants, without New York residence, had established sufficient “minimum contacts” with New York to support the requirements for in personam jurisdiction; (2) whether the New York court’s in personam jurisdiction had been constitutionally acquired over the defendants; and (3) whether, if personal jurisdiction was attained, the doctrine of forum non conveniens should now be applied to deny recognition of the foreign judgment.

Plaintiffs are partners doing business as L. F. Rothschild, Unterberg, Towbin, a New York stock brokerage firm with its principal office in New York. In November 1977, defendants ordered plaintiffs’ agent in Chicago to purchase certain shares of stock which were traded on the New York stock exchange. Defendants did not pay for the stock purchases and plaintiffs sold the stock through the stock exchange at a loss of $6,357.57.

Plaintiffs filed a complaint against defendants in the Supreme Court of New York to collect the alleged balance due. Defendants were served with summons in Chicago but did not respond. A default judgment was entered against defendants in the amount of $6,696.10.

On September 26, 1978, plaintiffs filed a petition for registration of foreign judgment in the circuit court of Cook County. The judgment was registered.

On December 4, 1978, defendants filed a motion to vacate and set aside the foreign judgment. Defendants’ motion stated that the New York court was an inconvenient forum and that the New York court lacked subject matter and personal jurisdiction. Plaintiffs filed a response to the motion. They stated that defendants’ motion merely alleged legal conclusions and did not state facts which would satisfy defendants’ burden of proving that New York lacked jurisdiction. Thereafter, defendants filed a reply to which they attached an alleged sales receipt of the stock purchased on defendants’ behalf by plaintiffs.

A hearing was held on defendants’ motion. At the hearing, defendants attempted to offer testimony of James Higgins, an alleged employee of plaintiffs. Higgins had been served with a subpoena. However, on the day of the hearing, plaintiffs filed a motion to quash the subpoena. Plaintiffs contended the Uniform Enforcement of Foreign Judgments Act (Ill. Rev. Stat. 1977, ch. 77, par. 88 et seq.) did not provide for the taking of testimony. They further asserted that defendants could only obtain relief through a motion to set aside the registration — not by a formal trial. The court ruled that any testimony from Higgins would not establish facts concerning jurisdiction and quashed the subpoena.

The court also ruled on defendants’ motion to vacate the registration. The court held that defendants failed to meet their burden of proof with facts showing the New York court lacked jurisdiction in the original proceeding. The motion to vacate was denied and defendants appeal that decision.

Defendants contend there were no minimum pontacts with the State of New York. Therefore, the question is whether New York had in personam jurisdiction over the defendants.

The United States Supreme Court in International Shoe Co. v. State of Washington (1945), 326 U.S. 310, 90 L. Ed. 95, 102, 66 S. Ct. 154, 158, stated:

“[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimal contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”

Since the decision in International Shoe, several States have passed statutes dealing with jurisdiction over nonresidents. “An Act in relation to Personal Jurisdiction by Acts of Non-Residents” is one such statute enacted in New York. It provides in part:

“(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:
1. transacts any business within the state; 8 8 8 .” N.Y. Civ. Prac. Law §302(a)(1) (McKinney 1973).

Hanson v. Denckla (1958), 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 1298, 78 S. Ct. 1228, 1240, a case which later attempted to define what was necessary to constitute minimum contacts, held:

“[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.”

“A key factor in determining whether there is a reasonable contact with the forum is the presence of some act by which the defendant voluntarily elects to invoke the protection of the laws of New York.” Watherston, Inc. v. Forman (1973), 73 Misc. 2d 875, 876, 342 N.Y.S.2d 744, 746.

In Wessel Co. v. Yoffee & Beitman Management Corp. (N.D. Ill. 1978), 457 F. Supp. 939, the court granted a motion to dismiss for lack of in personam jurisdiction over a nonresident corporate defendant. The district court held that jurisdiction was not conferred by the long arm statute since the defendant had not “ ‘invoked, by act or conduct, the benefits and protection of the laws of the forum.’ ” Wessel Co., at 940; see Rosenthal & Co. v. Dodick (N.D. Ill. 1973), 365 F. Supp. 847.

In Davis v. Nehf (1973), 14 Ill. App. 3d 318, 302 N.E.2d 382, the plaintiff, a licensed New York real estate broker, sued the defendant in New York for payment of an alleged brokerage commission. The only contact the parties had with each other was by telephone and mail correspondence regarding rental space in a certain building in Chicago. The parties entered into an agreement under which plaintiff was to be defendant’s broker for the leasing of the building space. However, after a tenant had been procured and plaintiff billed defendant for his commission, defendant refused to pay the entire fee. A judgment was entered in New York in favor of plaintiff. He thereafter filed a petition to register that judgment in the circuit court of Cook County. The petition was allowed.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

International Shoe Co. v. Washington
326 U.S. 310 (Supreme Court, 1945)
Hanson v. Denckla
357 U.S. 235 (Supreme Court, 1958)
Rosenthal & Company v. Dodick
365 F. Supp. 847 (N.D. Illinois, 1973)
Davis v. Nehf
302 N.E.2d 382 (Appellate Court of Illinois, 1973)
Wessel Co., Inc. v. Yoffee & Beitman Management
457 F. Supp. 939 (N.D. Illinois, 1978)
Francis I. duPont & Co. v. Chelednik
69 Misc. 2d 362 (Appellate Terms of the Supreme Court of New York, 1971)
Margaret Watherston, Inc. v. Forman
73 Misc. 2d 875 (Appellate Terms of the Supreme Court of New York, 1973)
Pallas v. Driv-Rite, Inc.
252 F. Supp. 582 (N.D. New York, 1966)

Cite This Page — Counsel Stack

Bluebook (online)
415 N.E.2d 528, 91 Ill. App. 3d 995, 47 Ill. Dec. 523, 1980 Ill. App. LEXIS 4128, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cohn-v-gnippe-illappct-1980.