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P.M.F. SERVS. v. GRADY

January 12, 1989

P.M.F. SERVICES, INC., Plaintiff,
v.
DANIEL J. GRADY, et al., Defendants


Milton I. Shadur, United Sttaes District Judge.


The opinion of the court was delivered by: SHADUR

MILTON I. SHADUR, UNITED STATES DISTRICT JUDGE

 P.M.F. Services, Inc. ("P.M.F.") initially filed an Amended Complaint (the "Complaint") against its former employee Daniel Grady ("Daniel"), his wife Lynn Grady ("Lynn"), Mount Greenwood Bank ("Mt. Greenwood") and The Northern Trust Company ("Northern"). At this point P.M.F. has only one remaining claim -- its Complaint Count II claim against Daniel -- and it now seeks summary judgment on that claim. For the reasons stated in this memorandum opinion and order, P.M.F.'s motion is granted.

 Facts

 Daniel admits liability -- as he must, given his guilty plea to criminal charges based on the same set of facts that ground P.M.F.'s Complaint. Though the criminal charges asserted a scheme to defraud Mt. Greenwood and obtain money in its custody by false and fraudulent pretenses, Daniel's acknowledged conduct in conceiving and implementing that scheme clearly involved the wrongful theft and conversion of $ 55,000 of P.M.F.'s funds -- checks payable to its order. Daniel specifically admitted that in the course of his guilty plea before this Court's colleague, Honorable Marvin Aspen (a transcript of that proceeding [cited "Tr. --" in this opinion] was tendered by P.M.F. together with its current motion).

 P.M.F.'s Damages

 With liability thus established, the only area of controversy is the amount to which P.M.F. is entitled. P.M.F. seeks treble damages of $ 165,000 plus reasonable attorneys' fees, as well as the costs of this action. Daniel counters that only single damages are recoverable. P.M.F. is right.

 For one thing, Daniel's Response to Motion for Summary Judgment ("Response") para. 2 says:

 But Complaint Count II -- which was labeled a "Fraud" claim but was upheld by this Court's June 2, 1988 memorandum opinion and order (the "Opinion" 687 F. Supp. 398) as a conversion claim (Opinion at 402-403) *fn1" -- sought at least $ 70,000 in compensatory damages and $ 500,000 in punitive damages. Even apart from the fact that pleadings state claims in factual terms and not in terms of their legal theory ( Indiana Harbor Belt Railroad Co. v. American Cyanamid Co., 860 F.2d 1441, 1445 (7th Cir. 1988) and cases cited there), Daniel cannot complain about P.M.F.'s now asserting a lesser claim for compensatory damages ($ 55,000) plus the equivalent of a punitive damage claim. *fn2"

 Daniel's other quarrel is with the application of the Indiana statutes on which P.M.F. relies for its treble damages claim. For that purpose there is no question that Illinois choice-of-law rules (made applicable by Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496-97, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941)) speak in terms of the state having the "most significant relationship" in tort actions such as P.M.F.'s conversion claim ( Ingersoll v. Klein, 46 Ill. 2d 42, 45-49, 262 N.E.2d 593, 595-97 (1970)).

 Here Daniel worked for Indiana corporation P.M.F. in Indiana (the location of its principal place of business and the situs of virtually all its operations). Most importantly, Indiana is where Daniel stole P.M.F.'s checks (which were sent to P.M.F.'s offices there by its customers).

 In an attempt to challenge that in factual terms, Daniel's Response paras. 3 and 4 state:

 
3. Moreover, there is nothing which establishes that the intent of DANIEL J. GRADY or the knowing or intentional conduct alleged occurred in the State of Indiana. Indeed, the transcript of the criminal ...

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