United States District Court, C.D. Illinois, Peoria Division
DAVID L. BIELFELDT, et al., Plaintiffs,
LEE C. GRAVES, et al., Defendants.
ORDER AND OPINION
JONATHAN E. HAWLEY U.S. MAGISTRATE JUDGE
the Court are cross motions for summary judgment, as well as
Defendant, Elm One Call Locators, Inc.'s
(“ELM”), motion for summary judgment on Counts I
and IX filed at the invitation of the Court. (D. 124, 127,
128, & 136). Specifically, Plaintiffs David Bielfeldt and
Karen Wales seek summary judgment on the counterclaim against
them for declaratory judgment filed by Defendants ELM and
James Bourazak. The Defendants seek summary judgment in their
favor on the same counterclaim. ELM also seeks summary
judgment in its favor on Counts I and IX. For the reasons
stated, infra, ELM's motion for summary judgment
on Counts I and IX is GRANTED (D. 136). Because the grant of
that motion resolves the only federal claims in this case and
the Court, as explained, infra, declines to exercise
supplemental jurisdiction over the remaining state law
claims, the remaining motions for summary judgment are MOOT.
(D. 124, 127, & 128).
undisputed facts relevant to ELM's motion for summary
judgment on Counts I and IX are as follows.
incorporated on June 5, 2003. At the time of incorporation,
Bielfeldt and Graves were each issued 50% of the Class A
Voting Shares of ELM. ELM, Bielfeldt, and Graves entered into
a Class A Stock Restriction Agreement (“SRA”) in
2003. Bielfeldt and Graves accepted appointments to the board
of directors and, during the time relevant to this case,
Graves was the CEO of ELM.
2013, Graves contributed approximately $1.8 million to ELM to
avoid ELM going into default on its liability insurance and
to allow it to meet its payroll obligations. After doing so,
Graves sent an email to Bielfeldt on January 16, 2014
As we discussed, our shortfall was in the $1.8m to $2m range.
Since you left the meeting with this issue unresolved and I
did not hear back from you on options and the immediate
threat of not being able to pay our liability insurance down
payment or meet payroll, I personally put up $1.8m. The
threat of not making payroll for hundreds of employees and
families as well as defaulting on our liability insurance
requirements was unthinkable.
While I have done this to solve our immediate problem, I
can't do this alone. Therefore, we have a couple of
options. First and preferred option, is for you to come up
with $900K to equalize our contributions and risk. If this
option is not preferred then let's have your ownership
valued and work on an exit strategy. This is not the same
business model we acquired over 10 yrs ago but we have
survived and are having something to talk about. If you have
another option, please let me know as I value our friendship
and would like to see this worked out.
(D. 126 at ECF pp. 3-4).
responded to this email the same day with, “Let's
talk . . .” Id. Thereafter, Bielfeldt and
Graves executed a Fourth Amendment to Business Loan Agreement
wherein Graves was given the authority, in light of his
pledge of capital to:
borrow money in the name of the Corporation, sign execute and
deliver promissory notes or other evidence of indebtedness of
the Corporation; and, endorse, assign, transfer, mortgage or
pledge bills receivable, real estate or other property now
owned or hereafter owned or acquired by the Corporation as
security for sums borrowed.
Id. at 5.
communications occurred between Bielfeldt and Graves, but
Bielfeldt never took action to address the additional capital
Graves put into ELM. Finally, on May 12, 2014, Graves sent a
letter to Bielfeldt on company letterhead. That letter in its
entirety is as follows:
Mr. David Bietfcldt
4737 N, Grand view Drive
Peoria Heights, IT, ...