United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JORGE ALONSO, District Judge.
Plaintiff sues defendants Graphic Pallet Transport Corporation ("Graphic") and its principals John and Christy Krawisz for breach of contract, breach of guaranty, replevin, and detinue. The case is before the Court on plaintiff's Federal Rule of Civil Procedure ("Rule") 56 motion for summary judgment. For the reasons set forth below, the Court grants in part and strikes as moot in part the motion.
On March 13, 2008, Graphic purchased an automated pallet nailing machine from plaintiff pursuant to lease no. 141771-000 ("first lease"). (Defs.' LR 56.1(b)(3)(B) Stmt. ¶ 7.) On August 18, 2008, Graphic purchased a mitre saw and a semi trailer from plaintiff pursuant to lease no. 141771-001 ("second lease"). ( Id. ¶ 19.) John and Christy Krawisz guaranteed Graphic's obligations under both leases. ( Id. ¶¶ 9-10, 21-22.)
The first lease had a term of thirty-six months and the second lease had a term of thirty-one months. (Pl.'s LR 56.1(a) Stmt., Ex. A, Compl., Ex. 1, First Lease at 1; id., Ex. 3, Second Lease at 1.) Both leases state that at the end of the term, Graphic:
may... purchase all... of the Equipment for a sum set forth on the front of this Lease.... If a $1.00 or $101 buyout is indicated in the End of Term section on the front of the Lease, then at the end of the Lease Term, you shall purchase the equipment for that amount. If the Fair Market Value Purchase Option is indicated in the End of Term section on the front of this lease then, at least 180 days prior to then end of the original term, you must give us written notice, via certified mail, that you will purchase the Equipment for its fair market value, which we shall determine in our reasonable judgment, or that you will return the equipment to us. If you do not give us such written notice or if you do not purchase or deliver the Equipment in accordance with the terms and conditions of this Lease, then this Lease shall automatically renew for a 12 month term, and thereafter renew for successive 3 month terms until you deliver the Equipment to us.... Upon payment of End of Term option price..., we shall transfer our interest in the Equipment to you... and this Lease will terminate.... Until the End of Term Option price is actually paid, you will be responsible to continue to pay rent at the monthly rate set forth in this Lease.
( Id., Ex. 1, First Lease at 1 & ¶ 16; id., Ex. 3, Second Lease at 1 & ¶ 16.) On the first page of each lease in a box titled "End of Term Option" appear the words "Fair Market Value Purchase Option" in bold type. ( Id., Ex. 1, First Lease at 1; id., Ex. 3, Second Lease at 1.)
When the leases expired in early 2011, Graphic did not exercise the fair market value purchase option or return the equipment. (Defs.' LR 56.1(b)(3)(B) Stmt. ¶¶ 12, 15, 24, 27.) Rather, it contends it purchased the equipment in accordance with the $1.00 buyout option it had negotiated with plaintiff's agent, Kenny Segin. (Defs.' LR 56.1(b)(3)(B) Stmt. Ex. 1, J. Krawisz Dep. at 60-63; id., Ex. 2, C. Krawisz Dep. at 23; see id., Ex. 3, Segin Dep. at 20, 55-56 (testifying that he had the authority to set $1.00 lease buyouts, that customers received the buyout options they requested, and that he "could have" discussed a $1.00 buyout with John Krawisz).)
On September 11, 2011, Graphic sued plaintiff for rescission of the leases. ( See Defs.' Resp. Mot. Summ., J., Ex. A, Compl., Graphic Pallet & Trans., Inc. v. Balboa Capital Corp., No. 11 C 9101 (N.D. Ill.).) On May 30, 2012, Judge Bucklo granted Balboa's motion to dismiss the suit on the grounds that Graphic's claim was barred by California's parol evidence rule. ( See generally Def.'s LR 56.1(a) Stmt., Ex. D, Mem. Opinion & Order, Graphic Pallet & Trans., Inc. v. Balboa Capital Corp., No. 11 C 9101 (N.D. Ill. May 30, 2012).) On September 11, 2013, Balboa filed this suit.
On March 17, 2014, defendants returned to plaintiff the pallet nailing machine that was the subject of the first lease. (Defs.' LR 56.1(b)(3)(B) Stmt. ¶ 17.) The same day, they told plaintiff they had just discovered that the semi trailer financed under the second lease had been stolen from one of their customers in 2011. ( Id. ¶ 29.) Because the leases require Graphic to replace stolen equipment or pay plaintiff its residual value, on March 14, and April 8, 2011, Graphic offered to replace or pay for the trailer. (Defs.' LR 56.1(b)(3)(B) Stmt., Ex. 4, Parks Aff., Ex. A, Letter from Parks to Darcy (Mar. 14, 2014); id., Ex. B, Letter from Parks to Darcy (Apr. 8, 2014).) Plaintiff did not respond to either offer. ( Id., Ex. 4, Parks Aff. ¶ 6.)
In August 2014, defendants returned the mitre saw, the second piece of equipment that was financed under the second lease, to plaintiff. (Pl.'s LR 56.1(a) Stmt., Ex. C, Edson Aff. ¶ 36.)
To succeed on a summary judgment motion, "the movant [must] show 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). At this stage, we do not weigh evidence or determine the truth of the matters asserted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). We view all evidence and draw all inferences in favor of the non-moving party. Michas v. Health Cost Controls of Ill., Inc., 209 F.3d 687, 692 (7th Cir. 2000). Summary judgment is appropriate only when the record as a whole establishes that no reasonable jury could find for the non-moving party. Id.
To prevail on its breach of contract claim, plaintiff must prove "(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." Oasis W. Realty, LLC v. Goldman, 250 P.3d 1115, 1121 (Cal. 2011). Citing their agreement with Kenny Segin, defendants argue that the first element is lacking. Plaintiff contends that the contract claim was decided ...