United States District Court, N.D. Illinois, Eastern Division
AMERICAN GUARDIAN WARRANTY SERVICES, INC. and AMERICAN GUARDIAN FUNDING CORPORTATION Plaintiffs,
AUTOMOBILE PROTECTION CORPORATION, INC., Defendant.
MEMORANDUM OPINION AND ORDER
D. LEINENWEBER, JUDGE
case involves a car dealership, its exclusive provider of
limited warranties (Plaintiff American Guardian Warranty
Services), and the company that allegedly interfered with the
relationship between the two (Defendant Automobile Protection
Corporation). For the reasons stated herein, Defendant's
Motion for Summary Judgment (Dkt. No. 184) is denied.
lawsuit began in 2016, when Plaintiffs American Guardian
Warranty Services, Inc. and American Guardian Funding
Corporation (collectively, “American Guardian” or
“AGW”) sued JCR-Wesley Chapel, LLC, Jesus
Rosario, and Cynthia Rosario (collectively, “the
Dealership Defendants”) for breach of contract.
JCR-Wesley Chapel is a Florida limited liability company
that, at the times relevant to this lawsuit, owned a car
dealership. Jesus “Jay” Rosario is the owner of
JCR-Wesley Chapel. Cynthia Rosario is Jesus's former
spouse. (Subsequent references to “Rosario” in
this opinion are to Jesus Rosario.)
Guardian provides financing and warranty servicers to car
dealerships. This suit arose out of a series of contracts
between American Guardian and the Dealership, in which
American Guardian gave the Dealership a loan in exchange for
the Dealership's promise to sell exclusively American
Guardian contracts to its customers. The first contract was
formalized on November 7, 2013, when the Dealership
Defendants entered into a “Dealer Agreement” with
American Guardian. (Pls.' Resp. to Def.'s Stmt. of
Facts (“DSOF”) ¶¶ 2-3, Dkt. No. 189.)
The Dealer Agreement provided that American Guardian would
loan the Dealership $300, 000 in exchange for the Dealership
selling exclusively American Guardian warranty products for
five years. (Id.) On November 14, 2014, the
Dealership and American Guardian entered into a “Dealer
Agreement Funding Addendum, ” which extended the
exclusive-sale period in exchange for an additional $1, 030,
601.15 loan. (DSOF ¶ 5.) The Dealership signed a third
Addendum Agreement with American Guardian on December 15,
2015, for an additional $716, 357.52 loan. (Id.
¶ 6.) The Dealer Agreement and the following Addendums
all contained the following language:
For a period of sixty (60) months from the effective date,
Dealer agrees to provide substantially all vehicle service
contracts, limited warranty, guaranteed asset protection,
certified ancillary product production through American
Guardian Warranty Services, Inc. or its approved product
providers. For purposes of this provision, substantially all
shall mean [95%] of vehicle service contracts, limited
warranty, guaranteed asset production, certified ancillary
product production produced by Dealer.
(Def.'s Resp. to Pls.' Stmt. of Add. Facts
(“PSOAF”) ¶ 6, Dkt. No. 195.) Thus, the
final 2015 agreement obligated the Dealership to sell
American Guardian products until December 2020. (PSOAF
¶¶ 5-6, 11.)
dispute between the parties began brewing in early 2016.
Rosario approached American Guardian for additional funding
for the Dealership. (PSOAF ¶ 12.) Around the same time,
in April 2016, representatives from Automobile Protection
Corporation, Inc. (APCO) visited the Dealership. (PSOAF
¶¶ 15-16.) Like American Guardian, APCO is an
automobile warranty provider that provides loans to car
dealerships in exchange for exclusive sales agreements. Joey
Falcon was the Dealership's general manager at the time.
(PSOAF ¶ 11.) Falcon had reviewed the Dealership's
contracts with American Guardian and understood that the
exclusive sales term continued through December 2020.
(Id.) Still, Falcon met with an APCO Vice President,
Pete Lee, and APCO salesperson, Rob Mirra, and discussed how
a loan advance from APCO could be helpful in funding
additions to the Dealership. (PSOAF ¶ 16.)
April 30, 2016, Lee sent an email to Mirra stating, “I
wanted to let you know that the loan for [the Dealership] is
approved. We are working on loan agreements and should have
them next week.” (PSOAF ¶ 18.) On May 3, 2016,
APCO sent its rate quotes and books to the Dealership.
(Id. ¶ 20.) On May 13, 2016, Mirra received a
copy of the Dealer Agreement between the Dealership and
American Guardian. (Id. ¶ 21.) Mirra circulated
a copy of the contract to other APCO executives.
(Id. ¶ 21.) On October 1, 2016, APCO entered
into an exclusive contract with the Dealership to sell the
same type of warranty products the Dealership was still
obligated to sell for American Guardian. Soon after, American
Guardian sued the Dealership Defendants for breach of
was not originally a party to this suit. In their Second
Amended Complaint, American Guardian added APCO as a
defendant. (See Sec. Am. Compl., Dkt. No. 101.)
American Guardian alleges that APCO intentionally induced the
Dealership Defendants to breach their contract with American
Guardian. American Guardian asserts two claims against APCO:
tortious interference with an existing business relationship,
and tortious interference with a contract.
Court has issued three prior rulings in this case.
(See May 22, 2017, Mem. Op., Dkt. No. 55; June 5,
2018, Mem. Op, Dkt. No. 124; Oct. 24, 2018, Order, Dkt. No.
142.) In denying APCO's earlier motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6), the Court held as
follows: (1) the Dealership Agreement is not unconscionable;
(2) American Guardian pleaded each element of a claim for
tortious interference with contract; and (3) American
Guardian's claims are not barred by the lawful
competition privilege. (See Oct. 24, 2018, Order.)
2019, the Dealership Defendants settled with American
Guardian and were dismissed from this case. (See
Minute Entry, Dkt. No. 173.) The case between American
Guardian and APCO is set to begin a jury trial on March 2,
2020. APCO now moves for summary judgment, arguing that
American Guardian has insufficient evidence to support a
claim for tortious interference with contract or business
judgment is appropriate where there are no genuine issues of
material fact and the movant is entitled to judgment as a
matter of law. Levy v. Marion Cty. Sheriff, 940 F.3d
1002, 1008- 09 (7th Cir. 2019) (citing Fed R. Civ. P. 56(a)).
The Court considers the entire evidentiary record and draws
all reasonable inferences from that evidence in the light
most favorable to the nonmovant. Horton v. Pobjecky,
883 F.3d 941, 948 (7th Cir. 2018). To defeat summary
judgment, a nonmovant must produce more than a “mere
scintilla of evidence” and come forward with
“specific facts showing that there is a genuine issue
for trial.” Johnson v. Advocate Health and Hosps.
Corp., 892 F.3d 887, 894, 896 (7th Cir. 2018).
Inferences supported only by speculation or conjecture will
not suffice. Skiba v. Ill. Cent. R.R. Co., 884 F.3d
708, 721-22 (7th Cir. 2018). Summary judgment is warranted
only if the evidence is such that a reasonable jury could not
return a verdict for the nonmoving party. Id.
(citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986)).
with contract and interference with business relations
(sometimes called prospective economic advantage) are related
torts. Int'l Mktg., Ltd. v. Archer-Daniels-Midland
Co., Inc., 192 F.3d 724, 731 (7th Cir. 1999).
In Illinois, the elements of a tortious interference with an
existing contract claim are:
(1) the existence of a valid and enforceable contract between
the plaintiff and another; (2) the defendant's awareness
of this contractual relation; (3) the defendant's
intentional and unjustified inducement of a breach of the
contract; (4) a subsequent breach by the other, caused by the
defendant's wrongful conduct; and (5) damages.
HPI Health Care Servs., Inc. v. Mt. Vernon Hosp.,
Inc., 545 N.E.2d 672, 676 (Ill. 1989); A-Abart Elec.
Supply, Inc. v. Emerson Elec. Co., 956 F.2d 1399, 1404
(7th Cir. 1992). In a tortious inference with a business
relationship or prospective economic advantage claim, the
plaintiff must establish (1) the existence of a valid
business relationship (not necessarily evidenced by an
enforceable contract) or expectancy; (2) the knowledge of the
relationship or expectancy on the part of the interferer; (3)
an intentional interference inducing or causing a breach or
termination of the relationship or expectancy; and (4)
resultant damage to the party whose relationship or
expectancy has been disrupted. Curtis 1000, Inc. v.
Suess, 843 F.Supp. 441, 452 (C.D. Ill.),
aff'd, 24 F.3d 941 (7th Cir. 1994).