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Polansky v. Anderson

November 20, 2007

MICHAEL E. POLANSKY, PLAINTIFF,
v.
JOSEPH ANDERSON, ANDERSON RACING DEFENDANTS.



The opinion of the court was delivered by: Marvin E. Aspen, District Judge

MEMORANDUM ORDER AND OPINION

Presently before us are Defendants' Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56 and the related Motion to Strike Affidavits in Whole or in Part and Other Relief. Plaintiff Michael Polansky alleges that Defendants Joseph Anderson and Anderson Racing, Inc. defrauded him in connection with his 2003 purchase of three Illinois-bred race horses from non-party Robert Waxman, resulting in Polansky's overpayment for the horses to the benefit of Defendants. Polansky further claims that Defendant Anderson breached the fiduciary duty owed to Polansky and that Defendants engaged in a civil conspiracy to commit such fraud. In their Rule 56 motion, Defendants contend, among other things, that Polansky failed to establish the existence of a fiduciary duty or any misrepresentation necessary for a fraud action. Defendants also challenge certain aspects of three affidavits put forth by Polansky to defeat summary judgment. For the reasons set forth below, we grant in part and deny in part Defendants' motion to strike. We also grant the Motion for Summary Judgment as to Count II (breach of fiduciary duty), but deny it as to the fraudulent concealment claim in Count I and the related conspiracy claim in Count III. Finally, we grant Defendants' motion in favor of their breach of contract counterclaim for $5898.50.

I. DEFENDANTS' MOTION TO STRIKE AFFIDAVITS

Before addressing the merits of the summary judgment motion, we first resolve Defendants' motion to strike, in whole or in part, the affidavits of Michael Polansky, Thomas Harmer and Robert Boni, submitted by Polansky with his opposition brief. Defendants contend that these affidavits fall short of the requirements of Rule 56(e), which states that "[s]supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed. R. Civ. P. 56(e); see also Payne v. Pauley, 337 F.3d 767, 772 (7th Cir. 2003) (noting that affidavits based on personal knowledge may include reasonable inferences, so long as those inferences are based on observation or first-hand experience); Vissier v. Packer Eng'g Assocs., Inc., 924 F.2d 655, 659 (7th Cir. 1991). When addressing the sufficiency of such affidavits, the Seventh Circuit has held that "[e]vidence presented to defeat a summary judgment motion need not be in admissible form, but it must be admissible in content." Juarez v. Menard, Inc., 366 F.3d 479, 484 n.4 (7th Cir. 2004); Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 490 (7th Cir. 2007). While we decline to strike these affidavits in whole, we agree with Defendants that portions thereof cannot be considered in deciding this summary judgment motion. Adusumilli v. City of Chicago, 164 F.3d 353, 359 (7th Cir. 1998) (holding that court cannot consider "parts of an affidavit that are insufficient under Rule 56(e)").

A. Affidavit of Michael Polansky

With respect to Polansky's affidavit, we strike all but the first three sentences of paragraph 1. (See Pl.'s Opp. to MSJ, Ex. 1, Polansky Aff. ¶ 1.) As Defendants contend, the remainder of this hyberbolic paragraph is conclusory and void of supported facts. See Pfeil v. Rogers, 757 F.2d 850, 862 (7th Cir. 1985) ("Because legal argumentation is an expression of legal opinion and is not a recitation of 'fact' to which an affiant is competent to testify, legal argument in an affidavit may be disregarded."); see also Tel-Lock, Inc. v. Thomson Consumer Elecs., No. 03-320, 2005 WL 741930, at *4 (N.D. Ill. Mar. 30, 2005).

We also strike the second sentence and the opening clause of the fifth sentence of paragraph 2, as Polansky fails to establish how he might have first-hand knowledge of Mr. Gelrod's thought processes. For example, while Polansky states that "[u]nbeknowst' to [him]," Gelrod was facing suspension and "was obviously looking for a new way to support himself," his affidavit lacks any facts about how he now knows these alleged facts to be true.

Because the third, fourth and fifth sentences of paragraph 4 lack specificity about who gave Polansky this information, we cannot rely on his statements as evidence of any representations -- or misrepresentations -- made by Defendants. (See Pl.'s Opp. to MSJ, Ex. 1, Polansky Aff. ¶ 4 ("I was told that Mr. Waxman was suffering financial difficulties . . . . I was told that the purchase price was $350,000.").) Contrary to Polansky's assertion, his affidavit does not state that Defendants provided this information. (Pl.'s Opp. to Mot. to Strike at 3.) These statements suffice to show Polansky's state of mind, but no more.*fn1

We strike the second sentence of paragraph 6 because Polansky's affidavit fails to set forth any personal knowledge about Mr. Waxman's financial situation or the treatment of the horses. (See Pl.'s Opp. to MSJ, Ex. 1, Polansky Aff. ¶ 6 ("I subsequently learned that this was a false representation. Because Mr. Waxman had fallen behind in his training bills owed to Erwin Miller, the trainer of the three horses, the horses were essentially being fed and watered and were not being trained.").) While this paragraph further describes Polansky's state of mind, he cannot testify as to the truth of these matters in an affidavit without actual knowledge.

As above, we cannot consider paragraph 8 as evidence in support of Polansky's claim that he was "victimized by Mr. Gelrod and Mr. Anderson." (Id. ¶ 8 ("Soon after I purchased the three horses, I began to hear rumblings and rumors passed on to me by others in the harness racing business that I had been victimized.").) Although this paragraph describes his state of mind and his reaction to rumors in the industry, Polansky acknowledges that his information is based on "rumblings and rumors." Accordingly, paragraph 8 is not admissible testimony as to whether he was victimized.

We decline to strike Polansky's statements in paragraph 9, to the extent that they rely on and summarize documents provided with his opposition brief. Otherwise, we agree with Defendants that Polansky's affidavit cannot include speculation as to the actions of Defendants without any personal knowledge.

We also deny the motion to strike as to paragraph 10. Nonetheless, we treat the first sentence as evidence only that Polansky believed Defendant Anderson was his agent and relied upon his expertise in deciding to buy the horses.. (Id. ¶ 10 ("Mr. Anderson was acting as my agent in the purchase of these horses.").) We do not consider this testimony as conclusive evidence that Mr. Anderson in fact was Polansky's agent.

We similarly will not strike paragraph 11. And as with paragraph 10, we will not consider paragraph 11 as factual evidence supporting Polansky's claim that Mr. Anderson engaged in wrongdoing or diverted money. (Id. ¶ 11 ("Needless to say, I was not going to send any more money to someone who had illegally diverted $110,000 of the $350,000 that I had given him to purchase horses.").) We rely on these statements only to demonstrate Polansky's state of mind and his reasoning for refusing to pay Defendants' invoices for training services.

B. Affidavit of Thomas Harmer

Regardless of whether we consider Thomas Harmer as a fact or expert witness, we strike his affidavit entirely.*fn2 Harmer is not competent to testify as a fact witness, as he lacks personal knowledge of the horses and their disputed training. The affidavit does not explain how he has any first-hand information about the horses, which might enable him to assess their market value. It does not state that he trained, examined, treated or even observed the horses, at any time or for any purpose. Paragraph 2, moreover, contains only hearsay of what Harmer says Ervin Miller told him about the horses, their training, their owner's financial status and the purported asking price. (See Pl.'s Opp. to MSJ, Ex. 3, Harmer Aff. ¶ 2.) Accordingly, it cannot serve to rebut the contrary sworn testimony of Miller submitted by Defendants. Paragraph 3 is also inadmissible, as Harmer states without foundation that he "came to learn that . . . Polansky had purchased the three horses and paid the sum of $350,000" and concludes that such "amount is twice what the asking price was." (Id. ¶ 3.)

Harmer's affidavit likewise cannot pass muster as expert testimony. Given that he lacks personal knowledge, Harmer's estimate of the horses' value is based on his "experience in the standardbred horse racing industry." (Id. ¶ 4.); see, e.g., United States v. Conn, 397 F.3d 548, 553-555 (7th Cir. 2002) (discussing differences between expert and lay testimony and concluding that agent's testimony about firearms collection was expert testimony, as it was based on his "training and experience"); Visser v. Packer Eng'g Assocs., Inc., 924 F.2d 655, 659 (7th Cir. 1991) (noting that "witnesses who are not expert witnesses . . . are permitted to testify only from their personal knowledge" and cannot provide "speculations, hunches, intuitions, or rumors remote from [their] experience"). Harmer, however, never describes his experience or how he might be qualified otherwise to offer an opinion on the value of the horses. While he states that he is "currently a licensed trainer of horses," he does not explain why that is sufficient to inform his assertion that the horses could not have been worth more than $200,000 as a group. (Id.) Although he testifies that he has "been involved ...


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