The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
G. Bauknecht GmbH ("Bauknecht") sues Electronic Relays, Inc.
and ERI-Energy, Inc. (collectively "ERI"), ERI President
Joseph Pascente ("Pascente") and ERI employee Barbara Breibach
("Breibach"). Bauknecht's Complaint has two counts:
1. Count I is a diversity*fn1 claim for
conversion, challenging ERI's refusal to refund a
very large overpayment Bauknecht mistakenly sent
to ERI in connection with a purchase order for
two samples of an ERI-manufactured electronic
2. Count II asserts a claim against all
defendants under the Racketeer Influenced and
Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961-68.
In turn defendants filed a Counterclaim seeking damages for
breach of contract. Both sides have filed various motions,
three of which are fully briefed and thus ready for
1. defendants' motion to strike the May 7 and
July 1, 1982 affidavits ("Bormann Affidavits") of
Gerrald Bormann ("Bormann"), an employee of
Bauknecht's Legal Department;
2. Bauknecht's Fed.R.Civ.P. ("Rule") 56 motion
for summary judgment on Count I; and
3. Bauknecht's motion to strike defendants'
Counterclaim and jury demand.
For the reasons set forth in this memorandum opinion and
order, this Court grants in part defendants' motion to strike
the May 7 Bormann Affidavits, denies (albeit regretfully)
Bauknecht's motion for summary judgment and grants its motion
to strike the Counterclaim and the jury demand.
PRICE FOR 2 UNITS OF PB2403-1 IS 34.95 EACH. AIR
PARCEL POST CHARGES (WITH INSURANCE) IS 20.00USD.
THEREFORE, ENTIRE ORDER IS 89.90USD.
DELIVERY WILL BE 2-4 WKS AFTER RECEIPT OF
PAYMENT. WE WILL ACCEPT EITHER CASH IN ADVANCE OR
FOR BANK TRANSFER PLS ISSUE TO AMERICAN NTL BANK OF
CHICAGO, OUR ACCOUNT NO IS 186384. PLS ADVISE WHICH
METHOD OF PAYMENT U CHOOSE.
On July 3 a clerk in Bauknecht's accounting department
caused Bauknecht's bank (inadvertently according to
Bauknecht)*fn3 to wire $89,900 rather than the $89.90 to that
ERI account. Bauknecht's banking transaction document (B. May
7 Aff.Ex. 3) contained the following entry:
2 Units of P8 2433 — Power Factor Controller
US $89.900, —
On that same day Pascente allegedly received a telephone
call from Hoffmann, an assertion hotly contested by Bauknecht.
According to P.Aff. ¶ 7:
On July 3, 1981, I received a telephone call from
Mr. Hoffmann of BAUKNECHT. Mr. Hoffmann
identified himself by saying that he was calling
for BAUKNECHT and that his company had just
recently ordered two samples of Power Factor
Controllers, and he said that he wanted to
purchase another 2,500 units. I told Mr. Hoffmann
that with our packaging for shipments there were
134 units to each pallet and that was the best
way to ship. Therefore, I said to Mr. Hoffmann
that 19 pallets would come the closest to his
2,500 figure, and that the total figure would
then be 2,548 units. I told Mr. Hoffmann that the
unit price was the same as for the sample, $33.95
[sic], and that we should allow about $3,000.00
for shipping. Mr. Hoffmann said that he wanted
the units and was purchasing such units at that
price and that he needed the units as soon as
possible. I then told him that full payment in
advance by letter or credit or cash was required
by company policy in conformity with the prior
letter and telex, and that no work or shipment
would take place without such full payment. Mr.
Hoffmann said that that was fine. Mr. Hoffmann
then said that he wanted 12 sets of literature
for a possible new German distributorship with a
potential of 50,000 units annually. We then said
goodbye to each other. Since I have a habit of
taking notes of my telephone conversations, I
made notes during my telephone conversation with
Mr. Hoffmann, and a true and correct copy of such
notes is attached hereto as Exhibit D.*fn4
P.Aff. ¶ 8 says ERI immediately proceeded to fill that 2,548
unit order (by making substantial purchases of needed supplies
and initiating the manufacturing process itself) when it
received the $89,900 on July 7.
Quantity Description Unit Amount
2546 POWER FACTOR CONTROLLER
Change order increase order as
PB2403-1 240VAC 3HP
Single Phase $33.95 $86,436.70
Order paid in full — bank transfer of 89,810.10USD
to American National Bank of Chicago
Estimated Air Freight 4000 pounds $3,000.00
Credit Allowance $373.40
That invoice promised delivery by September 28.
On August 5 Hoffmann sent a telex (B. July 1 Aff. ¶ 5,
incorporating Cplt.Ex.CC) to Breibach. Bauknecht's copy of that
telex again unequivocally confirmed its order of two
RE OUR ORDER NBR. 043290 OF JULY 10TH
WE ORDERED TWO POWER FACTOR CONTROLLERS TYPE PB
2403-1 BUT DIDN'T RECEIVE THEM UNTIL NOW. YOU
PLEASE MAY CONFIRM OUR ORDER AND DISPATCH THEM AS
SOON AS POSSIBLE
As received by ERI the telex (P.Aff.Ex.G) was somewhat
scrambled, though it expressly referred to Bauknecht's July 10
telex purchase order (which was for only two units):
RE OUR ORDER NBR. 043290 OF JULY 10TH
DERED TWO T
HO POWER FACTOR CONTROLLERS TYPE
BUT DIDN'T RECEIVE THEM UNTIL NOW.
YOU PLEASE MAY CONFIRM OUR ORDER AN
D DISPATCH AS SOON AS
Later that same day Breibach sent a return telex (B. July 1
Aff. ¶ 6, incorporating Cplt.Ex. DD), which referred to
Bauknecht's July 10 order and stated "SORRY FOR DELAY. UNITS
ARE SHIPPING TODAY VIA A.P.P." ERI shipped two Controller
units, not 2,000 or 2,548 units.
On August 12 ERI mailed an invoice (B. May 7 Aff.Ex. B)
confirming shipment of two Controllers per Bauknecht's July 10
purchase order at a unit price of $34.95 for a total of $89.90
(including $20.00 in postal charges). Significantly that
invoice states, "Paid in full — bank transfer of $89.90 USD to
American National Bank of Chicago."
On September 3 Pascente sent the following telex (B. July 1
Aff. ¶ 7, incorporating Cplt.Ex. EE) to Bauknecht — according
to Bauknecht, the first clue ERI had been sent $89,900 rather
WE HAVE SHIPPED 2 UNITS AGAINST YR ORDER OUR W/O
NO 11020 FOR 2546 UNITS. THE BALANCE OF YR ORDER
WILL BE SHIPPED IN 10 WEEKS.
EXCUSE, THERE IS A MISUNDERSTANDING. OUR
BOOK-KEEPING DEPARTMENT REMITTED INSTEAD OF USD