The opinion of the court was delivered by: McCUSKEY, District Judge.
This case is before the court for ruling on two Motions filed
by Plaintiff, Archer Daniels Midland Company (ADM), a Motion for
Summary Judgment (# 137) and a Motion to Stay (# 159). Following
careful review, ADM's Motion for Summary Judgment (# 137) is
GRANTED in part and DENIED in part. In addition, ADM's Motion to
Stay proceedings regarding Count VII of its Amended Complaint (#
159) is GRANTED. ADM's request to voluntarily dismiss Count IV of
its Amended Complaint is GRANTED. This court is also providing
notice to ADM that it intends to dismiss Counts V and VI of ADM's
Amended Complaint for the reasons stated in this Order. ADM is
allowed fourteen (14) days to file any objections to the
dismissal of Counts V and VI. See Stewart Title Guar. Co. v.
Cadle Co., 74 F.3d 835, 836-37 (7th Cir. 1996).
Defendant, Mark W. Whitacre, began his employment with ADM on
November 13, 1989. He was originally vice-president of ADM
BioChem. ADM BioChem was later named ADM BioProducts Division. In
May 1990, Whitacre was promoted to president of ADM BioProducts
Division, which produces lysine. In November 1992, Whitacre
became a corporate vice-president of ADM. Also in November 1992,
Whitacre began taping conversations at
ADM. The recordings were turned over to the FBI to be used in its
investigation into allegations of price-fixing of lysine. On June
27, 1995, the FBI raided ADM's corporate headquarters. On August
7, 1995, Whitacre's employment was terminated. Whitacre was
informed by letter that he was being terminated "for cause,
including the theft of at least $2.5 million from the Company."
ADM filed its original Complaint against Whitacre on September
19, 1996, in the circuit court of Macon County. In its 39-page
complaint, ADM alleged that Whitacre unlawfully obtained over
$9.5 million from ADM during his employment with ADM. In Count I,
ADM claimed that Whitacre was liable for the breach of fiduciary
duties. In Count II, ADM alleged that Whitacre was liable for
conversion. In Count III, ADM alleged that Whitacre was liable
for fraud. In Count IV, ADM sought an accounting and the
imposition of a constructive trust. In Count V, ADM sought a
declaratory judgment that Whitacre continues to be obligated
pursuant to the Non-Disclosure Agreement signed during his
employment and that Whitacre is barred from disclosing
information described within the Non-Disclosure Agreement. In
Count VI, ADM named various individuals allegedly involved with
Whitacre in unlawfully obtaining money from ADM as Respondents in
Discovery. ADM requested that they be required to participate and
respond to discovery in this case.
Whitacre removed the action to this court on October 17, 1996,
on the basis of diversity of citizenship (28 U.S.C. § 1332) as
Whitacre was then a resident of North Carolina. On November 22,
1996, Whitacre filed an Answer to the Complaint and a
Counterclaim. In his Counterclaim, Whitacre sought damages from
ADM for: (1) retaliatory discharge following his cooperation with
the FBI in its investigation into price-fixing (Count I); (2)
breach of contract (Count II), based upon ADM's breach of three
stock option agreements; (3) intentional infliction of emotional
distress (Count III); and (4) five counts of defamation (Counts
IV, V, VI, VII and VIII).
On January 9, 1997, ADM filed its Complaint in Case No. 97-2005
against many of the individuals named as Respondents in
Discovery. This case has recently been settled by all of the
parties, and an Order dismissing the case was entered by this
court on July 14, 1999.
On October 10, 1997, Whitacre pleaded guilty to 37 counts of an
indictment charging him with wire fraud, interstate
transportation of stolen property, conspiracy to defraud the
United States, money laundering and filing false Income Tax
returns. On March 4, 1998, Whitacre was sentenced to 108 months'
incarceration and was ordered to pay ADM $11,403,698 in
On July 21, 1998, this court granted ADM's motion to amend its
Complaint and add Count VII, alleging that Whitacre violated
Federal wiretapping statutes (18 U.S.C. § 2511(1), 2512(1)) and
Count VIII, alleging that Whitacre violated Illinois'
eavesdropping statute (720 Ill. Comp. Stat. 5/14-2 (West 1996)).
Whitacre filed his Answer to these additional counts on August
ADM filed a Motion for Summary Judgment (# 137) on September
10, 1998. ADM also filed a Statement of Undisputed Facts, a
lengthy Memorandum in Support of the Motion and three volumes of
exhibits. In its Motion, ADM sought a judgment in its favor on
Counts I, II, III, V, VII and VIII of its Amended Complaint. ADM
also sought a judgment in its favor and against Whitacre on all
counts of Whitacre's Counterclaim.
On September 17, 1998, following a jury trial before United
States District Judge Blanche M. Manning, Whitacre and ADM
executives Michael D. Andreas and Terrance S. Wilson were found
guilty of conspiring to fix the global price and allocate the
sales volume of lysine. See United States v. Andreas,
39 F. Supp.2d 1048, 1054 (N.D.Ill. 1998). On December 16, 1998,
Whitacre filed his Response to the Motion for Summary Judgment.
ADM filed a Motion to Stay (# 159) on April 7, 1999. ADM noted
that United States District Judge Michael M. Mihm entered an
Order in In re High Fructose Corn Syrup Antitrust Litigation,
46 F. Supp.2d 819 (C.D.Ill. 1999). According to ADM, this Order
related to the same tapes at issue in Count VII of ADM's Amended
Complaint. ADM stated that an appeal from Judge Mihm's Order
would be filed. ADM argued that it would serve judicial economy
to stay resolution of its Motion for Summary Judgment regarding
Count VII pending the disposition of the forthcoming appeal.
Whitacre has not responded to the Motion to Stay.
Whitacre was sentenced by Judge Manning on July 9, 1999. He was
sentenced to a term of 30 months in prison, 20 months to be
consecutive to the sentence previously imposed by Judge Baker.
United States v. Andreas, 1999 WL 515484, at *17 (N.D.Ill.
I. SUMMARY JUDGMENT STANDARD
This court first notes that ruling on ADM's Motion for Summary
Judgment has been complicated by Whitacre's failure to comply
with the Central District of Illinois' Local Rules. Local Rule
Similar to answering a complaint, in response the
party opposing the summary judgment, shall file a
separate document (entitled "Response to statement
of Undisputed Facts") which numerically responds to
each of the movant's undisputed facts. The party will
either admit or contest the fact. If the fact is
contested, the party (1) shall submit a short and
plain statement of why the fact is in dispute and (2)
cite to discovery material or affidavits that support
the contention that the fact is disputed. (Emphasis
In this case, Whitacre was allowed numerous extensions of time in
which to file his Response to the Motion for Summary Judgment. In
fact, the Response was filed more than three months after the
Motion was filed. Nevertheless, Whitacre did not comply with the
requirements of Local Rule 7.1(D). In the Response, Whitacre
merely listed the numbers of Plaintiff's Undisputed Facts which
he contested. He provided no statement of why any of the facts
were in dispute and no citation to discovery material or
affidavits. In addition, Whitacre has provided this court with
little reasoned analysis explaining why summary judgment should
not be granted.
The Seventh Circuit has repeatedly upheld the strict
enforcement of the local rules and has sustained the entry of
summary judgment when the non-movant fails to submit a factual
statement in the form required by the local rules. Columbia
Pictures Indus., Inc. v. Landa, 974 F. Supp. 1, 3 (C.D.Ill. 1997)
(citing Waldridge v. American Hoechst Corp., 24 F.3d 918, 922
(7th Cir. 1994)). However, strict enforcement of the local rules
does not mean that a party's failure to comply with the rules
automatically results in summary judgment for the moving party.
LaSalle Bank Lake View v. Seguban, 54 F.3d 387, 392 (7th Cir.
1995). It remains "the movant's burden to demonstrate that no
genuine issue of material fact exists and that he is entitled to
summary judgment as a matter of law." Doe v. Cunningham,
30 F.3d 879, 883 (7th Cir. 1994). Accordingly, the district court
must make the further finding that summary judgment is proper as
a matter of law. LaSalle Bank, 54 F.3d at 392. "Where the
evidentiary matter in support of the motion [for summary
judgment] does not establish the absence of a genuine issue,
summary judgment must be denied even if no opposing evidentiary
matter is presented." Adickes v. S.H. Kress & Co.,
398 U.S. 144, 160, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) (quoting the
Advisory Committee Note on the 1963 Amendment to subdivision (e)
of Rule 56 of the Federal Rules of Civil Procedure); see also
Wienco, Inc. v. Katahn Assocs., Inc., 965 F.2d 565, 568 (7th
Summary judgment shall be granted "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." Fed.R.Civ.P.
56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23,
106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In ruling on a motion for
summary judgment, a district court has one task and one task
only: to decide, based upon the evidence of record, whether there
is any material dispute of fact that requires a trial.
Waldridge, 24 F.3d at 920. Neither the mere existence of some
alleged factual dispute between the parties nor the existence of
some metaphysical doubt as to the material facts is sufficient to
defeat a motion for summary judgment. Hoffman v. MCA, Inc.,
144 F.3d 1117, 1121 (7th Cir. 1998).
II. ADM'S CLAIMS FOR DAMAGES
In Counts I, II and III of its Amended Complaint, ADM seeks
damages from Whitacre for breach of fiduciary duty, fraud and
conversion. ADM has provided detailed documentation of fraudulent
transactions engaged in by Whitacre during his employment with
ADM. This court concludes that ADM has presented more than
sufficient evidence to establish that Whitacre engaged in
fraudulent transactions, beginning in 1991 and continuing into
1995, which caused ADM to pay a total of $9,538,694 for services
it never received. Indeed, on October 10, 1997, Whitacre pleaded
guilty to 37 counts of the indictment against him based upon the
fact that he engaged in these transactions. On March 4, 1998,
when he was sentenced for those crimes, he was ...