The opinion of the court was delivered by: Judge Joan H. Lefkow
Beacon Textile Unit-2, Panorama Fashion Wear, and B.R. Fashion Wear (collectively, "plaintiffs") filed suit against JK Group, Ltd. ("JK Group"), Mahabubul Kabir ("Mahabubul"), and Nila Kabir ("Nila") (collectively, "defendants"). The sole count seeks damages for JK Group's breach of an implied contract for sale of T-shirts. Plaintiffs also seek to hold Mahabubul and Nila individually liable for JK Group's alleged breach.*fn1 Before the court are the parties' cross-motions for summary judgment. Plaintiffs seek summary judgment on liability of all defendants, while Mahabubul and Nila seek summary judgment on their own individual liability. For the reasons set forth below, plaintiffs' motion [#26] is granted in part and denied in part, Nila's motion [#31] is granted, and Mahabubul's motion [#34] is denied.
Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). To determine whether any genuine fact exists, the court must pierce the pleadings and assess the proof as presented in depositions, answers to interrogatories, admissions, and affidavits that are part of the record. Id. While the court must construe all facts in a light most favorable to the non-moving party and draw all reasonable inferences in that party's favor, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed. 2d 202 (1986), where a claim or defense is factually unsupported, it should be disposed of on summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323--24, 106 S.Ct. 2548, 91 L.Ed. 2d 265 (1986). The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Id. at 323. In response, the non-moving party cannot rest on bare pleadings alone but must use the evidentiary tools listed above to designate specific material facts showing that there is a genuine issue for trial. Id. at 324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000).
Plaintiffs are Bangladeshi corporations owned by Faiz Ahmed and his brother. They design and manufacture apparel for sale worldwide. Their sales process is rather complex: Plaintiffs manufacture T-shirts using loans from Somali Bank. After producing the merchandise, plaintiffs send invoices, packing lists, and bills of lading to Somali Bank and ship the merchandise to the buyer -- in this case, to JK Group in the United States. It then becomes the buyer's responsibility to retrieve the merchandise from the U.S. Customs Service ("Customs"). In order to obtain the shipment from Customs, the buyer must pay Somali Bank to obtain release authorization and the original bill of lading. After presenting these documents to Customs, the buyer receives its order, and the transaction is complete.
In 2004, Mahabubul formed JK Group, an Illinois corporation, in order to import T-shirts from Bangladeshi manufacturers -- including plaintiffs -- and sell them to retailers in the United States. Mahabubul is the CEO and secretary of JK Group, and he manages the business. Mahabubul places the orders for the T-shirts and acts as an intermediary between the Bangladeshi T-shirt suppliers and the U.S. retailers. He also does JK Group's banking and prepares its taxes. Mahabubul works mostly out of his home, using his personal computer and telephone to complete the transactions. JK Group does not have an office, a website, or an email address. It does have two checking accounts, one at Charter Bank and one at Foster Bank, both of which only Mahabubul can access. Any profit that JK Group makes comprises Mahabubul's salary.
Nila, Mahabubul's wife, is the president of JK Group, but according to both Mahabubul and Nila, she does "nothing" for the business. Mahabubul Dep. 7:6-7, Mar. 11, 2010, attached as Ex. B to Pls.' Mot. for Summ. J.; Nila Dep. 7:23-8:1, Mar. 11, 2010, attached as Ex. C to Pls.' Mot. for Summ. J. Nila knows JK Group is a "garments company," Nila Dep. 7:14-16, but she does not know how JK Group conducts its business. As the president, she has not attended any corporate meetings or received a salary, nor does she know anything about JK Group's corporate records. She does not even know whether JK Group is still in business. JK Group has no other employees or officers.
Between January 2006 and December 2007, JK Group wrote Mahabubul checks totaling $198,750, and during that same period, Mahabubul made $1,384,200 in cash withdrawals. JK Group also wrote a $5,000 check to a Lexus dealership near Mahabubul and Nila's home and four checks totaling $19,900 to Imexco, another apparel importer with which Mahabubul and Nila are involved.*fn2 In contrast, since April 2009, JK Group's checking account with Foster Bank has been more or less idle, and as of February 2010, the account was completely empty. Mahabubul testified that he was paid about $60,000 -- JK Group's annual profits -- per year in 2006 and 2007, and he acknowledged JK Group's recent inactivity. Mahabubul Dep. 11:17-12:12:8. Mahabubul said the extensive cash withdrawals between January 2006 and December 2007 were necessary to acquire cashier's checks, which were used to "facilitate a large number of international services that [JK Group] provided for clients." Mahabubul Aff. ¶ 4, Apr. 30, 2010, attached as Ex. A to Defs.' Opp'n to Pls.' Statement of Add'l Facts. Furthermore, he said only some of the checks and withdrawals were used as his personal income. Id. ¶ 5. Mahabubul did not explain what kind of international services require these large cashier's checks; how the checks to Mahabubul, which go above and beyond his $60,000 salary, were used; or the purpose of the payments to Lexus and Imexco.
II. The Parties' Course of Dealing
In 2005, Ahmed called Mahabubul and offered to sell T-shirts to JK Group using plaintiffs' sales process described above. After consulting with Lee & Lee Enterprises, Inc. ("Lee"), a customer-retailer, JK Group agreed that it would order T-shirts from Bangladeshi factories and sell them to Lee. When Lee received the merchandise, it would have thirty days to pay JK Group, and then JK Group would pay plaintiffs. Since 2005, JK Group placed numerous orders with plaintiffs on behalf of several customers. There were never any written contracts between plaintiffs and JK Group. Plaintiffs sent the invoices, bills of lading, and packing lists for the sales to JK Group, and these documents mention JK Group as one of the three "parties to notify" (presumably that the shipment had been made). E.g., Ex. 1 to the Mahabubul Dep. They list prices but no other term relevant to payment obligations.
JK Group placed the nine orders at issue in this case between May 2006 and November 2006. The invoices for the nine sales were similar to those exchanged throughout the parties' course of dealing. Rafiqul Alam, an agent for JK Group in Bangladesh, received these invoices from Ahmed and emailed them to JK Group. The invoices attached to Alam's affidavit differ from those submitted by plaintiffs in that they identify JK Group as the "consignee-buyer" instead of a party to notify. See Ex. D to Defs.' Resp. at BJK 000044-BJK 000052.
After it received the shipments at issue, Lee refused to pay JK Group for the merchandise. In 2007, JK Group sued Lee in state court to collect approximately $700,000 owed for orders in 2006. Mahabubul admits that JK Group owed some of this money to plaintiffs. Lee countersued in this court, and the parties eventually reached a settlement agreement on April 30, 2008. Lee & Lee Enter., ...