United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
MARIA VALDEZ UNITED STATES MAGISTRATE JUDGE
Cathay Industries USA, Inc.'s (“Cathay”)
complaint, which is premised on diversity jurisdiction,
alleges breach of contract due to Defendant William J.
Bellah's failure to pay sums due under a promissory note.
The parties have consented to the jurisdiction of the United
States Magistrate Judge pursuant to 28 U.S.C. § 636(c).
previously moved for summary judgment on Bellah's Third
Affirmative Defense, and that motion was denied on September
28, 2017. Cathay now moves for summary judgment on
Bellah's First and Second Affirmative Defenses. For the
reasons that follow, Plaintiff's Motion for Partial
Summary Judgment [Doc. No. 69] is granted.
facts of the case were discussed in the earlier summary
judgment motion and will not be repeated here unless
necessary. See Cathay Indus. USA, Inc. v. Bellah,
No. 16 C 2070, 2017 WL 4310623 (N.D. Ill. Sept. 28, 2017).
Two particular contracts are relevant to the present motion.
First is the $1.5 million promissory note known as the
Compass Note, which is the subject of the present litigation.
The Compass Note was executed on September 23, 2008 by Bellah
in favor of Compass Chemical International, LLC. (LR
56.1(b)(3)(C) ¶¶ 4-5, 11.) The Compass Note was
assigned to Cathay in 2012; assigned from Cathay to its
parent Cathay Pigment Holdings (“Cathay
Holdings”) in 2014; and finally assigned in 2016 from
Cathay Holdings back to Cathay. (Id. ¶¶
second relevant contract is the 2007 Consulting Agreement,
which was entered into on January 1, 2007 by Cathay Holdings
and Bellah, on behalf of Bel-Air Investments, Inc.
(“Bel-Air”), a company owned by him. Pursuant to
the 2007 Consulting Agreement, Bel-Air was to provide certain
consulting services to Cathay Holdings, and Cathay Holdings
would in turn pay monthly fees and yearly bonuses to Bel-Air.
The yearly bonuses, in a lump sum amount equal to the total
monthly payments during the year, were to be paid in the
first quarter of the following year. The bonuses were paid as
scheduled in the years 2008 through 2012. The parties also
observed an “informal agreement” whereby half of
the yearly bonus payments were to be credited to the amounts
owed under the Compass Note. (Id. ¶¶ 6-10,
issue in the present motion is Defendant's second
affirmative defense, which alleges that any obligation owed
by Bellah on the Compass Note “is subject to a set-off
for services rendered to Plaintiff by Defendant, ” (LR
56.1(a)(3) ¶ 15), namely $962, 000 allegedly owed to him
under the 2007 Consulting Agreement.
judgment is appropriate where “the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law.” Fed.R.Civ.P. 56(c). The Court must draw all
reasonable inferences in favor of the nonmovant.
Bennington v. Caterpillar Inc., 275 F.3d 654, 658
(7th Cir. 2001).
once the movant has carried its burden under Rule 56(c),
“its opponent must do more than simply show that there
is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). The party opposing summary judgment
must offer admissible evidence in support of his version of
events, and hearsay evidence does not create a genuine issue
of material fact. McKenzie v. Ill. Dep't of
Transp., 92 F.3d 473, 484 (7th Cir. 1996); see
Larimer v. Dayton Hudson Corp., 137 F.3d 497, 500 (7th
Cir. 1998) (“‘If the non-moving party bears the
burden of proof on an issue, . . . that party may not rest on
the pleadings and must instead show that there is a genuine
issue of material fact.'”) (citation omitted).
“The mere existence of an alleged factual dispute is
not sufficient to defeat a summary judgment motion. . . . The
nonmovant will successfully oppose summary judgment only when
it presents ‘definite, competent evidence to rebut the
motion.'” Vukadinovich v. Bd. of Sch. Trs. of
N. Newton Sch. Corp., 278 F.3d 693, 699 (7th Cir. 2002)
(citations omitted); see also Hall v. Bodine Elec.
Co., 276 F.3d 345, 354 (7th Cir. 2002)
(“Conclusory allegations and self-serving affidavits,
without support in the record, do not create a triable issue
considering a motion for summary judgment, this court is not
required to scour the record in search of evidence to defeat
the motion; the nonmoving party must identify with reasonable
particularity the evidence upon which the party
relies.” Pleniceanu v. Brown Printing Co., No.
05 C 5675, 2007 WL 781726, at *7 (N.D. Ill. Mar. 12, 2007)
(citing Johnson v. Cambridge Indus., Inc., 325 F.3d
892, 898 (7th Cir. 2003)); see Estate of Moreland v.
Dieter, 395 F.3d 747, 759 (7th Cir. 2005). Finally, the
Court is “‘not required to draw every conceivable
inference from the record.”' McCoy v.
Harrison, 341 F.3d 600, 604 (7th Cir. 2003) (citation
Compass Note obligates Bellah to pay Cathay $1.5 million.
According to Bellah, Cathay Holdings owes him over $900, 000
pursuant to an “informal agreement” that
accompanied the 2007 Consulting Agreement, which was between
Cathay Holdings and Bel-Air Investments. Bellah's
affirmative defense claims that the money owed by Cathay
Holdings should be set off from his obligations under the
Compass Note. Plaintiff argues that summary judgment on the
affirmative defense is warranted because (1) the debt