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Spitz v. Proven Winners North America, LLC

United States District Court, N.D. Illinois

August 22, 2013

SUSAN SPITZ, an individual, Plaintiff,
PROVEN WINNERS NORTH AMERICA, LLC, a California limited liability company, and EUROAMERICAN PROPAGATORS, LLC, a California limited liability company, Defendants

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For Susan Spitz, an individual, Plaintiff: David J. Fish, Stephen Terrance Sotelo, The Fish Law Firm, P.C., Naperville, IL; Douglas D Churovich, Polster, Lieder, Woodruff & Lucchesi, L.C., St. Louis, MO.

For Proven Winners North America, LLC, a California limited liability company, Defendant: Patrick Ross Grady, LEAD ATTORNEY, The Law Offices of Wolf & Wolfe, Ltd., Chicago, IL; Dina Marie Masiello, Wolf & Wolfe, Ltd., Chicago, IL.

For Euroamerican Propagators, LLC, a California limited liability company, Defendant: P. Stephen Fardy, LEAD ATTORNEY, Keely V Wise, Swanson, Martin & Bell, Chicago, IL; Patrick Ross Grady, LEAD ATTORNEY, The Law Offices of Wolf & Wolfe, Ltd., Chicago, IL; Troy M Sphar, Swanson, Martin & Bell, LLP, Chicago, IL.



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Plaintiff Susan Spitz claims defendants Proven Winners North America, LLC (" PW" ) and EuroAmerican Propagators, LLC (" Euro" ) contracted with her to use her " Marketing Concept" related to pet-safe plants and thereafter used the Concept, but failed to pay her any fee. In the Second Amended Complaint (" SAC" ), plaintiff describes her Marketing Concept as follows:

74. In brief summary, Ms. Spitz conceived and proposed that a plant cultivation, marketing and distribution company or associated companies, such as for example PW and the PW Owners, would benefit substantially by collectively branding through selective tagging, labeling and/or other designation, specific ornamental plant varieties that had been established through testing to be nontoxic to pets, and which plant varieties could therefore be marketed, advertised and sold as " Pet Friendly" or " Pet Safe" or other similar term (Ms. Spitz's " Marketing Concept" ).
75. The fundamental aspect of Ms. Spitz's Marketing Concept was the concept of marketing, advertising and selling ornamental plant varieties determined to be nontoxic to pets by collectively tagging, labeling and/or otherwise designating such plant varieties as " Pet Friendly" or " Pet Safe" or other similar term. (" Key Aspect" ).

SAC ¶ ¶ 74-75 [Docket Entry (" D/E" ) 101].

Although originally asserting federal Lanham Act claims, the presently pending SAC is limited to state law claims. [1] Plaintiff's

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claims are: (I) Breach of 2¢ Per Plant Contract for any plant having a label marked " pet friendly" or " pet safe; " (II) Breach of an alleged Pet Friendly Project joint venture Agreement which provided for unstated additional compensation for a Marketing Concept based on identifying " non-toxic" plants as " pet friendly" ( as contrasted with Count I that only pertains to an alleged contract to pay a 2¢ royalty for each plant labeled as" pet friendly" or " pet safe" ); (III) Breach of Fiduciary Duty; (IV) Breach of Confidentiality; (V) Breach of Confidentiality and Nondisclosure Agreement by EuroAmerican; (VI) Misappropriation of Trade Secret; (VII) Quantum Meruit (In the Alternative); and (VIII) Unjust Enrichment (In the Alternative). Defendants have each moved for summary judgment dismissing all counts. Plaintiff has moved for summary judgment dismissing all of PW's and most of Euro's affirmative defenses. Plaintiff's motion need only be considered to the extent her claims survive defendants' summary judgment motions.


On a motion for summary judgment, the entire record is considered with all reasonable inferences drawn in favor of the nonmovant and all factual disputes resolved in favor of the nonmovant. Crawford v. Metro. Gov't of Nashville & Davidson Cnty., Tenn., 555 U.S. 271, 274 n.1, 129 S.Ct. 846, 172 L.Ed.2d 650 (2009); Malen v. MTD Prods., Inc., 628 F.3d 296, 303 (7th Cir. 2010); Stokes v. Bd. of Educ. of City of Chicago, 599 F.3d 617, 619 (7th Cir. 2010). The burden of establishing a lack of any genuine issue of material fact rests on the movant. Ponsetti v. GE Pension Plan, 614 F.3d 684, 691 (7th Cir. 2010); Outlaw v. Newkirk, 259 F.3d 833, 837 (7th Cir. 2001). The nonmovant, however, must make a showing sufficient to establish any essential element for which she or it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Montgomery v. Am. Airlines, Inc., 626 F.3d 382, 389 (7th Cir. 2010). The movant need not provide affidavits or deposition testimony showing the nonexistence of such essential elements. Celotex, 477 U.S. at 324; Freundt v. Allied Tube & Conduit Corp., 2007 WL 4219417 *2 (N.D. Ill. Nov. 29, 2007); O'Brien v. Encotech Constr., 2004 WL 609798 *1 (N.D. Ill. March 23, 2004). Also, it is not sufficient to show evidence of purportedly disputed facts if those facts are not plausible in light of the entire record. See Lorillard Tobacco Co. v. A & E Oil, Inc., 503 F.3d 588, 594-95 (7th Cir. 2007); Yasak v. Ret. Bd. of Policemen's Annuity & Benefit Fund of Chicago, 357 F.3d 677, 679 (7th Cir. 2004); Lampley v. Mitcheff, 2010 WL 4362826 *6 (N.D. Ind. Oct. 27, 2010). As the Seventh Circuit has summarized:

The party moving for summary judgment carries the initial burden of production to identify " those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Logan v. Commercial Union Ins. Co., 96 F.3d 971, 978 (7th Cir. 1996) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)

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(citation and internal quotation omitted)). The moving party may discharge this burden by " 'showing'--that is, pointing out to the district court--that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325, 106 S.Ct. 2548. Once the moving party satisfies this burden, the nonmovant must " set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). " The nonmovant must do more, however, than demonstrate some factual disagreement between the parties; the issue must be 'material.'" Logan, 96 F.3d at 978. " Irrelevant or unnecessary facts do not preclude summary judgment even when they are in dispute." Id. (citation omitted). In determining whether the nonmovant has identified a " material" issue of fact for trial, we are guided by the applicable substantive law; " [o]nly disputes that could affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." McGinn v. Burlington Northern R.R. Co., 102 F.3d 295, 298 (7th Cir. 1996) (citation omitted). Furthermore, a factual dispute is " genuine" for summary judgment purposes only when there is " sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Hence, a " metaphysical doubt" regarding the existence of a genuine fact issue is not enough to stave off summary judgment, and " the nonmovant fails to demonstrate a genuine issue for trial 'where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party . . . .'" Logan, 96 F.3d at 978 (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).

Outlaw, 259 F.3d at 837.

Discovery has been protracted and excessive. Analysis has been made complicated by numerous unnecessary filings under seal. Both sides object that the other side has violated Local Rule 56.1 by asserting multiple facts in individual statements and thereby exceeding the paragraph limit for fact statements. There are also contentions regarding briefs exceeding page limits. No fact statement or brief will be stricken. As long as the facts are presented in a manageable form, this bench generally will exercise its discretion to not strictly enforce the requirements of Local Rule 56.1. See Banaei v. City of Evanston, 2012 WL 4892414 *2 (N.D. Ill. Oct. 11, 2012); see also Trade Fin. Partners, LLC v. AAR Corp., 573 F.3d 401, 409 (7th Cir. 2009); Bordelon v. Chicago Sch. Reform Bd. of Tr., 233 F.3d 524, 527 (7th Cir. 2000). In a number of paragraphs of her Rule 56.1(b)(3)(B) response, however, plaintiff has asserted many additional and extraneous facts that should have instead been set forth in plaintiff's Rule 56.1(b)(3)(C) statement of additional facts, for which defendants would have provided a direct response. Asserting additional facts in a Rule 56.1(b)(3)(B) response is not prohibited if responsive to the fact asserted by the opponent and in support of the denial of that asserted fact. Additional facts that are extraneous, however, must be separately stated in the Rule 56.1(b)(3)(C) statement of additional facts. Levin v. Grecian, 2013 WL 2403642 *1 (N.D. Ill. May 31, 2013). Local Rule 56.1 expressly provides that the movant must respond to the nonmovant's Local Rule 56.1(b)(3)(C) statement of additional facts, lest those facts be taken as true for purposes of summary judgment. Contrary to defendants' contentions, though, nothing in Local Rule 56.1

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prohibits the movant from also responding to the nonmovant's Rule 56.1(b)(3)(B) statement and this bench's experience is that parties often so respond. Still, Local Rule does not require that the nonmovant respond to the Rule 56.1(b)(3)(B) statement and defendants have not. [2] Plaintiff makes following her narrative more difficult by not reciting her additional facts in her own Rule 56.1(b)(3)(C) statement nor providing a clear factual presentation in her briefs. No parties' motion to strike is being granted, but improperly asserted extraneous facts cannot support a genuine factual dispute.

Plaintiff complains that the court's denial of her discovery motions to require the details of defendants' business arrangements with Karen Platt and John Greenlee in order to demonstrate the authority of Joshua Schneider to negotiate contracts on behalf of Amerinova Properties, LLC (" Amerinova" ) prejudiced her defense of defendants' summary judgment motions. However, today's ruling does not rest on any lack of evidence showing Schneider's apparent authority to negotiate or contract on behalf of Amerinova.


A. Facts

The facts in this case require a consideration of marketing practices and the terminology used in the plant or horticultural industry. Resolving all genuine factual disputes and drawing all inferences in plaintiff's favor, the facts assumed to be true for purposes of ruling on defendants' motions for summary judgment are as follows.

Plaintiff, who is now retired, has worked as a freelance copywriter in the field of horticulture. She described herself as a Marketing Creative Director and Senior Copywriter. She has written material for PW's Gardener's Idea Books and an article on pet-safe plants appearing in another publication that was listed on PW's website.

Euro is a California LLC with its principal place of business in California. Its two members, John Rader and Gerald Church, who are citizens of California, own equal shares. Euro's primary business is to propagate plants and distribute them to plant brokers who sell them to commercial growers.

PW is also a California LLC. Its three members own equal shares. They are: Euro; Four Star Greenhouse, Inc., a Michigan corporation with its principal place of business in Michigan; and Pleasant View Gardens, Inc., a New Hampshire corporation with its principal place of business in New Hampshire. PW is a branding and marketing company that purchases from plant propagators, labels the plants, and distributes Proven Winners and Proven Selections brand plants nationally. Except for their joint interest in marketing the Proven Winner and Proven Selection brands, the members are in competition with each other. They have entered into an operating agreement which controls the activity of PW, particularly requiring the members' consent for entry into marketing contracts such as the kind claimed by plaintiff.

Non-party Amerinova, a California LLC, is owned by its members, Rader and Church. Amerinova negotiates licensing and royalty agreements with plant breeders

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to bring plants to the consumer market on behalf of breeders. Amerinova works with companies other than Euro and PW. Plaintiff's contacts with respect to her claimed Marketing Concept were principally with a representative of Amerinova. Plaintiff claims that there is no entity distinction between Euro and Amerinova, which are both owned by Rader and Church. While there is some evidence of commingling of funds and overlap of responsibility, plaintiff does not present sufficient evidence establishing that the distinctions between the two entities should be ignored.

From 2000 until sometime in 2004, Joshua Schneider was the Director of Marketing and Advertising for Euro. From 2004 until March 2006, he was the Director of Product Development for Amerinova. Schneider was authorized to negotiate contracts on behalf of Amerinova, but Rader and Church generally had to approve the contracts and would sign the written contract. There is, however, disputed evidence that must be resolved in plaintiff's favor supporting that sometimes Schneider would complete and sign off on contracts without obtaining Rader's and Church's approval and without the contracts being subsequently rejected or formally ratified by Rader ...

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