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Midwest Renewable Energy, LLC v. Marquis Energy-Wisconsin, LLC

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

September 16, 2014

MIDWEST RENEWABLE ENERGY, LLC, a Nebraska limited liability company, Plaintiff,
v.
MARQUIS ENERGY-WISCONSIN, LLC, a Delaware limited liability company, and GATX CORPORATION, a New York corporation, Defendants. GATX CORPORATION, a New York corporation, Counterclaimant,
v.
MIDWEST RENEWABLE ENERGY, LLC, a Nebraska limited liability company, Counter-Defendant.

MEMORANDUM OPINION AND ORDER

SHARON JOHNSON COLEMAN, District Judge.

On May 10, 2013, plaintiff Midwest Renewable Energy LLC ("MRE") filed a First Amended Complaint [53] alleging breach of a lease agreement and tortious interference with a business relationship against defendant GATX Corporation ("GATX"), and tortious interference with a contract and promissory estoppel against defendant Marquis Energy-Wisconsin LLC ("Marquis"). In an Order on December 18, 2013, this Court converted defendants' motions to dismiss to motions for summary judgment pursuant to Federal Rule of Civil Procedure 12(d) and allowed the parties time to conduct discovery and comply with Local Rule 56.1. Marquis now moves for summary judgment on Counts III and IV of the First Amended Complaint. For the reasons set forth below, the motion is granted.[1]

Background

The following facts are undisputed.

MRE/GATX Lease Agreement

MRE is an ethanol producer. GATX leases railcars for transport. On January 1, 2005, MRE entered into a lease with GATX (the "Lease Agreement") under which MRE leased twenty railcars from GATX. The Lease Agreement provided for the lease of 10 railcars until 2017 and for the lease of the remaining 10 railcars until 2020. Under the Lease Agreement, MRE owed between $550.00 and $575.00 per month per railcar to GATX. The Lease Agreement required MRE to pay service fees to GATX on a monthly basis in an amount based on the Lease Agreement riders. The Lease Agreement states that the customer (MRE) shall not furnish, assign or subcontract the railcars or make any transfer or assignment of the Lease Agreement without GATX's prior written consent.

The Lease Agreement also states that it:

may not be amended, altered, or changed except by written agreement signed by the parties hereto [and] [n]o waiver of any provision of this Agreement or consent to any departure by [MRE] therefrom shall be effective unless the same shall be in writing signed by both parties and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.

MRE/Marquis Railcar Lease

In early March 2012, Marquis, as sublessee, and MRE, as sublessor, entered into an agreement entitled "Railcar Lease." Under the Railcar Lease, MRE agreed to sublease the 20 railcars under the GATX/MRE Lease Agreement to Marquis for the sum of $1, 200.00 per month, for two months. In the Railcar Lease, MRE represented that "it has the legal right and ability to lease the Railcars according to the terms of the [Railcar Lease] and has obtained all required approvals or authorizations required to effectuate [the Railcar Lease]." Shortly after executing the Railcar Lease, Marquis paid to MRE the entire amount due under the Railcar Lease.

On April 26, 2012, Troy Gavin, general manager of MRE, emailed Norm Anderson at Marquis, stating: "We have leased out cars and leased a lot of cars from various companies and on either side have never had to have written consent from GATX. I just read our lease agreement again and there is no provision requiring the master lessor to sign off on it." On or about April 30, 2012, Marquis and MRE entered into a second sublease agreement, entitled "Amendment to Railcar Lease." The Amendment to Railcar Lease provided for Marquis' sublease of the 20 railcars for six months, from May 12, 2012, to November 12, 2012, at the rate of $1, 900.00 per car per month. After executing the Amendment to Railcar Lease, Marquis paid to MRE the entire amount due, $228, 000.00 under the Amendment to Railcar Lease. In the Amendment to Railcar Lease MRE provided the covenant:

that during the Extended Renewal Term, [MRE] shall:
...
b. Make all payments required under any master lease to which the ...

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