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      "FLOYD WILES, Plaintiff-Appellant, v. MORITA IRON WORKS COMPANY, LTD., Defendant-Appellee."
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        "text": "JUSTICE BILANDIC\ndelivered the opinion of the court:\nPlaintiff, Floyd Wiles, a resident of Cook County, Illinois, sued defendant Morita Iron Works Company, Ltd. (hereinafter Morita or MIW), a Japanese corporation, which designed and manufactured the machine which allegedly caused plaintiff\u2019s injuries. Plaintiff\u2019s employer, Astro Packaging Co. (hereinafter Astro), is a corporation which operates plants in Hawthorne, New Jersey, and Alsip, Illinois. Astro purchased four machines from defendant. Two were shipped to the New Jersey plant, and two were shipped to the Illinois plant. Plaintiff was employed by Astro\u2019s Alsip, Illinois, plant. One of the machines allegedly caused personal injuries to plaintiff, for which plaintiff seeks damages from defendant. The cause of action sounds in strict liability and negligence.\nDefendant filed a special and limited appearance and a motion to dismiss, challenging the in personam jurisdiction of the court, pursuant to the Illinois long arm statute (Ill. Rev. Stat. 1985, ch. 110, par. 2 \u2014 209). The motion was supported by the affidavit of Motoo Morita, defendant\u2019s president. The trial court quashed the service of process on the defendant and dismissed defendant from this action \u201cdue to lack of personal jurisdiction.\u201d Plaintiff appeals.\nI\nWe must determine whether sufficient minimal contacts existed between the defendant and the State of Illinois for Illinois courts to invoke in personam jurisdiction over the defendant pursuant to the Illinois long arm statute (Ill. Rev. Stat. 1985, ch. 110, par. 2 \u2014 209). An evidentiary hearing was not held on defendant\u2019s motion to dismiss. Therefore, our determination of minimal contracts must be made on the basis of plaintiff\u2019s complaint, defendant\u2019s motion to dismiss, and the supporting affidavit of defendant\u2019s president. (Zeunert v. Quail Ridge Partnership (1981), 102 Ill. App. 3d 603, 607, 430 N.E.2d 184.) We must accept all undenied, well-pleaded allegations of plaintiff\u2019s complaint as true and resolve all factual disputes in plaintiff\u2019s favor. Mandalay Associates Ltd. Partnership v. Hoffman (1986), 141 Ill. App. 3d 891, 895, 491 N.E.2d 39.\nPlaintiff alleged that the defendant manufactured, designed, and sold the air cell former machine in question. On April 11, 1983, he was injured while cleaning the machine pursuant to his employment duties at Astro. In its motion to dismiss, defendant admitted that it manufactured the machine, that two machines were delivered to plaintiff\u2019s employer in Japan, and that the machines were taken to Illinois by Astro. The affidavit filed by Motoo Morita, defendant\u2019s president, revealed that four machines were sold to Astro and that he \u201cis informed and believes that two (2) of the air cell formers were transported by Astro to Alsip, Illinois.\u201d The affidavit disclosed that the negotiations for the purchase of four air cell formers between plaintiff\u2019s employer and defendant took place at the following locations and times:\nSeptember 22-23,1980 Monchengladbach, West Germany\nNovember 17-19,1980 Hawthorne, New Jersey\nJuly 21-23, 1981 Defendant\u2019s plant, Japan\nSeptember 24,1981 Hawthorne, New Jersey\nJanuary 25-27, 1982 Defendant\u2019s plant, Japan\nApril 27-May 1, 1982 Defendant\u2019s plant, Japan\nOctober 17-20,1983 Defendant\u2019s plant, Japan\nFurther, counsel for defendant admitted before the trial court that two of the air cell formers were shipped from Japan directly to Alsip, Illinois.\nDefendant\u2019s theory is that the machines were designed and manufactured in Japan and sold to Astro in Japan. The fact that two of the four machines were shipped by Astro \u201cto Illinois from Japan was entirely fortuitous.\u201d We must determine whether the record supports this conclusion.\nPlaintiff was not a part to the transaction between his employer and defendant which resulted in the purchase and delivery of the machine that caused his injury. Motoo Morita, defendant\u2019s president, stated in his affidavit:\n\u201cThe four (4) machines purchased by Astro Packaging Co. were manufactured by MIW at our plant in Japan. MIW delivered all air cell formers into the custody of agents of Astro Packaging Co. while the machines were in Japan. Astro Packaging Co. and its agents transported the machines from Japan. MIW is informed and believes that two (2) of the air cell formers were transported by Astro Packaging Co. to Alsip, Illinois.\u201d\nConspicuously absent from the affidavit are any references to contracts, shipping documents, delivery receipts, and other data which would support the conclusion that the sale and delivery of the machines was consummated in Japan. The carefully drawn affidavit does not state any facts to support the conclusion that during the two or three years of negotiations with Astro, defendant did not know that Astro had a plant in Illinois or that the machines were sold to Astro for use at a plant other than in Illinois or that the machines were sold to Astro for use at a plant in Illinois. No reference is made regarding service, warranty, or replacement parts that would normally be a part of such transactions and could shed light on contacts or contemplated contacts with any of the sovereign States of the United States.\nThe affidavit also states that defendant \u201cdoes not own or operate any manufacturing plant or other business in Illinois\u201d; that \u201cMIW has not in the past employed any business or other agents in Illinois nor maintained any office in the State\u201d; and that \u201c[a]ll witnesses to the design process, manufacturing decisions, and assembly process are in Japan.\u201d\nConsidering the well-pleaded facts of plaintiff\u2019s complaint and resolving all factual disputes in favor of plaintiff, we can conclude that defendant knew that Astro had a plant in Illinois and that two of the machines purchased by Astro were intended for use in its plant in Al-sip, Illinois.\nII\nTo sustain the exercise of long arm jurisdiction, under sections 2 \u2014 209(a)(1) and (a)(2) of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, pars. 2 \u2014 209(a)(1), (a)(2)), plaintiffs must show: (1) that defendant transacted business in Illinois or committed a tortious act within Illinois; (2) that the cause of action arose from the acts enumerated; and (3) that personal jurisdiction was consistent with due process. (Green v. Advance Ross Electronics Corp. (1981), 86 Ill. 2d 431, 427 N.E.2d 1203.) Plaintiff has the burden of proving a valid basis for the assertion of jurisdiction over the defendant. In order to meet this burden, it is only necessary that there be a prima facie showing that jurisdiction exists. (Bobka v. Cook County Hospital (1983) , 117 Ill. App. 3d 359, 360-61, 453 N.E.2d 828, appeal denied (1984) , 99 Ill. 2d 527.) In determining whether there has been such a showing, we must accept all undenied, well-pleaded allegations in plaintiff\u2019s complaint as true and resolve all factual disputes in plaintiff\u2019s favor. Mandalay Associates Ltd. Partnership v. Hoffman (1986), 141 Ill. App. 3d 891, 895, 491 N.E.2d 39.\nA\nIt is undisputed that defendant, a Japanese corporation, has no office or agent in Illinois and does not own any real estate in Illinois. Defendant sold its machine directly to Astro in Japan without utilizing any middlemen such as agents or distributors. Under such circumstances, we must determine if it is possible for defendant to be engaged in \u201c[t]he transaction of any business within this State.\u201d Ill. Rev. Stat. 1985, ch. 110, par. 2 \u2014 209(a)(1).\nThe influx of foreign products to our shores and the dominance of some of our major markets by foreign enterprises against their American competitors has become a matter of national concern. (State of the Union Address by President Reagan (January 27, 1987).) The defendant cannot insulate itself from jurisdiction of the Illinois courts by making the sale and delivery of the machines to Astro in Japan. Although it did not directly transact business in Illinois with its physical presence, the defendant did transact business in Illinois \u201cas a matter of commercial actuality.\u201d (Buckeye Boiler Co. v. Superior Court (1969), 71 Cal. 2d 893, 902, 458 P.2d 57, 64, 80 Cal. Rptr. 113, 120.) In Gray v. American Radiator & Standard Sanitary Corp. (1961), 22 Ill. 2d 432, 176 N.E.2d 761, the Illinois Supreme Court stated:\n\u201cWith the increasing specialization of commercial activity and the growing interdependence of business enterprises it is seldom that a manufacturer deals directly with consumers in other States. The fact that the benefit he derives from [their] laws is an indirect one, however, does not make [those laws] any the less essential to the conduct of his business; and it is not unreasonable, where a cause of action arises from alleged defects in his product, to say that the use of such products in the ordinary course of commerce is sufficient contact with [such states] to justify a requirement that he defend [there].\u201d (22 Ill. 2d 432, 442, 176 N.E.2d 761.)\nCommenting favorably on Gray, the California Supreme Court said:\n\u201cA manufacturer\u2019s economic relationship with a state does not necessarily differ in substance, nor should its amenability to jurisdiction necessarily differ, depending upon whether it deals directly or indirectly with residents of the state.\u201d Buckeye Boiler Co. v. Superior Court (1969), 71 Cal. 2d 893, 902, 458 P.2d 57, 64, 80 Cal. Rptr. 113, 120.\nThe circumstances of defendant\u2019s sale of two of the machines to Astro were such that it knew or should reasonably anticipate that the machines would be used at Astro\u2019s plant in Alsip, Illinois. Defendant\u2019s conscious and persistent efforts over more than two years of meetings with Astro in the United States, West Germany, and Japan indicate that the ultimate use of defendant\u2019s machine at Astro\u2019s plant in Illinois was not fortuitous or unanticipated. The sale to Astro generated gross income for defendant. \u201cA manufacturer engages in economic activity within a state as a matter of \u2018commercial actuality\u2019 whenever the purchase or use of its product within the state generates gross income for the manufacturer and is not so fortuitous or unforeseeable as to negative the existence of an intent on the manufacturer\u2019s part to bring about this result.\u201d 71 Cal. 2d 893, 902, 458 P.2d 57, 64, 80 Cal. Reptr. 113, 120.\nThe trial court relied on World-Wide Volkswagen Corp. v. Woodson (1980), 444 U.S. 286, 62 L. Ed. 2d 490, 100 S. Ct. 559, in finding for the defendant. In that case, the plaintiffs, New York residents, purchased an automobile from a New York retailer through a New York distributor. The plaintiffs were en route to their new home in California when they were involved in an automobile accident in Oklahoma. The plaintiffs sued the retailer and the distributor in Oklahoma alleging that the automobile\u2019s defective design proximately caused their injuries. The court held that Oklahoma could not exercise jurisdiction over the New York defendants because there were no minimum contacts between the defendants and the forum State. The New York defendants never directly or indirectly attempted to reach the Oklahoma market because their franchise covered three States in the New York region. They did not design or manufacture the automobile. The only contact the defendants had with the forum State was the fortuitous circumstance that a single automobile, sold by defendants in New York to New York residents, happened to be involved in an accident while passing through Oklahoma. The factual distinction with the case at bar is obvious.\nNot only did the trial court fail to note the factual distinctions of the instant case as compared to World-Wide Volkswagen Corp., but it also failed to correctly apply the law. The trial court erroneously based its decision solely on the defendant\u2019s physical contacts with Illinois. Other courts have been confronted with jurisdictional questions similar to the case at bar and, while the nonresident defendant\u2019s contacts with the forum State are of importance, other significant factors enter into the jurisdictional analysis.\nIn Plant Food Co-op v. Wolfkill Feed & Fertilizer Corp. (9th Cir. 1980), 633 F.2d 155, a Canadian distributor of fertilizer (Pillsbury) was found liable on two third-party actions for shipping the wrong fertilizer to the Montana plaintiff. Pillsbury premised its appeal, in part, on Montana\u2019s lack of jurisdiction over it.\nThe court of appeals affirmed the district court\u2019s holding that it had jurisdiction over Pillsbury. Pillsbury argued that the fertilizer just happened to travel to Montana, just as the car in World-Wide Volkswagen Corp. traveled to Oklahoma. But the court observed that Pillsbury had the ability to control its contacts with the forum and that it derived benefits from the contact. Pillsbury knew from the bill of lading that the fertilizer was headed towards Montana. Pillsbury also voluntarily entered into a contract that resulted in its product going to Montana. If Pillsbury found Montana's long arm jurisdiction unacceptable, it could have done business elsewhere. Plant Food Coop v. Wolfkill Feed & Fertilizer Corp. (9th Cir. 1980), 633 F.2d 155, 159.\nThe defendant, Morita, like Pillsbury, voluntarily entered into a contract that resulted in its product going to the forum State.\nThe leading case in Illinois dealing with the transaction of business in this State (Ill. Rev. Stat. 1985, ch. 110, par. 2 \u2014 209(a)(1)) is Connelly v. Uniroyal, Inc. (1979), 75 Ill. 2d 393, 389 N.E.2d 155, cert, denied and appeal dismissed (1980), 444 U.S. 1060, 62 L. Ed. 2d 738, 100 S. Ct. 992. In Connelly, the plaintiff sued a Belgian tire-making company for personal injuries sustained when a tire manufactured by defendant failed while the plaintiff was driving his Opel automobile in Colorado. Plaintiff\u2019s father purchased the car in Illinois. Defendant argued that jurisdiction could not be exercised over it in Illinois because its principal place of business was Belgium, it had no agents or employees in Illinois, it never shipped or sold any products to Illinois, and it never advertised in Illinois. Accordingly, defendant urged that under both the United States Constitution and applicable Illinois law, Illinois courts had no jurisdiction over it. Our supreme court rejected this argument. It held that since the Belgian tire maker introduced the tires into the stream of commerce and the tires came into Illinois on a regular basis as a part of the Opel car, the defendant transacted business in Illinois. It was reasonable to require the Belgian corporation to defend in Illinois, and the State\u2019s jurisdiction does not offend traditional notions of fair play and substantial justice.\nIn the instant case, the factors favoring the court\u2019s assertion of jurisdiction over Morita are substantially the same as the factors that were present in Connelly. Defendant contends that Connelly is distinguishable from the case before us because in Connelly, from 600 to 1,320 Opel cars per year, equipped with the Belgian manufacturer\u2019s tires, came to Illinois through channels of interstate commerce. It involved the regular and systematic sale of its products in Illinois through the stream of commerce. However, the case at bar was not a volume sales transaction. It involved the sale of four machines to an American corporation which shipped two of the machines to Illinois. Because of these distinguishing facts, defendant argues that the principles of law declared in Connelly cannot be applied. We disagree. Unlike tires, custom-made air cell former machines for use in a manufacturing operation are not volume sales items. A single business transaction with consequences in Illinois is sufficient to assert jurisdiction over the foreign defendant. (See Johnson v. United Presbyterian Church in the United States of America, Inc. (1981), 103 Ill. App. 3d 869, 431 N.E.2d 1275.) In the instant case, defendant transacted business in Illinois because it sold its products to a corporation that used the products in Illinois, the transaction was a money-making event for defendant, and plaintiff\u2019s injury was a direct result of the transaction. If defendant\u2019s sale of air cell formers to Astro did not constitute transacting business under the Illinois long arm statute, then Illinois courts would be powerless to assert jurisdiction over foreign manufacturers of defective products which are not a high volume variety. The State of Illinois has a \u201cmanifest interest\u201d in providing its residents with a convenient forum for redressing injuries inflicted by out-of-State actors. McGee v. International Life Insurance Co. (1957), 355 U.S. 220, 223, 2 L. Ed. 2d 223, 226, 78 S. Ct. 199, 201.\nThe case for asserting personal jurisdiction over Morita is also evident because there were no middlemen involved in the transaction. Morita made a conscious effort to sell its product to a limited, but known, American market. Because Morita sold directly to the ultimate user of the product, Astro, it could reasonably anticipate Astro utilizing two of its machines at the Astro plant in Alsip, Illinois. As the court noted in Gray v. American Radiator & Standard Sanitary Corp. (1961), 22 Ill. 2d 432, 442, 176 N.E.2d 761, \u201cif a corporation elects to sell its products for ultimate use in another State, it is not unjust to hold it answerable there for any damage caused by defects in those products.\u201d Therefore, under section 2 \u2014 209(a)(1), Morita transacted business in Illinois.\nB\nAnother basis for the exercise of in personam jurisdiction over a nonresident defendant is \u201c[t]he commission of a tortious act within this State.\u201d (Ill. Rev. Stat. 1985, ch. 110, par. 2 \u2014 209(a)(2).) Plaintiff was injured in Illinois while operating an allegedly defective machine manufactured by defendant in Japan.\nOur supreme court has held that the alleged negligence in manufacturing a product could not be separated from the resulting injury. \u201cTo be tortious an act must cause injury. The concept of injury is an inseparable part of the phrase.\u201d (Gray v. American Radiator & Standard Sanitary Corp. (1961), 22 Ill. 2d 432, 436, 176 N.E.2d 761.) The court concluded that defendant manufacturer committed a tortious act in Illinois, even though it never had an agent or employee in Illinois.\nDefendant argues that Gray is distinguishable because the foreign manufacturer in Gray injected a large quantity of its products into the stream of commerce. We have already rejected this argument.\nThe defendant consciously placed its product into the stream of commerce which led into Illinois and from which it derived economic benefit. Assumption of jurisdiction by the Illinois courts does not offend traditional notions of due process.\nC\nDefendant makes a major point of the fact that the machines it manufactured in Japan were sold to an American corporation in Japan. It would like to end its responsibility at this point. However, the record does not show that the machines were purchased by Astro in Japan for use by Astro in Japan. On the contrary, there is no allegation of fact to show that Astro even had a plant in Japan in which it could utilize the machines. It was obvious the machines were intended for use in Illinois and New Jersey.\nThe record does not express any sovereign interest of the nation of Japan or any political or foreign policy considerations which would cause Japan to take precedence over the sovereign interest of this State. Illinois has a \u201cmanifest interest\u201d in providing its residents, as plaintiff is here, with a convenient forum for redressing injuries allegedly inflicted by out-of-State actors. Burger King Corp. v. Rudzewicz (1985), 471 U.S. 462, 85 L. Ed. 2d 528, 105 S. Ct. 2174.\nDefendant does not concede that plaintiff could obtain in personam jurisdiction over it in the State of New Jersey. At oral argument, defendant acknowledged that if plaintiffs action does not lie in Illinois, the filing of a new action in New Jersey would be subject to the additional defense of the statute of limitations. Thus, if the plaintiff is left with any remedy, he must pursue it in Japan.\nPlacing our approval on defendant\u2019s theory would be unjust to plaintiff and to defendant\u2019s American competitors. If a manufacturer in a foreign country wants to avoid products liability, it can cause the American purchaser to consummate the transaction and take delivery in the foreign country. Without concern for such liability and the financial burden of insurance premiums or self-insured reserves, the foreign manufacturer could possibly gain an additional economic advantage over its American competitors. The due process clause of the United States Constitution does not require us to inflict such potential harm upon the injured plaintiff or American industry.\nOur application of the Illinois long arm statute to the facts of this case is consistent with due process and does not offend traditional concepts of fair play. Overseas manufacturers are encouraged to compete on the same terms as their American counterparts.\nThe issue in this case is not forum non conveniens but in personam jurisdiction. We conclude that defendant is properly subject to in personam jurisdiction in Illinois. If defendant believes that there is a more convenient forum, it is not precluded from seeking the removal of this action to the more convenient forum.\nFor the foregoing reasons, the order of the circuit court of Cook County quashing the service of process and dismissing defendant from this action is reversed and this cause is remanded for further proceedings consistent with the views expressed herein.\nReversed and remanded.\nSCARIANO, P.J., and STAMOS, J., concur.",
        "type": "majority",
        "author": "JUSTICE BILANDIC"
      }
    ],
    "attorneys": [
      "Eugene I. Pavalon, Gary K. Laatsch, and Allen Tish, all of Asher, Pavalon, Gittler & Greenfield, Ltd., of Chicago, for appellant.",
      "Patterson, Carl, Meuth, Basford & Fogle, of Libertyville, for appellee."
    ],
    "corrections": "",
    "head_matter": "FLOYD WILES, Plaintiff-Appellant, v. MORITA IRON WORKS COMPANY, LTD., Defendant-Appellee.\nFirst District (2nd Division)\nNo. 86\u20140255\nOpinion filed February 18, 1987.\nEugene I. Pavalon, Gary K. Laatsch, and Allen Tish, all of Asher, Pavalon, Gittler & Greenfield, Ltd., of Chicago, for appellant.\nPatterson, Carl, Meuth, Basford & Fogle, of Libertyville, for appellee."
  },
  "file_name": "0782-01",
  "first_page_order": 804,
  "last_page_order": 813
}
