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November 22, 1999


The opinion of the court was delivered by: Bucklo, District Judge.


I here consider whether a company that got in over its head in a business area about which it knew little should be held to the express terms of some plain and simple lease contracts that it signed. I conclude that it should so be held. Cozzi Iron & Metal, Inc. ("Cozzi"), an Illinois corporation with its principal place of business in Chicago, Illinois, leased more copying equipment than it needed from a firm called U.S. Office Equipment ("U.S.Office") under ten leases executed from February 1998 to December 1998. The leases were assigned to GreatAmerica Leasing Corporation ("GreatAmerica"), an Iowa corporation with its principal place of business in Cedar Rapids, Iowa. GreatAmerica believes that Cozzi is in default for $372,053.14, and demanded the monies it believes are due to it under the leases, plus attorneys' fees, costs, and interest. Failing to obtain satisfaction, it filed this diversity lawsuit. Cozzi demanded trial by jury, and made several affirmative defenses as well as counterclaiming under the Illinois Consumer Fraud Act, common law fraud, and various contract claims. GreatAmerica now moves to dismiss the counterclaims under Fed.R.Civ.P. 12(c), strike all the affirmative defenses but one (failure to mitigate damages), and strike the jury demand. I grant these motions.


I must begin with a discussion of subject matter jurisdiction. Cozzi lists as its "Third Affirmative Defense" the claim that the amount in controversy is $75,000 or less, so below the amount required for a diversity case under 28 U.S.C. § 1332(a), and I accordingly lack subject matter jurisdiction. This is not an affirmative defense, but no matter. According to Cozzi, on the date of filing, the past due amounts, interest, and penalties totaled only $30,336.74. But when deciding whether a claim meets the jurisdictional minimum for the amount in controversy, "the plaintiff's evaluation of the stakes must be respected. `It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.'" Barbers, Hairstyling for Men & Women, Inc. v. Bishop, 132 F.3d 1203, 1205 (7th Cir. 1997) (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938)). "If, from the proofs, the court is satisfied to a [legal] certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed." St. Paul Mercury Indemnity Co., 303 U.S. at 289, 58 S.Ct. 586.

It does not appear to me to a legal certainty that GreatAmerica will never be able to recover more than $75,000. Cozzi's unsupported and unexplained assertion to the contrary is worthless — "one bald assertion is as good as another," Olander v. Bucyrus Erie Co., 187 F.3d 599, 608 (7th Cir. 1999) — especially where GreatAmerica has offered detailed, plausible, and, as far as I can tell, accurate calculations explaining the value of the case to be greater than the amount in controversy. Cozzi's figures in any event leave out attorneys' fees, to which GreatAmerica would be entitled under the contracts. I would not be surprised if the attorneys' fees incurred so far in this case, added to the amount that Cozzi admits it is worth, would push the case over the jurisdictional amount. If the litigation continues, I would be surprised if the attorneys' fees themselves did not exceed the jurisdictional amount. I therefore conclude that I have subject matter jurisdiction.


In a diversity case I apply federal procedural law and state substantive law, Dawn Equipment Co. v. Micro-Trak Sys., Inc., 186 F.3d 981, 986 (7th Cir. 1999), here, undisputedly, the law of Illinois. In a motion to dismiss a claim or counterclaim under either Fed.R.Civ.P. 12(b)(6) or Rule 12(c), I accept the well-pleaded allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff — here, the counterclaim plaintiff. Gastineau v. Fleet Mortgage Corp., 137 F.3d 490, 493 (7th Cir. 1998). Such motions "should not be granted unless it appears beyond doubt that the plaintiff cannot prove any facts that would support his claim for relief." Hentosh v. Herman M. Finch Univ. of Health Sciences/The Chicago Med. School, 167 F.3d 1170, 1173 (7th Cir. 1999) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

Cozzi says that it was solicited by U.S. Office to lease copiers in February 1998. It "had never leased copiers before" and so was "not familiar with what would be fair pricing, terms, and conditions of copier leases." Therefore, Cozzi "was unfamiliar with how many copies it made in the normal course of its business on a monthly or annual basis." Cozzi asserts, and I must accept for the purposes of a motion to dismiss, that a U.S. Office Sales representative told Cozzi that it would only be responsible for the actual number of copies it made and that number would be determined after a few months. The leases Cozzi actually signed, however, called for a minimum monthly payment per copier of $1,996.40, regardless of whether any copies were made, and provided for penalties and interest in event of nonpayment. Cozzi says no one actually informed it of these terms or that the contracts were "subject to fine print terms and conditions on the reverse side" of the two-page leases, although Cozzi does not deny that it had the leases available to read at the time they were signed and the leases themselves state that Cozzi has read and understood the terms.


In this section I address Cozzi's counterclaims and affirmative defenses based on fraudulent inducement. Cozzi asserts that in including provisions in the leases different from its salesperson's oral representations GreatAmerica: (1) violated the Illinois Consumer Fraud Act, 815 ILCS 505/1, et seq. (the "Act") (Count I); (2) committed common law fraud (Count II); (3) breached the contracts between them and violated an implied covenant of good faith and fair dealing,*fn1 and therefore Cozzi demands (Count III) (4) rescission (Count IV) and (5) revocation of acceptance under the UCC, 810 ILCS § 5/2a-517 (Count V).

Cozzi's affirmative defenses in fraud, based on the same facts, include the claims that: (1) the contracts were fraudulently formed because Cozzi was not informed of the terms of the written leases it signed (Second Affirmative Defense), and (2) Cozzi therefore canceled the lease contracts (Fourth Affirmative Defense) or (3) modified them to reflect the oral understanding (Fifth Affirmative Defense).

These claims cannot be maintained. Cozzi signed the contracts which have the disputed language. Illinois uses a "four corners" rule in the interpretation of contracts, holding that "if the language of a contract appears to admit of only one interpretation, the case is indeed over." Bourke v. Dun & Bradstreet, 159 F.3d 1032, 1036 (7th Cir. 1998) (internal citations omitted). As the Illinois Supreme Court recently restated this rule: "The terms of an agreement, if not ambiguous, should be generally enforced as they appear, and those terms will control the rights of the parties." Dowd & Dowd, Ltd. v. Gleason, 181 Ill.2d 460, 230 Ill.Dec. 229, 693 N.E.2d 358, 368 (1998) (internal citations omitted). An unambiguous contract is interpreted by the court "as a matter of law without the use of parol evidence." Air Safety, Inc. v. Teachers Realty Corp., 185 Ill.2d 457, 236 Ill.Dec. 8, 706 N.E.2d 882, 884 (1999).*fn2

The evidence of prior or contemporaneous agreements is normally excluded from the interpretation of a contract which, like these, is concededly unambiguous. Cozzi claims that the contracts were not integrated and that the complete understanding of the parties includes the oral agreements which contradict the written language. But the contracts specified that "[n]o individual is authorized to change any provision of this agreement." This unambiguously indicates that the writings reflect the complete understanding of the parties, which would be the normal presumption in Illinois contract law in any event.

Cozzi replies that in Illinois, fraud in the inducement may justify consideration of prior understandings which would be otherwise excluded under the parol evidence rule. Carlile v. Snap-on Tools, 271 Ill. App.3d 833, 207 Ill.Dec. 861, 648 N.E.2d 317, 323 (1995). But there was no fraud in the inducement. In order to sustain a cause of action for fraud in Illinois, the plaintiff must prove that the defendant made a false statement of material fact, which he knew or believed to be false, with the intent to induce the plaintiff to act in reliance on the statement and that the plaintiff did, in fact, act in reasonable reliance on that false statement ...

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