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Lubrizol Corp. v. Olympic Oil Ltd.

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

April 27, 2018

THE LUBRIZOL CORPORATION, Plaintiff,
v.
OLYMPIC OIL LTD., OLYMPIC PETROLEUM CORPORATION, ASSIGNEE HOWARD B. SAMUELS, Assignee for the benefit of creditors of Olympic Oil Ltd., Defendants.

          MEMORANDUM OPINION AND ORDER

          Hon, Virginia M. Kendall, United States District Judge.

         Plaintiff, The Lubrizol Corporation (“Lubrizol”), sued Defendants Olympic Oil Ltd. (“Old Olympic”), Olympic Petroleum Corporation (“Olympic Petroleum”), and Howard B. Samuels as Assignee for the benefit of creditors of Olympic Oil Ltd. (“Trustee”) under Illinois law for breach of contract, violations of the Illinois Uniform Commercial Code, an accounting, unjust enrichment, breach of the Agreement for Purchase and Sale (“APA”), breach of the Trust Agreement, and breach of fiduciary duty. (Dkt. No. 1.) The Trustee seeks dismissal of the counts against him for breach of the Trust Agreement (Count VIII) and breach of fiduciary duty (Count IX) asserting the failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6). (Dkt. No. 16.) The Court denies the motion for the following reasons. [16.]

         BACKGROUND[1]

         Lubrizol, an Ohio corporation, is a chemical company that “provides technologies that improve the quality and performance of its customers' products in the global transportation, industrial and consumer markets.” (Dkt. No. 1, at ¶¶ 3, 4.) One of its product purchasers was Old Olympic - an Illinois corporation that provided packing and supply chain services, produced automotive additives, lubricants, car care products, motor oil, antifreeze, engine and fuel products, and provided automotive oil products for users around the world. (Id. ¶¶ 5-6, 11.) LiquidPower Specialty Products, Inc. (“LSPI”)[2] is an affiliate of Lubrizol that purchased warehousing storage and operations from Delta Petroleum Company, Inc. (“Delta”), which at the time owned Old Olympic up to and until 2015. (Id. ¶¶ 19-20.) But, in September 2015 Old Olympic split with Delta and instructed purchase orders to be placed directly with Old Olympic. (Id. ¶ 21.) Unfortunately, LSPI or Lubrizol instead continued making payments totaling $92, 077.70, intended for services provided by Delta, to Old Olympic between October 2015 and February 2016. (Id. ¶¶ 22-23.)[3] In May 2016, when Lubrizol informed Old Olympic of these payments and requested a refund, Old Olympic acknowledged receipt of the payments intended for Delta and informed Lubrizol they would set up “our payment plan later.” (Id. ¶ 26; Ex. 7.)

         Then, on July 7, 2016, Old Olympic entered into a Trust Agreement with the Trustee whereby they transferred certain of its property into the “Olympic Oil Trust” for the purpose of liquidating assets and property so as to proceed to a public sale on July 25, 2016, and to pay off outstanding creditors. (Id. ¶¶ 27-30.) A copy of the Trust Agreement is incorporated as attached as an exhibit to Lubrizol's Complaint and contains the following pertinent provisions:

WHEREAS, OLYMPIC OIL is indebted to various persons, corporations, and other entities and is unable to pay its debts in full, has decided to discontinue its business, and is desirous of transferring its property to a Trustee/Assignee for the benefit of its creditors …

(Id., Ex. 1 at 1.) (Emphasis added.) And,

A. Creation and Object of Trust.
The name of this Trust shall be the “Olympic Oil Creditors Trust, ” and its object shall be the orderly liquidation of the assets and property of OLYMPIC OIL and the distribution of the proceeds of the liquidation to creditors of OLYMPIC OIL in accordance with applicable law. OLYMPIC OIL hereby nominates and appoints Howard B. Samuels as Trustee/Assignee to carry out the purpose of this OLYMPIC OIL Trust in accordance with its terms and conditions set forth herein …
B. Transfer of Personal Property Assets.
OLYMPIC OIL does hereby grant, convey, assign, transfer, and set over to the Trustee/Assignee … all property and assets of OLYMPIC OIL, whatever and wherever situated. The property and assets transferred shall include without limitation, all personal property, tangible and intangible, including, without limitation, all cash on hand, bonds, bank accounts, accounts receivable, … claims and causes of action.
D. Powers and Duties of Trustee/Assignee.
The Trustee/Assignee shall have, inter alia, the following powers, ...

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