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Susan Patterson Interiors, Inc., An Illinois Corporation v. Randall Tobias

October 1, 2012

SUSAN PATTERSON INTERIORS, INC., AN ILLINOIS CORPORATION, PLAINTIFF,
v.
RANDALL TOBIAS, DEFENDANT.
RANDALL TOBIAS, COUNTER-PLAINTIFF/ THIRD-PARTY PLAINTIFF,
v.
SUSAN PATTERSON INTERIORS, INC., AN ILLINOIS CORPORATION, COUNTER-DEFENDANT, AND SUSAN PATTERSON, INDIVIDUALLY, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:

MEMORANDUM OPINION AND ORDER

The parties tried this case before the Court in a three day bench trial. This Memorandum Opinion and Order sets forth the Court's findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure. For the following reasons, the Court finds:

* for Defendant Randall Tobias on Plaintiff Susan Patterson Interiors, Inc.'s claim for breach of contract against Defendant (the only count in the Complaint);

* for Counter-Plaintiff Randall Tobias on his counterclaim for breach of contract against Counter-Defendant Susan Patterson Interiors, Inc. (Count I of the Counterclaims/Third-Party Complaint);

* for Counter-Defendant Susan Patterson Interiors, Inc. on Counter-Plaintiff Randall Tobias' counterclaim for consumer and common-law fraud (Counts II and III of the Counterclaims/Third-Party Complaint); and

* for Third-Party Defendant Susan Patterson (individually) on Third-Party Plaintiff Randall Tobias' claim for consumer and common-law fraud (Counts II and III of the Counterclaims/Third-Party Complaint).

I. Background

This action arises out of a long-standing professional relationship between the parties. Ms. Susan Patterson, a citizen of Illinois, is the president of Susan Patterson Interiors, Inc. ("SPI"), an Illinois corporation that provides interior decorating services. (Compl.*fn1 & Ans. to Compl.*fn2 ¶¶ 1, 3.) Randall Tobias is a citizen of Indiana. (Id. ¶ 2; Counterclaims/TPC*fn3 & Ans. to Counterclaims/TPC*fn4 ¶ 1.)

For over a decade, Ms. Patterson has decorated numerous properties for Mr. Tobias in different states. During the course of that relationship, Ms. Patterson was affiliated with different decorating firms, including Slifer Designs Co., Patterson Shonberg Interiors, Inc., and most recently, SPI. Ms. Patterson generally "was compensated for those" interior decorating services with the terms of the contract to be billed at cost plus 75% basis for interior design furnishings, fabrics and lighting, cost plus 25% for antiques, and that specification work and travel was on an hourly basis of $125 per hour for Susan Patterson for $75 per hour for associates." (Counterclaims/TPC & Ans. to Counterclaims/TPC ¶ 6.) The parties generally did not execute separate contracts for each project but instead typically operated under these terms.

On or before February 3, 2009, Ms. Patterson, on behalf of SPI, "met with [Mr. Tobias] in Captiva, Florida, and discussed the engagement of her firm's services for the interior design of [the Tobias] home in Carmel, Indiana." (Compl. & Ans. to Compl. ¶ 3.) At that time, the parties agreed that SPI "would perform interior decorating services for the Tobias property in Carmel, Indiana, and that said services would include, but [were] not limited to, the selection and purchase of product and materials for the [Tobias] home." (Id. ¶ 5.) SPI thereafter purchased products and materials, and issued invoices to Mr. Tobias for services rendered. (Id. ¶¶ 6-7.) The relationship between Ms. Patterson and Mr. Tobias subsequently soured.

On December 10, 2010, SPI filed a one count Complaint against Mr. Tobias in the Circuit Court of Cook County, Illinois.*fn5 In the Complaint, SPI alleges that Mr. Tobias breached an interior decorating contract between the partes by failing to pay all amounts owed for services rendered. Mr. Tobias thereafter removed the action to this Court pursuant to 28 U.S.C. §§ 1331(a), 1441, and 1446 (R. 1, 3), and on January 19, 2011, filed an Answer and Affirmative Defenses. (R. 6.)

Additionally on January 19, 2011, as amended on May 10, 2011, Mr. Tobias filed a consolidated "Counterclaims and Third Party Complaint." (R. 7, 36.) Count I asserts a claim for breach of contract against SPI. Counts II and III assert claims for statutory and common law fraud against SPI and Ms. Patterson (individually).*fn6

On August 14, 2012, the case proceeded to trial before the Court, sitting without a jury. Trial lasted three days. At the end of the day on August 15, 2012, the Court continued the trial until mid-September, with the parties' agreement, to permit the parties to engage in settlement discussions. Those discussions proved unsuccessful, and the trial resumed on September 17, 2012 and concluded that same day. During the course of trial, the following witnesses testified: Ms. Patterson; Mr. Tobias; Ms. Marianne Tobias (ex-wife of Mr. Tobias); and Ms. Meg Linden (accountant/staff for Mr. Tobias).

II. Standard of Decision

Where, as here, an action is "tried on the facts without a jury," Rule 52 requires the district court to "find the facts specially and state its conclusions of law separately." Fed. R. Civ. P. 52(a); see also See Khan v. Fatima, 680 F.3d 781, 785 (7th Cir. 2012) ("The trier of fact must decide whom to believe (and how much to believe) on the basis of the coherence and plausibility of the contestants' testimony, corroboration or contradiction by other witnesses, and other clues to falsity and veracity."). The district court must "explain the grounds" of its decision and otherwise demonstrate a "reasoned, articulate adjudication." Aprin v. United States, 521 F.3d 769, 776 (7th Cir. 2008) (citing Jutzi-Johnson v. United States, 263 F.3d 753, 758 (7th Cir. 2001) ("the judge must indicate the reasoning process that connects the evidence to the conclusion").

Here, in adjudicating the parties' claims, the Court has considered the totality of the evidence presented at trial. The Court has carefully considered the weight to be accorded the evidence, including the credibility of each witness. In assessing credibility, the Court considered, among other things, each witness' demeanor and facial expressions; intelligence; ability and opportunity to see, hear, or know the matters about which the witness testified; memory; potential for bias; and, significantly, the believability of the witness' testimony in light of the other evidence presented. See, e.g., Anderson v. City of Bessemer, N.C., 470 U.S. 564, 105 S. Ct. 1504, 84 L. Ed. 2d 518 (1985) (applying the well-settled principle that the trial judge is in the best position to assess witness credibility).

The Court has additionally considered the parties' arguments and the applicable law. The elements of the parties' claims are set forth below. The parties agree that Illinois law governs each claim in this case. This decision on the merits incorporates the Court's findings of fact and conclusions of law, as required by Rule 52. See Fed R. Civ. P. 52(a); Kahn, 680 F.3d at 786.

III. Analysis

A. Breach of Contract -- Complaint; Counterclaim, Count I

The Court begins with the two claims for breach of contract: (1) SPI's claim against Mr. Tobias; and (2) and Mr. Tobias' counterclaim against SPI. After setting forth the elements of breach of contract under ...


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