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Suburban Business Products, Inc. v. Granite City Community Unit School District No. 9.

United States District Court, S.D. Illinois

May 16, 2014

SUBURBAN BUSINESS PRODUCTS, INC. d/b/a SBP Image Solutions, Plaintiff,
v.
GRANITE CITY COMMUNITY UNIT SCHOOL DISTRICT NO. 9, Defendant.

MEMORANDUM AND ORDER

J. PHIL GILBERT, District Judge.

This matter comes before the Court on the motion for summary judgment filed by defendant Granite City Community Unit School District No. 9 ("District") (Doc. 21). Plaintiff Suburban Business Products, Inc. ("SBP") has responded to the motion (Doc. 29), and the District has replied to that response (Doc. 34).

I. Standards for Summary Judgment

Summary judgment must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Spath v. Hayes Wheels Int'l-Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000). The reviewing court must construe the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in favor of that party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Tolan v. Cotton, No. 13-551, 2014 WL 1757856, at *6 (U.S. May 5, 2014) ( per curiam ); Chelios v. Heavener, 520 F.3d 678, 685 (7th Cir. 2008).

The initial summary judgment burden of production is on the moving party to show the Court that there is no reason to have a trial. Celotex, 477 U.S. at 323; Modrowski v. Pigatto, 712 F.3d 1166, 1168 (7th Cir. 2013). Where the non-moving party carries the burden of proof at trial, the moving party may satisfy its burden of production in one of two ways. It may present evidence that affirmatively negates an essential element of the non-moving party's case, see Fed.R.Civ.P. 56(c)(1)(A), or it may point to an absence of evidence to support an essential element of the non-moving party's case without actually submitting any evidence, see Fed.R.Civ.P. 56(c)(1)(B). Celotex, 477 U.S. at 322-25; Modrowski, 712 F.3d at 1169. Where the moving party fails to meet its strict burden, a court cannot enter summary judgment for the moving party even if the opposing party fails to present relevant evidence in response to the motion. Cooper v. Lane, 969 F.2d 368, 371 (7th Cir. 1992).

In responding to a summary judgment motion, the nonmoving party may not simply rest upon the allegations contained in the pleadings but must present specific facts to show that a genuine issue of material fact exists. Celotex, 477 U.S. at 322-26; Anderson, 477 U.S. at 256-57; Modrowski, 712 F.3d at 1168. A genuine issue of material fact is not demonstrated by the mere existence of "some alleged factual dispute between the parties, " Anderson, 477 U.S. at 247, or by "some metaphysical doubt as to the material facts, " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists only if "a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented." Anderson, 477 U.S. at 252.

II. Facts

The admissible evidence in the record, viewed in SBP's favor, establishes the following relevant facts.

Prior to the 2006-07 school year, the District requested proposals for bids on providing digital copy machines and maintenance service to the District for the 2006-07 to 2010-11 school years. SBP submitted a bid, and on May 23, 2006, the District's Board of Education ("Board") awarded it the contract.

On that same day, SBP President Richard Shay and the District's Director of Finance Dennis Burnett signed the Equipment Rental Agreement ("Rental Agreement") and the Digital Copier Maintenance Agreement ("2006 Maintenance Agreement"). The Rental Agreement states that SBP will provide thirty-four copy machines to the District for a term of five years, and in exchange the District will make quarterly payments of $17, 246.04. It also states that the District is responsible for protecting the rented copiers from damage other than ordinary wear and tear. The 2006 Maintenance Agreement provides that SBP will provide maintenance and supplies for the copiers rented in the Rental Agreement. In exchange the District will make quarterly payments of $10, 965.00 plus $0.0043 per page (referred to as a "per click" charge) for copies over 10, 200, 000 annually.

In March 2007, SBP assigned the right to receive payments under the Rental Agreement and the 2006 Maintenance Agreement to Royal Banks of Missouri ("Royal Banks") and instructed the District to make payments under those agreements directly to Royal Banks. The District complied with the request and made subsequent payments to Royal Banks.

In the spring of 2007, an SBP sales representative prepared another Digital Copier Maintenance Agreement ("2007 Maintenance Agreement") with the same price terms as the 2006 Maintenance Agreement and sent it to Burnett. The parties never executed the agreement but they performed during the 2007-08 school year under the same terms as they had during the 2006-07 school year.

Until the spring of 2008, SBP continued to service the rented copiers and the District continued to pay $10, 965 quarterly and any other "per click" charges assessed. However, on April 14, 2008, the District informed SBP that it would not renew the maintenance agreement for the 2008-09 school year and it no longer allow SBP onto the District's property to service the rented copiers. SBP, believing it had a five-year maintenance agreement with the District, objected to the District's decision. Nevertheless, the District did not allow SBP to perform any further copier maintenance services. Instead, the District hired another company to provide the needed service and stopped paying SBC quarterly payments of $10, 965.00. The District also declined to pay $0.0043 "per click" for 5, 281, 768 copies over and above 10, 200, 000 annually, an amount totaling $22, 711.60.

At the conclusion of the 2010-11 school year, SBP found that one of the rented copiers had been damaged beyond normal wear and tear. The District has presented expert testimony that, with ordinary wear and tear and considering the approximately 3.3 million clicks registered on the copier, it would have been worth only $150. SBP contends it would have been worth $5, 495.00 had ...


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