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On Command Video Corporation v. Sam Roti

January 3, 2011

ON COMMAND VIDEO CORPORATION, PLAINTIFF/COUNTER-DEFENDANT,
v.
SAM ROTI, DEFENDANT/COUNTER-PLAINTIFF



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiff/Counter-Defendant On Command Video Corporation has filed a two-count complaint against Defendant/Counter-Plaintiff Sam Roti alleging fraud and, under a theory of piercing the corporate veil, seeking enforcement of a default judgment entered in Colorado state court against Markwell Properties, LLC ("MP")-of which defendant is allegedly the alter ego-and registered in the Circuit Court of Cook County, Illinois.

In its April 30, 2010, opinion, the court granted plaintiff's motion to dismiss defendant's counterclaims for fraudulent inducement and breach of contract, and struck defendant's first, second, third, fifth, and sixth affirmative defenses.*fn1 The parties have filed cross-motions for summary judgment on both counts. For the reasons discussed below, defendant's motion for summary judgment is denied, and plaintiff's motion for summary judgment is denied as to Count I and granted as to Count II.

Defendant has also filed a motion to strike improper affidavits and exhibits.*fn2 The disputed evidence is not dispositive in deciding the motions for summary judgment. As such, the court does not rule on the motion to strike.

FACTS

In considering a motion for summary judgment, the court draws "all reasonable inferences from undisputed facts in favor of the nonmoving party and [views] the disputed evidence in the light most favorable to the nonmoving party." Harney v. Speedway SuperAmerica, LLC, 526 F.3d 1099, 1104 (7th Cir. 2008). The following facts are taken from the complaint and from the parties' statements of facts and accompanying exhibits as to which there is no material dispute.

Plaintiff provides pay-per-view and on-demand video services to hotels and other venues. MP was formed as an Illinois limited liability company in November 1999. From inception until December 2004, MP had two member-owners, defendant and his cousin Michael Roti. In MP's Articles of Organization, Michael was listed as the registered agent and signed as an "organizer." In 2002, defendant also formed Markwell Hillside, LLC ("MH"), through which he purchased Holiday Inn Hillside ("the Hotel") located at 4400 Frontage Road, Hillside, Illinois. Defendant was the sole managing member and officer of MH.

In 2004, MP contracted with DC Truck Financial, a subsidiary of Daimler-Chrysler, for a lease to supply vans to the Hotel (the "Van Lease"). MH made the payments on the Van Lease.

With respect to the Hotel, plaintiff had an existing contract with its previous owners, and MH assumed this contract when it purchased the Hotel. Plaintiff sent invoices to the "Holiday Inn Hillside," and MH remitted payment to plaintiff. MP did not make payments to plaintiff.

David Redpath became plaintiff's Regional Sales Manager for the Midwest in 2003. In or about November 2004, Redpath and William Patterson, MH's manager, met to discuss plaintiff's new digital platform. Paterson testified that they discussed a change in equipment for the Hotel, and that Redpath said he would prepare the necessary paperwork to this end.

After submitting paperwork to plaintiff's Contracts Department, Redpath learned that the ownership group and management company on the paperwork were incorrect. Subsequently, Redpath contacted Patterson to obtain updated ownership information. Although Redpath does not recall the conversation, Patterson testified that he thought the problem was with MH as party-namely the Hotel's bad credit and history of late payments to plaintiff. Patterson further testified that Redpath asked if there was "any other way-or any other facility...another avenue that we could use at that time." Redpath, however, has no recollection of asking for another facility in this manner and denies he would have done so. At most, Redpath stood to earn about $203.00 for the deal. Redpath testified that he would not have sought to use an entity without regard to its ownership status. Plaintiff argues that Redpath sought only ownership information to confirm that plaintiff was contracting with the Hotel's owner.

According to Patterson's testimony, he met with Redpath and defendant after the revised paperwork was approved by Redpath's supervisor. Patterson stated that he told Redpath that defendant did not want to be personally liable on any contract with plaintiff, and Redpath assured Patterson that plaintiff would not hold defendant personally liable. Redpath, however, testified that he was "certain" that he had never met defendant prior to Redpath's deposition in March 2010. He further testified that it was not possible that he would have "assured [defendant] that OCV would not hold him personally liable" because he had "neither the authority nor the knowledge to know the answer to that question."

On December 28, 2004,*fn3 defendant signed a video services agreement ("the VSA") with plaintiff through August 16, 2012, as "Member" and "Registered Agent" of MP. Plaintiff signed the VSA on February 4, 2005. No personal guaranty was signed. Defendant alleges that he did not review the text of the VSA before signing it. The VSA states that MP owns the Hotel.

In February 2005, MH filed for Chapter 11 bankruptcy. The bankruptcy trustee terminated defendant from MH. The new owner of the Hotel continued to pay plaintiff until the owner terminated its services. In January 2007, plaintiff sent a letter to MP seeking damages for lost profits.

In the Denver County District Court in Colorado, a default judgment for breach of contract was entered on October 16, 2007, against MP in the sum of $261,058.31. On September 17, 2008, plaintiff registered the Colorado judgment in the Circuit Court of Cook County, Illinois. Plaintiff brought the instant case to hold defendant personally liable for the judgment.

DISCUSSION

Legal ...


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