Mohn v. International Vermiculite Co.

498 N.E.2d 375, 147 Ill. App. 3d 717, 101 Ill. Dec. 193, 1986 Ill. App. LEXIS 2830
CourtAppellate Court of Illinois
DecidedSeptember 30, 1986
Docket4-86-0166
StatusPublished
Cited by17 cases

This text of 498 N.E.2d 375 (Mohn v. International Vermiculite Co.) 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
Mohn v. International Vermiculite Co., 498 N.E.2d 375, 147 Ill. App. 3d 717, 101 Ill. Dec. 193, 1986 Ill. App. LEXIS 2830 (Ill. Ct. App. 1986).

Opinion

PRESIDING JUSTICE McCULLOUGH

delivered the opinion of the court:

This cause involves an attempt to use offensive, nonmutual collateral estoppel to prevent defendant from litigating an issue in an Illinois court. Plaintiff, Lynette Mohn, appeals an order of the circuit court of Macoupin County which granted Charter Consolidated, PLC’s (Charter’s) motion to quash summons and dismiss for lack of personal jurisdiction. Plaintiff contends that the trial court erred when it failed to give collateral-estoppel (estoppel by verdict) effect to Barber v. Pittsburgh Corning Corp. (1983), 317 Pa. Super. 285, 464 A.2d 323, cert, denied (1984), 467 U.S. 1205, 81 L. Ed. 2d 346, 104 S. Ct. 2387. The Barber court held that Charter had sufficient contacts with Pennsylvania to be subject to personal jurisdiction under its long-arm statute. In reaching this determination, the Barber court disregarded the corporate structure of Cape Asbestos Fibres, Ltd. (Cape), and attributed its actions to Charter.

We affirm.

The factual context of the cause will be related only as necessary to an understanding of our disposition.

Everett Heaton, an employee of International Vermiculite Company in Girard, Illinois, filed a multicount complaint in McLean County naming Charter and a number of other defendants. Heaton alleged that they were involved in the mining, sale, and distribution of asbestos and asbestos products. Heaton also alleged that he contracted lung cancer as a result of work-related exposure to asbestos fiber and dust. Heaton died. Mohn was substituted as plaintiff.

On the motion of a defendant not involved in this appeal, the cause was transferred to Macoupin County. A second amended complaint, a wrongful-death action, was filed alleging that Charter and Cape were in the business of distributing asbestos and asbestos products to which Heaton was eventually exposed. The complaint also alleged that they knew exposure to asbestos dust could cause asbestosis and related diseases.

Charter, a holding company based in England, entered a special and limited appearance. It moved to quash service of summons and dismiss the complaint as to it for lack of personal jurisdiction. The affidavits and record before the trial court reveal the following facts. Charter is an investment holding company incorporated under the laws of the United Kingdom. Its stock is publicly traded. Charter has a wholly owned subsidiary, Charter Consolidated Investments Limited (CCI). CCI currently owns 67.3% of the stock in Cape.

Neither Charter nor its wholly owned subsidiary directly engaged in mining, production, marketing, or shipping of asbestos or asbestos products. Charter is not qualified to do business in Illinois. It does not: sell products, purchase goods or services, lease or own property, maintain a post office box, or have directors, officers, or employees in Illinois. It does not: pay taxes or franchise fees, have an Illinois bank account, or advertise in the State. It has never brought suit in Illinois.

Cape is also a publicly held company incorporated under the laws of the United Kingdom. Until 1979, it owned companies which mined and marketed asbestos. North American Asbestos Corporation, an Illinois corporation which voluntarily dissolved in 1978, was a wholly owned subsidiary of Cape. North American Asbestos Corporation sold asbestos products to plaintiff’s employer.

From 1965 to 1969, while Charter’s subsidiaries held a minority interest in Cape’s stock, Charter nominated two directors to Cape’s board of directors. During this time, Cape’s board had 11 to 14 members. Since attaining majority interest, Charter has nominated three directors to Cape’s board.

The companies maintain separate locations, bank accounts, and records. Under English law, their incomes are consolidated for statutory accounting purposes. Francis Howard, one of Charter’s executive directors and a member of Cape’s board of directors, stated that Charter is not involved in Cape’s day-to-day operations nor with the day-to-day operation of Cape’s subsidiaries.

Plaintiff argued below that Charter was Cape’s alter ego. Therefore, the court should pierce the corporate veils of the subsidiary corporations and assert personal jurisdiction over Charter through Cape. Plaintiff also asserted Charter was collaterally estopped from relitigating the alter-ego issue.

The trial court found Charter was not Cape’s alter ego and granted Charter’s motion. It found that there was no just reason to delay enforcement or appeal of its order. In this court, plaintiff does not question the trial court’s factual assessment but argues the trial court erred in addressing the alter-ego issue and not finding Charter was estopped from relitigating its relationship with Cape.

We cannot agree.

A brief discussion of the Barber case is necessary. Barber was one of many plaintiffs who alleged that he contracted asbestosis while working for Pittsburgh Corning Corporation. He alleged that Cape and Charter were part of the chain of corporations responsible for the sale and distribution of asbestos products in Pennsylvania. Charter objected to the Pennsylvania court’s personal jurisdiction over it. The trial court denied the motion due to Charter’s own activities in Pennsylvania, the activities of its wholly owned subsidiary, Pandrol, which was licensed to do business in Pennsylvania, and on the theory that Charter was the alter ego of Pandrol and Cape.

The appellate court affirmed the lower court’s actions. It stated that the basic question before it was whether Charter was subject to the jurisdiction of the Pennsylvania courts. After analyzing the import of the long-arm statute, it agreed that Charter was the. alter ego of Cape. However, the court stated that even absent the Charter-Cape relationship, sufficient contacts existed to subject Charter to the jurisdiction of the Pennsylvania courts. (Barber v. Pittsburgh Corning Corp. (1983), 317 Pa. Super. 285, 301, 464 A.2d 323, 332.) The appellate court also noted that in ruling on the motion to dismiss and the objections to jurisdiction, it was obligated to view the evidence in the light most favorable to Barber.

Initially, we note that the collateral-estoppel effect of a foreign judgment is determined by the law of the State where the judgment was rendered. (Nathan v. Tenna Corp. (7th Cir. 1977), 560 F.2d 761, 763; Restatement (Second) Conflict of Laws sec. 95 (1970).) Thus, Illinois should apply Pennsylvania’s law in initially determining the collateral-estoppel effect of the Pennsylvania judgment. However, Illinois and Pennsylvania apply the same rules in this area. A party may be estopped from relitigating an issue or question when: the issue in the former case and pending case are identical; a final judgment on the merits has been rendered in the cause asserted as a bar; and the party against whom estoppel is asserted is the same party or in privity with a party in the first cause.

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Bluebook (online)
498 N.E.2d 375, 147 Ill. App. 3d 717, 101 Ill. Dec. 193, 1986 Ill. App. LEXIS 2830, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mohn-v-international-vermiculite-co-illappct-1986.