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General Citrus International Inc. v. Remien

August 10, 2009

GENERAL CITRUS INTERNATIONAL INCORPORATED, PLAINTIFF
v.
JEROME REMIEN, THE JEROME REMIEN REVOCABLE TRUST, BURTON URY, AND URY CORP. DEFENDANTS



The opinion of the court was delivered by: Michael T. Mason, Magistrate Judge

MEMORANDUM OPINION AND ORDER

Before the Court are plaintiff General Citrus International Incorporated's ("General Citrus") motions in limine and defendant Jerome Remien's ("Remien") motions in limine. Defendants Burton Ury ("Ury") and the Ury Corporation ("Ury Corp.") (collectively the "Ury Defendants") elected not to file any motions in limine. This Court heard oral arguments on the motions in limine on July 29, 2009. For the reasons set forth below General Citrus' motion to bar defendants from relitigating issues resolved on summary judgment [191] is granted, General Citrus' motion to bar evidence of the parties' negotiations and dealings [192] and motion to bar evidence of whether General Citrus gave notice to LaSalle [190] are denied, and Remien's motion against General Citrus [188] and his motion against Ury Corp. [184] are both denied.

RELEVANT FACTUAL BACKGROUND

This case stems from General Citrus' sale of certain assets to Avoco International LLC ("AI LLC"), an entity formed by Ury, Remien, and various other non-parties. In order to finance its purchase of those assets, AI LLC borrowed money from LaSalle Bank. AI LLC's debt to LaSalle is referred to as the "Senior Indebtedness" or, alternatively, the "LaSalle Notes." AI LLC also financed its purchase of the assets through a term loan from General Citrus (the "General Citrus Note").

At the time of the sale, General Citrus, AI LLC, Remien, Ury and other non-parties executed a subordination agreement (the "Subordination Agreement"). The Subordination Agreement states that AI LLC's debt to General Citrus is subordinate to the Senior Indebtedness. It further provides that General Citrus shall not commence any action against the borrower (AI-LLC) or guarantors (Remien and Ury) "until all of the Senior Indebtedness has been satisfied and paid in full." Ury and Remien each guaranteed up to $1,000,000 of AI LLC's debt to LaSalle under the LaSalle Notes (the "Ury Guaranty" and the "Remien Guaranty," respectively). The Remien Guaranty cannot be enforced until the holder of the LaSalle Notes uses "commercially reasonable efforts" to pursue its remedies against Ury under the Ury Guaranty. Remien also guaranteed up to $500,000 of AI LLC's obligations under the General Citrus Note (the "Remien Subordinated Guaranty").

AI LLC defaulted on its obligations to LaSalle and General Citrus. After a representative of LaSalle informed Ury that the bank would require him to pay AI LLC's debt pursuant to the Ury Guaranty, Ury came up with the idea of creating a corporation to provide payment to LaSalle. That corporation became Ury Corp. LaSalle and Ury Corp. executed the "Assignment," which purported to transfer the LaSalle Notes to Ury Corp. Remien subsequently relied on the Assignment as a defense to General Citrus' request for payment under the Remien Subordinated Guaranty.

Through this action, General Citrus seeks $500,000 - the outstanding indebtedness owed by AI LLC and guaranteed by Remien - along with interest, attorneys' fees and expenses. On August 24, 2006, General Citrus filed its second amended complaint (the "Complaint"), the operative complaint in this case. In the Complaint, General Citrus asserts a claim against Remien for breach of the Remien Subordinate Guaranty (Count I) and against Ury and Ury Corp. for tortious interference with the Remien Subordinate Guaranty (Count III).*fn1 Ury Corp. filed a counterclaim against General Citrus, seeking a declaration that the Assignment is legal, valid and enforceable, and that Ury Corp. is entitled to payment of the LaSalle Notes from Remien to the extent of the Remien Guaranty before General Citrus receives payment under the Remien Subordinate Guaranty. Ury Corp. also filed a cross-claim against Remien, seeking $795,894.74, plus interest, costs and attorneys' fees, in a total amount not to exceed $1,000,000. In that cross-claim, Ury Corp. alleges that Remien is liable for the outstanding Senior Indebtedness pursuant to the Remien Guaranty, initially executed in favor of LaSalle Bank and now held by Ury Corp by virtue of the Assignment.

General Citrus moved for summary judgment on Counts I and III and Ury's counterclaim. The Ury Defendants sought judgment as a matter of law on Count III and on Ury Corp.'s counterclaim, and Remien filed a motion for summary judgment on Count I. Neither Remien nor Ury Corp. moved for summary judgment on Ury Corp.'s cross-claim.

This Court entered judgment in favor of General Citrus with respect to its claim for breach of contract against Remien in part, and found that Remien's obligation to provide payment to General Citrus under the Remien Subordinate Guaranty was ripe "at least" as of the date of that opinion. As set forth in more detail in the Memorandum Opinion and Order dated February 26, 2009, this Court also found that: (1) Ury Corp. is Ury's alter ego, and (2) the Assignment of the LaSalle Notes to Ury Corp. lacked consideration and therefore the Assignment is void as a matter of law. No party sought reconsideration of that order or requested certification for an immediate appeal under Fed. R. Civ. P. 54(b). Subsequently, we set this case for a bench trial beginning August 24, 2009.

LEGAL STANDARD

This Court has broad discretion in ruling on evidentiary questions presented before trial on motions in limine. Jenkins v. Chrysler Motors Corp., 316 F.3d 663, 664 (7th Cir. 2002). Our power to exclude evidence in limine derives from our authority to manage trials. Luce v. United States, 469 U.S. 38, 41 n.4 (1984). A motion in limine should only be granted where the evidence is clearly inadmissible for any purpose. Hawthorne Partners v. AT&T Technologies, Inc., 831 F. Supp. 1398, 1400 (N.D. Ill. 1993). "Unless evidence meets this high standard, evidentiary rulings should be deferred until trial so that questions of foundation, relevancy and potential prejudice may be resolved in proper context." Id. With these guidelines in mind, we turn to the motions before this Court.

ANALYSIS

1. General Citrus' Motion in Limine to Bar Defendants from Relitigating Issues Resolved on Summary Judgment

General Citrus moves to bar "all evidence that is solely relevant to those issues already determined on summary judgment." In opposing General Citrus' request, the Ury Defendants argue that Fed. R. Civ. P. 54(b) establishes that "nothing in the court's summary judgment order . . . forecloses any issue raised by the pleadings." Remien also relies on Fed. R. Civ. P. 54(b) to oppose plaintiff's motion.*fn2 Defendants' reliance on Fed. R. Civ. P. 54(b) as the basis for reconsideration of our findings on summary judgment is contrary to the plain language of that rule. See, e.g. Village of Schaumberg v. St. Paul Mercury Ins. Co., 2009 U.S. Dist LEXIS 42515, * 2 (N.D. Ill. May 20, 2009) (stating that a motion to reconsider an interlocutory ...


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