Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

KENT METERS, INC. v. EMCOL OF ILLINOIS

July 8, 1991

KENT METERS, INC., Plaintiff,
v.
EMCOL OF ILLINOIS, INC., PATRICK JENKINS and THE CITY OF CHICAGO, Defendants


George M. Marovich, United States District Judge.


The opinion of the court was delivered by: MAROVICH

GEORGE M. MAROVICH, UNITED STATES DISTRICT JUDGE

 When the City of Chicago ("City") is the debtor to a contract obligation, can the contract creditor assign that account receivable without the City's consent? The assignee here, Kent Meters, Inc. ("Meters") argues yes; the City, the account debtor, argues no. We find in favor of Meters; however, material questions of fact exist which prevent us from entering summary judgment in Meters' favor.

 BACKGROUND

 On August 24, 1987, Emcol of Illinois, Inc. ("Emcol") contracted to supply the City with water meters. The contract contained a provision which purportedly prohibited Emcol from assigning any part of the contract without the written consent of the City's purchasing agent. Meters agreed to supply Emcol the water meters on credit in exchange for an assignment to Meters of Emcol's accounts receivable due from the City. Meters opened a joint bank account with Emcol at the Barnett Bank in Ocala, Florida, to receive payment of the City's accounts receivable.

 On December 30, 1987, Emcol wrote to the City's purchasing agent and advised the City that all monies due under the contract had been assigned to Meters. The letter specifically authorized and directed the City to make all contract payments due Emcol directly to the Barnett Bank account. The City alleges that it has never received the December 30 letter; however, in a payment voucher dated December 31, 1987, the City directed payment to be made to the Barnett Bank. As will be discussed below, material questions of fact exist regarding whether the City received the December 30 letter.

 On January 14, 1988, Meters delivered the water meters to the City. Six days later, Emcol sent invoices totaling $ 129,049.50 to the City for payment. These invoices directed the City to make payment to the Barnett Bank account. The City disregarded that instruction and instead paid $ 129,049.50 to Emcol's Chicago office. Emcol deposited the check in its own account and never paid Meters.

 Meters filed suit against the City alleging that the City is liable to it for the full $ 129,049.50 for failing to direct payment in accordance with the assignment. The City denies that it received either notice of the assignment or a demand to remit the payment to the Barnett Bank. Meters and the City have filed cross-motions for summary judgment. To decide these motions, we must resolve two issues. First, we must decide whether an account receivable, arising from a contract with the City, can be assigned without the written consent of the City's purchasing agent. To decide this issue, we must determine whether the Illinois Municipal Code, which prohibits such an assignment, or the Illinois Uniform Commercial Code ("UCC"), controls this issue. Second, we must decide whether material questions of fact exist regarding whether the purported assignment in this case was proper under Ill. Rev. Stat. ch. 26, para. 9-318(3).

 DISCUSSION

 Summary judgment is appropriate if "the pleadings depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Renovitch v. Kaufman, 905 F.2d 1040, 1044 (7th Cir. 1990).

 The City alleges that the assignment by Emcol to Meters was in violation of both the contract and the Illinois Municipal Code, Ill. Rev. Stat. ch. 24, para. 8-10-14. The contract states as follows:

 
No contract shall be assigned or any part of the same sub-contracted without written consent of the Purchasing Agent. . . . The Contractor shall not transfer or assign any contract funds or claims due or to become due without the written approval of the Purchasing Agent having been attained. The transfer or assignment of any contract funds either in whole or in part, or any interest therein, which shall be due or to become due to the Contractor, shall cause the annulment of said transfer or assignment so far as the City is concerned.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.