United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
W. DARRAH United States District Court Judge
Loggerhead Tools, LLC, filed a Second Amended Complaint
against Defendants, Sears Holdings Corporation and Apex Tool
Group, LLC. The Second Amended Complaint alleges, among other
claims, common law fraud in Count XI, fraud in the inducement
in Count XII, and promissory fraud in Count XIII, against
Sears. Defendant Sears filed a Motion for Summary Judgment on
Loggerhead's Fraud Claims . For the reasons set
forth more fully below, Sears' Motion for Summary
Judgment  is granted.
Rule 56.1(a)(3) requires the moving party to provide “a
statement of material facts as to which the party contends
there is no genuine issue for trial.” Ammons v.
Aramark Uniform Servs., 368 F.3d 809, 817 (7th Cir.
2004). Local Rule 56.1(b)(3) requires the nonmoving party to
admit or deny every factual statement proffered by the moving
party and to concisely designate any material facts that
establish a genuine dispute for trial. See Schrott v.
Bristol-Myers Squibb Co., 403 F.3d 940, 944 (7th Cir.
2005). A nonmovant's “mere disagreement with the
movant's asserted facts is inadequate if made without
reference to specific supporting material.” Smith
v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003). In the case
of any disagreement, the nonmoving party must reference
affidavits, parts of the record, and other materials that
support his stance. Local Rule 56.1(b)(3)(B). To the extent
that a response to a statement of material fact provides only
extraneous or argumentative information, this response will
not constitute a proper denial of the fact, and the fact is
admitted. See Graziano v. Vill. of Oak Park, 401
F.Supp.2d 918, 936 (N.D. Ill. 2005). Similarly, to the extent
that a statement of fact contains a legal conclusion or
otherwise unsupported statement, including a fact that relies
upon inadmissible hearsay, such a fact is disregarded.
Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir.
1997). Pursuant to Local Rule 56.1(b)(3)(C), the nonmovant
may submit additional statements of material facts that
“require the denial of summary judgment.”
following facts are taken from the parties' statements of
undisputed material facts submitted in accordance with Local
is an Illinois limited-liability company with its principal
place of business in Illinois. (DSOF ¶ 1.) Sears is a
Delaware corporation with its principal place of business in
Illinois. (Id. ¶ 2.) Beginning in 2009, Sears
began retailing Plaintiff's Bionic Wrench. (Id.
¶ 4.) In 2009, Plaintiff signed a Universal Terms and
Conditions (“UTC”) Agreement as consideration for
doing business with Sears. (Id.¶ 5.) A second
UTC Agreement was signed in 2011. (PSOF ¶ 2.) The UTC
contained two provisions: (1) a statement that product
forecasts are for planning purposes and do not give rise to a
commitment to purchase; and (2) a statement that a commitment
to purchase will only arise after a Purchase Order has been
placed. (DSOF ¶ 6.) Throughout 2009 and 2010, Sears
retailed the Bionic Wrench. (Id. ¶ 7.)
parties entered into an agreement to sell the Bionic Wrench
for the time period of February 1, 2011, to January 31, 2012.
(Id. ¶ 8.) The agreement contained terms for
the price of the Bionic Wrench and for a promotional subsidy.
(Id.) Sears promoted Plaintiff's wrench during
the 2011 Christmas shopping season in a direct-to-consumer
television (“DRTV”) promotion. (Id.
in late 2011, Amanda Campana, Plaintiff's main point of
contact with Sears, began contract discussions in order to
forecast the 2012 fiscal year. (Id. ¶ 11.)
Campana asked about Plaintiff's plans to partner with
other retailers. (Id.) In early 2012, Campana was
replaced with a new individual, Stephanie Kaleta, who
continued negotiations with Plaintiff. (Id. ¶
12.) During the course of negotiations, Plaintiff and Sears
disagreed over pricing and the quantity of wrenches to be
supplied. (Id. ¶ 13.) On February 15, 2012,
Sears sent Plaintiff a draft Supply Agreement, which
detailed, among other things, proposed pricing and subsidy
terms for the 2012 DRTV promotion. (Id. ¶ 16.)
On February 16, 2012, Plaintiff responded to the proposed
Supply Agreement, claiming that “[u]pon reviewing the
contract extension that you have sent, LoggerHead cannot move
forward.” (Id. ¶ 18.)
also indicated that they would “be pursuing TV
promotions with all other possible outlets for 2012.”
(Id.) On February 20, 2012, Plaintiff solicited Home
Depot to purchase wrenches for the 2012 Christmas season; on
May 8th, 2012, Home Depot responded: “. . . Have seen
many times. No interest right now in this SKU.”
(Id. ¶¶ 20-21.) Between March and May
2012, Plaintiff solicited several other competitors
including: Wal-Mart, Walgreens, and Menards. (Id.
¶¶ 22-24.) Plaintiff did not disclose these
activities with other retailers to Sears. (Id.
March 6, 2012, Plaintiff sent Sears a draft DRTV agreement.
(Id. ¶ 28.) The following day, Plaintiff sent a
revised DRTV draft to Sears, which included changing a clause
that referenced a “commitment” for 300, 000 units
of the Bionic Wrench to “forecast.” (Id.
¶ 29.) During the next three months, Plaintiff and Sears
exchanged three more drafts of a DRTV agreement, none of
which were executed. (Id. ¶ 31.) A provision
limiting Plaintiff from retailing the Bionic Wrench with
retailers other than Ace Hardware and QVC was in the last
DRTV draft on April 27, 2012 . (Id. ¶¶
33-34.) Plaintiff stated that they were unable to sign the
fourth draft agreement because they had agreed to sell
limited quantities of the Bionic Wrench to Menards.
(Id. ¶ 36.)
DRTV agreement provided that “written forecasts [would
be provided] 120 days prior to shipment” and purchase
orders “90 days prior to shipment.” (Id.
¶ 37.) On May 15, 2012, Sears provided Plaintiff with
the 120-day forecast and provided notice that the
“forecast is subject to change pending [F]ather's
[D]ay performance and finalization of Q4 marketing
assets.” (Id. ¶ 38.) Two days later, on
May 17, 2012, Plaintiff responded to the proposed DRTV
agreement and expressed hope that Sears would assemble
purchase orders soon, so that Plaintiff could finalize
production. (Id. ¶ 40.) After the exchange of
draft agreements, Sears received an email on May 17, 2012,
that called into question Plaintiff's ability to meet
production forecasts for the 2012 Father's Day DRTV
promotion. (Id. ¶ 41.) Despite not having a
finalized agreement, Sears engaged in a DRTV promotion for
the Bionic Wrench over Father's Day 2012. (Id.
in February 2012, Sears began negotiations with Apex Tool
Group to develop a “backup plan” in response to
negotiations with Plaintiff. (Id. ¶ 44.) Sears
did not receive a prototype of Apex's product until April
17, 2012. (Id. ¶ 47.) By April 26, 2012, it was
unclear what the business relationship between Sears and Apex
would be. (Id. ¶ 48.) On May 22, 2012,
Kaleta sent an email to her point of contact at Apex, Jill
Lowe, confirming forecasts for over 300, 000 units from Apex.
(PSOF ¶ 26.) However, in mid-May 2012, Sears had still
not finalized a purchase order with Apex due to continued
modifications to the design of the Apex wrench. (DSOF ¶
49.) By May 23, 2012, Sears received notice that Apex Tool
Group would be able to produce enough product for Sars to run
a DRTV promotion. (Id. ¶ 53.) On the same day,
Kaleta called Plaintiff to inform them that Sears would no
longer be pursuing a DRTV agreement with them. (Id.
¶¶ 54-55.) Following the phone call between Kaleta
and Plaintiff, no DRTV agreement was signed. (Id.
¶ 56.) On June 20, 2012, Sears sent an updated forecast
which lowered the forecast. (Id. ¶ 57.)