NHI-2, LLC v. Wright Property Management, Inc. et al

Filing 69

MEMORANDUM Opinion and Order. The Court grants defendants' motion for summary judgment 48 . Furthermore, the Court grants third party defendants' motion to dismiss 38 because the Court declines to exercise supplemental jurisdiction over the claims in the third party complaint. Civil case terminated. Signed by the Honorable Jorge L. Alonso on 3/2/2018. Notices mailed by judge's staff (ntf, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NHI-2, LLC, an Illinois limited liability
Company d/b/a TRAVELLIANCE,
Plaintiff,
v.
WRIGHT PROPERTY MANAGEMENT, INC.
a Kentucky corporation, and
WELLINGTON E, LLC, a Kentucky limited
liability company,
Defendants.

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Case No. 15 C 7913
Honorable Judge Jorge L. Alonso

MEMORANDUM OPINION AND ORDER
In this diversity case, defendants Wright Property Management, Inc. (“Wright”) and
Wellington E, LLC (“Wellington”) (collectively “defendants”), have filed a motion for summary
judgment asserting that plaintiff NHI-2, LLC (“NHI-2”) lacks standing and that the contract at
issue is not valid. For the following reasons, defendants’ motion for summary judgment is
granted.
BACKGROUND
This lawsuit arises from a contract dispute. On or about August 17, 2014, defendants
entered into an agreement with “Travelliance, Inc.” regarding layover services for airline
employees. (Defs’ LR 56.1 Stmt. ¶¶ 1, 17, ECF No. 48-2; Sec. Amend. Compl., Ex. 1, ECF No.
6-1.) In 2015, relations between the parties soured and plaintiff brought this breach of contract
suit.

The agreement at issue lists “Travelliance, Inc.,” a corporation, as a party to the
agreement. (Sec. Amend. Compl., Ex. 1, Contract, ECF No. 6-1.) It includes a parenthetical
stating that the abbreviated name for “Travelliance, Inc.” is “[h]ereinafter called Travelliance.”
(Id.) When the agreement was executed in 2014, “Travelliance, Inc.,” was the assumed name of
Nationwide Hospitality, Inc., a corporation. (Defs’ LR 56.1 Stmt. ¶ 8, ECF no. 48-2, Ex. 2,
Certified Public Records of Assumed Name of Nationwide Hospitality, Inc., ECF No. 48-4;
Defs’ Reply, Nationwide Hospitality, Inc.’s Application to Adopt, Change or Cancel an
Assumed Corporate Name, ECF No. 58-1.)
Plaintiff NHI-2, LLC is a limited liability company. (Defs’ LR 56.1 Stmt. ¶ 2.) It has
registered to conduct business under the names “Travelliance Chicago” and “Travelliance” but
has not registered to conduct business under the assumed name “Travelliance, Inc.” (Id. ¶¶ 4, 5.)
Plaintiff and Nationwide Hospitality, Inc. are separate entities. (Id. ¶ 9.)
STANDARD
To prevail on a summary judgment motion, “the movant [must] show[ ] 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). At this point, the court may not weigh evidence or determine the
truth of the matters asserted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Instead,
the Court must view the evidence and draw all inferences in favor of the non-moving party.
Michas v. Health Cost Controls of Ill., Inc., 209 F.3d 687, 692 (7th Cir. 2000) 1. “Summary
judgment should be denied if the dispute is ‘genuine’: ‘if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.’” Talanda v. KFC Nat’l Mgmt. Co., 140
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Although the parties entered into an extensive discussion as to the substantive law that governs
this dispute, there is no substantial difference between Illinois law and Kentucky law regarding
either the standing analysis or parole evidence rule. Thus, this Court will cite Illinois law for the
purposes of this opinion.
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F.3d 1090, 1095 (7th Cir. 1998) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)); see also Bunn v. Khoury Enters., Inc., 753 F.3d 676, 681-82 (7th Cir. 2014). The court
will enter summary judgment against a party who does not “come forward with evidence that
would reasonably permit the finder of fact to find in [its] favor on a material question.”
Modrowski v. Pigatto, 712 F.3d 1166, 1167 (7th Cir. 2013).
DISCUSSION
Defendants contend that they are entitled to summary judgment because plaintiff is not a
party to the contract it is seeking to enforce and thus lacks standing. Defendants further contend
that, even if plaintiff has standing, the contract is not valid. Plaintiff responds that it is a party to
the agreement because it has done business as “Travelliance” for several years and that defendant
Wright knew that it was negotiating with plaintiff when it entered into the agreement. Plaintiff
further says that the contract is valid and enforceable.
I.

Standing
The United States Constitution in Article III, § 1 states that federal jurisdiction shall only

extend to a case or controversy. Lujan v. Defenders of Wildlife, 504 U.S. 555, 559 (1992). A
fundamental aspect of the case or controversy requirement is the doctrine of standing. Id. at 560.
The standing requirement “limits the category of litigants empowered to maintain a lawsuit in
federal court to seek redress for a legal wrong.” Spokeo, Inc. v. Robbins, 136 S. Ct. 1540, 1547
(2016). For a plaintiff to establish standing, it must meet the three elements that make up the
constitutional minimum. Id. These require that the plaintiff have “(1) suffered an injury in fact,
(2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be
redressed by a favorable judicial decision.” Id. The party seeking federal jurisdiction has the
burden of establishing that it meets the constitutional standing requirements. Lujan, 504 U.S. at

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561. If the court finds that the plaintiff does not have standing to raise their claims, then the court
cannot consider the merits of the claims. Meyers v. Nicolet Restaurant of De Pere, LLC, 843
F.3d 724, 726 (7th Cir. 2016).
A.

Injury-in-Fact

To meet the first requirement of standing, injury-in-fact, plaintiff must show an actual or
impending injury, regardless of how small that injury may be. Bauer v. Shepard, 620 F.3d 704,
708 (7th Cir. 2010). Here, plaintiff claims that it suffered monetary damages as a result of
defendants’ breach of contract. When applying Illinois law, a plaintiff asserting a breach of
contract claim must allege four elements, “(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.” W.W. Vincent and Co. v. First Colony Life Ins. Co., 814 N.E.2d 960, 967 (Ill. App.
Ct. 2004). A valid and enforceable contract imposes duties on the parties to the contract per its
terms. Id. Thus, the only parties that may bring a breach of contract claim under a contract are
those that have signed the contract at issue. Id.
The parties to the contract at issue are listed as “TRAVELLIANCE, INC., A corporation
in good standing with the State of Illinois” and “DOUG WRIGHT PROPERTY
MANAGEMENT LLC, an LLC in good standing with the State of Kentucky d/b/a
HOMEWOOD SUITES BY HILTON 2.” (ECF No. 6-1, p. 1.) The Illinois Secretary of State
records indicate that “Travelliance, Inc.” is the assumed name of Nationwide Hospitality, Inc.
The records also show that the assumed name of plaintiff is “Travelliance.”
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Plaintiff alleges that “Wright Property Management represented to Travelliance at the time it
executed the contract that it was a limited liability company called Doug Wright Property
Management, LLC” and that it “was both the ownership and management group for the
Homewood Suites Hotel in Lexington, Kentucky and that the hotel was a d/b/a for Wright
Property Management.” (See Sec. Amend. Compl., ¶¶ 9-10, ECF No. 6.) The parties do not
dispute defendants’ names and/or standing.
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“Travelliance, Inc.” and “Travelliance” are not the same entity. One is a corporation and
the other is a limited liability company. Under the plain terms of the contract, the party to the
contract is the corporation Nationwide Hospitality, Inc. with the assumed name of Travelliance,
Inc., not NHI-2, LLC.
Plaintiff maintains that it has standing because “Travelliance” is its assumed name, and
the name “Travelliance” appears throughout the agreement. (ECF No. 56, p. 2.) However,
plaintiff overlooks the fact that when the contract refers to “Travelliance” throughout the
agreement, it is doing so because it is the abbreviated name given to “Travelliance, Inc.” in the
contract.
Plaintiff further argues that it is the proper party to the agreement because Nationwide
Hospitality, Inc. transferred its assets, including the assumed name of “Travelliance, Inc.,” to
NHI-2, LLC in 2012. (Pl’s Response, ECF No. 55, p. 5; Affidavit of Thaddeus Scislowski, ECF
No. 56-2.) Plaintiff also says that defendant Wright knew that he was negotiating with NHI-2,
LLC. (Id.; Affidavit of Heather Bouley, ECF No. 56-4.) Defendants argue that the Court should
not consider this evidence because Scislowski’s affidavit conflicts with plaintiff’s discovery
responses and Bouley’s affidavit is disingenuous, lacks foundation and contains inadmissible
hearsay.
Scislowski states in his affidavit that Nationwide Hospitality, Inc. registered
“Travelliance, Inc.” as its assumed name in 2012. (See Scislowski Affidavit ¶ 7, ECF No. 56-2.)
He further states that Nationwide Hospitality, Inc. transferred its assets, including assumed
names, to plaintiff in February 2012. (Id. ¶ 14.) However, plaintiff did not previously provide
this information to defendants. During discovery, defendants issued interrogatories to plaintiff
and asked it to identify “all written or oral contracts, including any assignments, that relate to the

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claims or defenses in this case…” (See Defs’ Reply, ECF No. 58, p. 5; Ex. 6, NHI2’s Response
and Answer to Wright Property Management’s First Set of Interrogatories, ECF No. 58-1, p. 28.)
Plaintiff, through Scislowski, identified two contracts: the agreement at issue as well as an
assignment of rights and damages by Air Wisconsin to plaintiff, dated May 31, 2016. (Id.)
Scislowski did not state that Nationwide Hospitality had transferred the assumed name of
“Travelliance, Inc.” or its assets to plaintiff. Because the statements in Scislowski’s affidavit,
created for the purpose of opposing summary judgment, are inconsistent with plaintiff’s previous
answers to defendants’ interrogatories, the Court will not consider them. See Kalis v. ColgatePalmolive, Co., 231 F.3d 1049, 1055 (7th Cir. 2000) (“[a]s a general rule, the law of this circuit
does not permit a party to create an issue of fact by submitting an affidavit whose conclusions
contradict prior deposition or other sworn testimony.”). Even so, Scislowski’s affidavit does not
explain how plaintiff has standing to sue on the contract.
Heather Bouley’s affidavit also does not help plaintiff’s position either. Affidavits in
support of a motion for summary judgment must be made on personal knowledge and set forth
facts that would be admissible in evidence. Fed. R. Civ. P. 56(c)(4); see also Gunville v. Walker,
583 F.3d 979, 985 (7th Cir. 2009) (“a court may consider only admissible evidence in assessing a
motion for summary judgment”). Bouley attests only that Wright Property Management, Inc.
was informed that she was negotiating on behalf of NHI-2, LLC. (See Bouley Affidavit ¶ 9, ECF
No. 56-4.) However, she does not state who informed Wright Property Management, Inc. of this
information, and Bouley cannot testify about what other people knew or expected. Bouley also
states that her email address has a Travelliance domain name. (Id. ¶ 5.) While this may be true,
Bouley fails to acknowledge the full domain name of her email address, which is travellianceinc,

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and in any event would have no bearing on the contract at issue. (See Defs’ Response, Ex. 2, p.
10, ECF No. 58-1.)
Based on the evidence before the Court, no genuine issues of material fact remain
regarding plaintiff’s standing in this case. Plaintiff is not a party to the contract and therefore
cannot assert a breach of contract claim against defendants. As such, plaintiff fails to
demonstrate that it has suffered an injury in fact and therefore fails to meet the constitutional
requirements of standing. Because plaintiff fails to meet the injury in fact requirement of Article
III standing, this Court does not need to address the remaining elements of standing. Meyers, 843
F.3d at 729.
II.

Third Party Complaint
The third party complaint is dismissed. Third party plaintiffs assert that the Court has

jurisdiction to hear the complaint pursuant to 28 U.S.C. § 1367, i.e. supplemental jurisdiction.
Courts can decline to exercise supplemental jurisdiction over a claim if the “court has dismissed
all claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3). In granting
defendants’ motion for summary judgment, this Court dismisses all claims over which it had
original jurisdiction. As such, this Court declines to hear the claims contained in the third party
complaint.

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CONCLUSION
For the reasons set forth above, this Court grants defendants’ motion for summary
judgment [48]. Furthermore, the Court grants third party defendants’ motion to dismiss [38]
because the Court declines to exercise supplemental jurisdiction over the claims in the third party
complaint. Civil case terminated.
SO ORDERED.

ENTERED: March 2, 2018

______________________
HON. JORGE ALONSO
United States District Judge

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