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BEVERAGE REALTY, INC. v. CHATHAM CLUB

United States District Court, Northern District of Illinois, Eastern Division


May 21, 2003

BEVERAGE REALTY, INC., PLAINTIFF,
v.
CHATHAM CLUB, LLC, DEFENDANT

The opinion of the court was delivered by: Milton I. Shadur, Senior District Judge

MEMORANDUM OPINION AND ORDER

Each side in this hotly-contested claim and counterclaim litigation earlier filed an Fed.R.Civ.P. ("Rule") 56 motion for summary judgment that caused this Court to jump through the required procedural hoops by reviewing the extensive documentation submitted by the parties, only to generate a lengthy February 19, 2003 memorandum opinion and order ("Opinion") that was compelled to grant only a portion of the relief sought by one of the litigants while denying every other aspect of the motions. Next Beverage Realty, Inc. ("Beverage") filed a Rule 54(b) motion to dismiss part of the Chatham Club, L.L.C. ("Chatham") counterclaim that sought to recover damages based on its loss of tax increment financing ("TIF") funds. At this Court's direction Beverage then filed a May 1 supplemental memorandum of law and accompanying documentation, followed by Chatham's May 16 response to the supplemented motion. Those submissions have triggered this memorandum opinion and order.

Initially Beverage had launched a twofold attack on Chatham's TIF claim:

1. Because Chatham had not. then entered into a Redevelopment Agreement with the City of Chicago (a necessary precondition to its receipt of TIF funding). Beverage could assertedly not be liable in any event for interfering with Chatham's potential contractual right to receive such funds.
2. Chatham had expressly admitted that Beverage was not responsible for Chatham's inability to enter into such a Redevelopment Agreement.
When it turned out that a Redevelopment Agreement had in fact been entered into on April 2, 2003 (just nine days before Beverage submitted its Rule 54(b) motion), that first asserted bar to Chatham's claim was no longer viable. But as to the second ground, Chatham's just-received response mysteriously says not a word — even more mysteriously, Chatham's counsel surprisingly reassert an entitlement on Chatharn's part to a partial summary judgment on the issue of causation.

On that score the situation is that Beverage took the deposition of two witnesses whom Chatham had designated under Rule 30(b)(6) to testify on its behalf. And one of those designees, Billie Jo Spathies ("Spathies"), after testifying on May 15, 2002 as to a number of difficulties that had caused the City to be "unwilling and unable to sign the redevelopment agreements" (Dep. 43), went on to say that they were then "preparing to sign the redevelopment agreement" (id. 43-44). After further inquiry by Beverage's counsel in connection with some other problems that had been encountered in connection with the construction project, Spathies admitted under oath (id. 49):

Q. Okay. Is a requirement to getting the tax increment financing that the redevelopment agreement between Chatham Club and the City be signed?
A. Yes.

Q. Okay. Does Chatham Club maintain that Beverage is in any way responsible for the delay in the signing of the redevelopment agreement?
A. No.

It would be difficult to envision a more unequivocal admission of a lack of causation between any delay attributable to Beverage and Chatham's asserted damage stemming from a delay in its receipt of TIF financing in consequence of the Redevelopment Agreement and the events to follow. That alone could suffice to defeat Chatham's position, and it is really inexplicable for Chatham's counsel to have been totally silent in terms of a response on that subject.*fn1

But even if that admission were not fatal to Chatham's claim, Chatham faces other difficulties as well. It seeks to avoid the causation question by pointing to provisions in the Redevelopment Agreement that identified conditions it could not have satisfied until Beverage completed its own performance, so that it contends "the Court may now hold as a matter of law that Beverage's breaches did contribute to the delayed generation and payment of TIF financing" (Chatham Mem. 2).

But that argument is obviously oversimplistic, for it leaves open the question whether there were other requirements that Chatham had to meet to obtain the execution of the Redevelopment Agreement that did not hinge on Beverage-related performance. If Chatham still could not have met those requirements until after Beverage actually delivered on its performance, Chatham cannot win on this claim.

What has just been said expresses the fundamental concept that a complained-of breach by a defendant must have been a proximate cause, though not necessarily the proximate cause, of plaintiff's injuries — something that the parties had to know was a key issue from Opinion 28-29:

Another piece of the puzzle would depend on whether any cause that is ascribable to Chatham, so that it could not have obtained the redevelopment agreement anyway, broke the link that could impose liability on Beverage.
This of course is a matter on which Chatham has the burden of persuasion. On that score, the seminal opinion in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986) teaches in the analogous context of summary judgment motions that the party bearing such a burden must present affirmative evidence in support of its position — an obligation that is underscored where, as here, Chatham is confronted with an unexplained admission on its part that Beverage did not cause the loss of TIF funds.

Accordingly, unless Chatham supplements its response on or before June 4, 2003 to satisfy its burden, this Court will be constrained to grant Beverages Rule 54(b) motion. If Beverage wishes to tender its own filing within the same time frame to identify any deficiencies on Chatham's part (independent of Beverage's asserted delays) that it believes made the execution of the Redevelopment Agreement unavailable to Chatham before Beverage satisfied its own obligations, it is free to do so.


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