McDonald's Corp. v. Smargon

334 N.E.2d 385, 31 Ill. App. 3d 493, 1975 Ill. App. LEXIS 2812
CourtAppellate Court of Illinois
DecidedAugust 7, 1975
Docket60968
StatusPublished
Cited by24 cases

This text of 334 N.E.2d 385 (McDonald's Corp. v. Smargon) 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
McDonald's Corp. v. Smargon, 334 N.E.2d 385, 31 Ill. App. 3d 493, 1975 Ill. App. LEXIS 2812 (Ill. Ct. App. 1975).

Opinion

Mr. JUSTICE MEJDA

delivered the opinion of the court:

Plaintiffs, McDonald’s Corporation and McDonald’s System, Inc., appeal from an order of the trial court dismissing their complaint against defendants, Samuel D. Smargon, Harry B. Smargon and Snograms, Inc., under the doctrine of forum non conveniens. Tire complaint sought to compel defendants’ compliance with certain standards and business practices incorporated by reference into a franchise agreement between the parties, and alternatively sought other relief.

Plaintiffs contend on appeal that the trial court erred in applying the doctrine of forum non conveniens because jurisdiction over one of the defendants could not be obtained in the alternative forran; the moving defendants did not meet the burden of demonstrating the inconvenience of the forran selected; and the moving defendants waived the right to assert the doctrine by delay and by submission to and reliance upon the jurisdiction of the forum selected. The pertinent facts follow.

On September 12, 1961, defendants Samuel D. Smargon and Harry B, Smargon entered into a franchise agreement and property sublease with plaintiffs in Chicago. The franchise agreement and sublease encompassed the operation of a restaurant at 771 New Circle Road, N.E., Lexington, .Kentucky. Samuel D. Smargon is a resident, of Kentucky, and Harry B. Smargon is a resident of Illinois.

On December 7, 1961, with the consent of the plaintiffs, Samuel D. Smargon and Harry B. Smargon assigned their rights under the franchise agreement and sublease to defendant Snograms, Inc., and each expressly agreed to remain personally liable for the performance by Snograms, Inc., of the covenants contained in the franchise agreement. Snograms, Inc., is an Illinois corporation owned equally by Samuel D. Smargon and Harry B. Smargon. The latter is president of the corporation, partakes of its profits, but does not participate in any of the operations of the restaurant franchise.

On May 3, 1974, plaintiffs filed a complaint for equitable relief and for an injunction, charging that the defendants had consistently refused to operate the restaurant in compliance with the franchise agreement. In particular, the complaint alleged that defendants had refused to dispose of unsold food products in accordance with the times prescribed in the Operations and Training Manual which they were required to observe under the terms of the franchise agreement. A hearing on plaintiffs motion for a preliminary injunction was set for May 23, 1974. Defendants then initiated discovery of certain of plaintiffs’ business records and took the deposition of John Argona, an employee of McDonald’s System, Inc., who had been responsible for the most recent inspection of the franchised restaurant. On May 23, 1974, a preliminary injunction was entered by agreement of the parties, requiring that defendants conform to the specified “holding times” for unsold food products. The cause was then set for trial on July 23, 1974.

Subsequent to the entry of the preliminary injunction plaintiffs secured the depositions of defendant Samuel D. Smargon, his daughter, Sunni Cox, and his son-in-law, Patrick Cox. The daughter and her husband were employed as managers of the restaurant. In these depositions it was admitted that the restaurant had not been operated in compliance with the prescribed holding times for unsold food products; that these holding times were viewed by the deponents as improper; and that the holding times had only recently been complied with under the compulsion of the preliminary injunction. Defendants also instituted further discovery by interrogatory. With the completion of all discovery defendants answered the plaintiffs’ complaint. Defendant Harry B. Smargon filed a separate answer.

On July 12, 1974, defendants Samuel D. Smargon and Snograms, Inc., moved that the complaint be dismissed under the doctrine of forum non conveniens, and in support of their motion that Kentucky would be a more appropriate forum than Illinois, filed a brief and an affidavit. The affidavit listed approximately 35 potential witnesses, many of whom were from the Lexington, Kentucky, area, whom defendants might call to testify. None of the potential witnesses, however, was listed in the affidavit as being expected to testify concerning the observance of the prescribed holding times for unsold food products. Plaintiffs filed a counteraffidavit which listed as potential witnesses certain employees of plaintiffs who had either inspected the restaurant or who were familiar with the purposes behind the prescribed holding time requirements. Defendant Harry B. Smargon also filed a memorandum in opposition to the motion to dismiss the complaint, which stated that he was not amenable to service of process in Kentucky and would not submit to the jurisdiction of the courts of that state.

On July 22, 1974, a hearing on defendants’ motion was held. No evidence was presented at the hearing, but the trial court did entertain arguments by the respective attorneys concerning the propriety of dismissing the complaint and the applicability of the Kentucky long-arm statute to defendant Harry B. Smargon. The trial court then entered an order dismissing plaintiffs’ complaint under the doctrine of forum non conveniens. The preliminary injunction was preserved pending the outcome of the instant appeal.

Plaintiffs initially contend that the trial court erred in applying the doctrine of forum non conveniens to the instant complaint because jurisdiction over one of the defendants, Harry B. Smargon, could not be obtained in the suggested alternative forum, Kentucky. The doctrine presupposes the existence of at least two alternative forums in which jurisdiction over the defendants to an action may be secured. (Lonergan v. Crucible Steel Co. of America (1967), 37 Ill.2d 599, 229 N.E.2d 536; Bagarozy v. Meneghini (1955), 8 Ill.App.2d 285, 131 N.E.2d 792.) This is a threshold requirement and of first consideration in determining the propriety of declining jurisdiction under the doctrine in a particular case. It is argued by plaintiffs that this criterion was not met because Harry B. Smargon was not a resident of Kentucky, would not voluntarily submit to its jurisdiction, and was not subject to its jurisdiction under the Kentucky long-arm statute (Ky. Rev. Stat. Ann. § 454.210 (1988)). However, assuming the inability of plaintiffs to obtain jurisdiction over Harry B. Smargon in Kentucky, we do not feel that this would preclude the application of forum non conveniens in the instant case. Our conclusion is premised upon the character of the instant action and the nature of the relief sought which demonstrates that Harry B. Smargon is not a necessary or indispensable party tb the maintenance of the plaintiffs’ suit in either Illinois or Kentucky. It is a principle of equity, in Illinois as well as in Kentucky, that all persons who are legally or beneficially interested in the subject matter of a litigation and who may be affected by its disposition must be joined as parties. (Oglesby v. Springfield Marine Bank (1944), 385 Ill. 414, 52 N.E.2d 1000; Tolliver v.

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Bluebook (online)
334 N.E.2d 385, 31 Ill. App. 3d 493, 1975 Ill. App. LEXIS 2812, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcdonalds-corp-v-smargon-illappct-1975.