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Union Pacific Railroad Co. v. Novick Industries

February 6, 2008

UNION PACIFIC RAILROAD COMPANY, PLAINTIFF,
v.
NOVICK INDUSTRIES, LTD., DEFENDANT.



The opinion of the court was delivered by: George M. Marovich United States District Judge

Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Plaintiff Union Pacific Railroad Company ("Union Pacific") filed a complaint against Novick Industries, Ltd. ("Novick"), in which complaint Union Pacific sought $465,118.00 in freight and related charges. Union Pacific has filed a motion for default judgment or, in the alternative, summary judgment. The Court concludes that the motion is more properly labeled a motion to enforce settlement agreement. For the reasons set forth below, the Court grants Union Pacific's motion and enforces the settlement agreement.

I. Background

Union Pacific, which operates a railroad, is a Delaware Corporation and has its principal place of business in Omaha, Nebraska. Novick is an Illinois Corporation, and its principal place of business is in Chicago, Illinois. Union Pacific filed a complaint alleging that Novick had failed to pay for freight and other services worth $465,118.00. Thus, the Court has jurisdiction over this dispute pursuant to 28 U.S.C. § 1332.

In late January 2007, the parties signed and notarized a Settlement Agreement and Release (the "Settlement Agreement"). The Settlement Agreement provides, in relevant part:

WHEREAS, UP has filed suit against NOVICK in the United States District Court for the Northern District of Illinois, Eastern Division, (the "Lawsuit"); and

WHEREAS, the parties wish to settle the Lawsuit, and all other matters arising out of the freight charges allegedly owed by NOVICK to UP that are specifically identified in the freight bills listed in Exhibit "A" appended hereto and incorporated herein by reference;

NOW THEREFORE, the parties agree as follows:

***

2. Dismissal. Upon execution of this Agreement, the parties will jointly execute a stipulation for dismissal, without prejudice, of the Lawsuit pursuant to Federal Rules of Civil Procedure 41(a), each party to bear its own costs and attorneys fees. UP or its attorneys will take all other actions which may be necessary to promptly effectuate such dismissal.

***

4. Payment. In consideration for each and every one of UP's agreements and covenants set forth herein, each of which is an essential and indispensable part hereof, NOVICK shall pay to UP the total sum of $396,000.00 ("Payment"). The Payment shall be satisfied by NOVICK paying 12 equal monthly installments of $33,000.00 to UP. The first such monthly installment payment is due on February 1, 2007. The successive monthly payments are due on the first day of each month thereafter until the Payment is made in full. . . . All payments must be received by Union Pacific by the fifth business day of each month. The parties stipulate and agree that the aforementioned sum of $396,000.00, represents payment for all actual and potential damages, and related attorney fees and court costs. Checks shall be made payable to Union Pacific Railroad Company and shall be sent to UP at the address set forth in Paragraph 7 of this Agreement.

5. Default, Cure, and Breach. In the event that any payment required by this Agreement is not received by UP on or before the applicable due date, UP may, at its option, declare NOVICK in default. In order for NOVICK to be considered in default, UP shall provide NOVICK with written notice that it is in default at the location set forth in Paragraph 8 of this Agreement. NOVICK shall then have three business days to cure the default. The default will only be cured by NOVICK making payment to UP within three business days following the date the notice of default is faxed as set forth in Paragraph 8 of this Agreement. If NOVICK fails to the [sic] cure the default, Union Pacific may, at its option, declare the entire remaining unpaid balance immediately due and payable, and may initiate a lawsuit on this agreement to recover the remaining unpaid balance together with attorneys' fees and costs incurred in bringing such suit. In the event UP files suit based upon a breach of this Agreement by NOVICK, UP will be entitled to entry of a Judgment against NOVICK for the full amount of $396,000.00, minus any payments made prior to the breach, plus interest at the rate of 8.25 percent per annum on ...


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