The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Plaintiff TruServ
Corporation's ("TruServ") request for damages from defendants
Flegles, Inc. and Ms. Alice Mae Flegles (collectively
"Defendants"). For the reasons stated below, we rule in favor of
TruServ against Defendants and award $77,149.27 in damages,
$5,143.28 in prejudgment interest, $50,374.50 in attorney's fees,
and $10,879.72 in costs, totaling $143,546.77.
On or about January 20, 2000, TruServ, as a company, and
Flegles, Inc. ("Flegles"), as a retail member, entered into a written agreement
entitled "Retail Member Agreement with TruServ Corporation an
Independent Retailer Cooperative" ("Member Agreement"). The
Member Agreement governed the relationship between TruServ and
Flegles and allowed Flegles, as a retail member, to purchase
merchandise and services from TruServ for amounts stated in the
member's statements of accounts ("Members Statements") for
Flegles. According to the terms of the Member Agreement, it was
agreed to by TruServ and Flegles that Illinois law would govern
the Member Agreement. On February 18, 2003, pursuant to the
Member Agreement TruServ terminated Flegles as a member for
nonpayment of outstanding debt owed to TruServ.
On May 16, 2003, TruServ filed a three count complaint against
Defendants in this court. In Count I, TruServ contended that
Flegles breached the Member Agreement. In Count II, TruServ
contended that Flegles was liable pursuant to the Member
Agreement for an account stated claim. In Count III, TruServ
contended that Ms. Alice Mae Flegle ("Ms. Flegle") breached three
separate guaranty agreements ("Guaranty Agreements") that she
executed which guaranteed to TruServ the payment "of any
indebtedness or balance of any past, present, or future
indebtedness. . . ." that Flegles owed to TruServ. TruServ moved
for summary judgment on all counts. On July 21, 2004, in a memorandum opinion, we granted TruServ's
motion for summary judgment on Counts I and III. In addition, we
denied TruServ's motion for summary judgment as to Count II and
dismissed Count II as moot. Because at summary judgment the
parties had not sufficiently briefed the damages issue, including
any applicable set-offs, attorney's fees, and costs, we ordered
the parties to submit briefing on damages.
On May 16, 2003, TruServ requested damages from Defendants for
breach of contract in the amount of $78,627.04, exclusive of
interest, costs, and attorney's fees. The $78,627.04 amount was
based on a May 1, 2003 TruServ Members Statement for Flegles.
Pl.'s Ex. A. Since that time, TruServ, in accordance with the
Member Agreement, has applied amounts owed to Flegles. These
amounts include credits for merchandise applied to Flegles'
account balance and services, as well as notes payable by TruServ
to Flegles which have now become due since Flegles' termination
as a member. On March 1, 2004, TruServ issued a new Members
Statement for Flegles that reflected these new amounts applied,
with a reduced balance of $78,174.81 owed to TruServ. Pl.'s Ex.
A. Additionally, the Members Statement dated March 1, 2004 contained a detailed list of the
transactions between TruServ and Flegles, along with a clearly
itemized account of the amount owed to TruServ by Flegles for any
and all of the merchandise, advances, and services that TruServ
provided or caused to be provided for Flegles.
Defendants argue that the $78,174.81 stated in the March 1,
2004 Members Statement should also credit Flegles with a
$1,025.54 patronage dividend check ("Dividend Check") that
TruServ sent to Flegles, but that Flegles returned to TruServ
without cashing. There is no dispute that the $1,025.54 reflected
in the Dividend Check belongs to Flegles. The court notes that
TruServ has already applied other amounts and credits owed to
Flegles which have become due since Flegles termination as a
member. TruServ did not exercise its right under the Member
Agreement to place a lien on the patronage dividend, but instead
mailed the dividend check to Flegles which was then returned to
TruServ. Under these facts, there is no reason whatsoever that
the $1,025.54 should not also be applied as a credit. Therefore,
we find that as a result of Flegles' breach of the Member
Agreement, TruServ has been damaged in the amount of $77,149.27.
II. Prejudgment Interest, Attorney's Fees, and Costs
TruServ maintains that pursuant to the Member Agreement, it is
entitled to prejudgment interest, attorney's fees, and costs. We agree. The
Member Agreement provides:
"In the event that the Company initiates proceedings
to recover amounts due it by Member or for any
breach of this agreement to seek equitable or
injunctive relief against the Member, the Company
shall be entitled to the recovery of all associated
costs, interest, and reasonable attorney's fees."
Pl.'s Ex. A.
TruServ and Flegles agree that under Illinois law, prejudgment
interest applies at the rate of 5% per annum as prescribed by the
Illinois Interest Act. 815 ILCS 205/2. Specifically,
815 ILCS 205/2 provides:
Creditors shall be allowed to receive at the rate of
five (5) per centum per annum for all moneys after
they become due on any bond, bill, promissory note,
or other instrument of writing; on money lent or
advanced for the use of another; on money due on the
settlement of account from the day of liquidating
accounts between the parties and ascertaining the
balance; on money received to the use of another and
retained without the owner's knowledge; and on money
withheld by an unreasonable and vexatious delay of
payment. In the absence of an agreement between the
creditor and debtor governing interest charges, upon
30 days' written notice to the debtor, an assignee or
agent of the creditor may charge and collect interest
as provided in this Section on behalf of a creditor.
815 ILCS 205/2.
Further, under Illinois law, in order for a court to award
prejudgment interest, the actual amount due must be a "liquidated
amount or subject to easy computation." Ameritech Information Systems, Inc. v. Bar ...