The opinion of the court was delivered by: Judge Joan B. Gottschall
MEMORANDUM OPINION AND ORDER
Plaintiff Ford Motor Credit Company ("Ford") has sued Thomas Wieringa ("Wieringa") for breach of contract. Ford claims that Wieringa has failed to honor his commitment personally to guarantee the financial obligations of Carry Companies of Illinois ("Carry"). Before the court are the parties' cross-motions for summary judgment. For the reasons stated below, plaintiff's motion for summary judgment is granted in part and denied in part; defendant's motion for summary judgment is denied.
A. The Parties and the Contract
Ford is engaged in the business of selling and leasing new and used trucks, automobiles, and other vehicles. Carry is a transporter and warehouser of liquid and dry food products. In 1997 and 1998, Wieringa served as Carry's president.
In 1997, Carry entered into a contract with Frito-Lay. Under the agreement, Carry was to transport potatoes, which were to be used in the production of Frito-Lay's "WOW" brand potato chips, to various Frito Lay processing plants. Due to the large volume of potatoes involved, Carry sought to purchase sixty new refrigerated trailers ("the vehicles" or "the trailers") manufactured by Stoughton Trailers ("Stoughton"). To obtain financing for the purchase, Carry retained a broker, Anthony Nazaroski, and Nazaroski's finance company, Capital Development Services. In May of 1998, Carry entered into a "Commercialease Lease Agreement" ("the agreement") with Ford. Wieringa executed a document under which he agreed unconditionally to guarantee Carry's present and future obligations to Ford.
The lease's term was for 96 months (8 years) and was intended to run from May 1998 through May 2006. The parties agreed to a capitalized cost of $54,342.60 for each trailer. The parties also set the "residual value" of each vehicle at twenty percent of the capitalized cost (i.e., $10,868.52). The monthly finance charge was $681.08 per vehicle, for a total monthly charge of $40,864.80. Finally, the parties agreed upon an "early termination value" ("ETV") for the trailers. The ETV was based upon a combination of the vehicle's capitalized cost and its residual value. Thus, for example, in the first month, the ETV for each trailer was $53,661.52 ($54,342.60 -$681.08); and in each succeeding month, the ETV for each vehicle would be reduced by $681.08.
Upon expiration of the agreement, Ford could either dispose of the trailers itself or designate Carry to sell them. If the vehicle's sale price was less than its residual value, Carry would be responsible for the deficiency; if the sale price was greater than the residual value, Carry would receive the surplus. Ford could terminate the lease at any time if Carry failed to make its monthly payments. Carry, too, could terminate the contract at any time, either by selling the trailers or by returning them to Ford for sale. If the sale price fell short of the ETV, Carry would be required to pay the deficiency. Carry also could purchase any of the trailers at any time by paying the trailer's ETV.
Under the agreement, Carry was responsible for licensing, registering, and titling each vehicle. Carry also was required to pay the vehicles' insurance costs, operating expenses, and taxes. If one of the trailers was lost or damaged, Carry was responsible for paying the vehicle's ETV.
B. Carry's Failure to Make Payments
Initially, Carry had no difficulty meeting its obligations under the contract. Indeed, in December of 2000, Carry bought five of the trailers and sold them to another party; and in February 2001, Carry purchased three additional trailers.
In May 2001, however, due to slackening demand for WOW potato chips, Frito-Lay cancelled its contract with Carry. Carry was able to make all of its payments through December 2001, and executed four "Commercialease Lease Deferral Addenda," which allowed Carry to defer certain payments. In exchange, Wieringa executed a separate "Reaffirmation and Guarantee" for each lease addendum, confirming his liabilities and obligations for Carry's obligations to Ford.
Sometime between March and May of 2002, however, Carry became unable to make its payments. Ford sent a letter to Carry demanding payment of $107,576.60, which Ford claimed was due under the agreement. When Carry made no payments, Ford sent Wieringa a letter on August 13, 2002, demanding payment of $103,949.87, if he wished to avoid termination of the lease. Ford sent another letter on August 19, 2002 to the same effect. Wieringa admits to receiving the letters. Neither he nor Carry paid the demanded amount.
The agreement was terminated at the end of August 2003. While the parties agree that the agreement in fact was terminated, they disagree over who terminated the contract and exactly when it was terminated: Wieringa claims that he cancelled the agreement on August 28, 2002; Ford claims that it cancelled on August 30, 2002.
C. Post-Termination Events
Ford repossessed forty-four of the trailers between January and March of 2003. Ford claims that it contacted Wieringa repeatedly in an attempt to arrange for the return of the eight remaining vehicles. Wieringa admits that Ford may have "made a few phone calls," but claims that he was unaware that Ford sought the return of the vehicles.
Ford eventually filed a replevin action in Cook County Circuit Court in November 2002. On March 17, 2003, Cook County Judge Alexander White entered an Order of Replevin, requiring the return of the remaining vehicles. The order was executed by the Cook County Sheriff, but none of the vehicles was recovered. On April 24, 2003, Ford filed a motion for civil contempt sanctions.*fn2 Some time later, one vehicle eventually was returned. Wieringa sold the other seven without inspection by Ford, the proceeds from which, Ford claims, were applied to Wieringa's outstanding balance.*fn3
Ford arranged to have the recovered vehicles sold at three separate auctions held in March, April, and May of 2003. The auctions were handled by Fort Wayne Vehicle Auction ("Fort Wayne"), an experienced seller and marketer of vehicles and the largest auction facility in the Midwest. The auctions were advertised in Farm World, and Truck Paper Great Lakes, a publication that reaches over half the country. Fort Wayne also circulated fliers announcing the auction.*fn4 Although not specifically required by the agreement, Ford sent Wieringa notices of the sales on those dates. Wieringa admits receiving notice of at least one of the sales and concedes that he did not object to the sale. He contends, however, that he was unaware that the sale was to be conducted via auction.
Several hundred people attended each of the auctions, and all of the vehicles were sold. The prices ranged from $9,250.00 to $15,750.00. Ford claims that it incurred a total of $44,037.24 in expenses in connection with selling the vehicles, and that it is owed a total of $1,314,373.37 as a result of ...