United States District Court, N.D. Illinois
September 27, 2004.
The opinion of the court was delivered by: PHILIP REINHARD, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, H.S. Crocker Co., Inc., filed an eight-count
complaint based on diversity jurisdiction against defendant,
Alcoa Flexible Packaging, alleging breaches of contract (Counts
I-IV), negligent misrepresentation (Count V), interference with
an existing business relationship (Count VI), interference with
prospective economic advantage (Count VII), and malicious
defamation (Count VIII). Defendant, in turn, filed an eight-count
counterclaim. Defendant has filed a motion for summary judgment
as to all counts of plaintiff's complaint. Also pertinent to the
motion for summary judgment is defendant's motion to strike the
affidavit and opinion of one of plaintiff's experts, Ann Lousin,
a law professor.
Initially, the court grants defendant's motion to strike the
Lousin affidavit and opinions. The opinions pertain to
determinative legal issues related to the interpretation of the
contract between the parties. This is not proper under Federal
Rules of Evidence 702 and 704. See United States v. Sinclair,
74 F. 3d 753, 758 n. 1 (7th Cir. 1996).
Summary judgment is appropriate when there is no genuine issue
of material fact and the moving party is entitled to judgment as
a matter of law. Lamers Dairy, Inc. v. United States Dept. of
Agriculture, 379 F.3d 466, 472 (7th Cir. 2004).
Count I is based on a written contract between the parties
which they agree is governed by Illinois law. Under Illinois law,
the construction of an unambiguous contract is a question of law
for the court. Platt v. Gateway Int'l Motorsports Corp.,
813 N.E. 2d 279, 282 (2004).
Here, while the parties persist in characterizing the contract
at issue as a "take or pay" contract, that characterization,
which may not be entirely accurate, is not controlling. The
written contract is a letter of confirmation that is signed by
both parties. It unambiguously states that plaintiff and
defendant entered into a contract for the purchase of 7,800,000
pounds of "lidstock" over a two-year period. The contract further
provides that the total volume is 7,800,000 composite pounds,
that the time period is from January 1996 through December 1997,
and that plaintiff is to purchase 3,600,000 pounds for 1996 and
4,200,000 pounds for 1997. The contract also provides for a
two-stage pricing structure whereby plaintiff will pay X amount
per thousand square feet for a product that existed at the time
of the contract (F288) and would pay Y amount for a different
product that had been contemplated by the parties but not yet
developed (PXF2940). Moreover, the contract does not mention any
other products, such as AL-1000, or any other amount or pricing
scheme as to any other product. The contract is also silent as to
any raw aluminum or any price or amount related to raw aluminum.
The record contains no evidence that any of plaintiff's claimed
breaches as alleged in Count I occurred during the time frame of
the contract (1996 or 1997). In fact, plaintiff's claim focuses
on defendant's failure to either deliver adequate amounts of
AL-1000 or to deliver AL-1000 in an acceptable condition. The
problem for plaintiff, at least to the extent it relies on the
contract, is that AL-1000 was not available until after the term
of the contract had expired. While plaintiff attempts to extend
the term of the contract via the fax sent by Temme, even if this
fax could be construed as an extension of the contract, the
contract remained silent regarding AL-1000. The contract that
governed the purchase of lidstock by plaintiff from defendant for
1996 and 1997 does not, by its plain terms, provide a legal basis
for a claim of breach based on AL-1000.
Plaintiff's attempt to rely on trade usage to modify the terms
of the contract regarding AL-1000 fails as such additional terms
would not be consistent as AL-1000 is an entirely different
product not even in existence at the time the parties entered
into the contract. See 810 ILCS 5/2-202 (West 2002). The term
plaintiff seeks to interject is not a gap filler, but rather, is
a new obligation for separate goods. See Latex Glove Co. v.
Gruen, 146 Ill. App. 3d 868, 874-75, 497 N.E. 2d 466 (1986).
Additionally, plaintiff has not pointed to any evidence of trade
usage in this regard.
Alternatively, plaintiff seeks to modify the contract via
evidence of course of dealings between the parties. This effort
also fails under section 2-202 for the same reasons that
plaintiff's trade usage argument was not proper. Further,
plaintiff has not provided evidence sufficient to conclude that
the parties engaged in a course of dealing that allowed for the
wholesale substitution in a contract of a term not previously
mentioned or consistent with the stated terms.
The court also notes that the contract does not mention raw
aluminum, the price of raw aluminum, or any amounts of raw
aluminum. There is simply no obligation under the contract as
plainly written for plaintiff to pay for any raw aluminum or to
purchase any other finished product made with raw aluminum beyond
the two particular types of products specified in the contract.
Having said that, the court also notes that plaintiff was not
obligated to accept any defective product under the contract
under an implied warranty of merchantability. See 810 5/2-314
Because the written contract that underlies Count I does not
apply either to the particular goods (AL-1000) or the time period
of the alleged breach, the court grants summary judgment to
defendant on Count I.
Defendant also moves for summary judgment on Counts II, III,
and IV because plaintiff has failed to come forth with any
evidence of damages in relation to those three breach of contract
As to Count II, the motion for summary judgment is denied as
plaintiff has submitted evidence sufficient to raise a material
question of fact regarding damages. The court rejects defendant's
contention based on an accord and satisfaction regarding the
claim in Count II as there is a question of material fact in that
regard. As for Count IV, defendant argues that plaintiff's
evidence regarding damages should be barred under Rule 26 for not
disclosing it. Plaintiff's Rule 26 disclosures, however,
satisfactorily comply with Rule 26 in terms of damages.
Otherwise, plaintiff has offered sufficient evidence of damages
to preclude summary judgment as to Count IV.
That leaves Count III. While defendant has filed two motions
related to Count III (Rule 37 motion and motion to bar
plaintiff's damages expert), the court need not address those
motions at this point as plaintiff has submitted sufficient
evidence to raise a material question of fact as to damages under
Count III irrespective of the outcome of the two motions. Thus,
summary judgment is also denied as to Count III.
Defendant seeks summary judgment on Count V because plaintiff
has not submitted evidence on all elements of its negligent
misrepresentation claim. In Count V, plaintiff alleges that
defendant negligently misrepresented its ability to produce
lidstock and its ability to deliver lidstock by a certain date in
accordance with certain purchase orders. This claim is clearly
barred by the economic loss doctrine and does not satisfy the
negligent misrepresentation exception to that doctrine because
the contracts at issue dealt with tangible goods and any
information related thereto was merely ancillary or incidental.
See Fox Associates, Inc. v. Robert Half Int'l, Inc.,
334 Ill. App. 3d 90, 93-95, 777 N.E. 2d 603 (2002). Summary judgment is
therefore granted as to Count V.
The court also grants summary judgment as to Counts VI and VII
as the tort of intentional interference with an existing business
relationship requires breach of a contract by a third party, see
Kehoe v. Saltarelli, 337 Ill. App. 3d 669, 676-77,
786 N.E. 2d 605 (2003), and interference with a prospective economic
advantage requires interference by a defendant with a third
party, see Vickers v. Abbott Laboratories,
308 Ill. App. 3d 393, 411, 719 N.E. 2d 1101 (1999), and there is evidence of
neither in this case.
That leaves plaintiff's claim for defamation in Count VIII.
Defendant contends it is entitled to summary judgment because
there is no evidence of damages as to either comment. The court
agrees that there is no evidence of special damages in this case
notwithstanding Giordano's generalized testimony to that effect.
Plaintiff contends, alternatively, that it needs no evidence of
damages because its defamation claim qualifies as defamation
per se. In Illinois, a comment is defamatory per se if it
contains words that, among other things, impute the lack of
ability in business, trade, or profession. Salamone v. Hollinger
Int'l, Inc., 347 Ill. App. 3d 837, 840, 807 N.E. 2d 1086 (2004).
The comments at issue here, to constitute defamation per se,
would have to fit into this category.
However, Illinois applies the innocent construction rule as an
exception to defamation per se. Salamone,
347 Ill. App. 3d at 840. The innocent construction rule, a question of law,
requires consideration of the statement in context, giving the
words and their implication their natural and obvious meaning.
Salamone, 347 Ill. App. 3d at 840. A statement that falls
within one of the recognized categories of words that are
actionable per se, but is reasonably capable of an innocent
construction, will not be found actionable. Salamone,
347 Ill. App. 3d at 840.
In this case, the statement made to Dannon's employee, Towl, is
reasonably capable of an innocent construction as it was made in
the context of a discussion about why plaintiff was not getting
materials from defendant. It was purely a speculative comment, if
not pure opinion, and was, in fact, interpreted that way by Towl
who stated he did not believe that was the reason.
The alleged defamatory statement, made by a salesperson to
Exactos that the bug problem was more on plaintiff's side than
defendant's, could again be reasonably construed as nothing more
than a generalized opinion that was made in the context of a
sales contact. It could reasonably be viewed as mere opinion or
puffing by the salesperson.
Because both statements are capable of an innocent
construction, summary judgment is granted as to Count VIII in its
For the foregoing reasons, the court grants defendant's motion
to strike the Lousin affidavit and opinions, grants defendant's
motion for summary judgment as to Counts I, V, VI, VII, and VIII,
and denies the motion as to Counts II, III, and IV.
The court notes that there are plaintiff's motion for partial
summary judgment, plaintiff's motion to strike certain
affirmative defenses, defendant's motion to strike the expert
report and testimony of Szobocsan, and defendant's motion
pursuant to Rule 37(c)(1) to preclude plaintiff from prosecuting
claims and using evidence not disclosed until after the close of
fact discovery which are all fully briefed and pending. Prior to
the court endeavoring to decide these various non-dispositive
motions, the court orders plaintiff to initiate a telephonic
conference with both parties and the court for October 8, 2004,
at 11:00 am to discuss the reinitiation of serious settlement
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