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KAESER & BLAIR, INC. v. WILLENS

May 24, 1993

KAESER & BLAIR, INC., Plaintiff,
v.
NOAH WILLENS and THE INCENTIVE NETWORK, LTD., Defendants.



The opinion of the court was delivered by: MARVIN E. ASPEN

 MARVIN E. ASPEN, District Judge:

 Plaintiff Kaeser & Blair, Inc. ("Kaeser") brings this diversity action against Noah Willens and The Incentive Network, Ltd. ("Incentive Network"), asserting ownership rights to a list of commissioned, independent sales agents purchased from Wilco Calendar and Advertising Specialty Company ("Wilco") and Kling Advertising Specialties and Calendars, Inc. ("Kling"). Presently before the court is defendants' motion for summary judgment on Counts II and III of Kaeser's complaint and, as explained below, the motion is denied.

 I. Summary Judgment Standard

 Under the Federal Rules of Civil Procedure, summary judgment is appropriate if "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). This standard places the initial burden on the moving party to identify "those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986) (quoting Rule 56(c)). Once the moving party has done this, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(c). In deciding a motion for summary judgment, the court must read all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202 (1986); Griffin v. Thomas, 929 F.2d 1210, 1212 (7th Cir. 1991).

 II. Background

 Each of the corporate entities associated with this lawsuit are, or were, engaged in the specialty advertising business. Specialty advertising items include coffee cups, pencils, calendars and the like, emblazoned with a company's logo or slogan. As is custom within the industry, specialty advertising businesses do not directly solicit orders from companies seeking their services. Rather, they rely on independent, commissioned sales agents who solicit the orders, forwarding them to the specialty advertising business. The specialty advertising business would produce the ordered items and ship them directly to the customer. The customer would pay the specialty advertising business, which in turn remits a commission to the agent who originally solicited the order.

 Both Wilco and Kling were founded by David L. Willens and incorporated in Illinois. Upon his death, on August 20, 1986, David Willens left all of his stock in Wilco and Kling to his wife, Rita Jacobs Willens. Rita Willens, who apparently had no desire to continue her husband's business, sold to Kaeser for consideration of $ 360,000 "[a] list of all the independent contractors who have been serving as commission sales agents for [Wilco and Kling]." The contract provided that Wilco, Kling and Rita Willens as sellers warranted that they "have full and exclusive authority to sell the [list]." Further, Wilco, Kling and Rita Willens represented that they "intend to terminate their commissioned sales business immediately . . . [and] agree that they will not use, sell or give away, either directly or indirectly, the . . . listees." Likewise, Wilco, Kling and Rita Willens agreed "that for a period of five (5) years after the date of this instrument [October 29, 1986], they will not, within the United States of America, . . . engage directly or indirectly in any distribution of advertising specialties business." Shortly after the sale, on September 2, 1987, Rita Willens voluntarily dissolved both Wilco and Kling.

 Noah Willens, David and Rita Willens' son, founded and incorporated Incentive Network on July 20, 1989. Noah Willens previously served as an officer of both Wilco and Kling, and participated in the post-contract transition to Kaeser, sending a notice to all listees and forwarding various orders received by Wilco and Kling to Kaeser. Incentive Network is now engaged in the same business as Wilco and Kling, selling the same products in the same manner. In order to enlist the services of independent sales agents, on approximately March 20, 1992, Noah Willens mailed the following solicitation letter to nearly all individuals on the list sold to Kaeser:

 
Dear [Listee]:
 
Let me take a moment to reintroduce myself. My name is Noah Willens, the son of the late David Willens. As you will recall, David was the president of Wilco Advertising Specialty Company. He and I had worked side by side for many years in the business. After a long and valiant fight with lung cancer David passed away in 1986. For various personal reasons I and my family decided to close the company.
 
Alas, I found that I could not and did not want to get the business out of my blood! So, in 1989 I reopened the company under the name of the Incentive Network Ltd.. Due to a legal obligation I could not contact you until now to give you the great news.
 
[Listee], as I recall, you were a very valuable asset to the Wilco family. I would be truly honored if you would consider the possibility of rejoining our Advertising Specialty House! You will find The Incentive Network to be an extremely friendly, warm, sincere and family oriented business. Just exactly the same qualities that David fought to maintain as President of Wilco.
 
In this day and age of huge corporations and computerization we can loose track of the fundamental concept that the people that make up the company are human beings! Although The Incentive Network is a highly organized, professional and computerized company, you will always be ...

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