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Sullivan v. Alcatel-Lucent USA, Inc.

United States District Court, N.D. Illinois, Eastern Division

May 6, 2014

JOHN P. SULLIVAN, D.D.S, J.D, and STEPHEN D. HELM, Plaintiffs,
v.
ALCATEL-LUCENT USA, INC., a Delaware Corporation, Defendant.

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Judge.

Plaintiffs John P. Sullivan, D.D.S, J.D. ("Sullivan") and Stephen D. Helm ("Helm") filed the present three-count Complaint against Alcatel-Lucent USA, Inc. ("Lucent" or "Defendant") based on the Court's diversity jurisdiction. See 28 U.S.C. § 1332(a). In Count I, Plaintiffs allege a breach of contract claim based on a contingent fee agreement ("Agreement") with Lucent. In Count II, Plaintiffs allege an anticipatory breach of contract claim based on work they performed on Lucent's behalf pursuant to the Agreement. In the alternative, in Count III, Plaintiffs allege an unjust enrichment claim for tax savings that Plaintiffs secured for Lucent for tax years 2011, 2012, and 2013. Before the Court are Plaintiffs' and Defendant's cross-motions for summary judgment brought pursuant to Federal Rule of Civil Procedure 56(a). For the following reasons, the Court grants in part and denies in part Plaintiffs' motion and denies Defendant's motion.

BACKGROUND

I. Northern District of Illinois Local Rule 56.1

Local Rule 56.1 "is designed, in part, to aid the district court, which does not have the advantage of the parties' familiarity with the record and often cannot afford to spend the time combing the record to locate the relevant information, ' in determining whether a trial is necessary." Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011) (citation omitted). Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to which the moving party contends there is no genuine issue." Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009). "The opposing party is required to file a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon." Id. (citing N.D.Ill. R. 56.1(b)(3)(B)). Local Rule 56.1(b)(3)(C) requires the nonmoving party to present a separate statement of additional facts that requires the denial of summary judgment. See Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643-44 (7th Cir. 2008).

In general, the purpose of Local Rule 56.1 statements and responses is to identify the relevant admissible evidence supporting the material facts, not to make factual or legal arguments. See Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006) ("statement of material facts did [] not comply with Rule 56.1 as it failed to adequately cite the record and was filled with irrelevant information, legal arguments, and conjecture"). "When a responding party's statement fails to dispute the facts set forth in the moving party's statement in the manner dictated by the rule, those facts are deemed admitted for purposes of the motion." Cracco, 559 F.3d at 632. In sum, "[f]or litigants appearing in the Northern District of Illinois, the Rule 56.1 statement is a critical, and required, component of a litigant's response to a motion for summary judgment. The purpose of the local rule is to make the summary judgment process less burdensome on district courts, by requiring the parties to nail down the relevant facts and the way they propose to support them." Sojka v. Bovis Lend Lease, Inc., 686 F.3d 394, 398 (7th Cir. 2012). In addition, the Rule 56.1 statement does not abrogate a party's obligation to recite its version of the facts in its supporting memorandum. Malec v. Sanford, 191 F.R.D. 581, 585 (N.D. Ill. 2000). With these standards in mind, the Court turns to the relevant facts of this case.

II. Relevant Facts

Plaintiffs are licensed attorneys who practice law in the State of Illinois. (R. 93, Pl.'s Rule 56.1 Stmt. Facts ¶ 1.) Lucent is a Delaware corporation with its headquarters and principal place of business in the State of New Jersey. (R. 104, Def. Rule 56.1 Stmt. Add'l Facts ¶ 2.) Lucent owns commercial property in Naperville, Illinois ("Naperville Property"). (Pl. Stmt. Facts ¶ 3.) In late 2010 or early 2011, Lucent decided to contest the 2010 real estate tax assessment of the Naperville Property. (Def. Stmt. Add'l Facts ¶ 3.) Lucent initially employed Marvin F. Poer & Co. ("Marvin Poer") to contest the 2010 real estate tax assessment for the Naperville Property. ( Id. ¶ 4.) Marvin Poer appealed the 2010 real estate tax assessment before the DuPage County Board of Review. (Pl. Stmt. Facts ¶ 6.) Plaintiff Sullivan assisted the Marvin Poer representative in processing Lucent's appeal. (Def. Stmt. Add'l Facts ¶ 6.) Marvin Poer's appeal was unsuccessful and Lucent paid 2010 real estate taxes for the Naperville Property in the amount of $2, 525, 187.46, which was based on an assessed valuation of $42, 829, 550. (Pl. Stmt. Facts ¶¶ 6-7.)

Following the unsuccessful appeal, Sullivan had a discussion with the Lisle Township Assessor, John Trowbridge ("Trowbridge"), who proposed a settlement offer reducing the 2010 and 2011 tax assessment for the Naperville Property. (Def. Stmt. Add'l. Facts ¶ 9.) On February 6, 2011, Sullivan forwarded an email to Lewis Lefkowitz ("Lefkowitz"), in-house counsel at Lucent, describing Trowbridge's offer and recommending that Lucent decline the offer. ( Id. ¶ 10-11.) Sullivan wrote that if Lucent rejects the offer it "has 30 days to file a PTAB' appeal with the state review board. Steve Helm and I would negotiate a contingent fee agreement to represent ALU on this (similar to the Forest Preserve agreement but with the % fee based on 1st year savings only)." (R.104-1, Feb. 6, 2011 Email.) Lefkowitz ultimately retained Plaintiffs to prosecute an appeal of the 2010 assessed valuation of the Naperville Property before the Illinois Tax Appeal Board ("PTAB"). (Pl. Stmt. Facts ¶ 8.) On March 7, 2011, the parties entered into a contingent fee agreement ("Agreement") in which the parties agreed that Plaintiffs would represent Lucent "in the contest of the real estate assessment of its real property located in Lisle Township, Naperville, IL." (R. 89-7, Contingent Fee Agreement.) The Agreement provided that Plaintiffs' fee "will be structured as a fee contingent on savings on the current year's taxes in these actions as follows: (a) 25% of such amount if the matter is settled or otherwise resolved prior to trial; or (b) 30% of such amount if the matter is settled or otherwise resolved after trial." ( Id. ) Lefkowitz was Lucent's primary attorney who dealt with Plaintiffs and he prepared and signed the Agreement. (Pl. Stmt. Facts ¶ 9.)

On April 18, 2011, Plaintiffs filed before the PTAB a Commercial Appeal for Assessment Year 2010 for the Naperville Property on behalf of Lucent. (Pl. Stmt. Facts ¶ 27.) The City of Naperville and School District 203 intervened in the PTAB Appeal because they already had received funds from Lucent's 2010 real estate taxes on the Naperville Property. (Pl. Stmt. Facts ¶ 41.) On or about October 27, 2011, the Lisle Township Assessor assessed the value of the Naperville Property for the 2011 calendar year at $42, 829, 710, which represented an increase of $160 over the 2010 assessed value. ( Id. ¶¶ 29-31.) On November 21, 2011, Lucent executed a "Letter of Authority to Act in Matters of Property Taxation" that appointed Sullivan to represent Lucent as its property tax agent with respect to the Naperville Property. (R. 89-16, Letter of Authority.) Pursuant to that Letter of Authority, on November 23, 2011, Plaintiffs filed an appeal for Tax Year 2011 with the DuPage County Board of Review ("2011 Assessment Appeal"). (Pl. Stmt. Facts ¶ 35.) The parties did not execute a new fee agreement to address Plaintiffs' work negotiating the 2011 Assessment. (Pl. Stmt. Facts ¶ 58.)[1] Lefkowitz testified at his deposition that Sullivan and Helm did not bill their work on an hourly basis and that the parties intended for the Agreement to cover Plaintiffs' work negotiating the 2011, 2012, and 2013 Assessment Years. ( Id. ¶ 59.)

After filing the 2011 Assessment Appeal, Plaintiffs began negotiating with Trowbridge regarding the 2010 PTAB Appeal and the 2011 Assessment Appeal. ( Id. ¶ 37.) Plaintiffs successfully negotiated a comprehensive settlement agreement ("Comprehensive Settlement") that traded reduced stipulated assessments for the Naperville Property for Assessment Years 2011, 2012, and 2013 in return for Lucent's agreement to withdraw the pending 2010 PTAB Appeal. ( Id. ¶ 40.) The parties intended for the Comprehensive Settlement to satisfy the intervenors in the 2010 PTAB Appeal. ( Id. ¶ 41.)

On February 9, 2012, Sullivan had a telephone conversation with Colin Cameron, Lucent's manager of the Naperville Property, and reported the Assessor's final settlement offer to Lucent. ( Id. ¶¶ 20, 43.) Sullivan then sent an email to Cameron and Lefkowitz reciting the details of the Assessor's final settlement offer. ( Id. ¶ 44.) In his email, Sullivan estimated that Lucent would receive tax savings of $855, 286 for 2011, $953, 620 for 2012, and $1, 012, 620 for 2013, reflecting reductions of 34%, 38%, and 40%, respectively. (R. 89-19, Feb. 9, 2012 Email.) Later that day, Cameron emailed Lefkowitz and Patrick Morrison, the lead manager of Lucent's North America Real Estate Department, and recommended that Lucent accept the offer and noted that after 2013 Lucent would be "subject to market rates once again." (Pl. Stmt. Facts ¶¶ 22, 46.) Lefkowitz responded to Cameron's email and said "I concur in Colin's recommendation that we accept their last offer." (R. 89-22, Feb. 9, 2012 Email.) In February 2012, Campbell secured Morrison's signature for the 2011, 2012, and 2013 stipulations of agreed assessed value for the Naperville Property and sent it to Sullivan to file with the Lisle Township Assessor and the DuPage County Board of Review. (Pl. Stmt. Facts ¶¶ 48, 51.) Lucent approved the Comprehensive Settlement and accepted the 2011, 2012, and 2013 stipulations of agreed assessed value for the Naperville Property in return for its agreement to withdraw the 2010 PTAB Appeal. (R. 105, Def. Resp. to Pl. Stmt. Facts ¶ 52.)

Based on the 2011, 2012, and 2013 stipulations of agreed assessed value for the Naperville Property and the last known tax rates, Sullivan estimated that the Comprehensive Settlement saved Lucent $910, 999.90 for the 2011 tax year and $1, 100, 028 for the 2012 tax year, and that it will save Lucent $1, 100, 028 for the 2013 tax year. ( Id. ¶¶ 53, 54.)[2] The Comprehensive Settlement also provided Lucent with stipulated assessed values for the Naperville Property that were 38% lower in 2012 and 40% lower in 2013 than the most recent assessed value. (Pl. Stmt. Facts ¶ 56.)

On February 9, 2012, Lefkowitz emailed Alexis Mendoza, an in-house attorney at Lucent, and recommended accepting the offer that Plaintiffs negotiated. ( Id. ¶ 60; R. 89-29, Feb. 9, 2012 Email.) In the email, Lefkowitz wrote, "[t]he numbers are rough estimates and we may want to negotiate the legal fees down." ( Id. ) On February 10, 2012, Lefkowitz and Sullivan had a telephone conversation, in which Lefkowitz acknowledged that payment to Plaintiffs for at least the savings achieved for the 2011 tax year was fair and consistent with the Agreement. (Pl. Stmt. Facts ¶ 67.) On February 12, 2012 Morrison emailed Cameron regarding the Agreement and wrote, ...


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