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Manley v. Boat/U.S., Inc.

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

January 3, 2017

JOHN J. MANLEY d/b/a CHICAGO MARINE TOWING, Plaintiff,
v.
BOAT/U.S., INC., a Virginia corporation, GREAT LAKES REPAIR, INC., d/b/a GREAT LAKES TOWING & REPAIR, a Michigan corporation, and RICHARD N. LENARDSON, an individual and resident of Michigan, Defendants.

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge

         Before the Court are Defendant Boat U.S., Inc.'s motion for summary judgment [61] and Defendants Great Lakes Repair, Inc. and Richard N. Lenardson's motion for summary judgment [62]. For the reasons that follow, Defendants' motions for summary judgment are granted as to Plaintiff's claim for intentional interference with prospective economic advantage (Count III) and Plaintiff's claim for defamation per quod (Count V). Summary judgment is denied as to Plaintiff's claim for breach of contract for wrongful termination (Count I), breach of implied covenant of good faith and fair dealing (Count II), and defamation per se (Count IV). This case is set for further status hearing on January 24, 2017 at 9:00 a.m.

         I. Background

         A. Factual Background

         The Court takes the relevant facts from Boat U.S.'s Local Rule 56.1 Statement of Material Facts [61-2] and supporting exhibits [61-3]. Plaintiff failed to file a timely response to Defendants' motions or Boat U.S.'s Local Rule 56.1 statement [see 72]. Therefore, pursuant to Local Rule 56.1(b)(3)(C), Boat U.S.'s fact statements are deemed admitted. N.D.Ill. L.R. 56.1(b)(3)(C) (“All material facts set forth in the statement required of the moving party will be deemed to be admitted unless controverted by the statement of the opposing party.”); see also Raymond v. Ameritech Corp., 442 F.3d 600, 608 (7th Cir. 2006) (affirming district court's decision to admit the facts set forth in moving party's Local Rule 56.1 submission where nonmovant failed to timely respond or submit its own Local Rule 56.1 statement); De v. City of Chicago, 912 F.Supp.2d 709, 712-13 (N.D. Ill. 2012) (“The Seventh Circuit has repeatedly held that a district court has broad discretion to require strict compliance with Local Rule 56.1.” (citation and internal quotation marks omitted)).

         Plaintiff John J. Manley d/b/a Chicago Marine Towing (“Chicago Marine”) is an Illinois corporation located in Chicago, Illinois, which provides marine towing and salvage services. [61-2, at ¶ 1.] Boat/U.S., Inc. (“Boat U.S.”) is a Virginia corporation that provides water towing services, 24-hour dispatch service, and insurance coverage for recreational boaters. [Id. at ¶ 2.] Defendant Richard Lenardson is the owner of Defendant Great Lakes Repair d/b/a Great Lakes Towing & Repair (“Great Lakes Repair”); both Lenardson and Great Lakes Repair (collectively, “the Great Lakes Defendants”) are citizens of Michigan. [Id. at ¶ 3-4.] Because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75, 000, the Court has jurisdiction pursuant to 28 U.S.C. § 1332(a).

         On or around February 5, 2009, Chicago Marine entered into an agreement with Boat U.S. [Id. at ¶ 6.] Pursuant to the agreement, Chicago Marine was a Boat U.S.-authorized marine towing company. The agreement provided that it would remain in effect until November 30, 2013, unless Chicago Marine breached Section I, Items 3, 4, 9, 10, or 11 of the agreement, thereby permitting Boat U.S. to terminate the agreement by “delivering written notice of proposed termination.” [Id. at ¶ 7; see also 1, at Exhibit A, Section I, Item 14(b).] Section I, Item 10 of the agreement states that both parties to the agreement “shall comply with all applicable federal, state and local laws, regulations, ordinances, and rules.” Further, Section I, Item 14(f) of the agreement provides that, with certain exceptions, “any party which is delivered written notice of a breach and subsequent Termination under this Agreement may within 10 days of such notice request a hearing by the Termination Review Board.”

         On July 1, 2012, Boat U.S. dispatched Chicago Marine to assist distressed boaters Nathan Locher and his girlfriend Laurie Jagla, whose powerboat had been run aground at or near Wells Beach, Indiana. [61-2, at ¶ 10.] Albert Bartkus (“Bartkus”), one of Chicago Marine's employees at that time, drove a Chicago Marine towboat to the location of Locher's grounded vessel. [Id. at ¶ 11.] When Bartkus arrived, Locher and Jagla were not on the boat, and there was a crowd of people around the boat on the beach. [Id. at ¶ 12.] Bartkus met and spoke with Locher and Jagla on the shore. [Id. at ¶ 13.] In Bartkus's view, they were coherent and cooperative.[1] [Id. at ¶ 14.] Bartkus had Locher sign a contract for salvage but did not discuss any associated charges. [Id. at ¶ 15.] The contract for salvage signed by Locher stated at the top that Chicago Marine was “A TowboatU.S. Company.” [Id. at ¶ 16.] Bartkus freed Locher's grounded boat, and Manley instructed him via phone to tow the boat to Crowley's Yacht Yard. [Id. at ¶ 17.] Chicago Marine asserted a high-priority possessory maritime lien on Locher's boat and towed it to Crowley's after learning that it was insured by American Family Insurance due to Manley's claimed difficulty obtaining payment from that insurer. [Id. at ¶ 18.] After Bartkus towed Locher's boat to Crowley's, he had no further contact with Locher or Jagla. [Id. at ¶ 19.]

         Manley drove a second towboat to the grounding site to provide Locher and Jagla transportation to their boat or to their home. [Id. at ¶ 20.] He arrived after Bartkus completed the salvage and idled his boat in the shallow water just off shore as Locher and Jagla waded into the water and boarded Manley's boat. [Id. at ¶ 21.] Locher and Jagla asked to remove property from their boat and wanted to know where their boat was being towed. [Id. at ¶¶ 22-23.] However, Manley testified that he said, “I'm not going to tell you [where Chicago Marine is taking your boat] right now * * * you'll get to your boat in good time.” [61-3, Exhibit 2 (Manley Deposition), at 73.] According to Manley, he responded to their demands to be taken to their boat in this manner because Locher and Jagla were “drunk and otherwise impaired.” [Id. at 63.] Relying on his training as a former police officer, Manley guessed that they had been using methamphetamines. [Id. at 66, 74.] He based this conclusion on their inability to sit still, their continuous yelling and screaming, their inability to absorb information, their rapid, unpredictable eye movements, and their jerkiness of limb movements, but did not administer any type of test to determine if they were in fact substance impaired. [Id. at 69-70.] In Manley's view, they would “[a]bsolutely not” have been competent to operate a motor vehicle in their current state. [Id. at 70.]

         Manley testified that he “didn't want them to go down to Crowley's and cause problems for Crowley's personnel.” [Id. at 74; see also id. at 64 (“I was not going to take a couple of drunken fools to Crowley's Yacht Yard when they're, one, totally out of their minds, and two, threatening violence.”] Manley stated that he gave Locher his card and told him to call tomorrow and that “[t]omorrow morning we'll get this all organized, we'll get the stuff off your boat.” [Id. at 74.] Manley further testified that “at one point” he said, “I'll tell you what * * * [w]e'll take you home, get whatever you need, we'll drive you down to your boat to get whatever you need off your boat, all right.” [Id. at 75.] Manley claimed that he thought this plan would have given him time to “prepare things at Crowley's for their arrival, ” maybe “get a couple of coppers over there from the fourth district if necessary, ” and that he was trying to “stretch some time out” in hopes that “they would have calmed down by that time.” [Id.] However, Manley testified that Locher and Jagla declined this offer and “didn't want [Chicago Marine] to give them a ride anywhere.” [Id.]

         Manley further testified that Locher was threatening and abusive, threatened to “beat the shit” out of him and to “throw you over the side, take your boat and get mine.” [Id. at 73, 76.] Locher never raised his hand towards Manley, never came at Manley, never tried to push, touch, or grab Manley, and never reached for or threatened to use a weapon against Manley. [61-2, at ¶ 25.] However, Manley testified that he knew Locher had the ability to follow through with this threats because he was approximately 6 foot 2 inches tall, 220 pounds, and muscular. [61-3, Exhibit 2 (Manley Deposition), at 78.] Manley also testified that he had a genuine concern that Locher was going to threaten his life. [Id. at 78.] In response to Locher's verbal threats, Manley stepped into the pilothouse, opened a briefcase he brought with him, removed a Sig 380 automatic handgun, inserted an ammunition clip, stepped out of the pilothouse, pointed the gun in the general direction of Locher and Jagla for 15-20 seconds, and said, “if you move your ass off that transom I'm going to shoot you.” [Id. at ¶ 26; see also 61-3, Exhibit 2 (Manley Deposition), at 79, 83, 87.] Locher and Jagla remained seated on the transom, Manley tucked the loaded handgun into the back of his belt under his jacket, and he dropped Locher and Jagla off at their home port, Marina Shores. [61-2, at ¶ 27.] Locher was not told the location of his boat and was not given access to his boat and property until the following day, when Manley contacted him pretending to be someone else. [Id. at ¶ 28.]

         On July 2, 2012, Boat U.S. received complaints from Locher and his insurer, American Family Insurance, regarding Manley's handling of the July 1, 2012 salvage operation and about being denied access to Locher's vessel. [Id. at ¶ 29.] Boat U.S. conducted a thorough investigation of the complaints, which included interviews with Locher, Jagla, and Manley, and consultation with outside legal counsel. [Id. at ¶ 30.] Based on the investigation, on July 23, 2012, Boat U.S. delivered to Chicago Marine a letter terminating the agreement, effective immediately. [Id. at ¶ 31.] The letter set forth various grounds for termination, including but not limited to Chicago Marine's breach of Section I, Item 10 - “Compliance With Law” of the agreement. [Id. at ¶ 31.] The termination letter stated:

[Chicago Marine] materially breached [Section I, Item 10] when it failed to comply with the law of salvage. A salvor who has earned the right to a salvage award through successful voluntary salvage services to a vessel in peril has a high-priority possessory, preferred maritime lien on the vessel. See 46 U.S.C. § 31301(5)(F) (1993); The FAIRFIELD, 30 F. 700 (D. Ga. 1887). A salvor in possession of a vessel is not bound to surrender it on demand to the owner until a reasonable security is provided. But, the salvor must move with all deliberate speed to either arrange for the posting of security or bring an action in rem against the vessel to foreclose his lien (turning the vessel over to the U.S. Marshall). However, it is against the law for the salvor to deny the owner or his agents (i.e., insurer) access to his vessel or property to inspect or preserve it. The ALCAZAR, 227 F. 633 (D.N.Y. 1915), See also Martin J. Norris, THE LAW OF SALVAGE (1958) § § 150-154.
[Chicago Marine's] admitted refusal to immediately tell Mr. Locher of the location of his boat and admitted refusal to immediately allow Mr. Locher or his agents access to his boat (until a later time determined by [Chicago Marine]) is a material violation of the law of salvage, as outlined above.
It is also reasonable to conclude [Chicago Marine's] refusal to tell Mr. Locher the location of his boat or to allow him access to his boat was the primary catalyst for any subsequent conflict, including [Chicago Marine's] admitted use of a firearm against the boater during service.

[1, Exhibit D, at 1-2.]

         Chicago Marine did not request a hearing by the Termination Review Board pursuant to Section I, Item 14(f) of the agreement. [61-2, at ¶¶ 32-33.] After terminating the agreement with Chicago Marine, Boat U.S. contracted with Lenardson and Great Lakes Repair to provide towing services in ...


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