Morris v. HALSEY ENTERPRISES CO., LTD.

882 N.E.2d 1079, 379 Ill. App. 3d 574, 317 Ill. Dec. 923, 2008 Ill. App. LEXIS 26
CourtAppellate Court of Illinois
DecidedJanuary 25, 2008
Docket1-06-2374
StatusPublished
Cited by11 cases

This text of 882 N.E.2d 1079 (Morris v. HALSEY ENTERPRISES CO., LTD.) 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
Morris v. HALSEY ENTERPRISES CO., LTD., 882 N.E.2d 1079, 379 Ill. App. 3d 574, 317 Ill. Dec. 923, 2008 Ill. App. LEXIS 26 (Ill. Ct. App. 2008).

Opinion

JUSTICE O’MARA FROSSARD

delivered the opinion of the court:

Plaintiffs Tillie and Joe Morris filed a lawsuit to recover damages allegedly caused by a defective ceiling fan designed and manufactured by defendants Hunter Fan Company, an Illinois corporation, d/b/a Casablanca Fan Company (Casablanca), and Halsey Enterprises Company, Ltd., a Taiwanese corporation (Halsey). In response, Halsey filed a motion to quash service and dismiss for lack of personal jurisdiction. The trial court denied the motion, and Halsey filed a petition for leave to appeal pursuant to Supreme Court Rule 306(a)(3). 210 Ill. 2d R. 306(a)(3). This court initially denied Halsey’s petition, but the supreme court subsequently entered a supervisory order directing this court to vacate our decision and grant Halsey leave to appeal. Morris v. Hunter Fan Co., 222 Ill. 2d 609 (2007). Having now granted Halsey’s petition and reviewed its contentions on the merits, we reverse the trial court’s denial of the motion to quash and dismiss.

BACKGROUND

Our factual summary is based on the record Halsey submitted to this court in support of its petition, as no additional portions of the trial court record were prepared after leave to appeal was granted. See 210 Ill. 2d R. 306(h).

On August 9, 2004, plaintiffs filed a first amended complaint against Casablanca and Halsey. In the complaint, plaintiffs alleged that Casablanca and Halsey designed and manufactured a “Star/ Starlet Casablanca” ceiling fan which was then sold to customers in, among other places, Illinois. In September or October of 1997, plaintiffs purchased one of these ceiling fans and Joe Morris subsequently installed the fan in plaintiffs’ home bathroom. On April 29, 2003, Tillie Morris suffered serious injuries after the fan motor fell on her without warning, causing her to fall to the floor and strike her head and face.

On May 5, 2005, Halsey filed a motion to quash service and dismiss the six counts in plaintiffs’ complaint directed toward it on the grounds that the court lacked personal jurisdiction. In the motion, Halsey contended that its contacts with Illinois were so lacking that the exercise of personal jurisdiction over it would fail to satisfy the requirements of due process. In support, Halsey’s motion contended that it: (1) was a Taiwanese corporation with a principal place of business in Taiwan, (2) had never manufactured or sold ceiling fans in Illinois, (3) at one time manufactured ceiling fans in Taiwan for Casablanca, but shipped those fans to California and made only 10% of its gross profits from the production of those fans, (4) did not ship any ceiling fans to Illinois for Casablanca and did not know that Casablanca would market or sell ceiling fans in Illinois, (5) had no control over Casablanca’s sale or marketing of ceiling fans and had not manufactured any fans for Casablanca since 1998, (6) has no sales or other offices, marketing personnel, bank accounts, telephone listings, real estate, or personal property in Illinois, (7) does not pay taxes in Illinois, is not a registered foreign corporation in Illinois, and has never before sued or been sued in Illinois, and (8) does not maintain an Internet website directed toward consumers in Illinois. Attached to the motion was an affidavit attesting to the truth of these assertions executed by Halsey’s general manager, Benjamin Lee.

The trial court allowed the parties to engage in limited discovery on the issue of personal jurisdiction. In its answers to written discovery, Halsey stated that it produced approximately 386,000 units of 20 different types of ceiling fans for Casablanca between 1996 and 1998. Of these, approximately 5,228 units were of the Starlet model. Halsey acknowledged that around 1994, Casablanca informed it that a significant increase in production would be required because Casablanca would begin selling ceiling fans through Home Depot. Halsey denied it ever discussed any marketing or distribution aspects of Casablanca’s arrangement with Home Depot.

In May 2005, the parties took a number of depositions. John Pearson, Casablanca’s vice-president of marketing, testified that he had worked for Casablanca in various capacities for over 20 years. In 1994, Casablanca acquired the Homestead Ceiling Fan Company and continued to sell the Star and Starlet models that Homestead had previously sold and Halsey manufactured. In 1995, Casablanca was in turn bought by the Hunter Fan Company.

Pearson testified that Casablanca sold ceiling fans through a nationwide network of some 600 to 700 retail lighting stores. Casablanca has also sold fans from time to time through nationwide home improvement stores such as Home Depot and Lowe’s. Halsey was a Taiwanese manufacturer whose main business was producing ceiling fans for the United States market. Casablanca’s business relationship with Halsey began in approximately 1990 or 1991 and continued through 1997 or 1998. During the relationship, Halsey would manufacture ceiling fans for Casablanca and package them for retail sale.

In the beginning, Halsey was producing approximately 20,000 to 30.000 units per year for Casablanca. However, Pearson began discussing an opportunity with Halsey to significantly increase this amount in order to supply ceiling fans nationwide to Home Depot in 1992 or 1993. This opportunity would require production to increase to 250.000 to 300,000 units per year. After ensuring that Halsey could meet this increased demand, Casablanca supplied Home Depot with ceiling fans from approximately 1993 to 1995. The Star and Starlet models were not sold through Home Depot, and Pearson could not recall ever discussing those models with Halsey.

Pearson testified Halsey was aware that Home Depot had stores nationwide and that Casablanca also distributed its fans through its nationwide chain of other retailers. He also testified that in addition to shipping fans to Casablanca in California, Halsey would also ship fans both directly to Home Depot’s own regional distribution centers and to at least one other Casablanca customer. However, Pearson could not say that Halsey was aware its fans were distributed to any specific market, including Illinois. Moreover, Pearson himself was not sure if either Home Depot or Casablanca’s other customers were located in each of the 50 states. Finally, Pearson testified that while he frequently met with Halsey representatives in Taiwan, California, and at a semiannual Dallas national show, he could only recall “running into them” once at a national trade show he attended in Chicago.

Lee Ching Tan, Halsey’s chairman, testified that his company was an “original equipment manufacturer” that produced ceiling fans for a number of different companies. Approximately 70% of the fans it produced were exported to the United States, where it shipped hundreds of thousands of units each year. Halsey first began producing ceiling fans for Casablanca around 1992. Those fans would be shipped fully assembled and individually packaged. Tan knew that Casablanca was a “sizable” manufacturer and distributer of ceiling fans, but denied that he or anyone else at Halsey had any specific knowledge of Casablanca’s distribution network or the identity of its customers.

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Bluebook (online)
882 N.E.2d 1079, 379 Ill. App. 3d 574, 317 Ill. Dec. 923, 2008 Ill. App. LEXIS 26, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morris-v-halsey-enterprises-co-ltd-illappct-2008.