Allied Metal Company v. Elkem Materials Inc.

Filing 114

MEMORANDUM Opinion Signed by the Honorable Charles P. Kocoras on 9/26/2024. Mailed notice. (sxh, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ALLIED METAL COMPANY,
Plaintiff/Counter-Defendant,
v.
ELKEM MATERIALS INC.,
Defendant/Counter-Plaintiff.

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21 C 1629

MEMORANDUM OPNION
Charles P. Kocoras, District Judge:
Before the Court is Defendant/Counter-Plaintiff Elkem Materials, Inc.’s
(“Elkem”) Motion for Summary Judgment and Plaintiff/Counter-Defendant Allied
Metal Company’s (“Allied”) Cross-Motion for Partial Summary Judgment. For the
reasons set forth below, both motions are denied.
BACKGROUND
As a preliminary matter, the Court notes that Elkem did not include a statement
of material facts section in its motion for summary judgment, and, in responding to
Allied’s motion, merely “incorporated by reference” its Local Rule 56.1 statements “as
if fully restated herein.” Dkt. # 104, at 3. Elkem jumped straight into legal argument,
assuming the Court is as familiar with the underlying events as the parties themselves,
and left it to the Court to sift through the Local Rule 56.1 statements and the underlying
exhibits to determine the factual background and sequence of relevant events. This

practice is frustrating, to say the least, and it places an undue burden on the Court and
its staff. Courts in this district—including this Court—have repeatedly informed
litigants that a Local Rule 56.1 statement is not a substitute for a statement of facts
section contained in the supporting brief. See, e.g., Flakes v. Target Corp., 2019 WL
6893005, at *2 (N.D. Ill. 2019); FirstMerit Bank, N.A. v. 2200 N. Ashland, LLC, 2014
WL 6065817, at *4 (N.D. Ill. 2014); Duchossois Indus., Inc. v. Crawford & Co., 2001
WL 59031, at *1 (N.D. Ill. 2001) (“Counsel obviously fail to understand the purpose of
L.R. 56. L.R. 56.1 statements are not intended to be substitutes for a statement of facts
section of a memorandum of law. Rather, their purpose is to assist the court in
identifying those material, uncontested facts in the record that entitle the movant to
judgment.”); McClain v. Costco Wholesale Corp., 2024 WL 1142001, at *1 (N.D. Ill.
2024) (Kocoras, J.). Counsel should keep this in mind for the future.
That being said, the following facts are undisputed unless otherwise noted.1
The Parties
Allied is a family-owned company in the business of recycling aluminum scrap
and making aluminum alloy for the diecasting industry. As part of this process, Allied
uses silicon alloy which gives the metal fluidity so that in making a casting, the
aluminum will flow into the company’s mold.

1

Any asserted facts or factual disputes that were not supported by evidence or were immaterial or
otherwise inadmissible have not been included.

2

Elkem is the North American sales arm of Elkem ASA, a Norwegian company,
and manufactures products such as SiLLOY® 170, which is an Elkem-proprietary
silicon alloy product. SiLLOY® 170 is a 97% purity silicon. Elkem also manufactures
SiLLOY® 130 which is a 98% purity silicon.
Allied and Elkem did business together for a number of years, during which
Allied would sometimes purchase Elkem products, such as SiLLOY® 170, through
quarterly, semi-annual, or annual contracts, and at times would issue spot orders on an
as-needed basis. Over the last several years, Joel Fink, Allied’s CEO, was the only
person at Allied responsible for buying silicon, and he would place his orders directly
with Richard Wolf of Elkem.
The market price of refined silicon fluctuates based on, among other things,
market demand, which is referred to as the “spot market.” Pricing of refined silicon
also depends on the grade, with a product with a higher silicon content (e.g., 99%
silicon) being a better product than silicon with a lower silicon content (e.g., 97%
silicon). The monthly pricing for SiLLOY® 170 in the parties’ contracts was derived
from Platts Metal Week (“Platts”), which is an industry publication that publishes prices
for various commodities. Allied has always preferred higher quality silicon, but
purchasing decisions always depend on price.
Pre-2020 Contracts
On August 29, 2016, Allied entered into Purchase Order 42985 to purchase 108
truckloads of product with anticipated delivery dates between January and December
3

2017 (“2017 Contract”). As acknowledged in Allied’s purchase order, “We are pricing
out 9 loads every month but might be late in taking a few of the months, per Joel and
Tony.” Dkt. # 96, ¶ 21. As of December 31, 2017, 11 truckloads2 remained to be
delivered under the 2017 Contract. Allied ordered, and Elkem delivered, the remaining
11 truckloads by February 24, 2018.
In October 2018, Allied entered into Purchase Order 44116 for delivery of 84
truckloads of SILLOY® 170 with anticipated deliveries between January and June 2019
(“1H2019 Contract”). As acknowledged in Allied’s purchase order for the 1H2019
Contract, “We are pricing 14 loads every month, but we might be late in taking a few
of the months, per Joel and Richard.” Dkt. # 92, at 144. As of June 30, 2019, 14
truckloads remained to be delivered under the 1H2019 Contract. It is unclear from the
record when those 14 truckloads were delivered.
Purchase Order 117
On February 4, 2019, Allied entered into Purchase Order 117 (“PO 117”) with
Elkem for delivery of 72 truckloads of SILLOY® 170 with anticipated deliveries
between July and December 2019 and a “stability”3 between July 1, 2019, and
December 31, 2019. According to PO 117, truckloads would be priced sequentially,
regardless of the date of actual delivery. For example, the first 12 truckloads would be

Elkem’s Local Rule 56.1 statement of facts states that 11 truckloads remained; however, Elkem’s
brief in support of its motion for summary judgment states that only nine truckloads remained. See
Dkt. # 106, ¶ 22, and Dkt. # 93, at 6.
2

3

“Stability” means the term of the contract. See Dkt. # 92, at 80.

4

priced according to Platts July Average, the next 12 according to Platts August average,
and so on. As acknowledged in PO 117, “We are pricing 12 loads every month but we
might be late taking a few months including Dec 2019 going into Jan 2020.” Dkt. # 106,
¶ 29. PO 117 included a provision stating, “All truckloads on the PO to be delivered
not later than January 15, 2020.” Dkt. # 97-9, at 3 (emphasis in original).
During the performance of PO 117, Elkem delivered and Allied accepted the first
12 truckloads, priced according to Platts July 2019 average, in August and September
2019. The truckloads priced according to August 2019 Platts were delivered in
September 2019, the truckloads priced according to September 2019 Platts average
were delivered in October 2019, the truckloads priced according to October 2019 Platts
pricing were delivered in November and December of 2019, and the truckloads priced
according to November 2019 Platts average were delivered in December 2019 and
January 2020. As of December 31, 2019, 13 truckloads remained to be delivered under
PO 117.
On January 2, 2020, Mr. Wolf sent an internal email to confirm a discussion he
had with Mr. Fink that Allied would take all of the SiLLOY® 170 ordered in PO 117,
although those releases “may just be further deferred by a short period of time,” and
that Allied would take all of the truckloads in the forthcoming 2020 contract. Dkt. # 9723, at 7.
Allied did not place any orders for delivery of any SiLLOY® 170 during January
2020, February 2020, or March 2020.
5

In an email dated March 18, 2020, Mr. Wolf asked Mr. Fink about Allied’s
ordering plans. In response, Mr. Fink stated that “[Allied] will honor everything [Allied
has] bought.” Dkt. # 97-18, at 2. Mr. Wolf responded and stated, “[p]ersonally, I have
every confidence that Allied will honor its commitments...you always have!” Id. Mr.
Wolf did not tell Allied that it was in breach of PO 117, state any reservation of rights
under PO 117 with respect to delivery dates, or state that Allied should have completed
all deliveries under PO 117 by January 15, 2020.
Following the March email exchange with Mr. Fink, on March 25, 2020, Mr.
Wolf sent an email within Elkem stating that Allied “will honor contractual
commitments but off-take will be delayed.” Dkt. # 97-19, at 2.
Between April and June 2020, Allied ordered and Elkem delivered the final 13
truckloads under PO 117. The parties completed PO 117 and moved on to their next
contract without Elkem having taken the position that Allied was in breach of PO 117
for not taking delivery of all 72 truckloads by January 15, 2020.
The 2020 Contract and PO 422
In September 2019, while Elkem was still delivering truckloads pursuant to
PO 117, Mr. Wolf met with Mr. Fink and Josh Gilford of Allied. During this time,
silicon market pricing had fallen such that the floor pricing of SiLLOY® 170 under
PO 117 was higher than market pricing.4 During the September 2019 meeting, Mr.
4

The terms governing PO 117 contained a pricing mechanism based on Platts, with a ceiling and
a floor. This meant that the price Allied paid for the 72 truckloads of SiLLOY® 170 would not
exceed the ceiling price, but would also not fall below the floor price.

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Wolf offered to make a slight reduction in the floor price for SiLLOY® 170 under
PO 117. Mr. Fink declined and stated that “a deal is a deal,” and Elkem had “won” for
that year based on the agreed pricing structure. Dkt. # 97-20, at 2. In summarizing the
meeting in an internal email, Mr. Wolf added that “[Mr. Fink will] look to get some of
this back next year.” Id.
On October 22, 2019, Mr. Wolf emailed Mr. Fink proposed terms for a 2020
contract. The original proposal stated that “All truckloads on the PO to be delivered not
later than December 31, 2020.” Dkt. # 92, at 18 (emphasis in original). However, after
discussing the matter with Mr. Fink, on October 29, 2019, Mr. Wolf sent a revised offer
including the following language:
Allied Metal Company will intend to release all truckloads on the PO for
delivery not later than January 31, 2021. However, Elkem will be willing
to negotiate a short extension if needed.
Dkt. # 92, at 16 (emphasis and highlighting in original).
The terms in Mr. Wolf’s revised offer included a stability date of February 1,
2020, through December 31, 2020. The revised offer contemplated a volume of 10
truckloads a month with the same sequential pricing mechanism as prior contracts,
where groups of 10 truckloads would be priced in sequential groups according to Platts
monthly averages, regardless of date of delivery. The revised offer provided that
“Elkem understands and accepts that some TL deliveries may roll over into a following
month but will be billed per the sequence described below. Conversely, any deliveries
pulled in early will be invoiced according to the sequential price in effect.” Dkt. # 92,
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at 16. Mr. Fink confirmed acceptance of this revised offer in an email to Mr. Wolf on
October 29, 2019 (“2020 Contract”).
On May 4, 2020, Mr. Wolf noted in an email to Elkem ASA executives that
“Allied will ultimately take all of the TL’s on their 2020 contract; 110 TL’s total
February through December 2020.” Dkt. # 73, ¶ 19.
On May 28, 2020, Mr. Wolf forwarded his October 29, 2019 email to Mr. Fink
and asked when Allied would issue its purchase order in connection with the 2020
Contract. Specifically, Mr. Wolf stated:
Kristy Grazier advises that we are approaching the end for deliveries
against PO #117 in fulfillment of the 2019 contract. Will Allied Metal
Company now be issuing its PO against the 2020 contract based upon the
terms of the agreement below.
Dkt. # 97-17, at 2. Allied responded the same day by issuing its Purchase Order 422
(“PO 422”). The stated delivery timeframe was February – December 2020.
PO 422 stated:

Dkt. # 92, at 20.

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Performance of the 2020 Contract
Allied placed its first orders under PO 422 in June 2020. The parties dispute the
number of truckloads delivered in June and July 2020, but it is undisputed that as of
August 31, 2020, Allied ordered and Elkem delivered 16 truckloads under PO 422.5
On September 15, 2020, Mr. Wolf wrote to Torbjorn Saethre, Business Director
of Silicon for Elkem ASA, stating that “Allied is months behind on their contract so I
don’t expect that we will have any new pricing discussions until we approach the end
of the current one. Allied will expect for us to honor our existing contract until it’s
fulfilled.” Dkt. # 97-25, at 2.
On September 18, 2020, Mr. Fink contacted Mr. Wolf wanting to purchase some
higher-silicon content alloy product from Elkem. Mr. Wolf was not able to provide this
product, but the parties discussed plans for 2021. Later that day, Mr. Wolf sent an
internal email to Mr. Saethre summarizing the conversation and stating that Mr. Fink
“was happy to hear that [Elkem] will be rolling over the existing agreement [PO 422]
until it’s fulfilled.” Dkt. # 97-26, at 2.
At a September 2020 meeting of Elkem’s board of directors, Mr. Wolf indicated
that volumes were “picking up” and Allied’s 2020 deliveries would carry over “well
into 2021.” Dkt. # 97-29, at 7. At a December 2020 board meeting, Mr. Wolf indicated

5

Allied appears to have included in its June count the final delivery under PO 117. Compare Dkt.
# 92, at 153–55, with Dkt. # 97-24, at 1.

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that volumes were “picking up” and the “2020 contract” with Allied “will carry over
well into 2021.” Id. at 9.
In October 2020, Elkem decided that it would supply the United States market
with SiLLOY® 130 (98% purity silicon) and would not be shipping any more
SiLLOY® 170 (97% purity silicon).
On October 15, 2020, Mr. Wolf emailed Mr. Saethre and advised him that Allied
was on truckload 29 of 110. He said that assuming Allied would likely only take
another 16 truckloads between that date and the end of the year, Elkem would be left
with approximately 1100mt supply going into 2021. Mr. Wolf asked whether Elkem
should reserve the remaining inventory of SiLLOY® 170 for Allied. Dkt. # 97-28, at
2.
As of December 31, 2020, Allied had ordered and received delivery of 47 out of
110 truckloads of SiLLOY® 170 under PO 422. This is how in December 2020, Allied
was receiving truckload #47 for $0.86/lb (June 2020 pricing), when the then-current
December 2020 market price would have yielded pricing of $0.97/lb.
As of January 31, 2021, Allied had ordered and received delivery of 53 out of
110 truckloads under PO 422. Elkem delivered another five truckloads in February
2021. As of March 1, 2021, Allied had ordered and received delivery of 58 out of 110
truckloads under PO 422.6 At no point between June 2020 and February 2021 did
6

Allied disputes this and says it had received 59 out of the 110 truckloads, but, again, Allied
appears to have included in its June count the final delivery for PO 117. Compare Dkt. # 92, at
153–55, with Dkt. # 97-24, at 1.

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Elkem discuss with Allied the pace of Allied’s deliveries or insist on adherence to the
delivery schedule in PO 422.
On February 26, 2021, Mr. Wolf advised Mr. Saethre that as of that date, Elkem
had supplied 59 of 110 truckloads to Allied and that the next shipment “will effectively
wipe out [Elkem’s] SiLLOY® 170 inventory.” Dkt. # 97-30, at 2–3. Mr. Wolf
reiterated some of the terms of PO 422, including the provision that Allied “will intend
to release all truckloads for delivery not later than January 31, 2021,” and that Elkem
“will be willing to negotiate a short extension if needed.” Id. Mr. Wolf stated Elkem
had two options: either allow the agreement with Allied to “run its full course” or cancel
the agreement and risk losing Allied as a customer. Id.
In response to Mr. Wolf’s February 26, 2021 email, Nils Dybwad, the director
of marketing and sales for Elkem ASA and the chairman of Elkem’s board, stated that,
while he admittedly did not “have the full story” and did not know “what kind of
agreement” Elkem had with Allied, he was “very surprised” that Elkem was still
delivering against PO 422 and delivering material that should have been taken in July
and August 2020. Dkt. # 97-32, at 2. Dybwad said that Allied could not “reasonably
expect us to supply at this price now,” and that a reasonable short extension would be
one month. Id. He suggested Mr. Wolf “discuss a termination of the present contract
with Allied as they have now had more than reasonable time to take deliver of the agreed
material, and they are substantially behind,” adding, “[i]n any new agreement you need
to put in some sort of ‘stop date.’ We can’t have open-ended agreements like this.” Id.
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Mr. Wolf contacted Mr. Fink on March 1, 2021, and summarized their
conversation in an internal email to Mr. Saethre that same day. Mr. Wolf reported that
he “[s]poke with Joel Fink and floated the plan as we discussed; honor contract for
remaining 100mt of SiLLOY® 170 in stock and then convert over to SiLLOY® 130 at
Platts minus $0.08/lb.”7 Dkt. # 97-2, at 2. Mr. Fink declined the offer and responded
that Allied was ready, willing, and able to accept all the remaining loads on PO 422.
As of March 1, 2021, Elkem did not have sufficient inventory of SiLLOY® 170
to supply Allied with all undelivered truckloads of SiLLOY® 170 under PO 422.
Elkem did, however, have enough inventory of either SiLLOY® 170 or SiLLOY® 130
to fulfill Allied’s requests for deliveries.
Prior to March 1, 2021, Elkem never told Allied that it was converting its silicon
supply to SiLLOY® 130, that it lacked sufficient inventory of SiLLOY® 170 to fulfill
PO 422 as of November 2020, or that it believed PO 422 had “ended” and “expired” on
December 31, 2020, and if Allied wanted to order all truckloads of SiLLOY® 170 under
PO 422, Allied needed to place those orders before December 31, 2020, or any other
date.
In March of 2021, Allied ordered and Elkem shipped five truckloads of
SiLLOY® 170, with the last truckload delivered on March 11, 2021. Ultimately, for
the 2020 Contract, Allied received the February 2020-priced material in June 2020, the

7

The then-current market price for SiLLOY® 130 on March 1, 2021, even with an eight-cent
discount, was higher than the price Allied paid Elkem for SiLLOY® 170 under PO 422.

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March 2020-priced material in July 2020, the April 2020-priced material in
September/October 2020, the May 2020-priced material in November 2020, the June
2020-priced material in December 2020, the July 2020-priced material in January and
February 2021, and a portion of the August 2020-priced material in March 2021.
Elkem did not deliver 110 truckloads of SiLLOY® 170 to Allied under PO 422.
As a result, from March 9, 2021, through September 10, 2021, Allied made “cover”
purchases to replace the truckloads Elkem did not deliver. Allied’s cover purchases
were made at prices in excess of the contract price in PO 422 had Elkem continued to
supply all outstanding SiLLOY® 170 after March 1, 2021, at the price mechanism
contained in PO 422.
Allied says that based on Elkem’s representation in September 2020 that it would
“roll over” PO 422 until fulfilled and its silence regarding its dwindling supply of
SiLLOY® 170, Allied did not go into the market to secure an alternative source of
supply for silicon alloy product prior to March 2021, and had to scramble to find spot
purchases (at a higher price) to make up for the undelivered truckloads. Elkem,
however, points out that Allied had purchased silicon from other suppliers between
September 18, 2020, and February 16, 2021.
According to Allied, had Elkem informed Allied that it was not planning to
deliver all truckloads of SiLLOY® 170 under PO 422 unless Allied took all deliveries
by a date certain, Allied would have secured an alternative source of supply.

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SiLLOY® 130
The parties agree that SiLLOY® 130 is a “more valuable” product than
SiLLOY® 170, as it has a higher purity. Dkt. # 106, ¶ 45. Allied’s processes would
change with a higher purity versus lower purity alloy product—the amount of alloy
needed depends on the quality, because Allied is always required to produce to
specifications. Allied’s expert testified that it “should not be a big deal” if the company
switched from using SiLLOY® 170 to SiLLOY® 130, but the customer needed to be
informed of any change. Dkt. # 92, at 132. Allied’s expert further testified that a switch
to SiLLOY® 130 could take place “with no adverse effect in Allied’s processes.” Dkt.
# 106, ¶ 46.
Unpaid Invoices
Between January and March 2021, Elkem shipped and Allied accepted 14
truckloads of SiLLOY® 170. Under the terms of the 2020 Contract, payment was due
“Net 45 Day from the original delivery date” of each truckload. Allied has not made
payment on the invoices for those 14 truckloads. According to Allied’s accounting
records, $516,805.02 remains due for these shipments under the 2020 Contract.
The 2020 Contract contains a set-off provision, which states: “Set-Off. All
claims for money due or to become due [to] SELLER from BUYER shall be subject to
set-off by BUYER by reason of any counterclaim arising out of this or any other
transaction with SELLER.” Dkt. # 92, at 21, ¶ 20. Allied contends it was not required

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to make payment based on this provision in the contract. Elkem denies Allied is entitled
to a set-off.
After the parties’ relationship soured, Allied brought this action against Elkem
alleging breach of contract and fraudulent concealment. Elkem filed a counterclaim for
breach of contract regarding the unpaid invoices. Based on the above undisputed facts,
Elkem now moves for summary judgment on Allied’s breach of contract and fraudulent
concealment claims, as well as on its counterclaim for breach of contract. Allied moves
for partial summary judgment on its breach of contract claim.
LEGAL STANDARD
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, 322–23
(1986). To defeat summary judgment, a nonmovant must produce more than a “mere
scintilla of evidence” and come forward with “specific facts showing that there is a
genuine issue for trial.” Johnson v. Advocate Health and Hosps. Corp., 892 F.3d 887,
894, 896 (7th Cir. 2018). The Court considers the entire evidentiary record and must
view all of the evidence and draw all reasonable inferences from that evidence in the
light most favorable to the nonmovant. Horton v. Pobjecky, 883 F.3d 941, 948 (7th Cir.
2018). The Court does not “weigh conflicting evidence, resolve swearing contests,
determine credibility, or ponder which party’s version of the facts is most likely to be
true.” Stewart v. Wexford Health Sources, Inc., 14 F.4th 757, 760 (7th Cir. 2021).
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Ultimately, summary judgment is warranted only if a reasonable jury could not return
a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court applies these “ordinary standards for summary judgment” in the same
way whether one or both parties move for summary judgment; when the parties file
cross-motions, the Court treats each motion individually, “constru[ing] all facts and
inferences arising from them in favor of the party against whom the motion under
consideration is made.” Blow v. Bijora, Inc., 855 F.3d 793, 797 (7th Cir. 2017); see
Reeder v. Carter, 339 F. Supp. 3d 860, 869–70 (S.D. Ind. 2018).
DISCUSSION
I.

Allied’s Motion for Partial Summary Judgment
In its motion for partial summary judgment, Allied argues that Elkem breached

the 2020 Contract on March 1, 2021, in two ways. First, Elkem breached the contract
when it refused to deliver the remaining truckloads of SiLLOY® 170 under PO 422.
Second, Elkem breached the contract when it refused to negotiate any extension of
PO 422 and instead offered to convert Allied to SiLLOY® 130 at a higher price. Allied
additionally argues that to the extent the December 2020 stability date and the
January 31, 2021 date in PO 422 can be read as “firm” cut-off dates, Elkem’s statement
that PO 422 would roll over until fulfilled, silence regarding enforcement of a
January 31, 2021 deadline, and delivery of truckloads after January 31, 2021, amounted
to a waiver of that deadline.

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Elkem, in response, argues that it is entitled to summary judgment on Allied’s
breach of contract claim because it provided Allied with PO 422’s contemplated short
extension by making deliveries beyond January 31, 2021, and it had no obligation to
deliver SiLLOY® 170 beyond March 11, 2021, because the contract expired by that
point.
The 2020 Contract, as a contract for the sale of goods, is governed by the Illinois
Commercial Code (“UCC”). Under the UCC, written contract terms may be explained
or supplemented by course of performance, course of dealing, or usage of trade. See
810 5/2-202. The UCC is clear that the express terms of a contract should be
harmonized with the parties’ course of performance, course of dealing, and the usage
of trade. See 810 ILCS 5/1-303(e). In the event this cannot be done, express terms
prevail over all three, course of performance prevails over course of dealing and usage
of trade, and course of dealing prevails over usage of trade. See id.
Allied’s breach of contract claim turns on the question of at what point Elkem
was no longer obligated to supply SiLLOY® 170 under the 2020 Contract pricing. As
explained below, the text of the 2020 Contract and PO 422, in what is affirmatively
stated and in what is omitted, renders the intent of the parties ambiguous. And in
assessing the evidence of record regarding the parties’ course of performance and
course of dealing8, it is evident that a genuine issue of material fact exists with respect

8

Neither party put forth any evidence or argument regarding usage of trade.

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to the parties’ intent. See Zemco Mfg., Inc. v. Navistar Int’l Transp. Corp., 186 F.3d
815, 818 (7th Cir. 1999).
A. Express Terms
Elkem argues the Court need look no further than the express terms of the 2020
Contract, which Elkem asserts states a specifically-negotiated express deadline for
delivery of January 31, 2021. Elkem points out that the original terms proposed by Mr.
Wolf included a sentence that all truckloads were to be delivered not later than
December 31, 2020, but after a discussion between Mr. Wolf and Mr. Fink, the offer
was revised to state that Allied “will intend to release all truckloads under the PO for
delivery not later than January 31, 2020. However, Elkem will be willing to negotiate
a short extension if needed.” Dkt. #92, at 16. Elkem says had the parties intended a
“flexible” delivery deadline permitting Allied to perpetually order until all 110
truckloads were fulfilled, there would have been no need to negotiate and revise the
original offer, and “to give no legal effect to the January 31, 2021 end date would render
the provision meaningless, and contrary to the intent of the parties.” Dkt. # 104, at 5
(citing Shapich v. CIBC Bank USA, 2018 IL App (1st) 172601, ¶ 21). In the Court’s
view, the matter is not so clear cut and an examination of the parties’ course of
performance and course of dealing is necessary.
B. Course of Performance
The Court first looks to the parties’ course of performance, which “can aid in
interpretation of a written contract by shedding light on the understanding between the
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parties.” Midwest Builder Distrib. v. Lord & Essex, 383 Ill. App. 3d 645, 673 (2007).
A “course of performance” is “a sequence of conduct between the parties to a particular
transaction that exists if: (1) the agreement of the parties with respect to the transaction
involves repeated occasions for performance by a party; and (2) the other party, with
knowledge of the nature of the performance and opportunity for objection to it, accepts
the performance or acquiesces in it without objection.” 810 ILCS 5/1-303(a).
Allied asserts that “[t]he parties’ course of performance of PO 422 confirms that
the parties were willing to be flexible with delivery dates.” Dkt. # 94, at 13. Elkem, on
the other hand, argues that what Allied views as the parties’ course of performance
under PO 422 was related only to “the internal schedule of monthly deliveries,” and
“[t]here could be no course of performance . . . with respect to the deadline for delivery
of all truckloads under the PO – which was a one-time, final event.” Dkt. # 104, at 5
(emphasis in original). Even if true, though, Elkem did deliver—without objection—
multiple truckloads after January 31, 2021, which indicates some level of flexibility.
C. Course of Dealing
A “course of dealing” is “a sequence of conduct concerning previous transactions
between the parties to a particular transaction that is fairly to be regarded as establishing
a common basis of understanding for interpreting their expressions and other conduct.”
810 ILCS 5/1-303(b). Allied makes much of the fact that PO 117 was not completed
until five months past the contract’s stated delivery timeframe, and says this extension
is evidence of the kind of extension Allied expected with PO 422. In the Court’s view,
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however, this five-month extension is not significant as Allied would have one believe.
Early 2020 saw the onset of the Covid-19 pandemic. In those initial months, many
businesses were forced to shut down or significantly adjust the way they operated.
Business owners were compelled to make changes to their operations that they would
never have considered absent such extraordinary circumstances. With the exception of
those initial months of the pandemic, the record shows that in prior contracts and in
PO 422, Allied ordered truckloads every month, even if the amount was not the number
contemplated at the time of contracting. Had things proceeded in the typical fashion
and had Allied placed its April, May, and June 2020 orders in January, February, and
March 2020, PO 117 would have been completed in early March—only about a month
and a half past the stated delivery deadline in PO 117.
This, then, tracks with Elkem’s willingness to deliver truckloads under PO 422
into February and March 2021. It also tracks with the 2017 Contract, which was
fulfilled two months after the delivery timeframe ended. Notably, deliveries under the
2017 Contract, the 1H2019 Contract, and PO 117 were much closer to being fulfilled
at their stated delivery deadlines (around one month behind) than was PO 422 as of
January 31, 2021. The 2017 Contract was for 9 truckloads a month and had 119
truckloads remaining at the end of the delivery timeframe. The 1H2019 Contract was

9

Or possibly nine, see supra, n.2.

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for 14 truckloads a month and had 14 truckloads remaining. PO 117 was for 12
truckloads a month, and 13 remained at the end of the delivery timeframe.
Allied argues that “[w]hen read in harmony with performance of PO 117 and
PO 422, including Elkem’s repeated and consistent acceptance of delivery requests
regardless of when they were placed without objection, the undisputed evidence shows
that the parties understood and intended for PO 422 to run until all 110 truckloads were
delivered, not until some arbitrary date unilaterally selected by Elkem.” Dkt. # 95, at
16 (emphasis in original). Elkem calls out the absurdity of such a position, arguing that
under Allied’s interpretation of the contract terms, Allied could order truckloads under
PO 422 years later, yet still pay based on the pricing from 2020. Allied then changes
its tune and asserts that it never argued that the flexibility in delivery schedules meant
that the parties intended for the contract to run perpetually and urges the Court to “reject
this strawman argument, particularly in light of Allied’s immediate demand for all
remaining truckloads” on March 1, 2021. Dkt. # 111, at 6. “Allied simply wanted the
opportunity to negotiate a short extension if the parties’ goal for the intention to release
deliveries was not met—as in fact occurred.” Id. at 6–7.
But what did the parties mean by “short” extension? One month? Six months?
A year? There is evidence in the record from which a reasonable jury could conclude
that Elkem, for its part, understood the parties’ intention to be that Elkem’s delivery
obligations under the 2020 Contract would continue until all 110 truckloads were
delivered, or at least extend past March 2021. For example, in his September 15, 2020
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email to Mr. Saethre, Mr. Wolf noted that Allied was months behind on the 2020
Contract and that “Allied will expect for us to honor our existing contract until it’s
fulfilled.”

Dkt. # 97-25, at 2 (emphasis added).

Mr. Wolf also reported on

September 18, 2020, that Mr. Fink “was happy to hear that [Elkem] will be rolling over
the existing agreement [PO 422] until it’s fulfilled.” Dkt. # 97-26, at 2 (emphasis
added). At a December 2020 board meeting, it was noted the 2020 Contract would
“carry over well into 2021.” Dkt. # 97-29, at 9 (emphasis added). And Mr. Wolf’s
February 26, 2021 internal email indicates that the 2020 Contract was still in effect as
of that date. See Dkt. # 97-8, at 2 (asking, “[d]o we allow the current agreement to run
its course?” and stating, “[i]f we cancel the current agreement and suggest a structure
for a new agreement . . . we run the risk of losing Allied’s business[.]”) (emphasis
added). Mr. Wolf’s email reiterated the key provisions of the 2020 Contract (that Allied
intends to release all truckloads for delivery no later than January 31, 2021 and that
Elkem would be willing to negotiate a short extension). In response to that email, Mr.
Dybwad suggested that Mr. Wolf “discuss a termination of the present contract with
Allied.” Dkt. # 97-32, at 2 (emphasis added).
Elkem was aware of how far behind Allied was in ordering under PO 422, and
while Elkem discussed the matter internally, nothing in the record suggests Elkem
relayed its concerns to Allied or otherwise indicated it would not supply the remaining
truckloads under the 2020 pricing after March 11, 2021, because it viewed the contract
as expired as of a certain date. In fact, there is no evidence in the record of any
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communication whatsoever between the September 2020 conversation where Mr. Fink
was “happy to hear” the 2020 Contract would roll over until fulfilled and March 1,
2021, when Elkem informed Allied it would not be supplying more than five additional
truckloads of SiLLOY® 170.
Yet there is also evidence that would permit the conclusion that the parties
understood January 31, 2021, to be the final delivery deadline, and/or that a reasonable
short extension would be one to two months. If the parties did not consider January 31
a deadline, what was the point in negotiating the change in language or the change in
date? Elkem makes a persuasive argument, but not so much so that no reasonable juror
could not find in favor of Allied. Nor is Allied’s case so strong that no reasonable
factfinder could find in favor of Elkem.
D. Waiver
Next, Allied argues that, to the extent the December stability date or the date by
which Allied intended to release all truckloads can be viewed as a hard and fast
deadline, Elkem waived its right to enforce that deadline.
Before diving in, the Court must first address Elkem’s argument that Allied
forfeited its waiver argument by failing to raise the “distinct factual theor[y]” in its
amended complaint. Dkt. # 104, at 9. As Elkem recognizes, however, a complaint does
not have to reveal legal theories. See Rabe v. United Air Lines, Inc., 636 F.3d 866, 872
(7th Cir. 2011). Here, Allied is not attempting to raise a new claim or inject new facts
into the litigation. It has always been Allied’s position that Elkem breached its
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contractual obligation to deliver all 110 truckloads of SiLLOY® 170 at the 2020
Contract prices. Determining whether a breach occurred requires an analysis of the
contract terms and the parties’ course of performance and course of dealing. See 810
ILCS 5/2-202.

And course of performance may give rise to waiver of express

contractual terms. See 810 ILCS 5/1-303(f). Elkem cannot credibly claim to be
surprised or prejudiced by Allied’s waiver argument at summary judgment, and the
parties had ample opportunity to brief the matter. Thus, the Court will consider the
merits of Allied’s waiver argument in addressing Allied’s motion.
Under the UCC, the parties’ course of performance may “give rise to waiver of
express contractual terms if those terms are not strictly adhered to.” Midwest Builder,
383 Ill. App. 3d at 673; 810 ILCS 5/1-303(f) (a course of performance is relevant “to
show a waiver or modification of any term inconsistent with the course of
performance.”). Waiver is “an intentional relinquishment of a known right.” Id.; see
also Delta Consulting Grp., Inc. v. R. Randle Constr., Inc., 554 F.3d 1133, 1140 (7th
Cir. 2009). Although waiver can be implied by the parties’ conduct, courts will find an
implied waiver only if the waiver is clearly inferable from the circumstances. Id.; see
also Ryder v. Bank of Hickory Hills, 146 Ill. 2d 98, 105 (1991) (“Implied waiver of a
legal right must be proved by a clear, unequivocal, and decisive act of the party who is
alleged to have committed waiver.”); Delta Consulting Grp., 554 F.3d at 1140 (“the act
relied on to constitute the waiver must be clear, unequivocal and decisive.”).

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The policy behind this broad doctrine of waiver in contract law is to “prevent the
waiving party from ‘lull[ing] another into a false assurance that strict compliance with
a contractual duty will not be required and then sue for noncompliance.’” Id. at 674
(quoting Wagner Excello Foods, Inc. v. Fearn Int’l, Inc., 235 Ill. App. 3d 224, 233
(1992)). “While the question of waiver may be resolved as a legal matter in certain
cases, the question becomes one of fact where the facts necessary to support a finding
of waiver are disputed or reasonable minds could draw different inferences from the
evidence.” Wolfram P’ship v. Lasalle Nat’l Bank, 328 Ill. App. 3d 207, 225 (2001).
Here, Allied has the burden of proving that Elkem waived its right to stop
delivering under the 2020 Contract pricing. See Claxton v. Bd. of Trs. of the City of
Alton Firefighters’ Pension Fund, 2023 IL App (5th) 220200, ¶ 29. Allied argues that
Elkem never told Allied it was going to insist on adherence to the stated delivery
schedules or objected to Allied’s delayed ordering. Instead, Allied says, Elkem assured
Allied that PO 422 would be rolling over until fulfilled and continued filling orders after
January 31, 2021, then “pulled the proverbial rug out from under Allied by departing
from the parties’ historic practice and unilaterally declaring its supply obligations at an
end.” Dkt. # 95, at 18.
Elkem argues that Mr. Wolf’s internal comment that Allied was “happy to hear”
that the 2020 Contract would be rolled over until fulfilled was not an unambiguous and
clear relinquishment of the right to cease deliveries at 2020 pricing “at some
commercially reasonable point after January 31, 2021.” Dkt. # 104, at 12. The Court
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finds that, at a minimum, a question of fact exists on the issue of waiver. Summary
judgment is not warranted on this basis.
E. Failure to Negotiate
Lastly, Allied argues that, in addition to its failure to supply all 110 truckloads
of SiLLOY® 170, Elkem further breached PO 422 “when it refused to, and was unable
to, negotiate a ‘short extension’ of that agreement.” Dkt. # 95, at 18. Again, PO 422
expressly stated: “Allied Metal Company will intend to release all truckloads on the PO
for delivery not later than January 31, 2021. However, Elkem will be willing to
negotiate a short extension if needed.” Dkt. # 97-22, at 3 (emphasis in original).
Allied says that when Elkem contacted Allied on March 1, 2021, to report for the
first time that it would not deliver any more SiLLOY® 170 beyond its remaining stock,
this was a refusal to negotiate any further extension of PO 422. Instead, Elkem offered
to “convert” Allied to SiLLOY® 130 at the then-current Platts pricing. And when
Allied demanded delivery of all outstanding truckloads of SiLLOY® 170, Elkem
refused—it couldn’t negotiate an extension because it didn’t have the stock.
In response, Elkem argues that it did not breach PO 422 because “Allied received
the benefit of its bargain for a short extension, without even having to negotiate.” Dkt.
# 104, at 15 (emphasis in original). According to Elkem, the course of dealing prior to
the 2020 Contract “could arguably establish that one month’s worth of shipments may
roll into a following year.” Id. Because every prior “short extension” had been, at most,
one month’s worth of deliveries, Elkem says it had no obligation based on a course of
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dealing to deliver more than 10 truckloads beyond the January 31, 2021 release
deadline.
The Court agrees with Allied that offering a different product at a new and higher
price is not an offer to extend PO 422, it is an offer to enter into an entirely new contract.
Based on the evidence, a reasonable jury could conclude that Elkem failed to negotiate
an extension as contemplated at the time of contracting. But a reasonable jury could
also conclude that it met its obligations. For example, the conversation that led Mr.
Wolf to report that Mr. Fink was happy to hear PO 422 would roll over until fulfilled
might have constituted a negotiation of a short extension—we don’t know what was
said in that conversation. Because a question of fact exists regarding whether Elkem
breached its obligation to negotiate, Allied is not entitled to summary judgment on this
basis.
II.

Elkem’s Motion for Summary Judgment
Moving on to Elkem’s motion, Elkem moves for summary judgment in its favor

on Allied’s breach of contract and fraudulent concealment claims, as well as on its
counterclaim for breach of contract.
A. Breach of Contract Claim
For the reasons explained above, questions of fact preclude the entry of summary
judgment in either party’s favor on Allied’s breach of contract claim.

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B. Fraudulent Concealment Claim
In order for Allied to demonstrate fraudulent concealment under Illinois law, it
must prove: (1) the concealment of a material fact; (2) that the concealment was
intended to induce a false belief, under circumstances creating a duty to speak; (3) that
Allied could not have discovered the truth through a reasonable inquiry or inspection,
or was prevented from making a reasonable inquiry or inspection, and relied upon the
silence as a representation that the fact did not exist; (4) that the concealed information
was such that Allied would have acted differently had he been aware of it; and (5) that
Allied’s reliance led to its injury. Trs. of the AFTRA Health Fund v. Biondi, 303 F.3d
765, 777 (7th Cir. 2002). Elkem argues it is entitled to summary judgment in its favor
because Allied cannot show the concealment of a material fact or reliance to its
detriment.
In the amended complaint, Allied alleged that “Elkem’s intentional failure to
inform Allied that it would not and could not honor PO 422 until all ordered loads were
delivered, and that it would be impossible for Elkem to provide all remaining truckloads
under PO 422, was an omission of material fact.” Dkt. 50, ¶ 48. Elkem argues that its
diminishing inventory of SiLLOY® 170 was immaterial because Elkem “had sufficient
inventory of a higher quality product (SiLLOY 130) to fulfill any orders that Elkem
would be obligated to supply under the 2020 Contract.” Dkt. # 110, at 7. Therefore,
Elkem says, Allied cannot prove a concealed material fact “that it would be impossible
for Elkem to provide all remaining truckloads under PO 422.” Elkem further asserts
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that its conversion to SiLLOY® 130 was immaterial based on Allied’s admission that
it always preferred a higher purity silicon product, and it always depended on the price.
According to Elkem, “there is only one possible logical inference from these two
premises: Allied would have accepted SiLLOY® 130 if it had been provided at the
SiLLOY® 170 pricing under the 2020 Contract.” Dkt. # 110, at 8. Maybe it would
have, or maybe not. That is a question of fact for the jury.
C. Counterclaim for Breach of Contract
Finally, Elkem argues that it is entitled to summary judgment on its counterclaim
for breach of contract because Allied admits that it has not paid Elkem for the delivery
of fourteen truckloads between January 2021 and March 2021. Allied, however, argues
Elkem is not entitled to summary judgment on its counterclaim because of the 2020
Contract’s set-off provision, which states: “Set-Off. All claims for money due or to
become due [to] SELLER from BUYER shall be subject to set-off by BUYER by
reason of any counterclaim arising out of this or any other transaction with SELLER.”
Dkt. # 92, at 21, ¶ 20. Because Elkem is not entitled to summary judgment on Allied’s
breach of contract and fraud claims, Elkem’s motion for summary judgment is also
denied as to Elkem’s counterclaim.

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CONCLUSION
For the foregoing reasons, Elkem’s Motion for Summary Judgment [91] is
denied and Allied’s Cross-Motion for Partial Summary Judgment [94] is denied.
Telephonic status hearing is set for 10/24/2024 at 10:00 a.m.
It is so ordered.

______________________________
Charles P. Kocoras
United States District Judge

Date: September 26, 2024

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