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Sellers Capital, LLC v. Wight

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

July 18, 2017

SELLERS CAPITAL, LLC, and SELLERS CAPITAL MASTER FUND, LTD., Plaintiffs,
v.
GEORGE WIGHT, ARMADA GROUP, GP, INC., AND ARMADA ENTERPRISES, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          JEFFREY T. GILBERT UNITED STATES MAGISTRATE JUDGE.

         In advance of trial, which currently is set to begin on August 7, 2017, Plaintiffs Sellers Capital, LLC and Sellers Capital Master Fund, Ltd. (collectively, "Plaintiffs") filed three motions: Plaintiffs' Motion in Limine No. 1: To Exclude Parol Evidence from Trial ("Plaintiffs' MiL No. 1"), [ECF No. 89]; Plaintiffs' Motion in Limine No. 2: To Exclude Evidence That All Contract Conditions Were Not Met ("Plaintiffs' MiL No. 2"), [ECF No. 91]; Plaintiffs' Motion in Limine No. 3: To Bar Evidence Offered in Support of Affirmative Defenses Not Pleaded ("Plaintiffs' MiL No. 3"), [ECF No. 92]. Defendants George Wight ("Wight"); Armada Group, GP, Inc. ("Group"); and Armada Enterprises, Inc. ("Enterprises") (collectively, "Defendants") did not file any motions in limine and they oppose Plaintiffs' motions. For the reasons stated below, Plaintiffs' Motion in Limine No. 1 [ECF No. 89] is granted in part and denied in part, their Motion in Limine No. 2 [ECF No. 91] is denied, and their Motion in Limine No. 3 [ECF No. 92] is granted in part and denied in part.

         I. BACKGROUND

         The following summary of this case comes from the parties' proposed final pretrial order, Final Pretrial Order, [ECF No. 90], at 4-5:

         "Plaintiffs allege they contracted to sell shares of stock in a company called Premier Exhibitions, Inc. ('Premier') to Group for $16, 201, 688. To this end, Plaintiffs executed a Stock Purchase Agreement ('Agreement') with Group on October 15, 2014. The Agreement required Group to pay the $16, 201, 688 million cash purchase price to Plaintiffs no later than November 20, 2014, provided all of the Agreement's conditions precedent were met. Group did not pay the purchase price by November 20, 2014, and the sale contemplated by the Agreement did not close. Plaintiffs have sued Group for breach of the Agreement, and seek damages of not less than $14, 998, 134 .... Plaintiffs have also brought breach of contract claims against Wight personally and Enterprises on a veil-piercing/alter-ego theory, alleging that Group was a sham corporation that Wight used for an improper purpose in a manner that harmed Plaintiffs. In the alternative, if the Court finds that Group's corporate veil cannot be pierced, Plaintiffs allege that Wight and Enterprises tortiously interfered with the Agreement, primarily by failing to provide Group with the cash required to close the deal.

         Defendants deny all of the allegations made by Plaintiffs. Specifically, Defendants allege that the Agreement is not valid and enforceable and, in the alternative, was violated by Plaintiffs. Defendants Wight and Enterprises further allege that they did not act in an improper manner that harmed Plaintiffs or otherwise tortiously interfered with the Agreement. Additionally, Defendants argue that Plaintiffs failed to mitigate and cannot prove damages."

         II, LEGAL STANDARD

         The district court has the inherent authority to manage the course of a trial. Luce v. United States, 469 U.S. 38, 41 n.4 (1984). The court may exercise this power by issuing an evidentiary ruling in advance of trial. Id. A party may seek such a ruling by filing a motion in limine, which requests the court's guidance on what evidence will (or will not) be admitted at trial. Perry v. City of Chicago, 733 F.3d 248, 252 (7th Cir. 2013). Prudent motions in limine serve a gatekeeping function by allowing the judge "to eliminate from further consideration evidentiary submissions that clearly ought not be presented to the jury." Jonasson v. Lutheran Child & Family Servs., 115 F.3d 436, 440 (7th Cir. 1997). By defining the evidentiary boundaries, motions in limine both permit "the parties to focus their preparation on those matters that will be considered by the jury, "id.., and help ensure "that trials are not interrupted mid-course for the consideration of lengthy and complex evidentiary issues." United States v. Tokash, 282 F.3d 962, 968 (7th Cir. 2002).[1]

         As with all evidentiary matters, the court has broad discretion when ruling on motions in limine. United States v. Ajayi, 808 F.3d 1113, 1121 (7th Cir. 2015); Jenkins v. Chrysler Motors Corp., 316 F.3d 663, 664 (7th Cir, 2002). Moreover, the court can change its ruling at trial, "even if nothing unexpected happens[.]" Luce, 469 U.S. at 41. Rulings in limine are speculative in effect; essentially, they are advisory opinions. Wilson, 182 F.3d 562, 570 (7th Cir. 1999) (Coffey, J., concurring in part and dissenting in part).

         The court will grant a motion in limine to bar evidence only where that evidence is clearly inadmissible for any purpose. Taylor v. Union Pac. R. Co., 2010 WL 5421298, at *1 (S.D. Ill.Dec. 27, 2010). This is a high standard. Thomas v. Sheahan, 514 F.Supp.2d 1083, 1087 (N.D. Ill. 2007). The moving party bears the burden of establishing clear inadmissibility. Euroholdings Capital & Inv. Corp. v. Harris Trust & Sav. Bank, 602 F.Supp.2d 928, 934 (N.D. Ill. 2009). If the moving party cannot satisfy her burden, the evidentiary ruling should be deferred until trial. Green v. Goodyear Dunlop Tires N. Am., Ltd., 2010 WL 747501, at *1 (S.D.. Ill. Mar. 2, 2010). That is because, at trial, the court will have the benefit of understanding "the context, foundation, and relevance of the contested evidence within the framework of the trial as' a whole." Casares v. Bernal, 790 F.Supp.2d 769, 775 (N.D. Ill. 2011).

         III. DISCUSSION

         The Court will address each of Plaintiffs' motions in limine in turn.

         1. Parol Evidence (Motion in Limine No. 1)

         Plaintiffs' Motion in Limine No. 1 is focused on what Plaintiffs characterize as inadmissible parol evidence. Plaintiffs' MiL No. 1, [ECF No. 89], at 1. Plaintiffs argue the Agreement contains an integration clause and the meaning of that Agreement is unambiguous. Id. ¶¶ 1-13. Thus, Plaintiffs say, Illinois law precludes the use of parol evidence to alter the meaning of the Agreement. In response, Defendants say they are not planning to introduce evidence in an attempt to alter or vary the plain meaning of the Agreement. Defendant Armada Group, GP, Inc.'s, Armada Enterprises, Inc.'s, and George Wight's Response to Plaintiffs' Motion in Limine No. 1: To Exclude Parol Evidence from Trial ("Defendants' MiL No. 1 Response"), [ECF No. 93], ¶ 1; see also Id. ¶ 7 ("Defendants, as noted above, will not be seeking to alter or vary the meaning of the terms of the Agreement.")- So, the parties do not disagree that parol evidence should not be admitted in this case. The parties disagree, however, whether '. certain evidence that Defendants want to introduce constitutes parol evidence.

         For instance, Defendants intend to introduce evidence that, in their view, will show Mark Sellers, a member of Plaintiff Sellers Capital, LLC, and/or Samuel Weiser, Premier's CEO and a member of Plaintiff Sellers Capital, LLC, breached a fiduciary duty by executing and performing the obligations imposed by the Agreement. Defendants claim this evidence is relevant to the representation in Article 3.3 of the Agreement, in which Plaintiffs and Mark Sellers ("the Sellers") state that the "execution, delivery and performance" of the Agreement and "the consummation .. . of the transactions contemplated hereby does not and will not, with or without . the giving of notice or the lapse of time, or both, (a) violate any provision of any Law to which any Seller is subject, or (b) violate or breach any provision of the articles of organization, operating agreement or other organizational or governance documents of any Seller, as applicable." Agreement, [ECF No. 89-2], at 4. The term "Law" is defined in the Agreement to include the common law. Id. at 12. In other words, Defendants argue Mark Sellers and Samuel Weiser breached their fiduciary duties in violation of the common law in connection with the execution, delivery, and performance of the Agreement and, by doing so, they breached Article 3.3 of the Agreement.

         Defendants affirmatively state they accept the representation in Article 3.3 of the Agreement and are not seeking to alter its meaning. Defendants' MiL No. 1 Response, [ECF No. 93], ¶ 5. Rather, they want to introduce evidence they contend will show the Sellers breached that unambiguous representation. Plaintiffs contend the evidence Defendants want to introduce amounts to parol evidence intended to "turn Article 3.3 into something different than the admittedly plain wording provides." Plaintiffs' Reply Memorandum in Support of Their Motion in Limine No. 1: To Exclude Parol Evidence from Trial ("Plaintiffs' MiL No. 1 Reply"), [ECF No. 94], at 3. But that is just another way of saying Plaintiffs disagree with Defendants that the Sellers breached their covenant in Article 3.3 of the Agreement.

         The Court is not convinced by Plaintiffs' parol evidence argument. If, as Plaintiffs seem to assert, Article 3.3 does not encompass the duties Defendants say it does, or a breach of any such duty, then irrelevance may be a proper objection to the evidence Defendants want to introduce. The Court can interpret and apply Article 3.3 of the Agreement and determine what it does and does not encompass. But the parties do not address the issue in this way, focusing instead on whether Defendants' theories and proposed arguments are barred by the parol evidence rule. The Court does not see the issue that way. The Court will, however, reserve ruling on the relevance of the evidence Defendants apparently will seek to introduce and discuss this matter further with the parties at the pretrial conference. ...


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