The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Refrigeration Sales Co. ("Refrigeration") has brought this
two-count diversity action against Mitchell-Jackson, Inc.
("Mitchell-Jackson") and its President Alfred L. Jackson
("Jackson"), seeking damages for loss of and damage to goods
and equipment stored in Mitchell-Jackson's warehouse. Count I
alleges Mitchell-Jackson is liable for conversion of the goods
and equipment, while Count II alleges Jackson is liable for
conversion both in his individual capacity and as alter ego of
Mitchell-Jackson. Defendants now move for summary judgment
under Fed.R.Civ.P. ("Rule") 56. For the reasons stated in this
memorandum opinion and order, defendants' motion is granted.
From before 1960 to 1979 Refrigeration, headquartered in New
York, stored goods and equipment (for convenience in reference
and because the usage conforms to the UCC and the documents in
this case, this opinion will simply use the collective term
"goods") at Mitchell-Jackson's warehouse in Chicago (so the
goods were more readily available for sale in this area). Each
time Mitchell-Jackson received goods from Refrigeration, it
issued a non-negotiable warehouse receipt ("Receipt") on the
reverse of which were listed the "Terms and Conditions" of the
bailment. Receipt § 10(b), its only relevant provision, reads:
Claims by the depositor must be presented in
writing within a reasonable time, and in no event
longer than 60 days after delivery of the goods.
No action may be maintained by the depositor
against the warehouseman for loss or damage to
goods covered hereunder unless commenced within
12 months next after date of delivery by the
Jackson (Mitchell-Jackson's president, chief executive
officer and manager) has testified he discovered a discrepancy
between Refrigeration's books and Mitchell-Jackson's about
September 1977 (Jackson Dep. 110-11). Jackson neither ordered
a physical inventory nor adjusted Refrigeration's bills to
conform to Refrigeration's records (id. 114). Neither side has
offered an explanation of the discrepancy.*fn3
Refrigeration failed to comply with Receipt § 10(b)'s
timetable in both respects:
1. It did not present a written claim for the
value of the lost and damaged goods to
Mitchell-Jackson within 60 days of the final
delivery by Mitchell-Jackson.
2. It did not file a lawsuit against
Mitchell-Jackson within a year of the final
Instead it filed this lawsuit in October 1981, nearly
two years after the final delivery date.
Issues and the Applicable Law
Defendants' motion for summary judgment is based on two
independent arguments, either of which would cause defendants
1. Refrigeration's two-fold noncompliance with
Receipt § 10(b)'s timetable is fatal to its claim.
2. In any event Refrigeration's evidence is
incapable of establishing vital elements of the
tort of conversion for each type of damages
Both sides agree this Court must look to Illinois law for its
rules of decision, though they reach that destination by
differing routes. Defendants contend an Illinois court would
choose Illinois law because Illinois was the place of
performance of the contract (citing Southwest Forest Industries
v. Sharfstein, 482 F.2d 915, 919 (7th Cir. 1972), a case of
doubtful current significance given the apparent movement of
Illinois law toward the "most significant relationship" test in
contract as well as tort cases). Refrigeration, rejecting the
contract characterization in favor of its tort theory of
recovery, retorts an Illinois court would choose Illinois ...