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NRRM, LLC v. Mepco Finance Corporation

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

April 21, 2015

NRRM, LLC, Plaintiff/Counter-Defendant/Cross-Defendant/Counter-Cross Plaintiff, and MARK TRAVIS and NICHOLAS HAMILTON, Plaintiffs/Counter-Defendants/Cross-Defendants,
v.
MEPCO FINANCE CORPORATION, Defendant/Counter-Plaintiff/Third-Party Plaintiff,
v.
CHOICE MANUFACTURING CO. INC., Third-Party Defendant/Counter-Third-Party Plaintiff/Cross-Plaintiff/Counter-Cross Defendant.

MEMORANDUM OPINION AND ORDER

GARY FEINERMAN, District Judge.

This is a sequel to last month's decision entering and continuing Mepco Finance Corporation's summary judgment motion against Choice Manufacturing Company, granting Mepco leave to file an amended Local Rule 56.1(a)(3) statement and a supplemental brief to address evidentiary issues raised by Choice, and allowing Choice the opportunity to file an amended Local Rule 56.1(b)(3)(B) response and supplemental brief to counter Mepco's additional materials. Docs. 202-203 (reported at 2015 WL 1501897 (N.D. Ill. Mar. 27, 2015)). Mepco filed its additional materials. Docs. 204-205. At a status hearing last week, Choice informed the court that it would not file anything in response to those materials. Doc. 207. Mepco's summary judgment motion (Doc. 152) is therefore ripe for ruling, and for the reasons that follow, the motion is granted.

This opinion assumes familiarity with last month's opinion as well as with the court's opinion denying an earlier summary judgment motion from Mepco. Docs. 134-135 (published at 2013 WL 4537391 (N.D. Ill. Aug. 27, 2013)). As noted in those opinions, Choice administered automobile service and repair warranties, while Mepco offered financing to customers who wanted to pay for the warranties in installments. In the present motion, Mepco contends that, pursuant to contracts with Choice and a particular Choice sales agent-U.S. Fidelis, Inc., which went out of business-Choice owes Mepco $4, 866, 140.75 in unpaid funding. Doc. 153.

In response, Choice does not dispute that if everything Mepco asserts about the key facts are true, then Choice owes Mepco $4, 866.140.75. Doc. 165 (Choice's brief opposing summary judgment). Having reviewed Mepco's motion, the court agrees that Choice owes Mepco that amount if Mepco's asserted facts are true. Moreover, Choice cannot even bring itself to argue that Mepco's asserted facts are not true. Ibid. Choice's only argument against summary judgment is that Mepco has not cited admissible evidence to support its asserted facts. Ibid.; Doc. 166 (Choice's Local Rule 56.1(b)(3)(B) response). This is not an improper argument; the law very clearly requires the movant to cite admissible evidence to obtain summary judgment, see N.D.Ill. L.R. 56.1(a); Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371, 382 (7th Cir. 2008), and the court held off ruling on Mepco's summary judgment motion due to the evidentiary concerns that Choice had raised in its opposition papers, 2015 WL 1501897, at *11. But it is the only argument Choice makes, and thus the only one the court will consider, particularly given Choice's representation by able and sophisticated counsel. If there were substantive grounds to forestall summary judgment, or additional evidentiary objections to the supplemental materials that Mepco just filed, then Choice undoubtedly would have advanced them.

Choice's evidentiary argument has three components: (1) Mepco has not established the existence of its contract with Fidelis; (2) the financial data cited by Mepco is inadmissible hearsay; and (3) Mepco's summary of the data to calculate Choice's liability violates Federal Rule of Evidence 1006. Doc. 165. The court ruled in last month's decision that Mepco's summary satisfies Rule 1006, 2015 WL 1501897, at *11, which disposes of the third objection, so this opinion will address only the first two.

With respect to first objection, which concerns Mepco's contract with Fidelis, the supplemental affidavit submitted by Mepco financial analyst Jim Jeske avers that "[t]rue and accurate copies of the Dealer Agreements are attached hereto as Exhibit A." Doc. 205-1 at p. 6, ¶ 15 (Jeske's affidavit); id. at 10-23 (copy of the Mepco-Fidelis contract). That is sufficient to make the contract admissible for summary judgment. See Article II Gun Shop, Inc. v. Gonzales, 441 F.3d 492, 496 (7th Cir. 2006) ("To be admissible, documents must be authenticated by and attached to an affidavit that meets the requirements of [Federal] Rule [of Civil Procedure] 56([c]) and the affiant must be a person through whom the exhibits could be admitted into evidence.") (internal quotation marks omitted); 10A Charles Alan Wright et al., Federal Practice & Procedure § 2722, pp. 382-84 (3d ed. 1998) (same). And to the extent Choice disputes that Fidelis was one of its sellers, Doc. 165 at 3 n.1 (arguing that "Mepco has not presented admissible evidence that Fidelis is even a seller covered by the Choice/Mepco" arrangement), Mepco points out that Choice's owner, Peter Masi, admitted in his deposition that Fidelis was one of Choice's sellers. Doc. 172 at 2-3; Doc. 205 at ¶¶ 7, 34; Doc. 205-3 at 13 ("Q. And Fidelis was one of your company's dealers? A. Yes. Q. And Mepco funded product warranties that you sold through Fidelis? A. Yes.").

As just noted, Choice's second objection submits that to generate its Rule 1006 summary, Mepco relied on an electronic database that is inadmissible hearsay. Last month's opinion reserved judgment on this point, noting that while the data "appears (at least at an initial glance) to" fall under the business records exception of Rule 803(6), the question whether "the information in the database qualifies as a business record [is] a matter on which the court is not ruling at this juncture." 2015 WL 1501897, at *10-11.

Rule 803(6) provides that the rule against hearsay does not bar:

A record of an act, event, condition, opinion, or diagnosis if:
(A) the record was made at or near the time by-or from information transmitted by-someone with knowledge;
(B) the record was kept in the course of a regularly conducted activity of a business, organization, occupation, or calling, whether or not for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the custodian or another qualified witness, or by a certification that complies with Rule 902(11) or (12) or with a statute permitting certification; and
(E) the opponent does not show that the source of information or the method or circumstances of preparation ...

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