United States District Court, Northern District of Illinois, Eastern Division
June 21, 2001
DOYLE'S CONSTRUCTION REMODELING, INC., AN ILLINOIS CORPORATION, PLAINTIFF, VS. WENDY'S INTERNATIONAL, INC., AN OHIO CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Edward A. Bobrick, United States Magistrate Judge.
Before the court is the motion of defendant Wendy's International,
Inc. for summary judgment on the complaint of plaintiff Doyle's
Construction & Remodeling, Inc.
Plaintiff brings this action in four counts, alleging three claims that
stem from contracts or alleged contracts to perform construction work,
and one defamation claim. The plaintiff is a local construction firm; the
defendant is a national fast food corporation. Plaintiff apparently
completed some construction projects for defendant before the events or
conversations leading to this litigation occurred. It is at this very
early point in the story of these two parties that the narrative becomes
more speculative. This matter highlights the rather obscure relationship
— or lack thereof — between the parties, involving — or
not involving — the construction or remodeling of twelve — or
nine or fourteen — Wendy's restaurants. The court cannot be more
specific because the record does not allow it.
If this sounds confusing, a thorough review of the record the parties
have developed for summary judgment does little to explain what exactly
occurred, or did not occur, as the parties disagree about nearly
everything and, in their manner of doing business, failed to write much
of anything down. There were apparently meetings and fleeting
conversations and assumptions. There were apparently no details or
agreements. Both sides took a rather lackadaisical attitude toward their
businesses and now hope the courts will iron things out for them.
Essentially, plaintiff contends that the parties had an oral contract
for the construction or remodeling of about twelve franchise sites, which
defendant breached; while defendant claims no such thing ever happened,
and moves for summary judgment. Plaintiff also seeks what it claims it is
owed for work on two projects, storage of defendant's equipment, and
recovery for a purported defamation. We will evaluate each count of
plaintiff's complaint under the familiar summary judgment standard, and
divine the facts as best we can from the rather convoluted record before
A. Summary Judgment
Summary judgment is appropriate if "there is no genuine issue as to any
material fact and . . . the moving party is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(c). To ward off summary judgment by
showing that there is a genuine dispute on a material fact, the
non-moving party must do more than raise a "metaphysical doubt" as to the
fact's existence. Gleason v. Mesirow Fin., Inc., 118 F.3d 1134, 1139 (7th
Cir. 1997). The non-moving party cannot merely allege the existence of a
factual dispute. McPhaul v. Board of Com'rs of Madison County,
226 F.3d 558, 563 (7th Cir. 2000). That party must supply evidence
sufficient to allow a jury to render a verdict in their favor. Id. In
this case, both parties have filed the required Local Rule 56.1*fn1
submissions to support their memoranda. Unfortunately, the parties
disagree as to much of whatever occurred between them. As a result, in
most instances, we bypass these submissions and look to the record itself
for enlightenment as to the facts of this case.
We met at nine. We met at eight. I was on time.
No, you were late.
Ah yes! I remember it well.
We dined with friends. We dined alone. A tenor sang.
Ah yes! I remember it well.
— Lemer & Loew's "I Remember It Well"
We begin with a few of the facts that the parties remember both well,
and without contradiction. Plaintiff's president and chief executive
officer was Martin Doyle, and he ran the plaintiff's day-to-day
operations. One of plaintiff's employees, Richard Esposito, was
responsible for the development of the plaintiff's account with
defendant. Defendant's contact with plaintiff was its director of
engineering, Briggs Sellers. Between January of 1995 and September of
1996, the parties entered into six written contracts for remodeling
franchises,*fn2 a written contract for the construction of a franchise
in Aurora. The Aurora project was apparently "exchanged" for a project in
Hazel Crest — the details on this transaction are scant — and
this apparently was an oral contract. (Defendant's Local Rule 56.1(b)(3)
Statement, ¶¶ 118-119). Then, there are the dozen sites that are the
here, all of which, purportedly, were subject to oral agreement. This is
where things become hazy.
1. Breach of Contract Claim
In the claim that appears central to this litigation, plaintiff seeks
recovery for breach of oral contract relating to twelve construction
sites in Count III of its complaint. The trouble here, as will become
apparent, is that the terms of this alleged oral agreement — from
when it was made to what it involved — are not clear. It would seem
that the parties had some sort of agreement in mind, but what it was or
whether it was finalized is simply not apparent or ascertainable.
Defendant moves for summary judgment on this claim, arguing that no oral
contract as to the sites at issue was ever formed, and that even if it
were, such a contract would be unenforceable under the statute of frauds
as it would not have been performed within one year from its making.
We begin with the statute of frauds issue. In its complaint, plaintiff
alleged that "pursuant to an ongoing verbal contractual relationship,
[it] was hired to construct, remodel or rehabilitate twelve (12) stores
commencing in January, 1995." (Complaint, at one, ¶ 3). Plaintiff
also specifically alleged that pursuant to this "ongoing verbal
relationship," the defendant committed "twelve (12) projects to the
plaintiff to be completed in a timely fashion from 1995 to 1997." (Id., at
4, ¶ 5).
In an affidavit filed in July of 1998, Mr. Doyle corrected his
assessment as to the duration of the contract, stating that there was a
single oral contract, formed in October of 1995, to remodel or construct
twelve stores. (Defendant's Exhibit 15, Affidavit of Martin Doyle,
¶¶ 2, 4). Mr. Doyle also claimed therein that Wendy's indicated that
each store would take two or three weeks to complete, that plaintiff
would work on two stores at a time, and that the entire project would be
completed by March of 1996. (Id., ¶¶ 3-4). Finally, he stated that
defendant requested extensions of time that took the project up to
December of 1996. (Id., ¶ 5).
Mr. Doyle was then deposed in November of 1999. At that time, he was
unsure when the oral agreement was reached. The only point of which he
seemed sure is that it was negotiated at a Bears game among himself,
Esposito, Sellers, and three others. (Id. at 41-44, 66). He testified:
Q: When was the Bears game?
A: I'd have to look it up but the Bears played Pittsburgh.
Q: What year?
Q: So it was at a Bears game, it was in 1995 when the
Bears played Pittsburgh at Soldier Field?
A: Yes, and it was either December of `94 — it
must have been December of `94, and we started
receiving the equipment — No, it would have been
November/December of `94 that was the Bears game. We
started receiving the equipment somewhere in `94 and
Q: `94 was the Bears game?
(Id. at 43-44). He also thought the oral contract began in January of
1995. (Id. at 76).
As for the duration of the contract, Doyle testified that work would
start within a month or two after the agreement and continue for a year
or a year and a half. (Id. at 44). He also testified that he assumed work
began on the contract in October or November of 1995. (Id. at 61). At
another point, he indicated that, if everything went as expected, the
twelve projects would take 72 weeks to complete. (Id. at 76). Thus, at
various times throughout his deposition testimony, Doyle gauged the
duration of the oral contract upon which plaintiff bases its complaint as
ranging from about fourteen months to two years.
In order to avoid a statute of frauds defense, in its response to
defendant's statement of facts, plaintiff contends "that each restaurant
project was always viewed as a separate contract with [defendant]."
(Plaintiff's Response to Defendant's Local Rule 56.1(b)(3) Statement,
¶¶ 54, et seq.). Plaintiff, however, provides no citation to the
record to support this contention. Indeed, throughout his deposition
testimony, echoes the claim he originally brought in the complaint,
discussing the oral agreement as a single contract:
Q: How long did this ongoing verbal relationship last?
A: It started in January of `95, and it was still
being practiced on the day we were terminated in
December of `96.
Q: You're alleging . . . on one count involving this
oral contract to construct and remodel 12
Q: Okay. Now the 12 restaurants I understand are
identified in your Answers to interrogatories, is that
A: The Answers to the Interrogatories contain the 12,
and the other ones that were added as the ongoing
verbal contract continued.
Q: Okay. You said in January or in 1995 Doyle's
entered into an oral contract with Wendy's to remodel
12 Wendy's restaurants, is that correct?
(Dep. of Martin Doyle, at 76-78).
Now, in its memorandum of law in opposition to defendant's motion for
summary judgment, plaintiff argues that "[defendant] and [plaintiff] did
not agree to a single contract for nine remodels but entered into nine
separate contracts for each of the nine restaurants." (Plaintiff's
Memorandum in Opposition, at 18). This contradicts the Doyle affidavit
and deposition testimony, to say nothing of the fact that it introduces
the assertion that there were nine projects as opposed to twelve or yet
It is well-settled that a plaintiff cannot manufacture an issue of fact
to avoid summary judgment with contradictions in his own testimony,
affidavits, or allegations. Piscione v. Ernst & Young, L.L.P.,
171 F.3d 527, 532 (7th Cir. 1999). Indeed, when there are conflicts
between a plaintiff's sworn deposition testimony and his affidavit, the
deposition testimony prevails. Id. Thus, we need not deal with the
contradictions raised in plaintiff's affidavits, and will focus instead
on plaintiff's deposition testimony. If that testimony could be
considered consistent in any respect, it was in the respect that the
projects at issue could not be completed within a year of the date the
alleged oral contract was made. Thus, when all plaintiff's conflicting
assertions are distilled down to their essence, it is apparent that the
oral contract upon which plaintiff sues is unenforceable under the
statute of frauds.
The Illinois statute of frauds precludes enforcement of oral contracts
that cannot be performed within a year of their making. 740 ILCS 80/1;
McInerney v. Charter Golf Inc., 176 Ill.2d 482, 489, 680 N.E.2d 1347,
1351 (1997). As the McInerney court explained:
The period of one year, although arbitrary, recognizes
that with the passage of time evidence becomes stale
and memories fade. The statute proceeds from the
legislature's sound conclusion that while the
technical elements of a contract may exist, certain
contracts should not be enforced absent a writing. It
functions more as an evidentiary safeguard than as a
substantive rule of contract. As such, the statute
exists to protect not just the parties to a contract,
but also — perhaps more importantly — to
protect the fact finder from charlatans, perjurers and
the problems of proof accompanying oral contracts.
Id. While we certainly do not regard Mr. Doyle as a charlatan or
perjurer, his inability to settle on any of the terms of the contract he
seeks to enforce certainly highlights the "problems of proof accompanying
While the plaintiff might have been comfortable
with proceeding somewhat informally in its dealings with defendant, it
cannot later expect the court to complete the negotiation process and
arrive at terms on its behalf J.F. McKinney & Assoc. v. General Electric
Inc., 183 F.3d 619
, 622 (7th Cir. 1999). The statute of frauds serves its
purpose here. Accordingly, we must find that summary judgment in the
defendant's favor is appropriate as to Count III of plaintiff's
2. Balance Due on Aurora and Hazel Crest Sites
Under Count I of its complaint, plaintiff alleges that at the time
defendant terminated construction contracts for two sites — Aurora
and Hazel Crest — defendant owed plaintiff $283,000 for work
completed. of that amount, the defendant apparently paid $185,000,
leaving a balance of $98,000 on the total.*fn5 Defendant contends that
the payment was in full settlement of the outstanding balance on the two
projects. Not surprisingly in this case, there is no written settlement
agreement to that effect.
The record before the court on this issue consists of Doyle's
deposition testimony, the affidavit of Harry Sherowski, defendant's vice
president of engineering, and a letter from plaintiff to defendant
discussing settlement negotiations, which includes several handwritten
"jottings." The parties agree that, after defendant terminated the Aurora
and Hazel Crest contracts, plaintiff filed original contractor's liens on
the two projects in the amounts of $13,699.95 and $352,984.32,
respectively, on February 5, 1997. (Defendant's Exhibits, Ex. 29). On
June 26, 1997, there was a meeting among Sherowski, Doyle, and three
other of defendant's representative including in-house counsel, to
discuss settlement. At that meeting, Sherowski claims he offered Doyle
$175,000 to settle claims on both projects. In his affidavit, plaintiff
states that the offer was for release of subcontractor's liens only.
(Plaintiff's Exhibits, Ex. 88, ¶ 77). Plaintiff's deposition
testimony is far less certain:
Q: On June 26th, Wendy's, had they offered to pay you
$175,000 for the Aurora and Hazel Crest projects?
A: I think it was.
Q: So then you sent this letter to Wendy's . . . and
you stated that you were willing to accept 191,000 to
cover the . . . seven month's interest and other
expenses for all work to date; is that correct?
Q: And that you were going to pay the subcontractors
that are listed and then whatever is left over will go
(Defendant's Exhibits, Ex. 12, Deposition of Martin J. Doyle ("Doyle
Dep."), at 337-38).
The letter to which the testimony refers provides, in pertinent part:
On June 26, 1997 [defendant] offered to pay
[plaintiff] $175,000.00 for Aurora, IL and Hazel
Crest, IL projects.
[Plaintiff] is willing to accept $191,000.00 to cover
the above, 7 months interest and other expenses for
all work to date. If approved, for $191,000.00 the
four subcontractors who filed liens will release liens
providing that the checks are available for
distribution on July 7, 1997.
The following amounts are for each subcontractor:
1. Area Blacktop $19,500.00
2. Bachstein Construction $16,003.32
3. Harrington Excavating $21,192.80
4. Indoor Plumbing $8,573.95
(Defendant's Exhibits, Ex. 30). Upon receipt of the letter by facsimile,
Sherowski and Doyle spoke over the phone and came up with a total amount
of $185,000. (Defendant's Exhibits, Ex. 10, ¶ 10; Doyle Dep. at
338). Thereafter, defendant issued checks in the requested amounts to the
four subcontractors, and made out a check to plaintiff $119,729.93, for a
total of approximately the $185,000 discussed. These checks were cashed
and all liens were released. (Doyle Dep., at 342).
Defendant seeks summary judgment on plaintiff's claiM for the contract
balance of $98,000 on a theory of accord and satisfaction. To constitute
an accord and satisfaction, there must be (1) an honest dispute between
the parties as to an amount owed between them; (2) a tender of payment
with the explicit understanding of both parties that it is in full
payment of all demands; and (3) an acceptance of the payment by the
creditor with the understanding that it is accepted as full payment.
Koules v. Euro-American Arbitrage, Inc, 293 Ill. App.3d 823, 830,
689 N.E.2d 411, 415 (2nd Dist. 1998). If there is an honest dispute as to
an amount owed and due, and the debtor tenders a check with the explicit
understanding that it is full payment of all demands, the creditor's
acceptance and negotiation of the check is an accord and satisfaction.
Id. The partial payment of a fixed and certain demand that is due and not
in dispute, however, does not constitute a satisfaction of the entire
debt even if the creditor agrees to receive a partial payment for the
whole debt and gives a receipt for the whole demand. Id.
In this case, plaintiff does not argue against the application of
accord and satisfaction. Instead, in its brief, plaintiff chooses to
discuss whether a release was executed. These are two different things:
an accord and satisfaction is a contractual method of discharging a debt
or claim by some performance other than that which was originally due; a
release is a contract whereby a party abandons a claim or relinquishes a
right that could be asserted against another. Koules, 293 Ill.App.3d at
829, 689 N.E.2d at 414. There is no doubt here, for example, that
plaintiff released its lien. While plaintiff does not dispute that there
was accord and satisfaction, however, we must consider whether defendant
has demonstrated its elements for the purposes of summary judgment
The record indicates that there was an honest dispute as to the amount
owed. Defendant expressed dissatisfaction with the work at the two sites
and terminated the contract; plaintiff disagreed with the assessment and
continued to seek the full amount due. There was definitely a tender and
acceptance of payment — the question is what that meant to the
parties. Doyle admits that they met to discuss settlement, and that
defendant offered $175,000. He testified, and wrote, that he would accept
$191,000 to cover the two projects, interest, and expenses to date. There
is no dispute that the figure was then negotiated to $185,000. The checks
were issued as Doyle requested and he cashed the one made out to
plaintiff. Although Doyle claims that "[t]he settlement reached was only
for Wendy's to pay an amount so that the subcontractors would be paid and
in return the subcontractor's liens would be released." (Plaintiff's
Exhibits, Ex. 88, ¶ 75), that explanation would make sense if the
amount agreed upon were equal to the subcontractor's claims, but it was
about $120,000 more. Basically, plaintiff does not mount an argument
against accord and satisfaction, and offers no explanation of what the
transaction between the parties constituted if not an accord and
satisfaction. Accordingly, we find summary judgment in favor of defendant
is appropriate as to Count I.
3. Equipment Storage
Under Count II of its complaint, plaintiff seeks recovery under quantum
meruit for storage of certain materials purportedly earmarked for the
twelve projects at issue. Defendant does not deny that it shipped the
equipment to plaintiff's facilities and later had it recovered by a third
party on its behalf. (See, generally, Motion for Summary Judgment, at 24;
Reply in Support of Motion for Summary Judgment, at 15). Instead,
defendant argues that there can be no recovery under quantum meruit in
this case, quoting North American Financial Group v. S.M.R. Enterprises,
Inc. 583 F. Supp. 691, 700 (N. D.Ill. 1984) for the proposition that:
"[w]here preliminary services are conferred for business reasons, without
the anticipation that reimbursement will directly result, but rather,
with the expectation of obtaining a hoped-for contract and incidental to
continuing negotiations related thereto, quasi contractual relief is
unwarranted." (Reply in Support of Motion for Summary Judgment, at 15).
Defendant fails to support this argument with any facts demonstrating
that plaintiff received the materials as part of any ongoing
negotiations. Indeed, it denied such a characterization in its answer to
plaintiff's complaint. (Defendant's Exhibits, Ex. 3. at 5, ¶ 7).
Defendant vehemently stresses, of course, that shipment of materials is
no indication that it has a contract with plaintiff. What defendant is
not vehement about, however, is why it would ship materials to a builder
with whom it has no contract and assume it would receive free storage for
those materials. The testimony of defendant's employees on this question
is reminiscent of Doyle's testimony. For example, Briggs Sellers
Q: Do you know . . . about the agreements to store
materials with Doyle's, between Doyle's and Wendy's.
A: While I was there Wendy's made no agreements.
The only equipment that should — that they
should have had in their hands would have been for
jobs that they were doing, correct.
Q: Okay. So if Doyle's Construction had equipment for
project that was cancelled, why would they have that
equipment if there was no contract entered into
between Doyle's and Wendy's?
A: It would have been shipped there — I mean
they shouldn't have, number one, but most likely one
of the construction managers was getting equipment on
hand early on. And then the project gets cancelled and
then have to do something with the equipment, move it
somewhere else, which is exactly why we never wanted
to store equipment anywhere other than with our
(Defendant's Exhibits, Ex. 7, at 58-60). So, defendant did not normally
store materials with contractors, it should not have done it, it did not
want to do it. Jurij Ozga, defendant's construction manager, also
testified as to why defendant shipped equipment to plaintiff:
When I was involved with the remodels, the equipment
was delivered to [defendant's] warehouse. What
triggered that? Why was it set up? I really don't
know. It was already — I assume it was —
in the essence, I inherited that process. So if it was
delivered to [defendant] — because that's how it
was done. I just — I just came in at a certain
point of this project, so —
(Defendant's Exhibits, Ex. 6, at 67-68). The testimony does not answer
the simple question, however, of why defendant did ship and store
materials with plaintiff in this case. As a result, defendant certainly
cannot contend that the storage was part of the negotiation of a contract
with plaintiff, and cannot succeed on its rather cursory argument against
plaintiff's claim for quantum meruit. Summary judgment is inappropriate on
In Count IV of its complaint, plaintiff alleges that defendant defamed
it in a letter criticizing its work. Dated December 4, 1996, the letter
terminated plaintiff from projects in Downers Grove, Darien, and Hazel
Crest. The reasons for the termination were improperly installed
paneling, poor quality of trim, improperly grouted tile, communication
problems with store operators, missed deadlines, and an injury to a store
manager due to an unsafe stainless steel corner. (Complaint, Ex. A).
Plaintiff alleges this letter was distributed to "numerous other persons
in the public domain." (Complaint, at ¶ 5). Plaintiff characterizes
this as defamation per se, in that the letter purportedly imputes a lack
of ability in plaintiff's trade, profession, or business.
Damages are presumed when a statement is defamatory per se. Kirchner
v. Greene, 294 Ill. App.3d 672, 679, 691 N.E.2d 107, 114 (1st Dist.
1998). Even statements that constitute defamation per se, however are not
actionable where they are reasonably capable of an innocent
construction. Id. Illinois courts apply a modified version of the
innocent construction rule*fn6, which provides "that a written or oral
statement is to be considered in context, with the words and the
implications therefrom given their natural and obvious meaning; if, as so
construed, the statement may reasonably be innocently interpreted or
reasonably be interpreted as referring to someone other than the
plaintiff it cannot be actionable per se." Chapski v. Copley Press,
92 Ill.2d 344, 352, 442 N.E.2d 195 (1982). "It is self-evident that a
statement `reasonably' capable of a nondefamatory interpretation, given
its verbal or literary context, should be so interpreted." Mittelman v.
Witous, 135 Ill.2d 220, 232, 552 N.E.2d 973 (1989). "The rigorous
standard of the modified innocent construction rule favors defendants in
per se actions in that a nondefamatory interpretation must be adopted if
it is reasonable. The tougher standard is warranted because of the
presumption of damages in per se actions." Mittelman, 135 Ill.2d at 234,
552 N.E.2d 973. Whether a statement may reasonably be innocently
interpreted is a question of law to be resolved by the court. Chapski, 92
Ill.2d at 352, 442 N.E.2d 195.
The letter at issue here was simply a letter in which defendant
terminated plaintiff and explained why, stating its dissatisfaction with
specific aspects of certain projects. Taken in context, this is an
employer making an assessment of plaintiff's performance in a particular
job setting, not a comment on a plaintiff's general inability to perform
its trade. See, Anderson v. Vanden Dorpel, 172 Ill. App.3d 399, 413,
667 N.E.2d 1296, 1302 (1996). As such, it may be innocently construed and
may not form the basis for a per se action. Id. See also Valentine v.
North American Co. for Life & Health Ins., 60 Ill.2d 168, 328 N.E.2d 265
(1974)(statement that plaintiff was a "lousy agent" capable of
construction regarding that particular relationship and did not
necessarily imply plaintiff's lack of skills in his calling).
Accordingly, summary judgment for defendant is appropriate on Count IV.
For the foregoing reasons, the defendants' motion for summary judgment is
GRANTED as to Counts I, III, and IV, and DENIED as to Count II.