Illinois First District Appellate Court
CHICAGO -- An Illinois appeals court has ruled that a North Carolina online auto auctioneer's advertising, emails, phone calls and its online auctions mean the company has done enough business in Illinois to be sued in Illinois state court for allegedly misleading an Illinois customer about the SUV he purchased online, even though the online seller's terms and conditions said disputes should be settled in North Carolina courts.
Justice Carl Walker of the Illinois First District Appellate Court wrote the Sept. 30 ruling. Justices John Griffin and MIchael Hyman concurred. The decision favors Illinois resident John Dixon in his lawsuit against GAA Classic Cars, of Greensboro, N.C., reversing the dismissal of the case in Cook County Circuit Court.
Dixon said he bought a 1973 Ford Bronco for $37,000 in March 2018 from GAA, by submitting the highest bid by telephone. The SUV was delivered 11 days later to him in Illinois. After receiving the Bronco, Dixon said he saw the vehicle was not in as good condition as GAA had allegedly conveyed by an online advertisement and had affirmed in a telephone conversation with Dixon. An agent with GAA also allegedly told Dixon the vehicle was rated 4.5 out of 5. During the simulcast auction, Dixon said GAA again allegedly described the Bronco as being in better condition than he later found it to be.
Illinois First District Appellate Justice Carl Anthony Walker | Illinoiscourts.gov
After the purchase, Dixon said a mechanic found a number of serious problems with the Bronco, including significant safety issues, which GAA had not allegedly disclosed. The mechanic said the Bronco was nowhere near deserving a 4.5 rating, Dixon alleged.
In May 2018, Dixon filed suit in Cook County against GAA, alleging fraud and negligent misrepresentation. GAA countered that an Illinois court had no jurisdiction over GAA, because the auction service never conducted business in Illinois. Cook County Circuit Judge Daniel Kubasiak agreed with GAA, dismissing the case.
On appeal Walker found, "Dixon adequately alleged that GAA directed its activities to Illinois by sending advertisements, emails and phone calls into Illinois, and by using its website to reach customers in Illinois, [all of which] allowed GAA to profit from its alleged fraud."
More specifically, Walker determined GAA, in e-mails and phone calls, "invited Dixon to participate in the auction by watching it as GAA simulcast it."
In addition one of the phone calls involved GAA contacting Dixon to solicit his bid for the Bronco, according to Walker.
GAA contended that the bidder registration form signed by Dixon, read in part: "By signing I do hereby affirm that I have read and agree to the GAA Classic Cars terms and conditions." According to GAA, this form incorporates by reference another document titled GAA Classic Cars terms and conditions, which requires any litigation be pursued in North Carolina.
However, Walker pointed out GAA did not say it furnished the terms and conditions document to Dixon or discussed it with him.
Walker sent the case back to circuit court for further proceedings.
Dixon is represented by Fisher & Phillips in Chicago.
GAA is defended by the Chicago office of Philadelphia-based Fox Rothschild LLP, which has a number of other offices, including one in Greensboro.