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Stops Enterprises, LLC v. United Medical Equipment Co.

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

June 13, 2014

STOPS Enterprises, LLC, Plaintiff,
v.
United Medical Equipment Co., Defendant.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, Jr., District Judge.

This matter is before the Court on Plaintiff STOPS Enterprises, LLC's motion for summary judgment [33]. For the reasons set forth below, the Court grants in part STOPS Enterprises' motion [33] as to Counts I and II and denies as moot the motion as to Counts III and IV. STOPS's motion to conduct expedited discovery into Defendant's current financial condition [56] is stricken as moot.

I. Background

A. Procedural History

On September 27, 2012, Plaintiff STOPS Enterprises, LLC ("STOPS") filed a four-count complaint alleging breach of contract (Count I), an action for account stated (Count II), quantum meruit (Count III), and breach of implied contract (Count IV).[1] The parties' joint status report, filed on December 5, 2012, specified a discovery closure date of March 29, 2013. The March 29, 2013 deadline for completing non-expert discovery passed without Defendant United Medical Equipment Co. ("UME") making any requests for any depositions. Further, UME failed to respond to STOPS's discovery requests in a timely fashion, and then failed to answer discovery by a March 6, 2013 extension agreed to by the parties during a Local Rule 37.2 conference. As a result, STOPS filed a motion to compel, which was granted, and the Court ordered UME to answer written discovery by March 15, 2013.

UME eventually answered written discovery; however, its responses were deficient, and the Court ordered outstanding discovery to be completed by June 12, 2013. UME again failed to comply with the deadline, and the Court again extended the discovery deadline and ordered discovery completed by June 28, 2013. The Court then ordered all supplemental discovery disclosures on or before August 16, 2013. After discovery was complete, STOPS timely filed its motion for summary judgment on September 13, 2013. UME's response to STOPS's summary judgment motion initially was due on October 11, 2013. UME filed a motion to extend that deadline by 28 days. The Court granted UME's requested extension, but UME disregarded this Court's November 8, 2013 filing deadline. UME failed to contact either the Court or STOPS about extending this deadline, and simply ignored it. Plaintiff then filed a motion for an order granting its unopposed motion for summary judgment.

At the hearing on Plaintiff's motion, UME orally requested another extension of time to respond to STOPS's summary judgment motion, which the Court granted. The Court ordered UME to respond to the summary judgment motion by December 17, 2013. On December 17, 2013, UME filed its response to the summary judgment motion, as well as a motion requesting additional discovery as to its affirmative defense that STOPS failed to charge the proper rate. UME first raised its argument that STOPS failed to charge the proper rate in its answer and affirmative defenses that were filed in November 2012. The Court denied UME's motion requesting additional discovery, concluding that UME's lack of diligence in pursuing discovery could not serve as a basis for allowing discovery in circumstances such as this. Kalis v. Colgate-Palmolive Co., 231 F.3d 1049, 1057 n. 5 (7th Cir. 2000) ("When a party fails to secure discoverable evidence due to his own lack of diligence, it is not an abuse of discretion for the trial court to refuse to grant a continuance to obtain such information.") (citing Pfeil v. Rogers, 757 F.2d 850, 857 (7th Cir. 1985)); see also Procter & Gamble Co. v. McNeil-PPC, Inc., 615 F.Supp.2d 832, 840-41 (W.D. Wis. 2009) (non-moving party was not entitled to further opportunity to engage in discovery because that party failed to timely file a motion asking that the court compel discovery).

B. Fact Statements

Local Rule of Civil Procedure 56.1 requires a party moving for summary judgment to file "a statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to a judgment as a matter of law." N.D.Ill. R. 56.1(a)(3). The statement "shall consist of short numbered paragraphs" that refer to "materials relied upon to support the facts set forth." N.D.Ill. R. 56.1(a). The party opposing summary judgment is then 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." N.D.Ill. R. 56.1(b)(3)(B).

Here, the relevant facts are taken from STOPS's Local Rule 56.1 Statement of Material Facts. Despite having the opportunity, UME-which is represented by counsel-failed to submit a statement of additional facts, but did submit a Local Rule 56.1(b)(3) Response to Plaintiff's Statement of Material Facts. In assessing Plaintiff's fact statements, the Court will consider UME's responses to the extent that UME properly cites to record evidence and does not merely assert legal conclusions.

C. Factual History

STOPS procures and provides transportation services, as well as other services, for injured workers. UME provides products and services, including medical equipment rental, for patients, workers' compensation and auto insurers, and third party administrators.[2] STOPS and UME entered into an agreemen in which STOPS agreed to provide transportation services to UME and its customers in exchange for compensation from UME. STOPS and UME maintained a business relationship for over three years, from approximately December 2008 to March 2012.

For more than two years, UME regularly paid its invoices; however, UME began to fall behind on payments, and by March 2011, UME owed $114, 000 to STOPS. For approximately one year, from March 2011 to March 2012, STOPS and UME representative Shawn Landa corresponded regarding payments owed to STOPS by UME; and in these communications UME continually promised payment to STOPS, acknowledged the balance due, and did not dispute any rates or charges. In March 2012, STOPS terminated the business relationship due to UME's failure to pay outstanding invoices.

During discovery in this lawsuit, UME produced the invoices that it received from STOPS, segregating the invoices as either "paid" or "unpaid." STOPS provided transportation services at the request of UME, as reflected by the invoices produced by UME. UME produced 648 paid invoices, ranging from December 22, 2008, to January 4, 2011, totaling $100, 037.69. Many of the 648 paid invoices produced by UME included "wait time" charges.[3] UME produced 948 unpaid invoices, ranging from January 4, 2011, to May 4, 2012, totaling $185, 811.88.

The evidence of record reflects that, with respect to all of the unpaid invoices, STOPS applied a discount to the usual and customary rates when invoicing UME. UME concedes that the parties initially agreed upon a 15% discount, which was later increased to an 18% discount, and the evidence of record confirms that STOPS initially applied a 15% discount, and increased the discount to 18% as agreed by the parties. STOPS periodically adjusted its usual and customary rates as reflected by its transportation pricing lists for the period applicable to the disputed invoices. When STOPS adjusted its usual and customary rates, it also adjusted its discounted rates. From January 2011 to March 2012, STOPS always applied an 18% discount to the prevailing usual and customary rates when invoicing UME. Over the course of the business relationship, STOPS charged UME at a lower rate than most of STOPS's other clients, the majority of whom received either a 5% or 10% discount from the usual and customary rates.

In order to authorize patient transportation, a UME representative would either call or e-mail STOPS, and the communications were documented in a patient-specific project authorization log. During discovery, UME produced appointment confirmation e-mails between UME employee Amy Kryski and various STOPS employees. When an appointment was made by UME, a STOPS employee would send an appointment confirmation e-mail to UME, which included patient name, transport locations, transport dates, and wait time authorization (either "yes" or "no"). The evidence of record reflects that, of the $185, 811.88 in total unpaid invoices produced by UME, $27, 918.29 of the charges are wait time charges, and $157, 893.59 of the unpaid invoice charges are not wait time charges. Of the $27, 918.29 in wait time charges, $14, 122.23 of the wait time charges were actually authorized by UME representatives, as reflected by the patient-specific project authorization logs and the appointment confirmation emails exchanged by the parties. The remaining $13, 796.06 in wait time charges do not reflect express authorization, but UME has not presented evidence that it ever objected to the wait time reflected in these invoices.

From March 4, 2011, to March 16, 2012, STOPS employees corresponded via e-mail with UME representative Shawn Landa regarding payments owed to STOPS from UME. On March 4, 2011, STOPS accounts receivable supervisor Sigi Nagys e-mailed Shawn Landa to notify him that UME owed STOPS a balance of $114, 000, with $88, 000 over 60 days old, and asking UME to get the balance under $100, 000 by the end of March. Landa did not object to the balance owed, and in response to the request about receiving the balance owed by the end of March, Landa responded "think so." On July 15, 2011, Nagys e-mailed Landa to notify him that UME had not made payments to STOPS in several weeks and that UME's accounts receivable balance was up to $112, 000 and requested payment of $20, 000 by the end of the month. Landa replied "OK" and did not raise any objection to the amount owed or STOPS's invoices.

On July 26-28, 2011, Nagys and Landa again corresponded via e-mail regarding the payments owed to STOPS; Landa never objected to STOPS's invoices or the amount owed and indicated that "I will try to get some money out to you, " "I'm working on it, " and "I'll get you something out." In response to Nagys' e-mail confirming the payment made on July 27, 2011, Landa indicated that "I'll work with payables to come up with a plan to get you folks paid off. I've been doing that one by one with all our vendors. We're not in the business of stiffing anyone." During the e-mail exchange between Nagys and Landa on July 15-28, 2011, Landa did not dispute the rates charged by STOPS, any fees charged by STOPS (including wait time), or the amount owed to STOPS by UME.

On December 7-9, 2011, Nagys and Landa exchanged e-mails regarding payment owed by UME to STOPS; during the e-mail exchange, Landa indicated that UME had sent $5, 000 and would "send more [M]onday." Landa did not dispute the rates charged by STOPS, any fees ...


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