R.S. Owens and Company, Inc. v. Bluestone Designs and Creations, Inc. et al
Memorandum Opinion and Order signed by the Honorable Robert W. Gettleman on 2/7/2017: Defendant's motion 180 for summary judgment is granted. Plaintiff's motion 197 to strike portions of defendant's statement of facts is denied. Mailed notice (gds)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
OWENS TROPHIES, INC. f/k/a
R.S. OWENS AND COMPANY, INC.,
BLUESTONE DESIGNS & CREATIONS,
No. 12 C 7670
Judge Robert W. Gettleman
MEMORANDUM OPINION AND ORDER
Plaintiff Owens Trophies, Inc. filed a one-count fourth amended complaint against
defendant Bluestone Designs & Creations alleging breach of contract. Defendant answered the
complaint and filed a counterclaim seeking declaratory relief. Plaintiff filed a motion for
summary judgment as to defendant’s counterclaim, after which defendant filed a motion to
voluntarily dismiss its counterclaim, which this court granted. Defendant then filed the instant
motion seeking summary judgment pursuant to Fed. R. Civ. P. 56. Plaintiff filed a motion to
strike portions of defendant’s Local Rule 56.1 statement for violating Fed. R. Civ. P. 56 and L.R.
56.1. For the reasons discussed below, defendant’s motion is granted and plaintiff’s motion is
Plaintiff is a design firm that began working with defendant, a manufacturer of trophies
and awards, to produce various items beginning in 2004. In January 2007, plaintiff presented,
and both parties signed, a Manufacturing and Supply Agreement (“the Contract”). The first
recital of the Contract states that it “ shall be made effective as of January 1, 2005.” The term
provision in the Contract, however, states that it “shall be effective for a period of five years
from April 1, 2006 until April 1, 2011.” Additionally, the Contract contained a clause that
prohibited defendant from providing “to anyone ... other than [plaintiff], any Work which
[plaintiff] has provided to [defendant] . . . .” This prohibition was to remain in place for two
years after the termination or expiration of the Contract. One of the items defendant
manufactured for plaintiff, the Emmy Award statue (“the Emmy Award”), is the subject of this
lawsuit. Plaintiff had a “longstanding” arrangement to produce the Emmy Award for both the
National Academy of Television Arts and Sciences and the Academy of Television Arts and
Sciences (“the Academy”). Defendant, along with its factory partner in China, began producing
the Emmy Award for plaintiff, who then sold it to the Academy, in 2005. In 2010, the Academy
The following facts are, unless otherwise specified, undisputed and taken from the
parties’ Local Rule 56.1 statements and responses. The court acknowledges plaintiff’s motion to
strike paragraphs 12–15, 19, and 30 of defendant’s Local Rule 56.1 statement because they
either contain legal and factual arguments or do not properly and accurately cite the record. The
court notes that many of plaintiff’s responses also violate L.R. 56.1 by asserting legal and factual
arguments. The court reminds counsel for both parties that the purpose of L.R. 56.1 statements
is to “identify the relevant admissible evidence supporting the material facts, not to make factual
or legal arguments.” Warner Bros. Entm’t, Inc. v. Synergex Corp., 2014 WL 518085, at *1
(N.D. Ill. February 10, 2012). Due to both parties’ failure to follow L.R. 56.1, the court has
devoted significant judicial resources to sifting through the record to ascertain those facts which
are, in fact, material and disputed. Having done a considerable amount of work to do so, the
court takes those facts that are supported by the record to decide the legal issue presented.
Accordingly, plaintiff’s motion is denied as moot.
notified plaintiff that a competitor had quoted the Academy a price well below plaintiff’s price
for producing the Emmy Award. Plaintiff matched the competitor’s price and increased
donations to the Academy, but the Academy subsequently advised plaintiff that some of its
chapters would be acquiring the Emmy Award through another source. Plaintiff learned that the
aforementioned competitor was this alternate source, and that defendant was producing the
Emmy Award for this competitor. After learning this, plaintiff and defendant continued their
relationship for approximately four years, at which point plaintiff filed the instant complaint
alleging breach of contract against defendant.
A movant is entitled to summary judgment pursuant to Fed. R. Civ. P. 56 when the
moving papers and affidavits show that there is no genuine issue of material fact and the movant
is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). Once a moving party has met its burden, the nonmoving party must
go beyond the pleadings and set forth specific facts showing there is a genuine issue for trial.
See Fed. R. Civ. P. 56(c); Becker v. Tenenbaum–Hill Assoc., Inc., 914 F.2d 107, 110 (7th Cir.
1990). The court considers the record as a whole and draws all reasonable inferences in the light
most favorable to the party opposing the motion. See Green v. Carlson, 826 F.2d 647, 651 (7th
A genuine issue of material fact exists when “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). The nonmoving party must, however, “do more than simply show that there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). “The mere existence of a scintilla of evidence in support of the
[nonmoving party's] position will be insufficient; there must be evidence on which the jury could
reasonably find for the [nonmoving party].” Anderson, 477 U.S. at 252.
Defendant argues that it is entitled to summary judgment for three reasons: (1) the Emmy
Award was not within the scope of the Contract because it did not qualify as a “Work”; (2)
assuming the Contract did apply to the Emmy Award, plaintiff is barred from recovery because it
did not exercise either of the two breach of contract remedies provided for in the Contract; and
(3) defendant was excused from performance because plaintiff materially breached the Contract
first by refusing to accept a shipment of 500 Emmy Awards and by failing to live up to its
payment obligations.2 The court need address only the first argument.
According to defendant, it was not contractually obligated to sell the Emmy Award
exclusively to plaintiff because it did not qualify as a “Work” under the Contract. The term
“Work” is, unfortunately, not defined in the Contract. Consequently, defendant’s argument that
the Emmy Award was not a “Work” is premised on provisions in the Contract that spell out the
process through which an item could become a “Work.” The Contract contained the following
(1) [Plaintiff] shall inquire with [defendant] as to its capability to manufacture, in
accordance with all standards and conditions identified herein and any others that may be
agreed hereinafter, [plaintiff]’s total requirements of a designated Work in the Territory
during the term . . . . [Plaintiff] shall provide [defendant] with all materials and
In its motion for summary judgment, defendant also argued that plaintiff waived its
right to recovery through its conduct. Defendant withdrew this argument in its reply brief.
information that [plaintiff] believes are reasonable and necessary to evaluate
[defendant]’s capability to manufacture and supply the designated Work in Accordance
with this agreement.
(2) Within a reasonable period of time but no later than forty-five days thereafter,
[defendant] shall provide [plaintiff] with a fully compliant prototype of the designated
(3) In furtherance of [plaintiff]’s evaluation, [defendant] shall provide [plaintiff] with any
additional information which [plaintiff], in its sole discretion, deems necessary to
evaluate [defendant]’s capabilities with respect the Work [sic] under consideration,
including but not limited to quality and price.
(4) In the event [plaintiff] determines, in its sole discretion, that [defendant] is capable of
manufacturing and supplying [plaintiff] with its total requirements of the designated
Work in the Territory at a competitive price in view of all market conditions, [plaintiff]
shall notify [defendant] that it has been approved as the sole and exclusive manufacturer
of the designated Work for the term of the Agreement.
(5) Upon receipt of such notice, [defendant] shall become obligated to manufacture for
[plaintiff] and [plaintiff] will be obligated to purchase from [defendant], [plaintiff]’s total
requirements of the designated Work in the Territory for the Term of the Agreement.
[Defendant] shall manufacture and supply the Work to [plaintiff] in accordance with all
mutually agreed upon standards and conditions.
According to defendant, by providing for such a specific process, the Contract excluded
any designs that plaintiff submitted to defendant prior to the Contract term, which did not go
through the specified process. Defendant also claims that it is undisputed that defendant
presented its Emmy Award to plaintiff in 2004, before the Contract was signed in 2007, and that
it did not go through the process required to qualify as a “Work.” Although plaintiff disputes
this, plaintiff’s claim is belied by its own evidence.
Plaintiff contends that the exchanges between plaintiff and defendant that took place
before they agreed that defendant would supply the Emmy Award were “precisely the
quote/sample process envisioned by the contract.” Plaintiff further argues that, although
discussions between plaintiff and defendant regarding the Emmy Award commenced prior to
them signing the Contract, its production was governed by the Contract because defendant did
not begin manufacturing the Emmy Award for plaintiff until after the Contract took effect.
Plaintiff is mistaken.
First, plaintiff has failed to submit sufficient evidence that the production framework set
out in the Contract, which the plaintiff drafted, was followed prior to defendant producing the
Emmy Award. Second, and most importantly, what plaintiff’s evidence does show is that
defendant began producing, and plaintiff began purchasing, the Emmy Award at some point in
2005, at least four months before the term of the Contract commenced on April 1, 2006. In its
Rule 56.1 Statement, plaintiff submitted an affidavit executed by its president stating that,
“evaluation of [defendant]’s production capabilities continued into 2005, at which point
[plaintiff] began placing orders for the Emmy.” Plaintiff argues that “the contract language does
not expressly state whether the contract applies to the Emmy award,” which is true. The
Contract does, however, unambiguously identify the term of the Contract: April 1, 2006 to April
1, 2011. Given the clarity of the term, and the parties’ agreement that defendant’s production of
the Emmy Award pre-dates this term, it is unnecessary for the court to look to extrinsic evidence
to determine the intent of the parties, as plaintiff urges.
Plaintiff acknowledges that, where the “court classifies the [Contract] as unambiguous,
then the intention of the parties must necessarily be determined solely from the language used in
the document.” Interway, Inc. v. Alagna, 85 Ill. App. 3d 1094, 1098 (1st Dist. 1980).
Recognizing this, plaintiff cautions that the Illinois Supreme Court disfavors strict contract
interpretation where such an interpretation would defeat the intent of the parties. Schek v.
Chicago Transit Auth., 42 Ill. 2d 362, 364 (1969). Plaintiff conveniently ignores the well-settled
principle of contract law that, “[i]n determining intent, we look to the unambiguous language of
the contract, not to belated explanations of what the contracting parties meant to do.” Pine Top
Receivables of Illinois, LLC v. Banco De Seguros Del Estado, 2013 WL 2574596, at *4 (N.D.
Ill. June 11, 2013), aff'd, 771 F.3d 980 (7th Cir. 2014). Plaintiff urges the court to find
ambiguity where there is none so that it may rely on statements made nearly ten years after the
fact to prove the intent of the parties when they entered into the Contract. The court declines to
make such a leap. Plaintiff drafted the Contract. When it did so, plaintiff knew very well when
it began (or didn’t begin) purchasing Emmy Awards from defendant. If plaintiff intended for the
Emmy Award to be included in the Contract, it would have made that explicit either by including
it in the Contract or, at the very least, including a term that encompassed defendant’s production
of the Emmy Award. Because it did neither, the court concludes that the Emmy Award does not
fall within the scope of the Contract.
Although plaintiff does not advance the argument, the court notes that it could be argued
that the Contract is ambiguous due to the contradiction between the “effective date” in the recital
and the date specified in the term provision. This argument, however, is foreclosed, again by a
well-settled principle of contract law. Where recitals in a contract contradict express provisions,
the latter provisions control and the court will resort to the recitals only “if necessary to
determine the intention of the parties and the operative provisions of the agreement.” Horton v.
Chicago, 2016 WL 4945014, at *7 (N.D. Ill. Sept. 15, 2016). Because the operative provisions
in the Contract are clear and the Contract itself is unambiguous, the court need not consider the
For the reasons described above, the court grants defendant’s motion for summary
judgment (Doc. 180) and denies plaintiff’s motion to strike portions of defendant’s statement of
facts (Doc. 197).
February 7, 2017
Robert W. Gettleman
United States District Judge
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