Susan Patterson Interiors, Inc. v. Tobias et al
Filing
101
MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 10/1/2012:Mailed notice(kef, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SUSAN PATTERSON INTERIORS,
INC., an Illinois corporation,
)
)
)
Plaintiff,
)
)
v.
)
)
RANDALL TOBIAS,
)
)
Defendant.
)
____________________________________)
)
RANDALL TOBIAS,
)
)
Counter-Plaintiff/
)
Third-Party Plaintiff,
)
)
v.
)
)
SUSAN PATTERSON INTERIORS,
)
INC., an Illinois corporation,
)
)
Counter-Defendant,
)
)
and
)
)
SUSAN PATTERSON, individually,
)
)
Third-Party Defendant.
)
Case No. 11 C 221
MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
The parties tried this case before the Court in a three day bench trial. This Memorandum
Opinion and Order sets forth the Court’s findings of fact and conclusions of law pursuant to Rule
52 of the Federal Rules of Civil Procedure. For the following reasons, the Court finds:
1
•
•
for Counter-Plaintiff Randall Tobias on his counterclaim for breach of contract
against Counter-Defendant Susan Patterson Interiors, Inc. (Count I of the
Counterclaims/Third-Party Complaint);
•
for Counter-Defendant Susan Patterson Interiors, Inc. on Counter-Plaintiff
Randall Tobias’ counterclaim for consumer and common-law fraud (Counts II
and III of the Counterclaims/Third-Party Complaint); and
•
I.
for Defendant Randall Tobias on Plaintiff Susan Patterson Interiors, Inc.’s claim
for breach of contract against Defendant (the only count in the Complaint);
for Third-Party Defendant Susan Patterson (individually) on Third-Party Plaintiff
Randall Tobias’ claim for consumer and common-law fraud (Counts II and III of
the Counterclaims/Third-Party Complaint).
Background
This action arises out of a long-standing professional relationship between the parties.
Ms. Susan Patterson, a citizen of Illinois, is the president of Susan Patterson Interiors, Inc.
(“SPI”), an Illinois corporation that provides interior decorating services. (Compl.1 & Ans. to
Compl.2 ¶¶ 1, 3.) Randall Tobias is a citizen of Indiana. (Id. ¶ 2; Counterclaims/TPC3 & Ans. to
Counterclaims/TPC4 ¶ 1.)
For over a decade, Ms. Patterson has decorated numerous properties for Mr. Tobias in
different states. During the course of that relationship, Ms. Patterson was affiliated with
different decorating firms, including Slifer Designs Co., Patterson Shonberg Interiors, Inc., and
1
Citations to “Compl.” refer to SPI’s Complaint, filed at docket # 3-1.
2
Citations to “Ans. to Compl.” refer to Mr. Tobias’ Answer to the Complaint, filed at
docket # 6.
3
Citations to “Counterclaims/TPC” refer to Mr. Tobias’ Amended Counterclaims and
Third Party Complaint, filed at docket # 36
4
Citations to “Ans. to Counterclaims/TPC” refer to the Answer to the Amended
Counterclaims and Third Party Complaint, filed at docket # 38.
2
most recently, SPI. Ms. Patterson generally “was compensated for those” interior decorating
services with the terms of the contract to be billed at cost plus 75% basis for interior design
furnishings, fabrics and lighting, cost plus 25% for antiques, and that specification work and
travel was on an hourly basis of $125 per hour for Susan Patterson for $75 per hour for
associates.” (Counterclaims/TPC & Ans. to Counterclaims/TPC ¶ 6.) The parties generally did
not execute separate contracts for each project but instead typically operated under these terms.
On or before February 3, 2009, Ms. Patterson, on behalf of SPI, “met with [Mr. Tobias]
in Captiva, Florida, and discussed the engagement of her firm’s services for the interior design of
[the Tobias] home in Carmel, Indiana.” (Compl. & Ans. to Compl. ¶ 3.) At that time, the parties
agreed that SPI “would perform interior decorating services for the Tobias property in Carmel,
Indiana, and that said services would include, but [were] not limited to, the selection and
purchase of product and materials for the [Tobias] home.” (Id. ¶ 5.) SPI thereafter purchased
products and materials, and issued invoices to Mr. Tobias for services rendered. (Id. ¶¶ 6-7.)
The relationship between Ms. Patterson and Mr. Tobias subsequently soured.
On December 10, 2010, SPI filed a one count Complaint against Mr. Tobias in the
Circuit Court of Cook County, Illinois.5 In the Complaint, SPI alleges that Mr. Tobias breached
an interior decorating contract between the partes by failing to pay all amounts owed for services
rendered. Mr. Tobias thereafter removed the action to this Court pursuant to 28 U.S.C. §§
5
The Complaint also named Deborah Tobias as a Defendant. Deborah Tobias in turn
joined Mr. Tobias in his counterclaims and third party claims against SPI and Ms. Patterson.
There is no basis in the evidence presented at trial to impose liability on Deborah Tobias, nor is
there any basis for her to recover against SPI and/or Ms. Patterson. After the close of evidence,
the Court dismissed Deborah Tobias as a defendant, with prejudice and without objection. The
Court also granted Deborah Tobias’ oral motion to dismiss her as both a counter-plaintiff and
third-party plaintiff.
3
1331(a), 1441, and 1446 (R. 1, 3), and on January 19, 2011, filed an Answer and Affirmative
Defenses. (R. 6.)
Additionally on January 19, 2011, as amended on May 10, 2011, Mr. Tobias filed a
consolidated “Counterclaims and Third Party Complaint.” (R. 7, 36.) Count I asserts a claim for
breach of contract against SPI. Counts II and III assert claims for statutory and common law
fraud against SPI and Ms. Patterson (individually).6
On August 14, 2012, the case proceeded to trial before the Court, sitting without a jury.
Trial lasted three days. At the end of the day on August 15, 2012, the Court continued the trial
until mid-September, with the parties’ agreement, to permit the parties to engage in settlement
discussions. Those discussions proved unsuccessful, and the trial resumed on September 17,
2012 and concluded that same day. During the course of trial, the following witnesses testified:
Ms. Patterson; Mr. Tobias; Ms. Marianne Tobias (ex-wife of Mr. Tobias); and Ms. Meg Linden
(accountant/staff for Mr. Tobias).
II.
Standard of Decision
Where, as here, an action is “tried on the facts without a jury,” Rule 52 requires the
district court to “find the facts specially and state its conclusions of law separately.” Fed. R. Civ.
P. 52(a); see also See Khan v. Fatima, 680 F.3d 781, 785 (7th Cir. 2012) (“The trier of fact must
decide whom to believe (and how much to believe) on the basis of the coherence and plausibility
of the contestants’ testimony, corroboration or contradiction by other witnesses, and other clues
to falsity and veracity.”). The district court must “explain the grounds” of its decision and
6
Mr. Tobias additionally asserted claims of assumpsit and unjust enrichment, but at the
final pretrial conference on August 8, 2012, the Court granted his oral motion to voluntarily
dismiss these claims. (R. 90, Minute Entry; see also Transcript of Proceedings on 8/8/12.)
4
otherwise demonstrate a “reasoned, articulate adjudication.” Aprin v. United States, 521 F.3d
769, 776 (7th Cir. 2008) (citing Jutzi-Johnson v. United States, 263 F.3d 753, 758 (7th Cir.
2001) (“the judge must indicate the reasoning process that connects the evidence to the
conclusion”).
Here, in adjudicating the parties’ claims, the Court has considered the totality of the
evidence presented at trial. The Court has carefully considered the weight to be accorded the
evidence, including the credibility of each witness. In assessing credibility, the Court
considered, among other things, each witness’ demeanor and facial expressions; intelligence;
ability and opportunity to see, hear, or know the matters about which the witness testified;
memory; potential for bias; and, significantly, the believability of the witness’ testimony in light
of the other evidence presented. See, e.g., Anderson v. City of Bessemer, N.C., 470 U.S. 564,
105 S. Ct. 1504, 84 L. Ed. 2d 518 (1985) (applying the well-settled principle that the trial judge
is in the best position to assess witness credibility).
The Court has additionally considered the parties’ arguments and the applicable law. The
elements of the parties’ claims are set forth below. The parties agree that Illinois law governs
each claim in this case. This decision on the merits incorporates the Court’s findings of fact and
conclusions of law, as required by Rule 52. See Fed R. Civ. P. 52(a); Kahn, 680 F.3d at 786.
III.
Analysis
A.
Breach of Contract – Complaint; Counterclaim, Count I
The Court begins with the two claims for breach of contract: (1) SPI’s claim against Mr.
Tobias; and (2) and Mr. Tobias’ counterclaim against SPI. After setting forth the elements of
breach of contract under Illinois law, the Court will analyze each claim separately.
5
1.
Legal Standard
Under Illinois law, a breach of contract claim requires the plaintiff to prove the following
elements by a preponderance of the evidence: “‘(1) the existence of a valid and enforceable
contract; (2) substantial performance by the plaintiff; (3) a breach by the defendant; and (4)
resultant damages.’” Reger Dev., LLC v. Nat’l City Bank, 592 F.3d 759, 764 (7th Cir. 2010)
(quoting W.W. Vincent & Co. v. First Colony Life Ins. Co., 351 Ill. App. 3d 752, 286 Ill. Dec.
734, 814 N.E.2d 960, 967 (2004)); see also Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 560
(7th Cir. 2012) (citing Assoc. Benefit Serv. v. Caremark RX, Inc., 493 F.3d 841, 849 (7th Cir.
2007); MC Baldwin Fin. Co. v. DiMaggio, Rosario & Veraja, LLC, 364 Ill. App. 3d 6, 30, 300
Ill. Dec. 601, 845 N.E.2d 22, 30 (Ill. App. Ct. 2006)).
2.
Analysis, Breach of Contract – SPI v. Mr. Tobias
SPI argues that Mr. Tobias breached a contract for interior decorating services related to
his home in Carmel, Indiana. (Compl. ¶¶ 3-4.) SPI further contends that under the contract, SPI
“would perform interior decorating services,” including “the selection and purchase of product
and materials” for Mr. Tobias’ home. (Id. ¶ 5.) According to SPI, the terms of the alleged
contract provided for “costs plus 75%” plus an additional 3.8% mark-up on delivery and
installation. (Id. ¶ 4.) SPI claims that Mr. Tobias breached the contract by failing to pay SPI
amounts owed for services rendered.
The Court finds for Mr. Tobias on SPI’s claim for breach of contract. First, SPI has
failed to establish the existence of the contract it contends governs the project. SPI’s theory of
the case rests on the alleged existence of a contract admitted into evidence as SPI’s Exhibit B.
That alleged contract, however, reflects an “agreement . . . between Randall Tobias (client) and
6
Patterson Shonberg Interiors, Inc.” (PX-B.) Although Ms. Patterson signed this agreement in
2001 on behalf of Patterson Shonberg Interiors, Inc., that entity is not a party to this action. SPI
has not offered any evidence or argument to suggest that Patterson Shonberg Interiors, Inc. and
SPI are the same entity. Under SPI’s theory, therefore, it has not established, by a
preponderance of the evidence, that Exhibit B was the operative contract between the parties.
That said, as discussed below, Mr. Tobias has established the existence of an implied contract
based on the parties’ prior dealings and course of conduct over many years. (See discussion
infra at pages 9-11.)
Second, even if SPI could establish the existence of a valid and enforcement contract
between the parties, SPI has failed to establish that Mr. Tobias breached the contract. SPI has
neither presented sufficient evidence to support a claim of breach of contract, nor has SPI even
offered a coherent theory of breach. Indeed, SPI’s claim of loss fluctuated significantly
throughout this litigation – for example, SPI requested $82,645.64 in the Complaint (Compl. at
5), $1,323,969.54 on the eve of trial (R. 83), and $613,606.00 in opening statements at trial
(8/14/12(a.m.) Trial Tr. at 3). During trial, SPI argued that Mr. Tobias failed to pay SPI
$144,463.00 owed under the alleged contract. (9/17/12(p.m.) Trial Tr. at 82.) SPI failed,
however, to prove that Mr. Tobias owed SPI any money for services rendered. In fact, as
described below, the evidence established to the contrary – Mr. Tobias overpaid SPI.
SPI attempted to substantiate its damages claim with an unhelpful exhibit binder that
contained hundreds of unorganized exhibits. Putting aside Mr. Tobias’ procedural objections to
7
the exhibit binder,7 its contents remained largely unexplained throughout trial. As the Court
commented after the close of all evidence, SPI did not present any coherent theory of breach that
would allow the Court to find for SPI. The exhibits, at best, represent an amalgamation of
hundreds of invoices, documents and other records, but without necessary context or
explanation. The exhibits were not placed in context by any witness. Although SPI claims that
Mr. Tobias owes it money based on certain invoices, SPI did not identify a single invoice,
properly billed, that remains unpaid.8 The party seeking relief, of course, has the burden of
persuasion, and that party cannot simply throw a mountain of unexplained and confusing
evidence at the fact-finder and expect to meet its burden. Cf. United States v. Dunkel, 927 F.2d
955, 956 (7th Cir. 1991) (“Judges are not like pigs, hunting for truffles buried in briefs”).
In addition to the exhibit binder, SPI relies heavily on the testimony of its principal, Ms.
Patterson, who testified that she reviewed all of the relevant invoices and determined that Mr.
Tobias owes SPI an amount of money. Despite the volumes of invoices and documents, neither
SPI nor Ms. Patterson offered any support for Ms. Patterson’s testimony. Without documentary
support, the Court places minimal weight on Ms. Patterson’s testimony. Indeed, her testimony
lacks credibility in light of the entirety of the trial record. This is not a case where records do not
exist. To the contrary, the evidentiary record contains hundreds of invoices and other records,
and neither SPI nor Ms. Patterson identified any record support for Ms. Patterson’s bald
7
Mr. Tobias moved to strike SPI’s exhibit binder on numerous bases, including the
timeliness of its production. The Court took the motion to strike under advisement. Although
the motion may well have merit, the Court denies it as moot in light of this opinion.
8
There was some evidence that Mr. Tobias underpaid SPI by approximately $10,000, but
after SPI pointed this out to Mr. Tobias, he promptly accounted for and credited this amount to
SPI. (PX-J.)
8
assertion that Mr. Tobias owes money to SPI. Ms. Patterson testified that she has reviewed
certain documents and made calculations by hand, but when pressed on cross-examination, she
could not point to any documents or calculations in the record to support her testimony. The
Court even continued the trial for approximately one month to permit SPI to locate and develop
existing evidentiary support for its claim, but SPI came back with nothing.9
Accordingly, for all of the reasons discussed above, the Court finds for Mr. Tobias on
SPI’s claim of breach of contract.
3.
Analysis, Breach of Contract – Mr. Tobias v. SPI
In Count I of his Counterclaim, Mr. Tobias asserts a claim for breach of contract against
SPI. (Counterclaims ¶¶ 11-13.) Mr. Tobias alleges that SPI breached an interior decorating
contract between the parties by over-charging Mr. Tobias through excessive and duplicate
invoices, among other things. (Id ¶¶ 13(a)-(c).) SPI denies this allegation, and does not assert
any affirmative defenses.
The Court finds for Mr. Tobias on Count I of its Counterclaims. Mr. Tobias’s
counterclaim is almost an inverse of SPI’s claim: he alleges that SPI actually owes him money
arising out of the same set of invoices related to the residence in Carmel, Indiana. He has met
his burden on this claim.
9
The Court appreciates the procedural history of this litigation. SPI filed its Complaint in
2010. Mr. Tobias removed the case to federal court, and soon therefore SPI’s counsel withdrew.
(R. 18). SPI then retained new counsel for it and Ms. Patterson individually, but that counsel
also withdrew. (R. 46.) Current counsel filed her notice of appearance on April 23, 2012, and
has worked diligently in prosecution of SPI’s claim.
9
As an initial matter, Mr. Tobias has established the existence of an agreement between
the parties, namely a contract implied in fact.10 There is no written agreement signed by both
parties, but under Illinois law, “[c]ontracts implied in fact arise under circumstances which,
according to the ordinary course of dealing and the common understanding of men [and women],
show a mutual intention to contract.” Dynergy v. Mktg. Trade v. Multiut Corp., 648 F.3d 506,
517 (7th Cir. 2011) (quoting Mowatt v. City of Chi,, 292 Ill. 578, 127 N. E. 176, 177 (1920)); see
also Schivarelli v. Chi. Transit Auth., 355 Ill. App. 3d 93, 101, 291 Ill. Dec. 148, 823 N.E.2d 158
(Ill. App. Ct. 2005) (“In a contract implied in fact, a contractual duty is imposed by reason of a
promissory expression inferred from facts, circumstances and expressions by the promisor
showing an intent to be bound. Such contract may be proved by circumstances showing that the
parties intended to contract and by the general course of dealing between them.”).
Here, based on the testimony of Mr. Tobias and Ms. Linden, which the Court credits, and
making certain inferences from credible portions of Ms. Patterson’s testimony, Mr. Tobias has
established by a preponderance of the evidence the existence of an implied contract between him
and SPI. For over a decade, the parties had a professional relationship in which Ms. Patterson
would provide interior decorating services and materials to Mr. Tobias, in exchange for
compensation. The terms of the implied contract at issue are consistent with the parties’ typical
terms: cost plus 75% for interior design furnishings, fabrics and lighting; cost plus 25% for
antiques; and $75-125/hour for specification work and travel. These terms are generally
consistent with an unsigned contract between Mr. Tobias and SPI that Mr. Tobias admitted into
10
Neither party pleads or argues that the Illinois statute of frauds is a bar to enforcement
of the alleged contract. The Court therefore does not consider that issue.
10
evidence as DX-1. Ms. Patterson even admitted in her deposition that DX-1 was the operative
contract. No credible evidence, however, suggests that Mr. Tobias ever agreed to pay SPI a
3.8% fee for delivery and installation, as SPI claims in the present litigation. That term is
therefore not part of the contract at issue.
Mr. Tobias has additionally met his burden on the remaining elements of his breach of
contract claim. He offered credible testimony that he paid SPI all amounts owed. He sought to
work with SPI’s principal, Ms. Patterson, to ensure timely and appropriate payment. If he had a
question about a charge, Mr. Tobias would ask for back-up from SPI, which was not always able
to provide it. Much of the billing was handled by Ms. Linden, who works for Mr. Tobias.
Ms. Linden is a certified public accountant who has worked for Mr. Tobias since 2004.
Ms. Linden had responsibility in Mr. Tobias’ office for reviewing and paying any invoice that
SPI submitted to Mr. Tobias. In Ms. Linden’s words: “If there was an invoice from Susan
Patterson Interiors, it was part of my job duties [to take care of it].”
Ms. Linden testified at trial and offered credible testimony. She testified that, as the
parties began to dispute billing items:
I was asked to objectively look at all the bills that [SPI] had sent [Mr. Tobias] and
all the payments he made to [SPI] and determine [with] the assistance of supplier
documents that [SPI] was able to provide to me whether he had been billed
accurately.
Ms. Linden personally reviewed each invoice and identified each payment from Mr. Tobias that
matched each invoice. She also confirmed whether Mr. Tobias received the product or services
at issue. Ms. Linden created a comprehensive spreadsheet that details the specific invoices,
dollar amounts and otherwise that show Mr. Tobias’ overpayments to SPI. (DX-51 & 52.) The
Court admitted this spreadsheet and the supporting documents into evidence. (DX-1-76, 79.)
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Based on her objective review of the underlying documents and her personal knowledge, Ms.
Linden testified that Mr. Tobias overpaid SPI in the amount of $264,674.25.
Although this figure does not include SPI’s claim at trial for unpaid “mark-up on labor”
(specifically, a 3.8% fee for delivery and installation), SPI has not presented any evidence or
pointed to anything in the record – other than Ms. Patterson’s incredible and unsupported
testimony – that Mr. Tobias ever agreed to a markup on delivery and installation in addition to
the “cost plus 75%” on goods. SPI thus cannot recover those amounts.
Having the benefit of observing Ms. Linden’s testimony, including her courtroom
demeanor, the Court finds Ms. Linden’s testimony to be credible. Although she works for Mr.
Tobias, SPI has not suggested bias and indeed, Mr. Tobias too credibly testified that he sought to
pay SPI all amounts owed. Ms. Linden is a certified public accountant and testified that she
personally and objectively reviewed and gathered hundreds of underlying documents to
determine what amounts are owed and to whom. Those documents are in evidence. (See, e.g.,
DX-1-76, 79.) Ms. Linden also credibly testified that she repeatedly asked for Ms. Patterson’s
input on the spreadsheet, but Ms. Patterson was unable or unwilling to identify specific invoices
that remained unpaid.
Ms. Linden’s testimony and the spreadsheet that she created are largely undisputed. Ms.
Patterson, in fact, admitted during her testimony that some invoices submitted to Mr. Tobias
were duplicates. Although Ms. Patterson further testified that she accounted for these amounts
elsewhere, she could not explain where or how, and did not identify any documentation to
support her assertions. On cross-examination, SPI failed to poke holes in Ms. Linden’s
testimony. In response to questioning, Ms. Linden adequately and credibly explained the basis
12
for her testimony, including the dollar amounts and invoices about which she testified. Indeed,
during trial, Ms. Linden agreed to exclude approximately $10,000 in overcharges from her initial
calculations in light of SPI’s contention that the amount did not represent an overcharge. On
cross-examination, she also readily agreed, in response to counsel’s questioning, to remove
$246.40 in sales tax that she inadvertently included.
For all of these reasons, Mr. Tobias has established by a preponderance of the evidence
that he substantially performed under the contract, that SPI breached the contract by
overcharging him, and that he was damaged in the amount of $264,427.85.
4.
Conclusion
The Count finds for Defendant Randall Tobias on Plaintiff SPI’s breach of contract
claim, and for Counter-Plaintiff Randall Tobias on his breach of contract claim against CounterDefendant SPI. The Court awards Mr. Tobias $264,427.85.
B.
Consumer and Common Law Fraud – Counterclaims/Third Party
Complaint Counts II & III
The remaining claims involve intentional torts. In Counts II and III of the
Counterclaims/Third-Party Complaint, Mr. Tobias alleges that SPI and Ms. Patterson violated
the Illinois Consumer Fraud and Deceptive Business Practices Act (“Consumer Fraud Act”), 815
ILCS 505 et seq., and additionally committed common law fraud.
1.
Legal Standard
To prevail on a claim under the Consumer Fraud Act, a plaintiff “must prove: (1) a
deceptive act or practice by [the defendant]; (2) that the act or practice occurred in the course of
conduct involving trade or commerce; (3) that [the defendant] intended [the plaintiff] to rely on
the deception; and (4) that actual damages were proximately caused by the deception.” Oshana
13
v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). The plaintiff must prove these elements by
a preponderance of the evidence. See Fox v. Heimann, 375 Ill. App. 3d 35, 313 Ill. Dec. 366,
872 N.E.2d 126 (Ill. App. Ct. 2007) (“[T]he appropriate standard of proof for a claim brought
under the Consumer Fraud Act is the preponderance of the evidence.”) (citing Avery v. State
Farm Mut. Auto. Ins. Co., 216 Ill. 2d 100, 313 Ill. Dec. 366, 835 N.E.2d 801 (Ill. App. Ct.
2007)).
To prevail on a claim of common law fraud, the plaintiff must prove: “(1) a false
statement of a material fact; (2) defendant’s knowledge that the statement was false; (3)
defendant’s intent that the statement induce plaintiff to act; (4) plaintiff’s reliance upon the truth
of the statement; and (5) plaintiff’s damages resulting from reliance on the statement.” Davis v.
G.N. Mortg. Corp., 396 F.3d 869, 881-82 (7th Cir. 2005). Under Illinois law, “the presumption
is that all persons are honest, and allegations of common law fraud must be established by clear
and convincing evidence.” All Am. Roofing, Inc. v. Zurich Am. Ins. Co., 404 Ill. App. 3d 438,
451, 343 Ill. Dec. 355, 934 N.E.2d 679 (Ill. App. Ct. 2010); see also Cwikla v. Sheir, 345 Ill.
App. 3d 23, 280 Ill. Dec. 158, 801 N.E.2d 1103 (Ill. App. Ct. 2003) (“The elements of fraud
must be proven by clear and convincing evidence.”) (citing In re App. of Rosewell, 106 Ill.2d
311, 318-19, 88 Ill. Dec. 28, 478 N.E.2d 343 (1985)).
2.
Analysis – Counts II and III
To prevail on either Count II or III, Mr. Tobias must prove that SPI or Ms. Patterson
acted with intent. Although the statute and the common law use slightly different iterations of
intent, the element is largely the same – intent that another rely on a misstatement or deception.
The element of intent is lacking here – Mr. Tobias has failed to establish intent by preponderance
14
of the evidence, much less by clear and convincing evidence.
Mr. Tobias presented evidence that, he argues, tends to show that SPI and Ms. Patterson
manipulated invoices and attempted to conceal costs from the client. (See DX-12.) Based on the
evidence, the Court finds that those invoices are the product of simple mismanagement and
disorganization. The evidence shows that Ms. Patterson struggled to keep organized billing
records related to the Tobias project. It is clear that the billing on this project, which was in the
seven figures, turned into a matter that was beyond Ms. Patterson’s capacity to handle. Although
Ms. Patterson may have been careless in her billings, the evidence does not establish that she
acted with nefarious intent. Accordingly, Mr. Tobias has not met his burden on Counts II and
III.
3.
Conclusion
The Count finds for Counter-Defendant SPI and Third-Party Defendant Susan Patterson
on Counter-Plaintiff/Third-Party Plaintiff Randall Tobias’ claims under the Consumer Fraud Act
and common law fraud.
IV.
Conclusion
For all of the reasons set forth above, the Court finds:
•
for Defendant Randall Tobias on Plaintiff Susan Patterson Interiors, Inc.’s claim
for breach of contract against Defendant (the only count in the Complaint);
•
for Counter-Plaintiff Randall Tobias on his counterclaim for breach of contract
against Counter-Defendant Susan Patterson Interiors, Inc. (Count I of the
Counterclaims/Third-Party Complaint), and awards Mr. Tobias damages in the
amount of $264,427.85 without regard to prejudgment interest, which is not
appropriate under the circumstances of this case;
•
for Counter-Defendant Susan Patterson Interiors, Inc. on Counter-Plaintiff
Randall Tobias’ for consumer and common-law fraud (Counts II and III of the
Counterclaims/Third-Party Complaint); and
15
•
for Third-Party Defendant Susan Patterson (individually) on Third-Party Plaintiff
Randall Tobias’ claim for consumer and common-law fraud (Counts II and III of
the Counterclaims/Third-Party Complaint).
The Court will enter judgment consistent with these findings. The parties shall bear their own
costs. See Fed. R. Civ. P. 54(d).
DATED: October 1, 2012
ENTERED
___________________________________
AMY J. ST. EVE
United States District Court Judge
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