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Budnick Converting, Inc v. Nebula Glass International

June 5, 2012

BUDNICK CONVERTING, INC., PLAINTIFF/COUNTER-DEFENDANT,
v.
NEBULA GLASS INTERNATIONAL, INC., D/B/A GLASSLAM, DEFENDANT/COUNTER-PLAINTIFF, NEBULA GLASS INTERNATIONAL, INC., D/B/A GLASSLAM, THIRD PARTY PLAINTIFF,
v.
TESA TAPE, INC., THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Herndon, Chief Judge:

#2595

ORDER

On March 30, 2012, this Court entered an order (Doc. 114) granting summary judgment in favor of Budnick Coverting, Inc. ("Budnick") and against Nebula Glass International, Inc. d/b/a Glasslam ("Glasslam"). The Court found, however, that issues still remained as to the amount of damages to which Budnick is entitled. Accordingly, the Court ordered the parties to file supplemental briefs regarding the issues of damages. The parties have filed their briefs, raising four issues concerning the following: 1) Whether Glasslam is entitled to reduce damages as a result of Budnick's alleged failure to mitigate; 2) Whether Budnick is entitled to recover finance charges under the terms and conditions; 3) Whether Budnick is entitled to recover attorneys fees under the terms and conditions; and 4) whether Glasslam is an entitled to a reduction for alleged under performance. For the reasons stated below, the Court orders that judgment be entered in favor of Budnick and against Glasslam in the amount of $2,473,353.00.

I. Background

Budnick is claiming $2,473,353.00 in damages, consisting of the following:

* $260,634.26 - material converted, delivered, and invoiced to Glasslam;

* $1,210,377.11 - material in inventory ordered by Glasslam but refused;

* $3,580.00 - expedited charges;

* $898,568.84 - finance charges; and

* $100,192.94 - attorneys fees.

* $2,473,353.15 - Total.

The Court has already determined, and Glasslam did not dispute, that Budnick's terms and conditions apply to the case at hand. Those terms and conditions, which will be set forth more specifically where applicable below, contained nine provisions governing: 1) "Prices"; 2) "Shipments"; 3) "Payments"; 4) "Cancellations, Returns, and Assignments"; 5) "Limited Warranty, Inspection and Claims"; 6) "Limits on Liability"; 7) "Force Majeure and Shortages"; 8) "Other Provisions"; and 9) "Exclusive Terms and Conditions." (Doc. 97-17, p. 2).

II. Standard of Review

In a diversity case, the Court applies state law to substantive issues. RLI Ins. Co. v. Conseco, Inc., 543 F.3d 384, 390 (7th Cir. 2008). Federal law governs procedure. Fednav Int'l Ltd. v. Cont'l Ins. Co., 624 F.3d 834, 838 (7th Cir. 2010). When neither party raises a conflict of law issue in a diversity case the applicable law is that of the state in which the federal court sits. Id. In this case, that state is Illinois. Under Illinois choice of law rules, however, litigants can stipulate to which substantive law applies to their case so long as the stipulation is reasonable. Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1219 n. 6 (7th Cir. 1995). Here, the Court notes that Budnick's terms and conditions state that Illinois law applies. Finding this to be reasonable, the Court will apply Illinois law in this case. To the extent that the Illinois Supreme Court has not yet spoken to ...


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