United States District Court, N.D. Illinois, Eastern Division
October 11, 2005.
BOB FOUNTAIN, a citizen of the United Kingdom, Plaintiff,
PAMELA H. LOHAN, an Illinois resident, Defendant.
The opinion of the court was delivered by: AMY ST. EVE, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Bob Fountain ("Plaintiff") brought a two-count
complaint against Defendant Pamela Lohan ("Lohan") for breach of
contract and specific performance. Defendant now moves for
summary judgment, contending that she was entitled to cancel the
sales contract in issue and that Plaintiff is not entitled to
lost profits. For the reasons discussed below, the Court denies
I. Parties and Jurisdiction
Plaintiff is a citizen of the United Kingdom, residing in
Beamish County, Durham. (R. 31-; First Am. Compl. at ¶ 1.)
Plaintiff has owned the Aston Workshop since 1986. The Aston
Workshop is a business in Great Britain that restores and resells
Aston Martin automobiles. (R. 32-1; Exs. F-J Pl.'s Stmt. Uncont.
Mat. Facts Local Rule 56.1(b)(3)(A) and (B) ("Exs. F-J Pl.'s
Facts"), Ex. G at ¶ 2.) Defendant is a citizen of the State of
Illinois, residing in the City of Chicago, County of Cook. (R.
3-1; First Am. Compl. at ¶ 2.) At the time the parties entered
into the contract in issue, Plaintiff owned a 1966 Aston Martin
Volante convertible (the "Car"). (R. 23-1; Def.'s Stmt. Mat.
Facts ("Def.'s Facts") at ¶ 3.)
The Court has subject matter jurisdiction over this action
through diversity of citizenship. See 28 U.S.C. § 1332(a).
II. Pre-Contractual Correspondence and Negotiations
Lars Lohan ("Lars") is the son from a previous marriage of
Defendant's ex-husband, Dirk Lohan. (R. 28-1; Pl.'s Affirmative
Stmt. Facts Local Rule 56.1(b)(3)(B) ("Pl.'s Facts") at ¶ 3.) The
Internet website that listed the Car for sale listed Lars as the
designated contact. (R. 321-; Exs. F-J Pl.'s Facts, Ex. G at ¶¶
3, 5.) On or about June 30, 2004, Plaintiff contacted Lars
regarding purchasing the Car. (Id. at ¶ 5.) Over the next
several weeks, Plaintiff and Lars exchanged a series of e-mails
negotiating that purchase. (Id. at 5.)
On July 19, 2004, after Defendant and Mr. Lohan obtained a
divorce, Defendant sent Lars an e-mail stating that she would
like him to continue selling the Car and thanking Lars for
handling the sale. (R. 28-1; Pl.'s Facts at ¶ 6.) On July 30,
2004, Defendant sent Lars an e-mail confirming that she would pay
Lars a 10% commission of the final sales price for the Car if
Lars sold the Car for more than $100,000. (Id. at ¶ 7.) In that
same chain of e-mails, Lars notified Defendant that Plaintiff was
a prospective buyer who restored Aston Martin automobiles and was
"in a position to fix the [C]ar and still make some money from a
resale." (Id. at ¶ 18.)
III. The Contract
On or about August 4, 2004, Plaintiff entered into a written
agreement with Defendant to purchase the Car for $140,000 (the
"Contract"). (R. 23-1; Def.'s Facts at ¶¶ 4, 5.) The Contract
contains an exclusivity provision, which states that Defendant
will reserve the Car for sale to Plaintiff through August 16, 2004, provided that Plaintiff pay
Defendant a deposit of $10,000 by August 13, 2004. (R. 3-1; First
Am. Compl., Ex. A.) The Contract also states that Plaintiff had
until August 16, 2004 to inspect the Car; if Plaintiff was not
satisfied with the condition of the Car, then Defendant would
refund the $10,000 deposit. (Id.) Additionally, the Contract
specifies that "[u]pon receipt of payment in full by Buyer, all
title and interest in the vehicle shall transfer to Buyer."
(Id.) The Contract does not set forth a date upon which total
payment is due, nor does it contain any terms regarding delivery.
(Id.) Lars drafted the Contract.*fn1 (R. 28-1; Pl.'s Facts
at ¶ 19.)
On or about August 12, 2004, the parties formally amended the
Contract through an addendum, which "extends the time allowed for
Buyer . . . to inspect the vehicle . . . [to] August 23rd, 2004."
(R. 3-1; First Am. Compl., Ex. A.) Lars prepared the text of that
August 12, 2004 addendum (the "Addendum"). (R. 28-1; Pl.'s Facts
at ¶ 20.)
IV. Post-Contractual Negotiations, Correspondence and Actions
On August 5, 2004, Lars sent Defendant an e-mail setting forth
a procedure for transferring ownership of the Car. (R. 28-1;
Pl.'s Facts at ¶ 14.) The e-mail described the procedure as
follows: (1) Defendant will deliver the Car to Plaintiff's
shipping agent; (2) Plaintiff's shipping agent will notify
Plaintiff of his receipt of the Car; (3) upon that notification,
Plaintiff will send Defendant the remaining $130,000; and (4)
Defendant will release the Car to be shipped to the United Kingdom once she confirms that she has
received the $130,000. (Id.) In e-mails dated August 18 and 24,
2004, Lars again described this delivery procedure to Defendant.
(Id. at ¶¶ 15, 16.)
In accordance with the Contract, Plaintiff provided Defendant
with a $10,000 deposit on or before August 13, 2004. (R. 23-1;
Def.'s Facts at ¶ 20.) Plaintiff's agent inspected the Car on or
about August 16, 2004. (R. 28-1; Pl.'s Facts at ¶ 25.) Two days
later, Fountain told Lars over the phone that he wished to
proceed with the transaction. (Id. at ¶ 26.) Lars relayed this
information to Defendant in an e-mail dated August 18, 2004.
(Id. at ¶ 27.) On August 24, 2004, Defendant sent Lars an
e-mail thanking him for his efforts in selling the Car. (R. 31-1;
Exs. A-E Pl.'s Stmt. Uncont. Mat. Facts Local Rule 56.1(b)(3)(A)
and (B) ("Exs. A-E Pl.'s Facts"), Ex. A(E).)
In mid-August 2004, Eric Jeffries agreed to purchase the Car
from Plaintiff for the sum of £150,000 (UK), after Plaintiff
restored the Car. (R. 32-1; Exs. F-J Pl.'s Facts, Ex. J at ¶ 4.)
At no time on or before August 27, 2004 did Plaintiff enter into
a written contract with Mr. Jeffries or any other third party to
sell the Car, nor did Plaintiff inform Defendant that there was a
third party interested in buying the Car. (R. 23-1; Def.'s Facts
at ¶¶ 29, 31, 32.)
Plaintiff's shipping agent received the Car on August 24, 2004.
(R. 28-1; Pl.'s Facts at ¶ 32.) Defendant, however, took the Car
back from Plaintiff's shipping agent the following day. (Id. at
¶ 32.) Also on August 25, 2005, Lars forwarded Defendant an
e-mail from Plaintiff stating that Plaintiff would transfer the
remaining amounts owed on the Car on the following Monday. (Id.
at ¶ 31.) Plaintiff never received confirmation from his shipper
that Defendant had delivered the Car, (id. at ¶ 33), and
Plaintiff never tendered the remaining $130,000 to Defendant. (R. 23-1; Def.'s Facts at ¶ 23.) On or about August
27, 2004, Defendant informed Plaintiff via facsimile that she was
canceling the Contract. (Id. at ¶ 24.) On October 27, 2004,
Plaintiff sued Defendant, claiming that Defendant breached the
Contract by refusing to complete the sale of the Car. (R. 3-1;
First Am. Compl. at ¶ 11.)
I. Legal Standard
Summary judgment is proper when "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). A genuine
issue of material fact exists only if "the evidence is such that
a reasonable jury could return a verdict for the nonmoving
party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In determining
whether a genuine issue of material fact exists, the Court must
construe all facts in a light most favorable to the non-moving
party and draw all reasonable and justifiable inferences in favor
of that party. Id. at 255, 106 S. Ct. at 2513. The party
seeking summary judgment has the burden of establishing the lack
of any genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552,
91 L. Ed.2d 265 (1986). The existence of a factual dispute is not sufficient
to defeat a summary judgment motion, instead the non-moving party
must present definite, competent evidence to rebut the summary
judgment motion. Butts v. Aurora Health Care, Inc.,
387 F.3d 921, 924 (7th Cir. 2004). With these standards in mind, the
Court turns to the merits of Defendant's motion.
II. Whether Defendant Was Entitled To Cancel The Contract On
August 27, 2004 Defendant makes two main arguments in support of her claim that
she was entitled to cancel the Contract: (1) Plaintiff breached
the Contract by refusing to pay for the Car until after it was
delivered to his shipping agent; and (2) Plaintiff failed to pay
Defendant the full purchase price in a timely manner. (R. 23-1;
Def.'s Mot. Summ. J. at 5-10.) Genuine issues of material fact
preclude the Court from granting Defendant's motion for summary
judgment on either of these grounds.
A. Plaintiff's Alleged Breach
Defendant argues that Plaintiff breached the Contract by
withholding payment until Defendant transferred the Car to
Plaintiff's shipping agent. According to Defendant, Plaintiff's
alleged breach relieves her of her contractual obligations.
Plaintiff responds that he was merely acting in accordance with
the parties' agreed-upon delivery procedure as set forth in Lars'
August 5, 2004 e-mail. (R. 29-1; Pl.'s Mem. Opp'n Def. Mot. Summ.
J. at 9-10.) Defendant contends that the August 5, 2004 e-mail
was not part of the Contract because: (1) Plaintiff has
judicially admitted that the Contract and the Addendum constitute
the entire agreement between Defendant and Plaintiff; (2) the
parol evidence rule bars Plaintiff from introducing extrinsic
evidence to supplement the Contract; and (3) Lars was not
Defendant's agent and had no authority to enter into negotiations
on her behalf. The Court finds none of these arguments
1. Judicial Admission
In support of her argument that Plaintiff breached the
Contract, Defendant claims that the entire agreement between
herself and Plaintiff is contained in the Contract and the
Addendum. (R. 37-1; Def.'s Reply Supp. Mot. Summ. J. at 4.)
Defendant argues that by attaching the Contract and the Addendum to the First Amended Complaint,
Plaintiff has judicially admitted "what the contract is and what
documents constitute the contract," which precludes Plaintiff
from relying on any extrinsic evidence of an agreed-upon delivery
procedure to explain or supplement the Contract. (Id. at 3-4.)
Not so. Under Federal Rule of Civil Procedure 8(a)(2), a
complaint need only include "a short and plain statement of the
claim showing that the pleader is entitled to relief." This
statement must "give the defendant fair notice of what the
plaintiff's claim is and the grounds upon which it rests." Coney
v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 103, 2 L. Ed.2d 80
(1957). In the First Amended Complaint, Plaintiff provided
Defendant with adequate notice of the nature of his claim. The
Federal Rules of Civil Procedure do not require that he do more.
Plaintiff's failure to attach certain e-mails to the Complaint
prior to the commencement of discovery does not preclude him from
relying upon those e-mails during the litigation.
2. Parol Evidence
Defendant also relies on the parol evidence rule to try to
prevent Plaintiff from introducing extrinsic evidence to
supplement the Contract. (R. 37-1; Def.'s Reply Supp. Mot. Summ.
J. at 10-11.) Under the Illinois Uniform Commercial Code ("UCC"),
"[p]arol or extrinsic evidence may be introduced to show
additional consistent terms of a contract where the writing is
found to be incomplete or to explain ambiguities." Johnson v.
Flueckiger, 81 Ill. App. 3d 623, 624, 37 Ill. Dec. 224, 226,
401 N.E.2d 1317, 1319 (2d Dist. 1980); Global Link Commc'ns, Inc. v.
Homisco, Inc., No. 98 C 0180, 1998 WL 774981, at *2-3 (N.D. Ill.
Oct. 27, 1998); 810 Ill. Comp. Stat. Ann. 5/2-202 (West 2005). In
this case, the Contract is incomplete, as it does not contain an
integration clause, or terms setting forth a procedure for
delivery of the Car or a deadline for final payment. (R. 3-1; First Am. Compl., Ex. A.)
Therefore, the parties may supplement the Contract with evidence
of consistent additional terms. See 810 Ill. Comp. Stat. Ann.
5/2-202 (West 2005).
Plaintiff has attached numerous e-mails between himself, Lars
and Plaintiff that set forth a procedure for transferring
ownership of the Car. According to the e-mails of August 5, 18
and 24, 2004, the procedure is as follows: (1) Defendant will
deliver the Car to Plaintiff's shipping agent; (2) Plaintiff's
shipping agent will notify Plaintiff of his receipt of the Car;
(3) after receiving that notification, Plaintiff will send
Defendant the remaining $130,000; and (4) after Defendant
confirms that she has received the $130,000, she will release the
Car to be shipped to the United Kingdom.*fn2 (R. 31-1; Exs.
A-E Pl.'s Facts, Ex. A(D), Ex. A(H), Ex. D at 17-18.) Plaintiff
has also submitted his own affidavit and that of Lars as further
support. (R. 32-1; Exs. F-J Pl.'s Facts, Ex. G at ¶¶ 7, 17, Ex. H
at ¶¶ 8, 15, 28, 31.)
Defendant argues that Plaintiff's proposed delivery terms,
which require Defendant to transfer the Car to Plaintiff's
shipping agent before she can receive the full purchase price,
directly conflict with the language in the Contract stating
"[u]pon receipt of payment in full by Buyer, all title and
interest in the vehicle shall transfer to Buyer." (R.23-1; Def.'s
Mot. Summ. J. at 5-7.) Defendant has not established, however,
that transferring the Car to Plaintiff's shipping agent
constitutes a transfer of title and interest to Plaintiff.
Therefore, the delivery terms are not inconsistent with the terms
of the Contract as a matter of law, and the Court will not
preclude Plaintiff from introducing extrinsic evidence of the delivery
terms in his opposition to Defendant's motion for summary
Next, Defendant argues that Lars was not her agent and did not
have the authority to agree to a delivery procedure with
Plaintiff. (R. 37-1; Def.'s Reply Supp. Mot. Summ. J. at 7-8.)
"The existence of an agency relationship is a question of fact."
Podolsky v. Alma Energy Corp., 143 F.3d 364, 370 (7th Cir.
1998) (citations omitted); Caligiuri v. First Colony Life Ins.
Co., 318 Ill. App. 3d 793, 800, 252 Ill. Dec. 212, 218,
742 N.E.2d 750, 756 (1st Dist. 2000). The determination of whether an
agency relationship exists and the scope of that relationship
should be decided by the trier of fact, "unless the parties'
relationship is so clear as to be undisputed." Plooy v.
Paryani, 275 Ill. App. 3d 1074, 1086, 212 Ill. Dec. 317, 327,
657 N.E.2d 12, 22 (1st Dist. 1995) (citations omitted).
Here, Plaintiff has set forth ample evidence of an agency
relationship between Lars and Defendant to raise a genuine issue
of material fact. For example, on July 19, 2004, Defendant sent
Lars an e-mail stating that she would like to continue selling
the Car and thanking Lars for handling the sale. (R. 28-1; Pl.'s
Facts at ¶ 6.) On July 30, 2004, Defendant sent Lars an e-mail
confirming that she would pay Lars a 10% commission of the final
sales price for the Car if Lars sold the Car for more than
$10,000. (Id. at ¶ 7.) Lars prepared the Contract and the
Addendum. (Id. at ¶¶ 19, 20.) On August 24, 2004, Defendant
sent Lars an e-mail thanking him for his efforts in selling the
Car. (R. 31-1; Exs. A-E Pl.'s Facts, Ex. A(E).) Additionally,
Lars states in his affidavit that "[a]t all times relevant to
this transaction I was acting on behalf of [Defendant]" (R. 32-1;
Exs. F-J Pl.'s Facts, Ex. H at ¶ 34.) Accordingly, whether or not
Lars was Defendant's agent is a material issue of fact.
B. Plaintiff's Alleged Failure To Pay Defendant In A Timely
Defendant also argues that she was entitled to cancel the
Contract because Plaintiff did not pay Defendant the entire
purchase price for the Car in a timely manner. Defendant claims
that full payment was due before the end of the exclusivity
period set forth in the Contract.*fn3 (R. 23-1; Def.'s Mot.
Summ. J. at 7-9.) She arrives at this conclusion two different
ways. First, Defendant interprets the end of the exclusivity
period as the deadline for final payment. (Id. at 7.) Second,
Defendant states that "Illinois law presumes that a reasonable
time for payment is allowed the Plaintiff," and argues that a
reasonable time should be defined as the exclusivity period.
The Court finds neither of Defendant's arguments persuasive.
First, the Contract does not set a deadline for final payment.
The Court will not presume in the absence of any supporting
evidence that the end of the exclusivity period is the payment
deadline. Second, the Court cannot determine on a motion for
summary judgment what constitutes a reasonable time. Under the
UCC, when a contract fails to include a specific time provision,
the time for action under the contract "shall be a reasonable
time." 810 Ill. Comp. Stat. Ann. 5/2-309 (West 2005). "What is a
reasonable time for taking any action depends on the nature,
purpose and circumstances of such action." 810 Ill. Comp. Stat.
Ann. 5/1-204(2). The determination regarding what constitutes a
reasonable time "rests with the trier of fact." GNP
Commodities, Inc. v. Walsh Heffernan Co., 95 Ill. App. 3d 966, 971,
51 Ill. Dec. 245, 250, 420 N.E.2d 659, 664 (1st Dist. 1981); Hays v.
Gen. Elec. Co., 151 F. Supp. 2d 1001, 1012 (N.D. Ill. 2001).
Even if the Court could determine what constitutes a reasonable
time, it is unlikely that the end of the exclusivity period would
be the reasonable time because Defendant indicated her
willingness to go forward with the transaction in an email she
sent to Lars after the exclusivity period had ended. (R. 31-1;
Exs. A-E Pl.'s Facts, Ex. A(E).) Accordingly, a material issue of
fact remains as to what constitutes a reasonable time for final
payment. Defendant, therefore, has failed to carry her summary
judgment burden as to Plaintiff's breach of contract claim.
III. Whether Plaintiff Is Entitled To Lost Profits
Defendant also moves for summary judgment on Plaintiff's claim
for lost profits. Defendant argues that Plaintiff is not entitled
to an award of lost profits under 810 Ill. Comp. Stat. Ann.
5/2-715 (West 2005) because such damages were not foreseeable and
are too speculative to be recoverable. (R. 23-1; Def.'s Mot.
Summ. J. at 10-11.) The Court finds neither of these two
arguments dispositive or persuasive.
The UCC defines consequential damages as "any loss resulting
from general or particular requirements and needs of which the
seller at the time of contracting had reason to know and which
could not reasonably be prevented by cover or otherwise."
810 ILCS 5/2-715(2)(a). It is well established that consequential
damages must be "reasonably foreseeable" to be recoverable under
Section 2-715(2). Outboard Marine Corp. v. Babcock Indus.,
Inc., No. 91 C 7247, 1995 WL 296963, at *2 (N.D. Ill. May 12,
1995), citing Garavalia v. Heat Controller, Inc.,
212 Ill. App. 3d 380, 383, 156 Ill. Dec. 505, 508, 570 N.E.2d 1227, 1230 (5th
Dist. 1991). In Illinois, however, the party seeking to recover
consequential damages need not establish that the damages were "`expressly contemplated.'"*fn4 Linc Equip. Servs.,
Inc. v. Signal Med. Servs., Inc., 319 F.3d 288, 289 (7th
Cir. 2003), citing Hadley v. Baxendale, 9 Ex. 341,
156 Eng. Rep. 145 (1894). Foreseeability is generally an issue of fact for
the jury to resolve, and "should be decided as a matter of law
only where the facts demonstrate that the plaintiff could never
be entitled to recovery." Outboard Marine, 1995 WL 296963, at
Defendant argues that lost profits were not foreseeable because
she was not aware of any agreement between Plaintiff and a third
party for resale of the Car, and Plaintiff had not entered into a
written agreement to resell the Car before August 27, 2004, the
day Defendant purported to terminate the Contract. (R. 23-1;
Def.'s Mot. Summ. J. at 10-11.) Those facts do not establish that
Plaintiff "could never be entitled to recovery." See Outboard
Marine, 1995 WL 296963, at *2. Before Plaintiff and Defendant
entered into the Contract, Lars informed Defendant via e-mail
that Plaintiff restored and resold Aston Martin automobiles. (R.
28-1; Pl.'s Facts at ¶ 18.) Moreover, if the trier of fact
determines that Lars is Defendant's agent, Lars' knowledge that
Plaintiff was in the business of restoring and reselling Aston
Martin automobiles may be imputed to Defendant. See Kuska v.
Folks, 73 Ill. App. 3d 540, 544, 29 Ill. Dec. 399, 402,
391 N.E.2d 1082, 1085 (2d Dist. 1979) ("a principal is deemed to have
knowledge of all material facts of which his agent receives
notice or acquires knowledge, while acting in the course of his
employment and the scope of his authority"). Accordingly, the
Court cannot say as a matter of law that it was not foreseeable that Plaintiff, a restorer and
reseller of Aston Martin automobiles, would enter into a
third-party agreement to resell the Car.
Nor can the Court decide as a matter of law that Plaintiff's
lost profits, if any, are too speculative to be recoverable. The
UCC "does not require plaintiff to prove consequential damages
with `mathematical precision.'" Bockman Printing & Servs., Inc.
v. Baldwin-Gregg, Inc., 213 Ill. App. 3d 516, 527,
157 Ill. Dec. 630, 638, 572 N.E.2d 1094, 1102 (1st Dist. 1991), citing Cates
v. Morgan Portable Bldg. Corp., 591 F.2d 17, 21 (7th Cir.
1979). Instead, "[a] recovery may be had for prospective profits
when there are any criteria by which the probable profits can be
estimated with reasonable certainey [sic]." Barnett v. Caldwell
Furniture Co., 277 Ill. 286, 289, 115 N.E. 389, 390 (Ill. 1917).
For almost twenty years, Plaintiff has owned a company that
restores and resells Aston Martin automobiles. (R. 32-1; Exs. F-J
Pl.'s Facts, Ex. G at ¶ 2.) Viewing this fact in the light most
favorable to Plaintiff, a market exists for restored Aston Martin
automobiles. Moreover, Plaintiff has submitted to the Court the
testimony of Mr. Jeffries, who states that he offered Plaintiff
£150,000 (UK) for the Car in mid-August 2004. (Id. at Ex. J, ¶
4.) The existence of these facts precludes the Court from
deciding as a matter of law that there are no criteria by which
Plaintiff can estimate his alleged lost profits with reasonable
certainty. Accordingly, Defendant has failed to carry her summary
judgment burden as to Plaintiff's claim for lost profits. CONCLUSION
For these reasons, Defendant's motion for summary judgment is
© 1992-2005 VersusLaw Inc.