United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, DISTRICT JUDGE
2009, Talcott Communications Corp. signed a contract with
Quebecor, later acquired by Quad/Graphics Printing Corp., to
print the magazines Talcott publishes. Between 2009 and 2011,
Talcott accrued a balance of past-due invoices. In 2014,
after repeated printing delays on Quad/Graphics' part,
Talcott's frustration came to a boil as it began to lose
advertisers because of the delays. The parties'
relationship came to an end, and Talcott later sued
Quad/Graphics for breach of contract. Quad/Graphics
counterclaimed, alleging that Talcott was in breach for
failing to pay its invoices in timely fashion. Quad/Graphics
has moved for summary judgment on Talcott's claim and its
is an Illinois corporation that publishes trade magazines,
including Giftware News, Fancy Food
Magazine, Baby Magazine, and Chef
Educator. It publishes tens of thousands of its
magazines each year. In 2009, it entered into a printing
contract with Quebecor. Quebecor was reorganized as World
Color Press, which Quad/Graphics subsequently acquired.
2009 and 2011, Talcott did not pay several invoices. On
December 18, 2011, it entered into an amended agreement with
Quad/Graphics. The agreement laid out an approach to remedy
Talcott's outstanding balance. For future printings,
Talcott was required to pay 130 percent of the cost before
the publication went to print, and the payment would be
applied to its oldest invoices first.
2014, Quad/Graphics moved Talcott's projects to a new
printing plant. Problems arose almost immediately. The record
contains numerous e-mails between September and November 2014
in which Talcott employees complain about delays in printing
the magazines. For Talcott, the final straw was the loss of
the advertisers who had grown frustrated with the late
publication of the magazines in which their ads were placed.
In 2017, Talcott sued Quad/Graphics for breach of contract.
Quad/Graphics counterclaimed that Talcott breached by failing
to pay its outstanding balance.
has moved for summary judgment on Talcott's breach of
contract claim, as well as its breach of contract
counterclaim against Talcott. The contract between
Quad/Graphics and Talcott requires that New York law governs
their dispute. Def.'s Ex. A ¶ 29 (Printing
Agreement). "The essential elements to pleading a breach
of contract under New York law are the making of an
agreement, performance by the plaintiff, breach by the
defendant, and damages suffered by the plaintiff."
Startech, Inc. v. VSA Arts, 126 F.Supp.2d 234, 236
(S.D.N.Y. 2000). To prevail on a motion for summary judgment,
Quad/Graphics must establish that no reasonable jury could
find in Talcott's favor, even after the Court views all
evidence and takes all reasonable inferences in Talcott's
favor. Blasius v. Angel Auto., Inc., 839 F.3d 639,
644 (7th Cir. 2016).
first element of the breach of contract analysis is common to
both Talcott's claim and Quad/Graphics' counterclaim:
whether an agreement existed between the parties. The answer
here is clearly yes. The parties have presented a written
contract, Def.'s Ex. A (Printing Agreement), and a
subsequent amendment. Def.'s Ex. B (Amended Agreement).
Moreover, both parties have acknowledged in their pleadings
the existence of a "valid and enforceable"
contract. See Answer ¶ 9 (admitting that
"[t]he Contract and Amendment between TALCOTT and QUAD
GRAPHICS was valid and enforceable at all times relevant to
Court reviews the remaining questions of each
claim-performance, breach, and damages-separately.
Startech, 126 F.Supp.2d at 236. The Court first
considers Talcott's breach of contract claim, then
reviews Quad/Graphics' counterclaim.
Talcott's breach of contract claim
alleges that Quad/Graphics breached its contract by
repeatedly delivering printing orders late, which caused
Talcott's advertisers to flee. To prevail on its breach
of contract claim, Talcott must show that (1) it performed
under the contract, (2) Quad/Graphics breached, and (3) it
suffered damages. Id. To obtain summary judgment,
Quad/Graphics must show that no jury could reasonably find in
Talcott's favor on these elements. Blasius, 839
F.3d at 644. Quad/Graphic focuses its argument on two
elements. First, it argues that no reasonable jury could find
that it breached the contract. Def.'s Mem. in Supp. of
Summ. J. at 10. Second, Quad/Graphic contends that no
reasonable jury could conclude that Talcott is entitled to
damages. Id. at 8. The Court does not address
Quad/Graphic's first argument, as it finds that
Quad/Graphics is entitled to summary judgment on the basis of
the second point.
argues it is entitled to summary judgment because Talcott
cannot recover its proposed damages-losses in advertising
revenue-as it disclaimed consequential damages in the
contract. Id. at 8-11. The contract states that
Quad/Graphics shall not be liable for "special,
incidental or consequential damages, " including
"lost profits." Def.'s Ex. A ¶ 15
(Printing Agreement). Talcott, in response, argues that the
damage waiver is unconscionable and, therefore,
unenforceable. Pl.'s Resp. Br. at 6. Quad/Graphics
responds that Talcott, through its complaint, conceded the
enforceability of the waiver. Def.'s Reply Br. at 4.
Quad/Graphics also argues that the contract, an agreement
between two sophisticated corporations, is not
unconscionable. Id. at 5. The Court need not resolve
the first contention, as Quad/Graphics prevails on the
argues that no reasonable jury would conclude that its
contract with Talcott is unconscionable. An unconscionable
contract is unenforceable. Gillman v. Chase Manhattan
Bank, N.A., 73 N.Y.2d 1, 10, 534 N.E.2d 824, 828 (1988).
To show the contract is unconscionable under New York law,
Talcott must show the contract was procedurally
unconscionable, "which requires some showing of an
absence of meaningful choice on the part of one of the
parties, " and that it was substantively unconscionable,
which requires ...