United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Jeffrey Cole Magistrate Judge
which is a diversified financial services company, which,
from its inception, has conducted business nationally with
well-established insurance agencies, [Dkt. #28 at 12], has
sued Capital Premium Financing, Inc. under an Option
Agreement and related Master Transaction Agreement. The Third
Amended Complaint spans 75 pages and 270 paragraphs.
[Dkt.#160]. While the parties' labyrinthine undertakings
are, in many ways, typical of modern corporate transactions,
at bottom the Third Amended Complaint alleges a breach of
contract. Insisting that the Defendant has done
nothing wrong, the Answer raised 12 “Affirmative
Defenses, ” and its 226-paragraph “Supplemented
Counterclaims” charge BankDirect with “willful
and bad faith breaches of [the] Master Transaction Agreement
and related agreements....”
heart of the Defendant's claim of wrongdoing is the
contention that the Plaintiff had falsely represented during
contract negotiations that it would exclusively market and
promote the Defendant's loan products - an allegation
denied by the Plaintiff - especially in the Eastern United
States to small to midsize insurance agencies, and that as a
consequence it was contemplated that the Defendant's
sales and earnings during the five-year term of the contract
would be substantially and positively affected. The
Counterclaim charges that, instead, the Plaintiff purchased
Standard Funding, “a direct competitor” of the
Defendant and failed to market and promote the
Defendant's loan products as it allegedly had promised.
Here is a sampling of the relevant allegations in the
197. A key component of the MTA [the contract between the
parties] for [Defendant] was the marketing and promotion of
its loan products and services by BankDirect's large
sales force, throughout the United States, and particularly
in the Eastern United States, for small to mid-sized
agencies, which would have substantially increased CPFI's
sales and earnings during the 5-year MTA period.
198. BankDirect representatives made several material and
misleading representations during negotiations that
BankDirect would exclusively market [the defendant's]
products for small to midsized agencies throughout the United
States, and particularly in the Eastern United States.
199. Prior to entering into the [Agreements with Defendant],
BankDirect was negotiating the acquisition of Standard
Funding, a direct competitor of CPFI.
200. BankDirect subsequently acquired Standard Funding
shortly after the MTA and Option Agreement were executed.
201. Thereafter, BankDirect marketed and promoted its own
products in the Eastern United States to the exclusion of
marketing CPFI's products.
209. CPFI reasonably relied on BankDirect's promises
concerning the exclusivity of the marketing in the small to
mid-sized agency market segment. (Emphasis added).
(Dkt. #172, at 114-115).
against this background of charges and countercharges that
the present discovery controversy arose. In Request 33, the
Defendant demanded that the Plaintiff produce:
“Documents sufficient to determine the proportion of
BankDirect's loan volume that is attributable to the 150
largest insurance agencies in the United States from 2010 to
the contract at issue was signed in 2016, the Request sought