Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CityLink Group, Ltd. v. Hyatt Corporation

May 12, 2000

CITYLINK GROUP, LTD. AND HOTEL SERVICES LTD., UNITED KINGDOM CORPORATIONS; AND ROBOSERVE, INC., AND HOTEL SERVICES, INC., DELAWARE CORPORATIONS, PLAINTIFFS-APPELLANTS AND CROSS-APPELLEES,
V.
HYATT CORPORATION, A DELAWARE CORPORATION, DEFENDANT-APPELLEE AND CROSS-APPELLANT



The opinion of the court was delivered by: Justice Campbell

APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE LORETTA C. DOUGLAS, JUDGE PRESIDING.

Plaintiffs, Citylink Group, Ltd. (Citylink), Hotel Services, Ltd. (Hotel Services), Roboserve, Inc.(Roboserve), appeal from several orders of the circuit court of Cook County: (1) granting summary judgment in favor of defendant, the Hyatt Corporation (Hyatt), in connection with a breach of contract action regarding the installation of computerized in-room mini-bars at the Hyatt Regency Chicago (HRC), and (2) dismissing certain counts of Roboserve's complaint. This opinion addresses only plaintiffs' appeal from the order of the trial court entered February 10, 1999, granting summary judgment in favor of Hyatt on count I of plaintiffs' complaint for fraud, and dismissing count II of plaintiff's complaint pursuant to sections 2-615 and 2-619 of the Illinois Code of Civil Procedure.*fn1

This appeal arises out of two cases originally brought in federal court by Roboserve against Kato Kagaku, Ltd. (Kato), the owner of the HRC and employer of Hyatt, as manager of the HRC. Roboserve prevailed on certain counts against Kato in the federal court and brought this subsequent state action against Hyatt to recover damages for fraud (count I) and tortious interference with prospective business relations (count II) respecting the same mini-bar installation contract. Kato is not a party to this appeal.

On appeal, plaintiffs contend that: (1) the trial court erred in failing to award attorney fees for costs incurred in the prior federal litigation; and (2) the trial court erred in dismissing its claim for tortious interference with prospective business relations. For the following reasons, we affirm the judgment of the trial court.

BACKGROUND

Roboserve is a company that leases and services hotel in-room mini-bars. On June 23, 1986, Roboserve entered into a Concession Agreement with Hyatt, as manager of the HRC, to install 1000 mini-bars ("RoboBars") in the rooms at the HRC. Hyatt in turn agreed that the HRC would use "reasonable endeavours" to place guests most likely to use the RoboBars into the rooms equipped with the RoboBar units. On October 2, 1986, Roboserve and Hyatt negotiated an amended Concession Agreement extending its duration to five years from "the date when all the RoboBar units have been commissioned" or installed.

Between February and April 1987, Roboserve installed 900 of the 1000 RoboBars in the west tower of the HRC. Late in 1987, Hyatt informed Roboserve of its intention to contract with ServiSystems, another mini-bar vendor, to install its "ServiBars" in the east tower of the HRC. Hyatt subsequently installed 970 ServiBars in the east tower of the HRC. Hyatt represented to RoboServe that a test would be conducted between the two mini-bar systems, and that the "winner" would get the contract for the entire hotel. Unbeknownst to RoboServe, on May 1, 1988, Hyatt signed a seven-year contract with ServiSystems to provide ServiBars, beginning on May 15, 1988.

In August 1988, Kato purchased the HRC and assumed the prior owner's management agreement which provided that Hyatt would manage the hotel. Kato also assumed all of the contracts of the prior owner, including the Concession Agreement.

RoboServe was subsequently informed that it had "won" the one-year test. Thereafter, RoboServe and Hyatt began negotiating for the replacement of the ServiBars with RoboBars. Hyatt did not reveal the existence of the seven-year contract with ServiSystems. Negotiations dragged on for about three years, and Roboserve did not press Hyatt for the installation of the remaining 100 RoboBars pursuant to the original Concession Agreement. In February 1992, Hyatt notified Roboserve that it would not replace the ServiBars with RoboBars at the HRC as a result of "complications of another contractual arrangement."

FIRST FEDERAL LAWSUIT

On August 4, 1992, Roboserve filed an action against Kato for breach of contract, wrongful termination and fraud in the United States District Court for the Northern District of Illinois. Roboserve sought to hold Kato responsible for the actions of its agent, Hyatt. A trial commenced in October 1993. The jury returned a verdict in favor of Roboserve on all counts, awarding compensatory and punitive damages totaling $9,950,000. On Kato's post-trial motion, the district court entered a remittitur of $127,500 on the wrongful termination claim, reducing the judgment to $9,722,500. Roboserve, Inc., v. Kato Kagaku Co., Ltd, 857 F. Supp. 1124 (N.D. Ill. 1995).

FIRST FEDERAL APPEAL

Kato appealed from the $9,722,500 judgment in the United States Court of Appeals for the Seventh Circuit. The Appeals court affirmed the jury's findings of breach of contract, wrongful termination and fraud. However, the Appeals court vacated the award of damages for the breach of contract and fraud counts, reduced the compensatory damage award from $1,000,000 to $37,810, and eliminated the punitive damages award under the fraud count. The Appeals court further determined that the damages for breach of contract should have been limited to $1,053.784, and to $722,500 for wrongful termination, for a total award to Roboserve in the amount of $1,814.094, plus $25,000 in costs. The Appeals court remanded the case to the District Court for a new trial on the issues of damages for breach of contract and fraud. Roboserve, Inc., v. Kato Kagaku Co., Ltd., 78 F.3d (7th Cir. 1996).

NEW TRIAL ON DAMAGES UPON REMAND

On remand to the District Court, Kato was granted an offset in the amount of $312,687.22, against the portion of the judgment in the amount of $722,500, pertaining to plaintiff's wrongful termination claim. The offset represented monies paid for the use of RoboBars, which were not removed from the Hyatt Regency by Roboserve notwithstanding Roboserve's claim that the contract had been terminated. Roboserve, Inc. v. Kato Kaguku Co., Ltd, 936 F. Supp. 522 (N.D. Ill. 1996) and 942 F. Supp. 1199 (N.D. Ill. 1996). On Roboserve's appeal, the District Court's order granting the setoff was affirmed. Roboserve, Inc., v. Kato Kaguku Co., Ltd., 121 F.3d 1027 (7th Cir. 1997).

SECOND FEDERAL LAWSUIT

In 1996, Roboserve filed a second case against Kato in the District court claiming breach of contract and unjust enrichment arising out of the use of the RoboBars during the same period as claimed in the prior litigation. The District Court granted Kato's motion for summary judgment on grounds of res judicata. Roboserve, Inc., v. Kato Kagaku Co., Ltd., No. 96 C 7098 (N.D. Ill. February 19, 1997).

SECOND FEDERAL APPEAL

Roboserve appealed the summary judgment order of the District Court. The appeal was consolidated with the second appeal from the first case in the District Court and the judgment was affirmed. Roboserve, Inc., v. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.