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CA Acquisition, LLC v. Key Brands International, Ltd.

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

June 28, 2017

CA ACQUISITION, LLC d/b/a CHICAGO AEROSOL, Plaintiff/Counter-Defendant,
v.
KEY BRANDS INTERNATIONAL, LTD., Defendant/Counter-Plaintiff.

          MEMORANDUM OPINION AND ORDER

          GARY FEINERMAN UNITED STATES DISTRICT JUDGE.

         CA Acquisition, LLC d/b/a Chicago Aerosol sued Key Brands International, Ltd. for breach of contract and unjust enrichment, alleging that Key Brands did not pay for goods shipped in connection with eight purchase orders. Doc. 16-1. Key Brands counterclaimed, alleging that Chicago Aerosol sent defective goods in connection with five earlier purchase orders. Doc. 19 at 11-20. The court dismissed some of Key Brands's counterclaims, but allowed ones for breach of contract and warranty to proceed. Doc. 31 (Zagel, J.).

         Chicago Aerosol now moves for partial summary judgment on an affirmative defense asserted by Key Brands to its claims. Doc. 63. In response, Key Brands moved under Civil Rule 56(d) for time to complete discovery on whether Chicago Aerosol's goods were defective. Doc. 75. Chicago Aerosol's motion is granted, and Key Brands's motion is denied as moot.

         Background

         The facts are set forth as favorably to Key Brands as the record and Local Rule 56.1 permit. See Canen v. Chapman, 847 F.3d 407, 412 (7th Cir. 2017). On summary judgment, the court must assume the truth of those facts, but does not vouch for them. See Arroyo v. Volvo Grp. N. Am., LLC, 805 F.3d 278, 281 (7th Cir. 2015).

         Chicago Aerosol manufactures aerosol spray can products, and Key Brands sells haircare products, including aerosol hairsprays. Doc. 84 at 1-2 ¶¶ 1-2. Chicago Aerosol became Key Brands' primary hairspray supplier in January 2012. Id. at 6 ¶ 3.

         Between June 2013 and March 2014, Key Brands issued five purchase orders to Chicago Aerosol, which Chicago Aerosol filled. Id. at 8 ¶¶ 10-11. Key Brands paid for those orders, but now asserts that the goods it accepted were defective. Id. at 5 ¶ 9. Between May 2014 and November 2014, Key Brands issued eight more purchase orders, which Chicago Aerosol again filled. Id. at 9 ¶¶ 20-21. Key Brands did not pay for any of those eight orders, which amounted to $557, 436.22. Id. at 4 ¶¶ 6-7.

         Chicago Aerosol's suit seeks payment for the eight later purchase orders, while Key Brands's counterclaims seek compensation for the allegedly defective goods shipped under the five earlier purchase orders. Id. at 5 ¶ 9. While briefing the present motions, Key Brands asserted that goods shipped under the eight later purchase orders were defective as well. Ibid.; Id. at 9-11 ¶¶ 20-26.

         Discussion

         Chicago Aerosol asks the court to hold as a matter of law that: (1) the thirteen purchase orders were each separate contracts, not part of one overarching contract; and (2) Key Brands therefore may not rely on Chicago Aerosol's alleged shipment of defective goods under the five earlier purchase orders to defend against Chicago Aerosol's claims for nonpayment for the goods shipped under the eight later purchase orders. Doc. 111 at 1. In other words, Chicago Aerosol seeks summary judgment only as to a set-off affirmative defense that Key Brands has asserted, based on the allegedly defective goods that Chicago Aerosol sent under the five earlier purchase orders, to Chicago Aerosol's claims on the eight later purchase orders.

         Chicago Aerosol's motion initially appeared to seek something more-entry of judgment on its claims. Doc. 63 at 2; Doc. 64 at 2. But the briefs cast matters in a different light, so at the motion hearing, the court inquired of Chicago Aerosol:

THE COURT: So, what do you think your summary judgment motion is about? Is it limited to the issue of whether defective product shipped in conjunction with the five earlier purchase orders can be used to set off the amounts owed under the eight subsequent purchase orders?
THE COURT: I know it definitely includes that, but are you also seeking summary judgment outright on the eight purchase ...

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