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LEWIS-KEARNS v. MAYFLOWER TRANSIT

July 11, 1996

DEBORAH LEWIS-KEARNS, Plaintiff,
v.
MAYFLOWER TRANSIT, INC., an Indiana Corporation, GLEN ELLYN STORAGE CORP., an Illinois Corporation, UNION VAN LINES, INC., an Illinois Corp., and OLSEN BROS., INC., an Illinois Corporation, Defendants.



The opinion of the court was delivered by: GETTLEMAN

 Plaintiff Deborah Lewis-Kearns has filed an eight count complaint against defendant Mayflower Transit, Inc. ("Mayflower"), and its agents Glen Ellyn Storage Corp. ("Glen Ellyn"), Union Van Lines, Inc. ("Union"), and Olsen Bros., Inc. ("Olsen"). Counts I through V allege racial discrimination under 42 U.S.C. § 1981, and Counts VI through VIII allege interference with contracts and interference with prospective business relationships. Jurisdiction is predicated upon 28 U.S.C. § 1331 and 1343(4) and 28 U.S.C. § 1367.

 The defendants have moved for summary judgment on all counts. For the reasons stated below, the motion is granted in part and denied in part.

 FACTS

 Defendant Mayflower is a moving and storage company engaged in interstate commerce. Defendants Glen Ellyn, Union, and Olsen are independently owned Mayflower agents.

 The relationship between Mayflower and its agents is not entirely clear from the record, but it appears that Mayflower provides name recognition, advertising and marketing consultation, and the agency network to coordinate interstate transportation of household goods. The agents provide the actual moving and storage services for their clients.

 In July 1993, plaintiff met Mark Harris, a vice president of Mayflower, at a wedding of a mutual friend. Plaintiff attended a meeting with Harris on August 17, and Mayflower subsequently expressed interest in appointing plaintiff as a Mayflower agent. Mayflower's interest in plaintiff stemmed from her status as an African American female, to enable Mayflower to penetrate markets set aside for minority-owned businesses.

 Plaintiff had no prior education or experience in the moving and storage business, and she had no formal training in accounting or finance. Further, she did not have the financial resources necessary to establish a typical full-service Mayflower agency, which would require funds for payroll, trucks, and warehouse facilities.

 Because of plaintiff's lack of experience and financing, Mayflower explored the possibility of making a special arrangement for her. The new concept was called a "sales agency" because plaintiff would limit her activities to booking business. Other Mayflower agents such as Glen Ellyn, Union, and Olsen would provide the actual packing and moving. The sales agency would require less capital investment than a full-service agency. The amount of start-up investment necessary, however, and the extent to which Mayflower would assist in financing the sales agency, are in dispute.

 Plaintiff alleges that she entered into two oral contracts with Mayflower: the first was to establish a sales agency, and the second was to recruit minority employees for Mayflower. Plaintiff alleges Mayflower breached both contracts as a result of racial hostility expressed by defendants Glen Ellyn, Union, and Olsen.

 Sales Agency Contract

 During September and October 1993, plaintiff alleges that she obtained office space for her agency, hired an accountant, and studied the moving and storage business. On October 1, 1993, plaintiff attended separate meetings with defendants Glen Ellyn and Union to arrange for them to provide moving and storage services for her sales agency. Plaintiff's financial adviser, Andrew Sawyer, was present at the meeting with Glen Ellyn, and Mayflower's Harris was present at both meetings.

 Plaintiff alleges that Larry Smith of Glen Ellyn objected to doing business with her because she was black, and threatened to use Glen Ellyn's clout to prevent her appointment as a Mayflower agent. According to plaintiff, Smith said, "I have a problem with having you stuffed down my throat by the corporation." Plaintiff alleges that Smith said that he did not believe in quota systems based on race, and that he did not want to help a black-owned agency to become successful.

 Others present at the meeting give differing accounts. Sawyer, plaintiff's financial adviser, confirms that Smith said he was not interested in working with a minority-owned company, and that he did not believe in affirmative action. Harris admits that Smith was "vehemently opposed" to the idea of plaintiff's sales agency before the meeting, but contends that this opposition was based on concerns with increased competition rather than plaintiff's race. Harris testified that during the meeting Smith said he did not want to be part of a "sham" to get minority business. Smith himself denies that he objected to doing business with minorities. Subsequent to the meeting, however, Smith wrote a letter to the president of Mayflower requesting input prior to the plaintiff's appointment as an agent.

 Plaintiff also met with Union on October 1, 1993. She testified that Keith Svec of Union said he objected to working with plaintiff because she was a black female, and that Union would "fight" against the establishment of her agency. Sawyer was not present at that meeting, and both Harris and Svec deny plaintiff's account of the meeting.

 Finally, plaintiff met with Richard Olsen on November 4, 1993, who represented Olsen, another Mayflower agent. Unlike Glen Ellyn and Union, Olsen did offer plaintiff a "Sales Agreement" to handle moving and storage services for plaintiff's clients. According to plaintiff, however, the terms of the agreement were extremely unfavorable. Plaintiff perceived the proposed agreement as an attempt to prevent her from doing business because she was black. Plaintiff did not testify, however, that Olsen made any racially motivated comments during or subsequent to the meeting. Further, plaintiff did not attempt to negotiate the terms with Olsen after receiving the initial proposal, even though Olsen called her to follow up on the status of the agreement. Plaintiff did complain about the proposal to Mayflower, and Thomas Ahern of Mayflower subsequently called Olsen to say the agreement was "too restrictive."

 On March 4, 1994, plaintiff wrote a letter to Mayflower stating grievances with the entire process, and requesting to either "proceed forward or to bring some closure to this situation." Soon after, Mayflower decided to cease negotiations with Kearns.

 Recruiting Contract

 Plaintiff also alleges that she had a "recruiting contract" with Mayflower which required her to screen and present minority females to be hired by Mayflower as sales representatives. The agreement was for Mayflower to submit a "job order" when it wanted a candidate. Plaintiff admits, however, that Mayflower never sent such a job order. In addition, the parties never agreed whether plaintiff would be paid on a contingency basis or by a retainer. According to plaintiff, the method of compensation was to be determined when Mayflower sent a job order.

 Nonetheless, plaintiff presented two applicants for interviews by Mayflower. Mayflower did not hire either candidate, and plaintiff alleges that Mayflower breached the so-called contract by not paying for her services.

 Summary Judgment Standard

 In a motion for summary judgment, the moving party is entitled to judgment as a matter of law if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact." Fed. R. Civ. P. 56(c). The movant has the initial burden to establish the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Once the movant has met this ...


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