The opinion of the court was delivered by: Richard Mills, District Judge.
Southwest Whey vs. Nutrition 101, revisited. (See Southwest
Whey, Inc. v. Nutrition 101, Inc., 117 F. Supp.2d 770 (C.D.Ill.
This cause now comes before the Court on the motion for summary
judgment on Count IV of its counterclaim filed by Nutrition 101,
This case was originally filed on September 11, 1998.
Defendant/Counter-Plaintiff Nutrition 101, Inc. ("Nutrition 101")
filed its amended counterclaim against
Plaintiff/Counter-Defendant Southwest Whey, Inc. ("Southwest
Whey") on May 9, 2000. Count IV of the amended counterclaim
alleges that Southwest Whey has failed to account for the
benefits which it has received pursuant to a joint venture
entered into by the parties. Nutrition 101 therefore asserts that
it is entitled to an accounting for the revenue and profits
received by Southwest Whey pursuant to the joint venture and its
further pro-rata share of such revenues and profits after the
joint venture was terminated. On August 4, 2000, Nutrition 101
filed a motion for summary judgment with respect to Count IV of
its amended counterclaim. Nutrition 101 has submitted the report
of its expert, Jay Buck ("Buck"), in support of its motion for
summary judgment on Count IV of its counterclaim.
Nutrition 101 entered into a joint venture with Southwest Whey
on May 30, 1989. Southwest Whey agreed to obtain whey from
dairies and Nutrition 101 agreed to market whey to hog farmers in
the region east of the Mississippi River and in other areas by
mutual agreement. Southwest Whey dissolved the joint venture on
September 16, 1993. There was no winding up or accounting
following the dissolution.
On March 30, 2000, a judgment was entered in the Circuit Court
of St. Louis County, Missouri, sustaining a Motion to Enforce
Settlement concerning the amount of $450,000.00 to be paid by
Raskas Foods, Inc., pursuant to a contract entered into by
Southwest Whey on behalf of the joint venture between the
parties. This is at issue in the instant motion. The Raskas
litigation has been terminated as to all substantive issues.
However, the settlement agreement has not yet been reduced to
writing. Moreover, no money has been paid by or on behalf of
Raskas Foods, Inc., pursuant to the settlement. Other assets and
benefits of the joint venture include various contracts and
agreements with dairies for the supply of whey.
Nutrition 101 therefore moves for summary judgement against
Southwest Whey as to Count IV of its amended counterclaim for its
pro-rata share of revenue and profits received by Southwest Whey
after the termination of the joint venture and the value of the
various contracts and agreements with dairies, prejudgment
interest, costs, and any other relief that the Court deems
Nutrition 101 alleges that there has been no winding up in the
instant case. Moreover, Southwest Whey has failed to account to
Nutrition 101 for the benefits it has received. Nutrition 101
refers specifically to profits from joint venture assets and
settlement proceeds of $450,000.00 it alleges were paid to
Southwest Whey by Raskas Foods, Inc., pursuant to a judgment
entered in the circuit court of St. Louis County, Missouri.
Nutrition 101 seeks an accounting on this basis.
Nutrition 101 relies on Buck's report to support its motion for
summary judgment. Buck is a certified public accountant
accredited in business valuation. He has attempted to determine
the final accounting and division of assets for the interests
owned by each party in the joint venture. Buck has valued the
margins earned by Southwest Whey and Nutrition 101 since the
joint venture was terminated. He has done this by valuing the
margins from farm customers and dairies that the joint venture
served from October 1993 through September 2000. Buck then added
each company's margin and divided the figure in half pursuant to
the joint venture. After taking into account the amount actually
received by Nutrition 101 from the plants and customers of the
joint venture, Buck concluded that Nutrition 101 is owed
$593,523.00 by Southwest Whey.
Nutrition 101 also relies on Buck's report regarding the
division of the joint venture assets. Each company would receive
one half of the assets in the final accounting for the joint
venture. Because there was no earlier division, Buck attempted to
equitably divide the assets as they currently exist for each
company. He concluded that the present value of Nutrition 101's
shortfall in expected margins is $324,277.00
Finally, Nutrition 101 relies on Buck's report with regard to
settlement proceeds allegedly received by Southwest Whey. This
involved a lawsuit which arose out of a contract entered into by
Southwest Whey on behalf of the joint venture. The cause of
action was not resolved at the time of dissolution. Nutrition 101
alleges that Southwest Whey received a settlement in the amount
of $450,000.00 pursuant to the dispute. Buck's report indicates
that each company should receive one half of the settlement
proceeds. Nutrition 101 is therefore entitled to $225,000.00.
Pursuant to Buck's report, Nutrition 101 asks this Court to
enter judgment in its favor on Count IV in ...