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Brook v. McCormley

United States Court of Appeals, Seventh Circuit

October 11, 2017

SHERWIN A. BROOK, as Trustee of the David North II Trust, successor to the assets of Cortina Financial, Inc., Plaintiff-Appellant,
v.
J. Lawrence McCormley, et al., Defendants-Appellees.

          Argued September 13, 2017

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 16 C 7345 - Matthew F. Kennelly, Judge.

          Before BAUER, ROVNER, and SYKES, Circuit Judges.

          BAUER, Circuit Judge.

         Plaintiff-appellant, Sherwin Brook ("Brook"), appeals the district court's finding that the Northern District of Illinois lacks personal jurisdiction over the defendants-appellees, J. Lawrence McCormley and Tiffany & Bosco, P. A. (collectively, "Defendants"), for a legal malpractice, breach of contract, and breach of fiduciary duty lawsuit. For the reasons set forth below, we affirm.

         I. BACKGROUND

         Cortina Financial, Inc. ("Cortina") is a now-dissolved corporation that was wholly-owned by the David North II Trust (the "Trust"). The beneficiaries of the Trust lived in Illinois when the Trust was established; however, in the mid-1980s, they relocated to Arizona. In 2011, the Trust became an Arizona trust. Brook, an Illinois resident, was the president of Cortina and is the trustee of the Trust. Lawrence McCormley is a resident of Arizona and an attorney at Tiffany & Bosco, a law firm with its principal place of business in Arizona.

         In 2001, Brook sought out Tiffany & Bosco to represent Cortina in a lawsuit. The lawsuit arose from a dispute over a ground lease created when Cortina sold one of four plots of land the company owned in Scottsdale, Arizona. The suit was dismissed in 2002.

         In 2005, and again in 2013, Cortina sought additional legal advice from Tiffany & Bosco to analyze the viability of claims related to the same ground lease under Arizona's various statutory limitation periods. In 2014, Cortina requested that Tiffany & Bosco initiate a nonjudicial foreclosure on the property. Tiffany & Bosco ultimately decided that the firm's involvement in the nonjudicial foreclosure would pose conflict of interest issues and declined the opportunity to represent Cortina. Throughout Tiffany & Bosco's thirteen years representing Cortina, the parties exchanged phone calls and correspondence between Arizona and Illinois, but all in-person meetings occurred in Arizona.

         Cortina filed suit against Defendants in the Northern District of Illinois alleging legal malpractice, breach of contract, and breach of fiduciary duty. After the district court requested a jurisdictional statement, Cortina substituted in Brook as the plaintiff through an amended complaint.

         The district court dismissed Brook's amended complaint for lack of personal jurisdiction. The district court acknowledged that Defendants entered into a business relationship with an Illinois plaintiff, but pointed out that the activities were strictly conducted in Arizona. Additionally, the court cited the lack of evidence showing that Defendants reached out to or solicited Cortina, the Trust, or Brook to enter into the relationship. Brook appeals.

         II. DISCUSSION

         The standard of review for a dismissal based on lack of personal jurisdiction is de novo. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). In order for a district court to bind an individual, the court must have personal jurisdiction over that individual. Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701 (1982). The plaintiff bears the burden of establishing personal jurisdiction. Cent. States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 939 (7th Cir. 2000).

         As a procedural matter, federal courts look to state law in determining the bounds of their jurisdiction over a party. Fed.R.Civ.P. 4(k)(1)(A); see also Walden v. Fiore,134 S.Ct. 1115, 1121 (2014). The Illinois long-arm statute permits the court to exercise jurisdiction to the full extent permitted by the Due Process Clause of the Fourteenth Amendment. 735 Ill.Comp.Stat 5/2-209(c). ...


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