Count V alleges that even if the last sentence of paragraph seven of the Separate Agreement provides for alternative performance (as the court held November 16, 1992), the Title Policy delivered to Janivo did not comply with that sentence. Janivo alleges numerous discrepancies between the delivered Title Policy and the Title Commitment referred to in the last sentence of paragraph seven.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "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 that the moving party is entitled to a judgment as a matter of law." In ruling on a motion for summary judgment, the evidence of the non-movant must be believed, and all justifiable inferences must be drawn in the non-movant's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202 (1986). This court's function is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.
The issue here is whether there is a genuine issue of material fact as to defendants' alleged material breach of the Separate Agreement through noncompliance with the last sentence of paragraph seven. Based on a review of the parties' materials, this court concludes that there are issues of material fact that must be resolved at trial, including, but not limited to, whether inclusion of the standard exceptions in the delivered Title Policy constituted a material breach of the Separate Agreement on the part of defendants. See Sahadi v. Continental Ill. Nat'l Bank & Trust Co., 706 F.2d 193, 196-97 (7th Cir. 1983) (materiality issues are "especially unsuited to resolution by summary judgment").
Defendants motion for summary judgment on Count V is therefore denied.
E. Counts VI and VII -- Unjust Enrichment and Conversion
Returning to defendants' motion to dismiss, that motion attacks Count VI, brought for unjust enrichment, on the basis that "under Illinois law, a plaintiff may not state a claim for unjust enrichment when a contract governs the relationship between the parties." First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007, 1011 (7th Cir. 1985). Defendants argue that the Separate Agreement governs the conditions under which they could draw on the letter of credit.
Defendants' position prevails. The Separate Agreement is attached to the Complaint, so the court may refer to that agreement in resolving this motion to dismiss. See United States v. Wood, 925 F.2d 1580, 1581-82 (7th Cir. 1991) (citing Goldman v. Belden, 754 F.2d 1059, 1065-66 (2d Cir. 1985) (pleading is deemed to include any document attached as an exhibit)). It is clear from the Separate Agreement that the Separate Agreement was meant to govern the conditions under which the banks could draw on the Letter of Credit. It thus fits squarely within Illinois law to reject an unjust enrichment claim on this basis. See also Gordon v. Matthew Bender & Co., 562 F. Supp. 1286, 1298 (ND. Ill. 1983) (granting Rule 12(b)(6) motion to dismiss in similar instance, holding "an action sounding in quasi contract will not lie" where relationship between parties is governed by expressed contract).
Consider the opposite conclusion: Count VI is based on an allegation that "in the alternative, if . . . the Banks have not breached the Separate Agreement, then the Banks have been unjustly enriched." (Complaint at 23, P 84.) Under this theory, the Banks have been fully justified in their draw under their contract with Janivo. Nonetheless, Janivo argues, the Banks draw was unjust. It is the court's reading of Illinois law that the contract in this commercial dispute determines whether a party's actions governed by the contract were a violation of the other party's rights. To hold otherwise would undermine the reason for entering into a commercial contract in the first place -- to effect a bargained-for exchange of rights and duties.
This same theory applies equally well to the action for conversion alleged in Count VII. Conversion is "the wrongful deprivation of property from the person entitled to possession." Glaser v. Kazak, 173 Ill. App. 3d 108, 527 N.E.2d 379, 383, 122 Ill. Dec. 881 (Ill. App. Ct. 1988). This allegation, again made under the assumption that the banks have acted rightfully under the Separate Agreement, is negated by the existence of a contract defining the parties' respective rights. Once again, a contract is of little value if a party's actions in compliance with the contract could be a conversion of property transferred pursuant to the contract. Cf. Securities Fund Servs., Inc. v. American Nat'l Bank & Trust Co., 542 F. Supp. 323, 328 (N.D. Ill. 1982); Eggert v. Weisz, 839 F.2d 1261, 1264 (7th Cir. 1988).
Accordingly, defendants' motion is granted as to Counts VI and VII.
F. Count VIII -- Punitive Damages
Defendants finally challenge Count VIII, which purports to state a claim for punitive damages. The specific issues defendants raise need not be addressed, since only Count V survives this motion, and Janivo represents that it is not seeking punitive damages arising out of Count V.
Accordingly, defendants' motion is granted regarding Count VIII.
The Motion of Continental and First Interstate for Summary Judgment on Count V of the Second Amended Complaint is denied. Defendants' Joint Motion to Dismiss Counts I-IV and VI-VIII of the Second Amended Complaint is granted.
JAMES H. ALESIA
United States District Judge