Schaefer v. Synergy Flight Center, LLC

2019 IL App (1st) 181779

• Court: Appellate Court of Illinois
• Decided: August 26, 2019
• Docket: 1-18-1779
• Status: Unpublished

Opinion

2019 IL App (1st) 181779 No. 1-18-1779 August 26, 2019 FIRST DIVISION

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT

JOHN C. SCHAEFER, as Administrator of Estate ) Appeal from the Circuit Court of Andrew C. Butler, Deceased; LYNDSEY F. ) of Cook County. JONES, as Executor of the Estate of Woodrow ) Jason Jones, Deceased; LINDSAY R. LEETCH, as ) Executor of the Estate of Aaron R. Leetch, ) Deceased; JOAN B. STRALOW, as Executor of ) the Estate of Terry L. Stralow, Deceased; and ) JANICE WARD, as Administrator of the Estate ) of Torrey Ward, Deceased, ) ) Nos. 16 L 10096 Plaintiffs-Appellees, ) 17 L 3448 ) 17 L 3523 v. ) 17 L 7363 ) 17 L 7373 SYNERGY FLIGHT CENTER, LLC, a Limited ) 17 L 7375 Liability Company; AIRCRAFT PROPELLER ) 17 L 7377 (cons.) SERVICE, LLC, a Limited Liability Company; ) AIRCRAFT PROPELLER SERVICE, INC., a ) Corporation; G&N AIRCRAFT, INC., a ) Corporation; RAM AIRCRAFT, L.P., a Limited ) Partnership; CONTINENTAL MOTORS, INC., a ) Corporation; SANDEL AVIONICS, INC., a ) Corporation; GARMIN INTERNATIONAL, INC., ) a Corporation; GARMIN AT, INC., a Corporation; ) GARMIN USA, INC., a Corporation; and ) GARMIN NORTH AMERICA, INC., a Corporation,) ) Defendants ) The Honorable ) Daniel T. Gillespie, (RAM Aircraft, L.P., Defendant-Appellant). ) Judge Presiding. __________________________________________ )

AMI HILEMAN, as Executor of the Estate of ) Thomas W. Hileman, Deceased, ) ) Plaintiff-Appellee, ) ) v. ) ) SYNERGY FLIGHT CENTER, LLC, an ) Illinois Limited Liability Company for Profit; ) G&N AIRCRAFT, INC., a Corporation for ) Profit; CONTINENTAL MOTORS, INC., a ) Corporation for Profit; RAM AIRCRAFT ) PROPELLER SERVICE, INC., an Illinois ) Corporation for Profit; and AIRCRAFT ) PROPELLER SERVICE, LLC, an Illinois ) Limited Liability Company for Profit, ) ) Defendants ) ) (RAM Aircraft, L.P., Defendant-Appellant). ) _________________________________________

CARRIE L. BITTNER, as Executive of the Estate ) of Scott Lee Bittner, Deceased, ) ) Plaintiff-Appellee, ) ) v. ) ) SYNERGY FLIGHT CENTER, LLC, a Limited ) Liability Company; AIRCRAFT PROPELLER ) SERVICE, LLC, a Limited Liability Company; ) AIRCRAFT PROPELLER SERVICE, INC., a ) Corporation; G&N AIRCRAFT, INC., a ) Corporation; RAM AIRCRAFT, L.P., a Limited ) Partnership; CONTINENTAL MOTORS, INC., ) a Corporation; SANDEL AVIONICS, INC., a ) Corporation; GARMIN INTERNATIONAL, ) INC., a Corporation; GARMIN AT, INC., a ) Corporation; GARMIN USA, INC., a ) Corporation; GARMIN NORTH AMERICA, ) INC., a Corporation, ) ) Defendants ) ) (RAM Aircraft, L.P., Defendant-Appellant). ) _________________________________________ JOAN B. STRALOW, as Executor of the Estate ) of Terry L. Stralow, Deceased, ) ) Plaintiff-Appellee, ) ) v. ) ) SYNERGY FLIGHT CENTER, LLC, a Limited ) Liability Company; AIRCRAFT PROPELLER ) SERVICE, LLC, a Limited Liability Company; ) AIRCRAFT PROPELLER SERVICE, INC., a ) Corporation; G&N AIRCRAFT, INC., a ) Corporation; RAM AIRCRAFT, L.P., a Limited ) Partnership; CONTINENTAL MOTORS, INC., ) a Corporation; SANDEL AVIONICS, INC., a ) Corporation; GARMIN INTERNATIONAL, ) INC., a Corporation; GARMIN AT, INC., a ) Corporation; GARMIN USA, INC., a ) Corporation; GARMIN NORTH AMERICA, ) INC., a Corporation, ) ) Defendants ) ) (RAM Aircraft, L.P., Defendant-Appellant). ) ________________________________________ ) ) LYNDSEY F. JONES, as Executor of the Estate ) of Woodrow Jason Jones, Deceased, ) ) Plaintiff-Appellee, ) ) v. ) ) SYNERGY FLIGHT CENTER, LLC, a Limited ) Liability Company; AIRCRAFT PROPELLER ) SERVICE, LLC, a Limited Liability Company; ) AIRCRAFT PROPELLER SERVICE, INC., a ) Corporation; G&N AIRCRAFT, INC., a ) Corporation; RAM AIRCRAFT, L.P., a Limited ) Partnership; CONTINENTAL MOTORS, INC., ) a Corporation; SANDEL AVIONICS, INC., a ) Corporation; GARMIN INTERNATIONAL, ) INC., a Corporation; GARMIN AT, INC., a ) Corporation; GARMIN USA, INC., a ) Corporation; GARMIN NORTH AMERICA, ) INC., a Corporation, ) ) Defendants ) ) (RAM Aircraft, L.P., Defendant-Appellant). ) ________________________________________ ) LINDSAY R. LEETCH, as Executor of the Estate ) of Aaron R. Leetch, Deceased, ) ) Plaintiff-Appellee, ) ) v. ) ) SYNERGY FLIGHT CENTER, LLC, a Limited ) Liability Company; AIRCRAFT PROPELLER ) SERVICE, LLC, a Limited Liability Company; ) AIRCRAFT PROPELLER SERVICE, INC., a ) Corporation; G&N AIRCRAFT, INC., a ) Corporation; RAM AIRCRAFT, L.P., a Limited ) Partnership; CONTINENTAL MOTORS, INC., ) a Corporation; SANDEL AVIONICS, INC., a ) Corporation; GARMIN INTERNATIONAL, ) INC., a Corporation; GARMIN AT, INC., a ) Corporation; GARMIN USA, INC., a ) Corporation; GARMIN NORTH AMERICA, ) INC., a Corporation, ) ) Defendants ) ) (RAM Aircraft, L.P., Defendant-Appellant). ) ________________________________________ ) JANICE WARD, as Administrator of the Estate ) of Torrey Ward, Deceased, ) ) Plaintiff-Appellee, ) ) v. ) ) SYNERGY FLIGHT CENTER, LLC, a Limited ) Liability Company; AIRCRAFT PROPELLER ) SERVICE, LLC, a Limited Liability Company; ) AIRCRAFT PROPELLER SERVICE, INC., a ) Corporation; G&N AIRCRAFT, INC., a ) Corporation; RAM AIRCRAFT, L.P., a Limited ) Partnership; CONTINENTAL MOTORS, INC., ) a Corporation; SANDEL AVIONICS, INC., a ) Corporation; GARMIN INTERNATIONAL, ) INC., a Corporation; GARMIN AT, INC., a ) Corporation; GARMIN USA, INC., a ) Corporation; GARMIN NORTH AMERICA, ) INC., a Corporation, ) ) Defendants ) ) (RAM Aircraft, L.P., Defendant-Appellant). )

JUSTICE WALKER delivered the judgment of the court, with opinion. Justice Pierce and Justice Griffin concurred in the judgment and opinion.

OPINION

¶1 Seven men died from a plane crash in Illinois on April 7, 2015. The estates of the seven

men filed complaints against RAM Aircraft, L.P. (RAM) and others for negligence. The

circuit court denied RAM’s motion to dismiss it from the lawsuits for lack of personal

jurisdiction. We hold that RAM’s ongoing business relationships with Illinois customers,

together with the alleged negligence in Illinois, suffice to give the circuit court personal

jurisdiction over RAM. We affirm the circuit court’s order denying the motion to dismiss.

¶2 I. BACKGROUND

¶3 A plane crashed on April 7, 2015, and seven men died. The estates of the seven decedents

filed complaints alleging that RAM negligently overhauled, repaired, and tested the plane’s

controller, left engine, and other parts. The circuit court consolidated the cases and permitted

discovery on the jurisdictional issue raised in RAM’s motion to dismiss it from all the

lawsuits.

¶4 Rick Roper, RAM’s director of operations, described RAM as a Texas limited

partnership that derives most of its income from overhauling Continental 520 and 550 series

airplane engines. RAM also sells some aircraft parts. RAM advertises in several aviation magazines with national distribution, targeting “general aviation fleet.” RAM is registered to

do business in Texas and is not registered in any other state. With rare exceptions, RAM

performed its work in Texas. RAM has no office, property, or assets in Illinois, and it has no

Illinois phone number. In the fiscal year ending in 2011, Illinois customers accounted for

barely 1% of RAM’s revenues; in the fiscal year ending in 2013, Illinois customers

accounted for a little more than 2.5% of RAM’s revenues. Sales to Illinois customers in other

years from 2010 through 2015 fell between the 2011 level and the 2013 level. Roper stated,

“The number of sales by RAM to customers in Illinois between 2010 and 2015 is comparable

to the number of sales by RAM to customers in other individual states outside of Texas

during the same time period.” Roper admitted that in several transactions, RAM sold parts to

West Star Aviation in Illinois. Between 2012 and 2016, RAM similarly had multiple sales to

Loravco, Ideal Aviation, Synergy Flight Center, LLC (Synergy), Hileman Aviation, Ozark

Air Services, Inc., and Jet Air, Inc., all in Illinois.

¶5 The maintenance record for the plane that crashed showed that RAM overhauled its left

engine in March 2008. In December 2013, Synergy, in Illinois, “Installed *** Starter Adapter

O/H’ed by Ram Aircraft.” In January 2014, RAM shipped a controller to G&N Aircraft, Inc.

(G&N), in Indiana, and G&N shipped the parts to Synergy, who installed the controller and

the engine in the plane.

¶6 The circuit court denied RAM’s motion to dismiss. RAM now appeals.

¶7 II. ANALYSIS

¶8 On appeal, RAM argues that the circuit court erred as a matter of law when it concluded

that RAM is subject to personal jurisdiction in Illinois. Illinois Supreme Court Rule 306(a)(3)

(eff. Nov. 1, 2017) gives this court jurisdiction over the appeal. The circuit court held no evidentiary hearing, and it based its decision solely on the documents the parties presented in

court. Therefore, we review the circuit court’s decision de novo. Wiggen v. Wiggen, 2011 IL

App (2d) 100982, ¶ 20.

¶9 Russell v. SNFA, 2013 IL 113909, guides our decision here. SNFA, a French company,

manufactured bearings for aircraft. Id. ¶ 1. It had no office, assets, property, or employees in

Illinois, and it had no license to do business in Illinois. Id. ¶ 10. SNFA sold some tail-rotor

bearings for helicopters to Agusta, an Italian company that manufactured helicopters. Id. ¶ 5.

A German owner sold an Agusta helicopter to Metro Aviation, a Louisiana corporation, in

1998. Metro Aviation purchased from a subsidiary of Agusta based in Pennsylvania some

tail-rotor bearings that SNFA manufactured. Metro Aviation used the new bearings to replace

some of the helicopter’s tail-rotor bearings. Metro Aviation later sold the helicopter to Air

Angels, Inc. (Air Angels), an Illinois air ambulance service. Id. ¶ 6. Russell, an Air Angels

employee, died when the helicopter crashed in 2003. Id. ¶ 4. Russell’s estate sued several

parties, including SNFA. The estate alleged that the tail-rotor bearings’ failure caused the

fatal crash. Id. ¶ 7. SNFA had no direct customers in the United States for its helicopter

bearings. Id. ¶ 13. However, SNFA sold other aircraft bearings to three United States

companies, including one with a division located in Illinois. Id. ¶¶ 14-15.

¶ 10 The circuit court granted SNFA’s motion to dismiss the claim against it for lack of

personal jurisdiction. Id. ¶ 21. Our supreme court noted that a court can assert personal

jurisdiction over a defendant based on either general jurisdiction or specific jurisdiction. For

general jurisdiction, the plaintiff must show that the defendant “has engaged in continuous

and substantial business activity within the forum, *** where it ‘is fairly regarded as at

home.’ ” Id. ¶ 36 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011)). The plaintiff in Russell did not contend that the court had general jurisdiction

over SNFA. The parties here similarly agree that Illinois courts do not have general

jurisdiction over RAM.

¶ 11 To establish specific jurisdiction, the plaintiff must show “that the defendant purposefully

directed its activities at the forum state and the cause of action arose out of or relates to the

defendant’s contacts with the forum state.” Id. ¶ 40. The Russell court found that SNFA’s

business relationship with an Illinois customer proved that SNFA “benefitted from Illinois’

system of laws, infrastructure, and business climate,” even though the Illinois customer

installed SNFA’s products in California, and the Illinois office only processed the payments.

Id. ¶¶ 81-82. The court found that SNFA had sufficient contacts with Illinois (1) because

SNFA “knowingly used a distributor, Agusta and AAC [Agusta’s subsidiary in

Pennsylvania], to distribute and market its products throughout the world, including the

United States and Illinois” (id. ¶ 85), (2) because of the multiple sales in Illinois and its

ongoing relationship with one Illinois customer (id.), and (3) because the plaintiff had

sufficiently alleged that the injury arose from SNFA’s negligence in the manufacture of the

bearings used in the helicopter that crashed in Illinois (see id. ¶ 40).

¶ 12 Here, RAM had ongoing business relationships with at least six Illinois customers, who

reliably accounted for more than 1% of RAM’s revenues and who in some years accounted

for more than 2% of that revenue. RAM advertised in magazines with national distribution,

and it considered owners of general aviation fleet, including planes based in Illinois, as its

market. The plaintiffs also adequately alleged that defects in the controller RAM sold and the

overhauling RAM performed on the engine caused the fatal crash in Illinois of a plane owned by an Illinois company and occupied by Illinois passengers. We find sufficient contacts with

Illinois to permit the exercise of specific jurisdiction over RAM in this case.

¶ 13 The determination of sufficient contacts did not end the Russell court’s inquiry. Next, it

considered “the reasonableness of requiring the defendant to litigate in Illinois.” Id. ¶ 87. For

this inquiry, the court considered

“(1) the burden imposed on the defendant by requiring it to litigate in a foreign forum;

(2) the forum state’s interest in resolving the dispute; (3) the plaintiff’s interest in

obtaining relief; and (4) the interests of the other affected forums in the efficient judicial

resolution of the dispute and advancement of substantive social policies.” Id.

Here, as in Russell, “Illinois has an indisputable interest in resolving litigation stemming

from a fatal Illinois *** accident causing plaintiff’s death ***.” Id. ¶ 88. Aside from Illinois

and Texas, no forum appears to have much interest in this case. Thus, no forum other than

Illinois appears to have an interest in resolving all of the interrelated controversies centering

on the fatal accident. All of the plaintiffs have considerable interest in resolving their claims

that the negligent acts of the defendants caused the accident. As in Russell, only the burden

on RAM weighs against a finding of jurisdiction. The burden on a Texas company defending

itself in Illinois is not as heavy the burden on a French company defending itself in Illinois.

See id. ¶ 89 (concerning the extra burden on a party forced to litigate in a foreign country).

¶ 14 We find our supreme court’s reasoning in Gray v. American Radiator & Standard

Sanitary Corp., 22 Ill. 2d 432 (1961), applicable to the case before us. The Gray court stated:

“[D]efendant does not claim that the present use of its product in Illinois is an

isolated instance. While the record does not disclose the volume of [the

defendant’s] business or the territory in which appliances incorporating its valves are marketed, it is a reasonable inference that its commercial transactions, like

those of other manufacturers, result in substantial use and consumption in this

State. To the extent that its business may be directly affected by transactions

occurring here it enjoys benefits from the laws of this State, and it has

undoubtedly benefited, to a degree, from the protection which our law has given

to the marketing of [defendant’s products]. Where the alleged liability arises, as in

this case, from the manufacture of products presumably sold in contemplation of

use here, it should not matter that the purchase was made from an independent

middleman or that someone other than the defendant shipped the product into this

State.” Id. 441-42.

¶ 15 Just as the Russell court found that the circuit court had personal jurisdiction over SNFA,

we hold that the circuit court properly exercised personal jurisdiction over RAM.

¶ 16 III. PETITION FOR REHEARING

¶ 17 In a petition for rehearing, RAM claims that the United States Supreme Court effectively

overruled Russell in Bristol-Myers Squibb Co. v. Superior Court of California, 582 U.S. ___,

137 S. Ct. 1773 (2017). In Bristol-Myers, a group of plaintiffs brought a class action lawsuit

against Bristol-Myers Squibb Company (Bristol Meyers) in California, alleging that a

Bristol-Myers product, Plavix, injured them. Many of the plaintiffs did not live in California.

Although Bristol-Myers did not manufacture Plavix in California, the California court found

that it had specific jurisdiction over Bristol-Myers for the claims of all class members. Id. at

___, 137 S. Ct. at 1777. The United States Supreme Court said,

“the nonresidents were not prescribed Plavix in California, did not purchase Plavix in

California, did not ingest Plavix in California, and were not injured by Plavix in California. The mere fact that other plaintiffs were prescribed, obtained, and ingested

Plavix in California—and allegedly sustained the same injuries as did the nonresidents—

does not allow the State to assert specific jurisdiction over the nonresidents’ claims.”

(Emphasis omitted.) Id. at ___, 137 S. Ct. at 1781.

The Court permitted California courts to continue to exercise jurisdiction over the claims

brought by California residents, although the opinion does not assert that all California

residents proved that they purchased Plavix in California.

¶ 18 The location of the injury distinguishes Bristol-Myers from Russell. The Bristol-Myers

Court emphasized that the nonresident plaintiffs did not allege that their injuries occurred in

California. The plaintiff in Russell, like the plaintiffs here, alleged that the defendant’s

negligence caused an accident and injuries in Illinois. We find that Russell remains binding

authority in Illinois, and Russell remains effectively indistinguishable from the case before

us. We deny the petition for rehearing.

¶ 19 IV. CONCLUSION

¶ 20 We find that RAM had sufficient contacts with Illinois for the assertion of personal

jurisdiction because RAM had ongoing business relationships with six Illinois customers and

plaintiffs adequately alleged that RAM’s negligence caused the crash in Illinois of an

Illinois-based plane. Following Russell, we hold that the circuit court has personal

jurisdiction over RAM. Accordingly, we affirm the circuit court’s order denying the motion

to dismiss the claims against RAM from the complaints.

¶ 21 Affirmed. No. 1-18-1779

Decision Under Review: Appeal from the Circuit Court of Cook County, Nos. 16-L- 10096, 17-L-3448, 17-L-3523, 17-L-7363, 17-L-7373, 17-L- 7375, 17-L-7377; the Hon. Daniel T. Gillespie, Judge, presiding.

Attorneys John S. Hoff and Jared A. Schneider, of Cremer, Spina, for Shaughnessy, Jansen & Siegert, LLC, of Chicago, for appellant. Appellant:

Attorneys Donald J. Nolan, Thomas P. Routh, and Michael S. McArdle, of for Nolan Law Group, of Chicago, for appellees John C. Schaefer, Appellee: Carrie L. Bittner, Lyndsey F. Jones, and Lindsay R. Leetch.

Kevin J. Golden, of Dudley & Lake, LLC, of Chicago, for appellee Joan B. Stralow.

David I. Katzman, of Katzman Lampert & Stoll, of Troy, Michigan, for appellee Ami Hileman.

Matthew C. Minner, of Hare Wynn Newell & Newton, of Lexington, Kentucky, for other appellee.