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FARARO v. SINK LLC.

March 29, 2004.

FRANK C. FARARO, & MARKIEWICZ COOK ASSOCIATES, INC., Plaintiffs,
v.
SINK LLC f/k/a ARTIST COLONY, LLC, and ARTIST COLONY LIMITED f/k/a ROUSSEAU ACQUISITIONS, INC., Defendants



The opinion of the court was delivered by: DAVID COAR, District Judge

MEMORANDUM OPINION AND ORDER

These cases come before the Court on Motions for Summary Judgment on Plaintiffs' unjust enrichment claims filed by Defendant Artist Colony Limited and Defendant Sink, LLC. As with the previous motions for summary judgment, see Farraro v. Sink., LLC, No. 01 C 6956, 2002 WL 31687671 (N.D. Ill. Nov. 27, 2002), the issues presented in both Farraro v. Sink. LLC, No. 01 C 6956, and Markiewicz v. Sink, LLC. No. 01 C 6957, are essentially identical. For efficiency purposes, the Court will once again dispose of the motions from both cases in a single opinion. For the reasons set forth in this opinion, Artist Colony Limited's Motions for Summary Judgment are granted in part and denied in part and Sink, LLC's Motions for Summary Judgment are granted in part and denied in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

  The Court will only briefly discuss the facts relevant to the issues in this opinion.*fn1 Page 2 Defendant Artist Colony Limited, formerly known as Rousseau Acquisitions, purchased Artist Colony, LLC (now known as Sink, LLC) in February 2001. Artist Colony Limited manufactures novelty furniture items, primarily bean bag chairs. Both Plaintiffs, Markiewicz-Cook, Associates, Inc. ("Markiewicz") and Frank C. Fararo ("Fararo") had oral agreements with Defendant Artist Colony, LLC whereby Plaintiffs were to place Defendant's products in catalogs, including J.C. Penney, Spiegel, Sears, and others.

  When Artist Colony, LLC sold its assets to Rousseau Acquisitions (which became Defendant Artist Colony Limited), neither the seller corporation nor the buyer corporation promptly notified Plaintiffs of the sale. Once Plaintiffs learned of the sale, they inquired whether the new entity, Artist Colony Limited, would continue to employ them to find catalog space for the products. Artist Colony Limited elected not to employ Plaintiffs.

  When Rousseau Acquisitions acquired the assets of Artist Colony, LLC in February 2001, Plaintiffs had already secured the catalog space for Artist Colony, LLC's products in the lucrative Christmas and Fall sale issues of the catalogs. Defendant Artist Colony Limited received and filled orders from the catalog placements that Plaintiffs secured for Artist Colony, LLC. Plaintiffs brought lawsuits in Illinois state court to recover commissions from the sales their catalog placements generated. Defendant Artist Colony Limited removed the cases to federal court where jurisdiction is based upon diversity of citizenship.

  Plaintiffs had several corporate law theories of recovery against Defendant Artist Colony Limited: successor liability, de facto merger, and implicit acceptance of obligation. On November 25, 2002, this Court granted Defendant Artist Colony Limited summary judgment on Page 3 those theories of relief. The only theory of recovery remaining against Defendant Artist Colony Limited after the summary judgment stage was unjust enrichment. Artist Colony Limited now seeks summary judgment on Plaintiffs unjust enrichment claim.

  Plaintiff's complaint details two theories of recovery against Defendant Sink, LLC, both arising under Illinois state law: the "procuring cause" rule and exemplary damages under the Illinois Sales Representative Act. Sink, LLC did not seek summary judgment on those theories.

  The parties were unable to agree on the scope of issues for trial prior to the pretrial conference on January 17, 2003. Additionally, the pretrial order that Plaintiffs submitted in advance of the pretrial conference was substantially out of compliance with the local rules. At the pretrial conference, the Court ordered Defendant Sink, LLC, to set forth its objections to Plaintiffs' pretrial order in writing. Sink, LLC presented three objections to the pretrial order. First, Sink, LLC contended that Plaintiffs were not entitled to proceed or recover against it on an unjust enrichment theory. Second, Sink, LLC objected to Plaintiffs' claims for commissions based on catalog sales that were not disclosed during discovery. Third, Sink, LLC objected to Plaintiffs' attempted recovery of pre-judgment interest under the Illinois Interest Act. The Court sustained the second objection, denied the third objection, and treated the first objection as a motion for summary judgment on Plaintiffs' unjust enrichment claim.

  Presently before the Court are Sink, LLC's Motions for Summary Judgment against Plaintiffs Fararo and Markiewicz on the unjust enrichment theory and Artist Colony Limited's Motions for Summary Judgment on the unjust enrichment theory against the same Plaintiffs. The Defendants are situated very differently with respect to Plaintiffs' unjust enrichment claims, so the Court will proceed with a separate analysis as to each Defendant. Page 4

 II. SUMMARY JUDGMENT STANDARD

  According to the Federal Rules of Civil Procedure, summary judgment is proper "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Kamler v. H/N Telecommunication Services. Inc., 305 F.3d 672, 677 (7th Cir. 2002). A genuine issue of material fact exists for trial when a reasonable jury could return a verdict for the party opposing summary judgment. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986); Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995). When determining whether a genuine issue of material fact exists, the Court considers the evidence and all proper inferences therefrom in the light most favorable to the non-moving party. See Neuma, Inc. v. AMP. Inc. 259 F.3d 864, 871 (7th Cir. 2001).

  Because the purpose of summary judgment is to isolate and dispose of factually unsupported claims, the non-movant must set forth specific facts showing that there is a genuine issue for trial in its response. See Fed, R. Civ. P. 56(e); Michael v. St. Joseph County, et al., 259 F.3d 842, 845 (7th Cir. 2001); Albiero v. City of Kankakee, 246 F.3d 927, 932 (7th Cir. 2001). To successfully oppose the motion for summary judgment, the non-movant must do more than raise a "metaphysical doubt" as to the material facts, see Wolf v. Northwest Ind. Symphony Soc'y, 250 F.3d 1136, 1141 (7th Cir. 2001) (citation and quotation omitted), and instead must present definite, competent evidence to rebut the motion. See Albiero, 246 F.3d at 932. Rule 56(c) mandates the entry of summary judgment against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and in which that Page 5 party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Civil Liberties for Urban Believers v. City of Chicago, 3 ...


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