Arlington Devco, LLC v. T10 Unison Site Management, LLC
Filing
51
MEMORANDUM Opinion and Order Signed by the Honorable Jeffrey Cole on 2/27/2017:Mailed notice(jms, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ARLINGTON DEVCO,
Plaintiff,
v.
T10 MELTEL, LLC, f/k/a
T10 UNISON SITE MGMT, LLC
Defendant.
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No. 15 C 3558
Magistrate Judge Jeffrey Cole
MEMORANDUM OPINION AND ORDER
In June 2011, the plaintiff purchased a building, which was formerly a hotel, in Arlington
Heights, Illinois. Its plan was to transform the hotel into an apartment building. At the time of the
purchase, there were a number of cellular carrier “tenants” – T Mobile, US Cellular, and Nextel are
specified – operating their cellular equipment on the building’s roof pursuant to leases. [Dkt. # 1-1,
Page 10-79/116]. After its purchase of the property, the plaintiff entered into negotiations to sell the
cellular leases and roof easement to the defendant. The plaintiff had plans for reconstructing the roof
and adding a number of amenities. Because the cellular equipment was scattered all over the roof,
the parties’ negotiations included the plaintiff moving the equipment to a single location, and
removing any outdated and abandoned equipment. The parties set up an incentive for the work to
be done by the plaintiff by a certain date, with the defendant holding back $300,000 of the purchase
price of the easement, which would then go to the plaintiff if its relocation work was completed on
time.
The plaintiff didn’t meet the deadline or even the agreed upon three-month extension of that
deadline. Nonetheless, the plaintiff continued the relocation work, ultimately completing it a year
late. The defendant retained the $300,000 being held in escrow. The plaintiff then sued the
defendant, claiming breach of contract regarding another holdback and unjust enrichment regarding
the relocation of the equipment. Both sides have moved for summary judgment on the plaintiff’s
unjust enrichment claim. As the plaintiff sees it, even though it failed to meet the agreed-upon
contractual deadline and complete its work within that time or in the three additional months the
defendant granted it, the defendant still received the benefit of the plaintiff’s work and thus, the
theory goes, the plaintiff has been unjustly enriched by $300,000.1
As the defendant sees it, plaintiff contractually agreed to a deadline for moving the equipment
and receiving the $300,000 payment. (The plaintiff had already been paid $1 million by the
defendant for the leases). Plaintiff missed the deadline for moving the towers and can’t skirt the
contract and still be awarded the $300,000 through an unjust enrichment claim.2
1
The plaintiff asked for $362,822.40 in its Complaint, but later, in the parties’ Initial Status Report,
conceded this was an error. [Dkt. #8, at 3].
2
The parties have filed the required Local Rule 56.1 statements and responses. Without going too
far off track into peripheral matters (or intending in any way to be critical), it must be said that there have
been more than a few violations of the local rule, such as failing to cite to the record in support of a number
of factual assertions and incorporating its entire 42-paragraph opening factual statement in its statement of
additional facts, thereby violating the limit of just 40 additional facts set out in Local Rule 56.1(b)(3)(C).
When taken to task by the defendant, the plaintiff was unapologetic. [Dkt. #45, at 1-3].
While one could call several of the defendant’s objections to the plaintiff’s factual assertions
hypercritical, greater regard must be had for the Local Rules of any court than has been shown here. Indeed,
plaintiff has submitted a courtesy copy of its Rule 56.1 Statement of Material Facts, which is voluminous,
without a single tab to separate the exhibits. This is in violation of Local Rule 5.2(d). This has made it
extraordinarily difficult to read and properly use the exhibits.
The Seventh Circuit has repeatedly emphasized the importance of a court’s Local Rules and has held
repeatedly that a district court is justified in demanding strict compliance with Local Rule 56.1, in particular.
Boss v. Castro, 816 F.3d 910, 914 (7th Cir. 2016); Flint v. City of Belvidere, 791 F.3d 764, 767 (7th
Cir.2015); Thornton v. M7 Aerospace LP, 796 F.3d 757, 769 (7th Cir. 2015). It can be a tragic mistake for
a party to decide the rules are not significant enough to apply to them. In this case, the court can overlook
the plaintiff’s insouciance, Gray v. Hardy, 826 F.3d 1000, 1005 (7th Cir. 2016)(court entitled to take flexible
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2
Overlooked by the parties is the Supreme Court’s decision in US Airways, Inc. v.
McCutchen, _ U.S._, 133 S.Ct. 1537, 1546–47 (2013). Quoting the Restatement (Third) of
Restitution and Unjust Enrichment (2011), the Court said: “‘A valid contract defines the obligations
of the parties as to matters within its scope, displacing to that extent any inquiry into unjust
enrichment.’” As we discuss below, in those circumstances, adhering to the parties' arrangement
yields “appropriate” as well as “equitable” relief.
ANALYSIS
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a);
see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)(emphasis supplied); Bordelon v. Bd. of
Educ. of the City of Chicago, 811 F.3d 984, 989 (7th Cir. 2016). This requires that “there be no
genuine issue of material fact,” and “the mere existence of some alleged factual dispute” will not
defeat summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986); Bordelon,
811 F.3d at 989. The moving party bears the initial burden of production, and must inform the
district court why a trial is not necessary. Celotex Corp., 477 U.S. at 325; Sterk v. Redbox Automated
Retail, LLC, 770 F.3d 618, 627 (7th Cir. 2014). The party opposing summary judgment must go
beyond the pleadings to show that there is a genuine issue of fact that must be resolved with a trial.
2
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approach to enforcement of the local rules), because the defendant so clearly has the better side of this
dispute.
It’s also worth pointing out that the plaintiff’s presentation has ignored Local Rule 26.2, which
controls the filing of documents under seal. In filing its exhibits electronically in support of its motion for
summary judgment, plaintiff has excluded a number of them claiming they are subject to a protective order.
The plaintiff does not cite to any such order and failed to file the required motion to seal documents under
the applicable Local Rule.
3
Hassebrock v. Bernhoft, 815 F.3d 334, 342 (7th Cir. 2016). “When, as here, cross-motions for
summary judgment are filed, we look to the burden of proof that each party would bear on an issue
of trial; we then require that party to go beyond the pleadings and affirmatively to establish a genuine
issue of material fact.” Diaz v. Prudential Ins. Co. of Am., 499 F.3d 640, 643 (7th Cir. 2007).3
The party claiming unjust enrichment has the burden of establishing the elements of its unjust
enrichment claim. Under Illinois law, in order to sustain a claim of unjust enrichment, the
complaining party has to show that the other party has “unjustly retained a benefit” “to [its]
detriment, and that [the]...retention of the benefit violates the fundamental principles of justice,
equity, and good conscience.” Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc., 831 F.3d
815, 832 (7th Cir. 2016). Indeed, “[i]t is now universally recognized that the principle central to all
restitution awards is the principle against unjust enrichment....” Dan B. Dobbs, Remedies, 222—229
(West Publishing Co. 1973). The American Law Institute notes in Restatement Third, Restitution
and Unjust Enrichment § 1(b) (2011): states: “[u]njust enrichment” is a term of art. The substantive
part of the law of restitution is concerned with identifying those forms of enrichment that the law
treats as ‘unjust’ for the purposes of imposing liability.... Unjust [ ] enrichment is enrichment that
lacks an adequate legal basis. Unjust enrichment is a necessary element or precondition of the larger
3
Since this case finds itself in the Northern District of Illinois, binding authority comes from the
Supreme Court or the Seventh Circuit. United States v. Glaser, 14 F.3d 1213, 1216 (7th Cir. 1994)(“Opinions
‘bind’ only within a vertical hierarchy.”); Gacy v. Welborn, 994 F.2d 305, 311 (1993); Alliance to End
Repression v. City of Chicago, 820 F.2d 873, 875 (7th Cir. 1987)(“A decision is authoritative when it is
binding because of the hierarchy among courts, rather than solely because it is persuasive.”). Yet, in briefing
what it calls the “Applicable Legal Standard” for summary judgment, the plaintiff oddly cites not a single
case from the Supreme Court, the Seventh Circuit, or even the Northern District of Illinois. All we find are
citations to the First Circuit, the Second Circuit, and oddly the district courts of the Eastern District of New
York, Nebraska, Connecticut, and West Virginia. [Dkt. #36, at 4]. Decisions of district courts are not
authoritative even within the rendering district. Van Straaten v. Shell Oil Products Co. LLC, 678 F.3d 486,
490 (7th Cir. 2012); Townsel v. DISH Network L.L.C., 668 F.3d 967, 970 (7th Cir. 2012). Why this method
of briefing was chosen is not clear. Whatever the reason, it is not not helpful.
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claim of restitution. The restitutionary claim affirmatively seeks the return of the benefit for which
it would be unconscionable for the defendant to retain.” Roy L. Brooks, Postconflict Justice in the
Aftermath of Modern Slavery, 46 Geo. Wash. Int'l L. Rev. 243 (2014).
After reviewing the record the parties have complied, and the arguments they have advanced,
it is clear that the plaintiff has not met its burden of proof, and that the defendant is entitled to
summary judgment on Count II of the Complaint.
A.
As has been said, as part of their agreement for the sale of an easement to the roof of the
building the plaintiff purchased, and given the plaintiff’s plans for the roof, the parties’ contract
provided for the relocation of the cellular equipment. The parties staggered their negotiations into
three agreements. They began with a “Terms of Agreement” dated May 8, 2012, which the parties
acknowledged were “the business terms upon which this transaction will be completed . . . However,
the terms are subject to due diligence and final Underwriting by [defendant], and receipt by
[defendant] of all required documentation.” [Dkt. #1-1, at 80]. Although it purportedly covered
payments four years in the future, the contract was nevertheless set to expire in 6 months –
November 2012 – unless extended by mutual consent. [Dkt. #1-1, at 80]. Under the “Terms of
Agreement,” the purchase price the defendant would pay for the 50-year easement was about $1.3
million. [Dkt. #1-1, at 80].
The payment was subject to deductions, holdbacks, and other closing conditions, [Dkt. #1-1,
at 80], including a relocation holdback:
In the event any one the [sic] Tenants agree to relocate but does not agree to pay for
the move, Site Owner will pay for the relocation of each applicable Tenant, at a cost
not to exceed $150,000.00/Tenant (noting Clearwire and Nextel for purposes of this
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provision are deemed one tenant) (the "Holdback Amount”). Since the Closing shall
take place in advance of the proposed relocation, the Holdback Amount shall be
withheld from the Purchase Price for all Tenants at closing and shall be remitted to
the Site Owner upon the completion of the relocation for each Tenant. A Holdback
letter agreement shall be signed at closing confirming the conditions for remittance
of up to $150,000 per each cellular company that agreed to relocate their equipment
but did not pay for the move.
[Dkt. #1-1, at 81].
Two months later, in July 2012, the defendant wrote to plaintiff [Dkt. #39, ¶ 17], saying its
letter would “serve as a record of [the parties’] mutual agreement” that defendant would fund escrow
accounts to cover two holdbacks: a $362,822.40 Nextel Holdback and a $300,000 Relocation
Holdback. The terms of the holdback at issue here, the Relocation Holdback, were as follows:
2. Relocation Holdback Amount. For a period not to exceed 12 months from the
Closing Date, $300,000.00 ($130,000.00 for US Cellular, and $85,000.00 each for
T-Mobile and Nextel (US Cellular, T-Mobile and Nextel, singularly, the “Tenant,”
collectively, the “Tenants”) to be credited toward relocation costs in the event any
one of the Tenants agree to relocate but do not agree to pay for the move.”
[Dkt. #1-1, Page 92/116]. Plaintiff’s representative signed the letter agreement on July 19, 2012.
[Dkt. #1-1, at Page 97/116]. If the relocation wasn’t timely completed, defendant could close the
escrow and retain the $300,000 within 48 hours of the deadline. [Dkt. #1-1, Page 93/116].
That same day, the parties executed a “Wireless Communication Easement and Assignment
Agreement.” [Dkt. #1-1, Pages 99-116/116]. This Easement Agreement included details regarding
the relocation of the cellular equipment – to be installed on the roof of the plaintiff’s planned
penthouse – and, again, indicated that the work would be done in twelve months. [Dkt. #1-1, Page
11-112/116]. The agreement included a provision stating that it “constitute[d] the entire agreement
and understanding of [the parties] with respect to the subject matter of this Agreement, and
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supersedes all offers, negotiations and any other written or verbal agreements . . . .” [Dkt. #1-1, at
104].
So, the plaintiff had until July 2013 to relocate the cellular equipment and reap the $300,000
holdback. In May of 2013, however, the plaintiff knew it wasn’t going to make that deadline and
wrote to the defendant, asking for a three-month extension to October 19, 2013. [Dkt. #40, Ex. F,
Page 266/286]. The parties agree that the defendant gave the plaintiff the extension it sought: an
additional three months. [Dkt. #37, ¶ 14; Dkt. #39, ¶ 28]. They also agree that the plaintiff was
aware that there would be no further extensions. [Dkt. #37, ¶ 16; Dkt. #39, ¶ 28]. Finally, there is
no dispute that plaintiff was unable to make the new deadline. In fact, the plaintiff didn’t relocate
the cellular equipment until September 1, 2014 – almost a year after the extended deadline passed.
[Dkt. #36, at 2-3; #37, ¶ 14; #37-2, Ex. 4 (Trandel Dep.), at 38; Dkt. #39, ¶29]. On October 28,
2013, the defendant wrote and informed the plaintiff that it failed to meet the deadline, and defendant
would be closing the escrow account and keeping the $300,000. [Dkt. #37-2, Ex. 8].4
4
Plaintiff claims – and makes much of its claim – that the defendant was actively rooting for it to
fail to meet the extended deadline so it could keep the $300,000. Defendant “rooting” for plaintiff to fail is
neither here nor there unless it was taking action to hinder plaintiff’s performance. It wasn’t. Pure and
unselfish motives are not necessary to contractual enforcement. Uncommunicated hopes on the part of one
party is ineffectual and is not a valid reason for avoiding an otherwise binding agreement. See Steinberg v.
Chicago Medical School, 69 Ill.2d 320, 330–331, 371 N.E.2d 634 (1977); Fratelli Gardino S.P.A. v.
Caribbean Lumber Co., Inc., 587 F.2d 204, reh. denied 590 F.2d 333 (5th Cir. 1979). Whatever hopes the
defendant may have harbored for the plaintiff’s nonperformance of the three months extension (or of the
original contract) are irrelevant.
In any event, the emails the plaintiff relies on for its “rooting” claim are merely a question from
defendant’s bank as to whether plaintiff would complete its work by the deadline or whether another
extension on the escrow account, which was set to close on October 19, 2013, would be needed. Defendant’s
answer was: “I seriously doubt they are going to make it but we really can’t release until we hit that trigger
date.” [Dkt. #37-2, Ex. 9]. That’s not exactly “[t]roubling[] . . . rooting.” [Dkt. #36, at 2]. But even if the
defendant had the fondest hope that the plaintiff would not succeed, the plaintiff could not impose liability
in this case under any theory, let alone unjust enrichment. Steinberg, supra; Skycom Corp v. Telstar Corp.,
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7
Despite this, the plaintiff proceeded with its work relocating the cellular phone equipment.
Why? Well, firstly, regardless of missing the deadline, plaintiff was still obligated to move the
cellular equipment as part of its reconstruction of the roof. This was part of the easement agreement
and part of what plaintiff agreed to provide in that easement, given that plaintiff was redoing the
entire location of the cellular equipment. [Dkt. #1-1, Page 111-114/116; Dkt. #40, Page 138-41/286
(Ex. C, at 13-16)]. Plaintiff contends that once the defendant informed plaintiff that plaintiff missed
the deadline and forfeited the $300,000, that terminated the parties’ entire contract. But plaintiff
points to nothing in any iteration of the parties’ agreement that supports that thinking. The letter
simply referenced the deadline and indicated that the plaintiff had not met the conditions for
obtaining the $300,000 holdback. The letter in no way suggests that the parties’ agreement is
terminated.
Secondly – and oddly, given that the parties clearly agreed that plaintiff had to meet a
deadline in order to receive the $300,000 holdback – even after receiving the defendant’s deadline
notice, the plaintiff took the position that the defendant was still on the hook for all payments upon
completion of the relocation of the towers – regardless of the date it was completed, including the
$300,000 for meeting the contractually agreed upon deadline. [Dkt. #37-2, Ex. 7, DEF0000573].
It’s unclear why plaintiff might have thought that, but, apparently, this was the view it secretly held.
And thirdly, according to the plaintiff’s manager, plaintiff had great plans for use of the roof
space:
. . . [I]t was always contemplated that we would effectively add a floor on the roof
for building amenities. So up there we have a yoga studio, fitness center, a
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813 F.2d 810, 814 (7th Cir. 1987).
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demonstration kitchen, we have 5400 feet of outdoor patio space with fire pits . . . It’s
really quite elegant. And that . . . sits out on a newly constructed roof we built above
the – a little taller than when we started.
. . . the cell antennas were scattered. You know, they looked like there was no rhyme
or reason to them. And so they were kind of just hung up there without any real
orchestration, they were unsightly, and frankly they were exposed to the elements.
[Dkt. #37-2, Ex. 4 (Trandel Dep.), at 22](Emphasis supplied).
Similarly, plaintiff’s expert, Mr. Marous, reported that if the plaintiff wanted to retain the
building, it had to replace the old roof. [Dkt. #32, Page 3,10/33]. Plaintiff couldn’t simply dump the
leaseholders’ equipment, however unsightly and inconsistent with plaintiff’s plans for the roof. And
so, as the plaintiff concedes, it gained a substantial benefit in moving the cellular equipment out of
sight to a confined location. [Dkt. #36, Page 7]. But, according to plaintiff, so did the defendant.
The plaintiff’s expert performed what he has portrayed as a detailed analysis and, after considering
multiple factors and variables, estimates the benefit to the defendant at “in excess of $300,000.”
[Dkt. #37, ¶18]. Now, one might call it serendipitous that the experts’s calculations place the
plaintiff – if it were to succeed in its unjust enrichment claim – in exactly the position it would have
been if it hadn’t failed to meet the deadline and the extended deadline by nearly a year. But
regardless of whatever suspicion one might have of the equivalent of the plaintiff’s claim and the
expert’s conclusion, the proper outcome of the plaintiff’s motion does not depend on what one may
think of that confluence of opinion. 5
5
Or, one might call it, unsurprising. Frequently, experts are little more than mouthpieces or hired
guns. Bodum USA, Inc. v. La Cafetiere, Inc., 621 F.3d 624, 639 (7th Cir. 2010);Tyus v. Urban Search Mgmt.,
102 F.3d 256, 263 (7th Cir. 1996). Judge Posner has said that once paid, “[t]here is hardly anything, not
palpably absurd on its face that cannot now be proved by some so-called experts.’” Olympia Equipment
Leasing Co. v. Western Union Telegraph Co., 797 F.2d 370, 382 (7th Cir.1986). This is not a Daubert ruling
on the admissibility of the plaintiff’s expert’s testimony, or a conclusion about him at all. It is merely an
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B.
“[W]hile [a] plaintiff may plead breach of contract in one count and unjust enrichment . . .
in [an]other, it may not include allegations of an express contract which governs the relationship of
the parties, in the count[] for unjust enrichment . . . .” Cohen v. Am. Sec. Ins. Co., 735 F.3d 601,
615 (7th Cir. 2013). And, of course, there is the Supreme Court’s recent and important statement in
US Airways, Inc., 133 S.Ct. at 1546–47, which bears repeating: “ ‘A valid contract defines the
obligations of the parties as to matters within its scope, displacing to that extent any inquiry into
unjust enrichment.’”
Yet, plaintiff has impermissibly alleged that the parties had “a written agreement wherein
[defendant] would pay [plaintiff] $300,000 if the Cellular Carriers were moved to a new position on
the Property’s roof by a certain date” and has incorporated that allegation in its claim for unjust
enrichment, not to mention attaching the written agreement it references to its Complaint. [Dkt. #1-1,
¶15 (emphasis supplied); ¶26; Ex. 3]. 6 The Seventh Circuit has explained that, in cases like this, “[a]
plaintiff may plead as follows: (1) there is an express contract, and the defendant is liable for breach
of it; and (2) if there is not an express contract, then the defendant is liable for unjustly enriching
himself at my expense.” Cohen, 735 F.3d at 615. But, as has been shown, a plaintiff cannot
acknowledge throughout that there is an express contract, as the plaintiff does here, and still claim
damages for unjust enrichment. Id. See also Doyle v. Holy Cross Hosp., 186 Ill. 2d 104, 120
(1999)(Freeman, C.J., concurring in part, dissenting in part)(“once it is established . . . that there is
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observation regarding his arriving at that same $300,000 figure as agreed to by the parties.
6
Attaching the contract to the Complaint makes it a part of the Complaint. Markadonatos v. Village
of Woodridge, 760 F.3d 545 (7th Cir. 2014); Rule 10(c), Federal Rules of Civil Procedure.
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in fact an enforceable contract between the parties . . . then a party may no longer recover under the
theory of promissory estoppel.”)(cited in Plaintiff’s Memorandum in Opposition, at 9).
“When two parties’ relationship is governed by contract, they may not bring a claim of unjust
enrichment unless the claim falls outside the contract.” Enger v. Chicago Carriage Cab Corp., 812
F.3d 565, 571 (7th Cir. 2016); Blythe Holdings, Inc. v. DeAngelis, 750 F.3d 653, 658 (7th Cir. 2014).
There is no dispute that the parties had a written agreement covering relocation of the cellular
equipment. The relevant terms were simple: there was a deadline by which plaintiff had to move
the cellular equipment or it would not receive the $300,000 holdback. (It had already received from
the defendant $1 million for the sale of the leases on the cellular towers). The parties don’t dispute
that plaintiff didn’t meet that deadline or the extended deadline. But plaintiff wants the $300,000
anyway, since, it says, it ultimately did the work – of which it may be noted it was the chief
beneficiary.
According to the plaintiff, once the defendant informed plaintiff by letter that it was closing
the escrow account and keeping the $300,000 due to plaintiff’s contractual failure to meet the
agreed-upon, extended deadline, the parties were in a new relationship. Plaintiff continued to work
on the relocation, and defendant was aware that plaintiff continued to work and did not tell plaintiff
to stop. [Dkt. #36, at 2-3; #41, at 3, 10]. But those are not controlling or relevant facts in this case.
The defendant had communicated, in no uncertain terms, that plaintiff had missed the extended
deadline and would not be receiving the $300,000 holdback. As already noted, plaintiff had plenty
of reasons to continue the work even after it forfeited the holdback payment. Indeed, it was always
going to redo the roof and install numerous amenities. [Dkt. #37-2, Ex. 4 (Trandel Dep.), at 22]. It
really had no choice in the matter, and thus it was economic folly not to continue the relocation
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project.
In order to succeed on a claim for unjust enrichment, a plaintiff must not only show that the
defendant was enriched, but must “show a detriment—and, significantly, a connection between the
detriment and the defendant's retention of the benefit.” Cleary v. Philip Morris Inc., 656 F.3d 511,
518–19 (7th Cir. 2011). Here, if the defendant received a benefit as a result of the relocation of the
cellular equipment, the retention of that benefit was not to the plaintiff’s legal detriment because,
as plaintiff’s manager testified, the plaintiff would have performed the work anyway. See Cleary,
656 F.3d at 519 (“Since these consumers would have acted no differently had the defendants
properly informed them about the true nature of cigarettes, their transfer of money to the defendants
in exchange for cigarettes was not to their detriment—and, accordingly, the defendants' continued
retention of the money cannot be to their detriment either.”).
Moreover, unjust enrichment must be just that – unjust. Empress Casino, 831 F.3d at 832.
“What makes the retention of the benefit unjust is often due to some improper conduct by the
defendant. And usually this improper conduct will form the basis of another claim against the
defendant in tort, contract, or statute.” Cleary v. Philip Morris Inc., 656 F.3d 511, 517 (7th Cir.
2011). Indeed, in Illinois, unjust enrichment is not even a separate cause of action. “‘Rather, it is a
condition that may be brought about by unlawful or improper conduct as defined by law, such as
fraud, duress, or undue influence, and may be redressed by a cause of action based upon that
improper conduct.’” Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631
F.3d 436, 447 (7th Cir. 2011). For example, a breach of a contract, or of a fiduciary duty, might
create a situation in which someone has retained a benefit that ought to be disgorged based on
principles of equity. Pirelli Armstrong, 631 F.3d at 447 (7th Cir. 2011). Here, the plaintiff brings
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its unjust enrichment claim as a stand-alone cause of action, without any complimentary charges of
fraud or breach of contract or fiduciary duty. Perhaps because there is none in connection with this
case.
While an unjust enrichment claim does not necessarily require wrongdoing on the part of the
defendant, the plaintiff must still show that the defendant’s retention of the “profits would violate
the fundamental principles of justice, equity, and good conscience.” Oshana v. Coca Cola Co., 472
F.3d 506, 515 (7th Cir. 2006). There’s nothing remotely like that going on here. The plaintiff
undertook to completely redo the roof of its new building and upgrade it with luxury amenities – no
doubt because its perception of economic circumstances that required relocation of the (unsightly,
to use the plaintiff’s adjective) cellular equipment.
As part of its planned renovation of the roof of the building and its lease of the cell towers
the plaintiff agreed it would move the equipment by a certain date in exchange for the release of a
$300,000 escrow account. Plaintiff missed the deadline and the extended deadline, through no fault
of the defendant. Defendant duly informed plaintiff that, because plaintiff didn’t come through with
its part of the bargain, defendant would be closing the escrow account and keeping the $300,000.
As the plaintiff itself concedes: [i]n no uncertain terms, the Defendant then informed [plaintiff] that
[plaintiff] was not entitled to Relocation holdback monies due to [plaintiff’s] failure to meet the
extended deadline.” [Dkt #41, at 10]. After all, those were the very terms the parties agreed to.
Plaintiff – quite naturally, given its plans for the roof – completed the relocation anyway. Whatever
benefit plaintiff might have gained from the relocation of the cellular equipment, there’s nothing to
suggest that its retention of that benefit was or is inequitable or unjust.
None of the allegations plaintiffs offers in support of its contentions are convincingly
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supported by evidence offered, in an effort to paint the defendant in an unflattering light. To
paraphrase the pithy observations of Judge Moran which were quoted in J.D. Marshall Int'l, Inc. v.
Redstart, Inc., 935 F.2d 815, 821 (7th Cir. 1991), adding more warts to a hog do not make it a
dragon. Or to vary the example, calling a donkey’s tail a leg doesn’t mean the animal has five legs.
Blue Cross Blue Shield of Massachusetts, Inc. v. BCS Ins. Co., 671 F.3d 635, 638 (7th Cir.
2011)(Easterbrook, C.J.). So too here. Perhaps the defendant did harbor a wish that the defendant
not meet the deadline and it could keep the $300,000. Assuming the truthfulness of the charge does
not advance the plaintiff’s position one millimeter. The parties are sophisticated businesses that
made an arm’s length transaction. That one side might harbor a hope to come out on top – to win,
as it were – is neither surprising nor unusual, unless, that is, we are to disregard considerations of
“inescapable human nature,” Hamdi v. Rumsfeld, 542 U.S. 507, 545 (2004), and the history of our
species on this planet. Of course, if people were angels, we would have no need of written
contracts! In short, the uncertain and highly subjective standard of “troubling” subtly proposed by
the plaintiff is not a proper one for determining contractual liability or unjust enrichment.
C.
“Enforceable contracts are vital to economic productivity,” Hoosier Energy Rural
Cooperative v. John Hancock Life Insurance Co., 582 F.3d 721, 727 (7th Cir. 2009) and lie “at the
foundation of all national life.” Farrington v. Tennessee, 95 U.S. 679, 682 (1877). It is this
recognition that in part accounts for the courts' historic refusal to rewrite contracts to accord with
some ill-defined notion of fairness (often acquired in the light of subsequent developments) is deeply
ingrained in judicial consciousness. The reasons are as sound as they are obvious. If judges were
allowed to act as post-hoc revisory boards and to ignore the agreement of the parties in order to
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relieve one of them from a hard bargain, voluntarily and honestly made, there would be created “an
insecurity in business transactions which would be intolerable.” Effinger v. Kenney, 115 U.S. 566,
572 (1885). “As Justice Brandeis recognized, ‘[p]unctilious fulfillment of contractual obligations
is essential to the maintenance of the credit of public as well as private debtors.’ ” United States v.
Winstar Corp., 518 U.S. 839, 885 (1996). “While we recognize that a rule of strict compliance might
lead to harsh results, such a rule tends to ‘enforce [ ] commercial certainty.’ ” Thomson Learning,
Inc. v. Olympia Properties, LLC, 365 Ill.App.3d 621, 631, 850 N.E.2d 314, 323 (2nd Dist.2006).
This policy of upholding the integrity of written contracts – where possible and otherwise
appropriate – is particularly relevant in cases such as this involving complicated, written contracts
between sophisticated corporations, represented by skilled counsel. Such parties should be held to
the terms of their written undertakings whenever it is proper to do so. The Seventh Circuit’s
observations in Binks Mfg. Co. v. National Presto Industries, Inc., 709 F.2d 1109, 1116 (7th Cir.
1983) bear repeating:
“‘The morass of business dealings between two companies described on this
record, their promises oral and written, the disparity of their understandings, the
frustration of expectations, the inevitable recriminations and conflicting
memories—all this is not unique, new, or infrequently encountered. The law in its
effort to facilitate just resolutions of such controversies has, over the centuries,
developed certain aids or guides to decision.... The first is the substantive principle
that when, in the course of business transactions between people or corporations, free
and uncoerced understandings purporting to be comprehensive are solemnized by
documents which both parties sign and concede to be their agreement, such
documents are not easily bypassed or given restrictive interpretations.’” 7
D.
Plaintiff also complains that, even after the deadline passed and the defendant closed the
7
The court was quoting the First Circuit’s decision in Intern. Business Machines v. Catamore
Enterprises, 548 F.2d 1065, 1073 (1st Cir.1976), cert. denied, 431 U.S. 960 (1977).
15
escrow account and told plaintiff it was keeping the $300,000 under the parties’ agreement, the
defendant still expressed desires that the relocation of the cellular equipment would be completed.
[Dkt. #38, at 3; #41, at 10]. In support of this contention, plaintiff cites Exhibit 11, which is a
collection of 50 pages of emails. [Dkt. #37, ¶ 38]. Even if the defendant’s desire that the equipment
would eventually be moved were relevant, it does not change the result. “Citations to an entire
transcript of a deposition or to a lengthy exhibit are not specific and are, accordingly, inappropriate.”
Ammons v. Aramark Unif. Servs., Inc., 368 F.3d 809, 817–18 (7th Cir. 2004). In any event, to the
extent review of the jumble of emails is possible, the gist is that the defendant was acting as a gobetween for the plaintiff and the cellular companies, T-mobile in particular. The emails demonstrate,
not so much the defendant’s desires, but those of the cellular companies who were understandably
interested in where their equipment was going to be moved and when.
Plaintiff’s final contention is that “[t]he Defendant, between October 19, 2013 and September
1, 2014, was always aware that [plaintiff] continued performing the relocation work with the
expectation that plaintiff would be paid the Relocation Holdback monies.” [Dkt. #36, at 3 (emphasis
supplied)]. Plaintiff provides no evidence to support this assertion, and it is not a part of its Local
Rule 56.1 statement of facts. [Dkt. #37, ¶¶37-41]. Plaintiff is unable to point to anything in the
record that suggests that plaintiff, at any time after the extended deadline had expired and the
plaintiff had received notice from defendant, told the defendant that it was moving the cellular
equipment with the expectation that it would still receive the $300,000 holdback despite its failure
to live up to its contractual obligations. On the other side, the defendant clearly informed the plaintiff
that it would not be getting the $300,000 because it missed the deadline.
This is a summary judgment proceeding. As the Seventh Circuit has bluntly put it, it’s “put
16
up or shut up time.” Citizens for Appropriate Rural Roads v. Foxx, 815 F.3d 1068, 1077 (7th Cir.
2016). A moving party cannot simply throw out unsupported contentions against the wall in the vain
hope that one of them might stick. It has to support those allegations with evidence. Id.; Hassebrock
v. Bernhoft, 815 F.3d 334, 342 (7th Cir. 2016).
Throughout the law, deadlines count. See, e.g., Elda Arnhold & Byzantio, L.L.C. v. Ocean
Atl. Woodland Corp., 284 F.3d 693, 700, 709 (7th Cir. 2002); Finwall v. City of Chicago, 239 F.R.D.
494, 496 (N.D. Ill. 2006). Plaintiff was subject to a deadline in this case – a contractual deadline that
the plaintiff and the defendant had been posed on themselves with the advice of counsel. The
defendant bargained for plaintiff to complete the relocation of the cellular equipment by a certain
date; if plaintiff made the deadline, it got $300,000. If it missed the deadline, the contract freely
entered into between the parties did not provide that the plaintiff would nonetheless get the
$300,000. Plaintiff missed the deadline, and the extension, badly. It completed the work anyway
because it was always part of plaintiff’s plan to do so – a plan dictated no doubt by the economic
necessities of the situation. Now, plaintiff wants to be paid for that work exactly as it would have
been paid if it had complied with the contract. That’s not a claim for unjust enrichment; it is rather
the claim of a party who made a deal that it has not lived up to. The law of contracts does not permit
a “do over” to advantage the nonperforming party.
It should come as no surprise that the plaintiff’s lawyers has presented a number of arguments
in his client’s favor. “A lawyer with an intense determination to win will, simply by his virtue of the
essential facts of human nature, spend enormous amounts of time on a case to make certain that he
is presenting his client's views and arguments in the best possible light.” Compare Harkless v.
Sweeny Indep. Sch. Dist., Sweeny, Tex., 608 F.2d 594, 597 (5th Cir. 1979). But that does not mean
17
that victory always accompanies the effort. Here it does not.
CONCLUSION
Acceptance of the plaintiff’s arguments would lead to a new method of analysis in contract
cases – or at least in certain contract cases. Henceforth, the measure of success in a summary
judgment setting would be whether the party seeking summary judgment had acted in a way that the
other party found “troubling” or “unfair.” Even in years past a judge sitting in equity could not
"succumb to the temptation to substitute his own 'incandescent conscience,' H. Shanks, The Art and
Craft of Judging: The Decisions of Judge Learned Hand 13 (1968), for the long established methods
of thought found by other judges over an extended period to be the proper mode of analysis. Legal
jurisdiction is not a floating commission to do good or to remake the world. Nor is it a limitless
fount of power which invests judges with unfettered discretion to decide cases in accordance with
their private notions of justice. Even equity cannot vary like the Chancellor's foot. Albermark Paper
Co. v. Moody, 422 U.S. 405, 407 (1975).
The defendant’s motion for summary judgment on Count II of the plaintiff’s complaint is
granted, and the plaintiff’s motion for summary judgment on that count is denied. It is not for a court
paternalistically to rewrite a party's agreement to include terms that they chose not to make a part of
their agreement, United States v. Bethlehem Steel Corp., 315 U.S. 289, 311–312 (1942); Hoosier
Energy Rural Electric Cooperative, Inc. v. Amoco Tax Leasing IV Corp., 34 F.3d 1310, 1317 (7th
Cir.1994). There is a strong presumption against provisions that easily could have been included in
the contract but were not. Cress v. Recreation Services, 341 Ill.App.3d 149, 185, 795 N.E.2d 817,
851 (2nd Dist.2003).
18
ENTERED:
UNITED STATES MAGISTRATE JUDGE
DATE: 2/27/17
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