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Larry Harmon and Harmon, Castillo, Llp F/K/A Larry v. Ben Gordon

August 25, 2011

LARRY HARMON AND HARMON, CASTILLO, LLP F/K/A LARRY HARMON & ASSOCIATES, P.A., PLAINTIFF,
v.
BEN GORDON, DEFENDANT.



The opinion of the court was delivered by: Charles P. Kocoras, District Judge:

MEMORANDUM OPINION

The parties to this action have filed cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. Plaintiffs Larry Harmon ("Harmon") and Harmon-Castillo, LLP, (collectively, "LHA") filed a motion for summary judgment and Defendant Ben Gordon ("Gordon") filed a cross-motion for summary judgment. For the reasons set forth below, Harmon's motion is denied and Gordon's motion is granted as stated herein.

BACKGROUND

Plaintiff Harmon is an individual residing in California and Harmon-Castillo, LLP, is a California-based entity serving as accountant and business manager for professional athletes. Defendant Gordon is a professional basketball player currently employed by the Detroit Pistons of the National Basketball Association ("NBA").

Gordon was drafted by the Chicago Bulls in 2004 and signed a three-year rookie contract with an option for the Chicago Bulls to extend his contract to a fourth year. On May 17, 2004, Gordon entered into a consulting agreement (the "Agreement") with LHA, whereby Gordon engaged LHA as his consultant and financial adviser. The Agreement stated that LHA's financial services would be provided for the "duration of [Gordon's] playing career." However, the parties agreed to a prospective compensation arrangement only for the duration of Gordon's rookie contract. The Agreement provided that, in exchange for its services, LHA would receive flat monthly payments of $4,000 during Gordon's rookie season, $5,000 during his second season, and $6,000 during his third and possibly fourth season. The Agreement also provided that after Gordon's rookie contract, the parties would evaluate the "amount of work" performed by LHA and LHA would provide Gordon with "a new engagement letter."

In April 2006, Harmon contacted Gordon to discuss a change in the fee structure of the Agreement. On May 5, 2006, Harmon informed Gordon by e-mail that, starting April 2006, the flat monthly payments would be replaced by a new percentage-based fee amounting to 1.5% of Gordon's annual income. From April 2006 to June 2007, monthly invoices were sent to Gordon and, pursuant to the modified fee schedule, all invoices were paid.

On February 12, 2007, Gordon agreed to transfer $1,000,000 to Vitalis Partners, an entity affiliated with LHA, and the parties executed a promissory note memorializing their agreement. Gordon alleges that Harmon described the transaction as though the money being transferred would be used to acquire an ownership interest in real estate property. LHA asserts that Gordon was never promised an ownership interest in the property and that the instrument the parties signed expressly disclosed that the transaction was a loan obligating LHA to repay the funds within a certain period of time. Ultimately, we ruled in Gordon's favor based on Vitalis Partners' failure to timely repay the borrowed money. See Gordon v. Vitalis Partners, LLC, No. 07 C 6807, 2010 WL 381119, at *2 (N.D. Ill. Jan. 27, 2010). We also held that the transaction constituted a loan with no ownership interest conferred to Gordon. Id.

On July 1, 2007, Gordon terminated LHA's services. His rookie contract continued into 2008.

On March 2, 2010, LHA filed suit against Gordon asserting a breach of contract claim. The parties dispute the exact duration of the Agreement. According to LHA, at no time did the parties intend or agree to limit the duration of their engagement. LHA claims that the parties agreed that LHA would provide its services throughout Gordon's entire NBA career. On the other hand, Gordon alleges that the parties intended the Agreement to be in force only for a maximum of four years since the Agreement anticipated that at the end of his rookie contract the parties would evaluate LHA's performance and sign a new engagement letter. Each party now moves for summary judgment.

LEGAL STANDARD

Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). A genuine issue of material fact exists when the evidence is such that a reasonable jury could find for the non-movant. Buscaglia v. United States, 25 F.3d 530, 534 (7th Cir. 1994). The movant bears the burden of demonstrating the absence of a genuine issue of material fact by specific citation to the record; if the party succeeds in doing so, the burden shifts to the non-movant to set forth specific facts showing that there is a genuine issue of fact for trial. Fed. R. Civ. P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In considering motions for summary judgment, a court construes all facts and draws all inferences from the record in favor of the nonmoving party. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 255 (1986).

When parties file cross-motions for summary judgment, each motion must be assessed independently, and denial of one does not necessitate the grant of the other. M. Snower & Co. v. United States, 140 F.2d 367, 369 (7th Cir. 1944). Rather, each motion evidences only that the movant believes it is entitled to judgment as a matter of law on the issues within its motion and that trial is the appropriate course of action if the court disagrees with that assessment. Miller v. LeSea Broad., Inc., 87 F.3d 224, 230 (7th Cir. 1996). With these principles in mind, we turn to the parties' motions.

DISCUSSION

LHA argues that it is entitled to summary judgment on its breach of contract claim. To establish a breach of contract claim under Illinois law, LHA must prove (1) the existence of a valid and enforceable contract, (2) performance by LHA, (3) breach by Gordon, and (4) resulting injuries to LHA. Gallagher Corp. v. Russ, 721 N.E.2d 605, 611 (Ill. App. Ct. 1999).*fn1 Gordon argues that the parties had not agreed on a valid contract for the duration of Gordon's playing career and that he was entitled to terminate the Agreement because of LHA's wrongdoings. We will address each argument in turn.

I. The Duration of the Agreement

LHA argues that the language contained in the Agreement is subject to only one reasonable interpretation: the Agreement was to be in effect for the duration of Gordon's NBA career. Gordon argues that the language is equivocal but still subject to one reasonable interpretation: the parties intended the Agreement to expire with Gordon's rookie contract and that a new contract had to be agreed upon. The facts established during discovery indisputably establish that Gordon's interpretation is the correct one.

To establish the formation of a valid and enforceable contract, a plaintiff must establish that the essential terms of the contract were definite and certain. Midland Hotel Corp. v. Reuben H. Donnelley Corp., 515 N.E.2d 61, 65 (Ill. 1987). A contract is sufficiently definite and certain if the court is able "under proper rules of construction . . . to ascertain what the parties have agreed to do." Id. In construing a contract, a court must give effect to the parties' intent. Gallagher v. Lenart, 874 N.E.2d 43, 58 (Ill. 2007). A court looks to the language of the contract alone, "as the language, given its plain and ordinary meaning, is the best indication of the parties' intent." Id. If a contract is ambiguous, the parties may submit extrinsic evidence to decipher the meaning of the ambiguity and ascertain the parties' intent. Regency Commercial Assocs, LLC v. Lopax, Inc., 869 N.E.2d 310, 316 (Ill. App. Ct. 2007). Ambiguity may be found where the language of the contract is "reasonably susceptible to more than one meaning." Cent. Ill. Light Co. v. Home Ins. Co., 821 N.E.2d 206, 213 (Ill. 2004). Generally, contractual ambiguity is a question of fact and therefore not susceptible to decision at the summary judgment stage. Cont'l Cas. Co. v. Nw. Nat. Ins. Co., 427 F.3d 1038, 1041 (7th Cir. 2005). However, "if a contract is ambiguous, its interpretation is a question of law for the court as long as the extrinsic evidence bearing on the interpretation is undisputed." Id. In such cases, summary judgment is appropriate.

Harmon was deposed in this case on November 6, 2008. A transcript of his testimony, in its relevant ...


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