The opinion of the court was delivered by: MORTON DENLOW, Magistrate Judge
MEMORANDUM OPINION AND ORDER
This case involves a $110,156.57 claim for breach of contract,
account stated, and unjust enrichment brought by Plaintiff ITQ Lata, LLC
("Plaintiff or "ITQ"), against Defendant MB Financial Bank, N A.
("Defendant" or "MB"), arising out of public relations services performed
during the year 2002. The Court conducted a bench trial on March 8-9,
2004. The Court has considered carefully the testimony of the five
witnesses who testified at the trial, the parties' trial exhibits, the
parties `written submissions, and the excellent closing arguments.
The following constitute the Court's findings of fact and conclusions
of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. To
the extent certain findings may be deemed conclusions of law, they shall
also be considered conclusions of law. Similarly, to the extent matters
contained in the conclusions of law may be deemed findings of fact, they
shall also be considered findings of fact, I. ISSUES PRESENTED
1. Was the monthly advance a cap on the fees that could be charged for
base media services? ANSWER: No,
2. How much is still owed by MB to ITQ for public relations services in
2002? ANSWER: 578, 517.86, including interest.
3. Is MB liable to ITQ for services performed in connection with MB's
2001 annual report? ANSWER: No.
1. ITQ is a limited liability corporation organized under the laws of
the State of New Mexico, with its principal place of business in
Albuquerque, New Mexico. and offices in Denver, Colorado and Chicago,
Illinois. ITQ is duly authorized to do business in the State of Illinois,
and it specializes in information technology. It is wholly owned by Los
Alamos Technical Associates, Inc. ("LATA"), a New Mexico. corporation with
its principal place of business in Alburquerque, New Mexico. Robert
Kingsbury currently is the sole officer of ITQ and is one of the three
managers of that company. He is also President of LATA. During 2002, ITQ
had a public relations and marketing division, known as ITQ Minkus &
Dunne, operating in Chicago. ITQ Minkus & Dunne provided public
relations and marketing services for MB, which are at the center of this
dispute. 2. MB is a nationally chartered bank with its principal place of
business in Chicago, Illinois. At all times pertinent to this case, Karen
Perlman was Vice President and Director of Marketing for MB.
B. THE RELATIONSHIPS AMONG THE KEY ACTORS
3. Raymond Minkus co-founded an independent firm known as Minkus &
Dunne, which specialized in providing public relations and marketing
services. On or about December 1, 1999, Raymond Minkus, on behalf of
Minkus & Dunne, and Karen Perlman, on behalf of MB, entered into a
written contract (the "Agreement") calling for Minkus & Dunne to
provide certain public relations and marketing services to MB. Px 13,
Within weeks of entering into the Agreement with MB, Minkus & Dunne
became the public relations and marketing services division of ITQ,
Raymond Minkus became the head of the Chicago office of the newly formed
division, ITQ Minkus & Dunne.
4. After the creation of ITQ Minkus & Dunne, the Agreement remained
intact. For their respective companies, Raymond Minkus and Karen Perlman
supervised the public relations and marketing activities under the
Agreement. Karen Perlman was the sole authority at MB to approve or
reject invoices from ITQ. Raymond Minkus was responsible for the
preparation and approval of all of the invoices sent to MB.
5. In order to prepare for important announcements, Perlman trusted
Minkus with confidential information regarding mergers and acquisitions.
Raymond Minkus performed work for Karen Perlman with respect to those
confidential mergers and acquisitions. 6. Under the direction of Raymond Minkus, ITQ Minkus & Dunne
maintained an excellent relationship with MB during the years 2000 and
2001. During those years, Perlman remained within her marketing budget,
and there were no disputes over charges for services provided by ITQ to
MB in 2000 and 2001, except for services in December, 2001, Dx 19.
Between early 2001 and mid-2002, MB publicly announced the following
mergers and acquisitions:
On February 9, 2001, MB made public its acquisition of First
Savings & Loan of South Holland.
On April 20, 2001, MB made public its merger with Mid City Bank.
On December 3, 2001, MB made public its renaming after the Mid
City Bank merger.
On December 27, 2001, MB made public its merger with Lincolnwood
On July 22, 2002, MB made public its merger with LaSalle Leasing.
7. By mid-2002, Perlman's budget became constrained and Minkus's
relationship with ITQ simultaneously began to sour. Beginning in
mid-to-Iate 2002, business relationships between Minkus, ITQ, and MB
began to unravel. Perlman began to refuse to pay the full amount of
invoices from ITQ as her budget became strained. Minkus attempted to
reconcile the invoices and to obtain payment. Px. 25. He was only
partially successful. Px 27. Minkus ultimately resigned from ITQ,
communicating his decision by a letter dated December 5, 2002, He subsequently filed a complaint in the Northern
District of Illinois against ITQ and individual current and former
employees, officers, and directors of ITQ and its parent company. Dx 4.
ITQ then filed a counterclaim against Minkus. That litigation was still
pending at the time of trial.
8. Shortly after Raymond Minkus resigned from ITQ, Karen Perlman
terminated the Agreement between MB and 1TQ by letter dated December
18, 2002, Px 43. On January 31, 2003, Raymond Minkus, on behalf of the
newly-formed Minkus & Pearlman Public Relations, Inc., contracted
with Karen Perlman, on behalf of MB, to provide the same services that
Minkus & Dunne had provided to MB when it was a division of 1TQ. Px
9. The December 1, 1999 Agreement called for certain public relations
and marketing services to be provided to MB. Px 13. The parties continued
to operate under the terms of the Agreement, with one material oral
modification, until the termination of MB's relationship with ITQ in
December 2002. The Agreement stated that ITQ Minkus & Dunne would be:
responsible for providing media relations and other
communications services. When projects are initiated,
all parameters will be discussed, budgeted and agreed
upon before any services are performed, with the
exception of "as needed" consulting services as long
as it pre-disclosed that those services are in
addition to the monthly advance invoice or other
pre-approved projects. Professional time is based upon the personal effort
required to perform on [MB's] behalf and includes
client and internal meetings, all forms of written and
oral communications, media and supplier contact.
Px 13, at 6.
10. The Agreement also provided, in relevant part entitled "IIS VOICING
STRUCTURE," that, beginning January 1, 2000, MB would:
make a monthly commitment of a $5,000 advance towards
funding the base media relations program during the
next twelve months. Core public and media relations
activities will be accounted for monthly with the
balance fees beyond the advance to be invoiced at the
end of each month. Advance payments are due the 1st of
the month in which services are rendered.
Out of pocket charges and expenses are additional.
. . .
Any project work in excess of the above monthly fee
will be performed only upon approval. Fees for all
additional assignments and expenses will be budgeted
and invoiced separately and arc due upon receipt.
Questions regarding any invoices must be brought to
our [ITQ's] attention within seven days of receipt.
Px 13, at 7 (italicized emphasis added; underlining in original).
Pursuant to a material oral modification by Minkus and Perlman, this
section was amended to increase the amount of the monthly advance paid to
ITQ by MB from $5,000.00 per month to $7,000.00 per month effective in
the Spring of 2002.
11. The services referred to as the base media relations program and
core public and media relations activities that were provided by ITQ
included services described in ITQ's invoices as "General Media
Relations," "Communications Planning," "Media List Development," "Media Monitoring," "Strategic Planning," and "Press
Releases." See, e.g., Pl. Ex, 10. MB paid for these services out
of its marketing budget.
12. The services referred to as project work in this case include those
services related to MB's mergers and acquisitions, MB had special project
funds, separate and apart from its marketing budget, from which fees for
project work were paid.
13. The invoicing provisions of the Agreement were not strictly
followed by the parties. Invoices were not always sent at the end of each
month. MB did not always object to invoices within seven days of receipt.
At times, the parties chose not to invoice base work and project work
separately. The parties' failure to strictly adhere to the Agreement is
the genesis of the disputes arising in this case and arises out of the
excellent working relationship that existed between Minkus and Perlman in
2000 and 2001,
14. In 2001, fees for both "project work" and for base or core media or
public relations services appear on the face of the invoices. See
e.g., Px 16, The advance of $5,000,00 was invoiced separately and
was applied against the monthly invoice. There is no indication, however,
as to what extent the advance was being applied to "project work" or to
base or core media or public relations services. Px 16,
15. The disputes arising in this case in 2002 caused Karen Perlman
ultimately to object to several invoices because she believed they
included fees for unauthorized base media service work as well as fees
for an incomplete media kit, excessive work on a one-day project involving Ralph Bloch, and work on MB's 2001 annual report
that MB had contracted Grady Campbell, Inc., to perform.
16. In September 2002, Raymond Minkus attempted to reconcile the
disputes, sending memoranda dated September 11, 2002, to Karen Perlman to
explain that "with the volume of activity relating to special projects,
there may have been several instances where charges were miscoded on
[ITQ's] end," resulting in outstanding invoices from as far back as
December 2001. Px 25. Minkus subsequently corrected several invoices,