In re Clark Retail Enterprises, Inc.

• Decision Date: 29 April 2004
• Docket Number: Bankruptcy No. 02 B 40046.,Adversary No. 03 A 04393.,Bankruptcy No. 02 B 40045.
• Citation: 308 B.R. 869
• Parties: In re CLARK RETAIL ENTERPRISES, INC., Clark Retail Group, Inc., Debtors. Super Stop Petroleum, Inc., Plaintiff, v. Clark Retail Enterprises, Inc., National Real Estate Clearinghouse, Inc., GE Capital Franchise Finance Corporation, and Shell Capital Inc., Defendants.
• Court: U.S. District Court — Northern District of Illinois

308 B.R. 869

In re CLARK RETAIL ENTERPRISES, INC., Clark Retail Group, Inc., Debtors Super Stop Petroleum, Inc., Plaintiff, v. Clark Retail Enterprises, Inc., National Real Estate Clearinghouse, Inc., GE Capital Franchise Finance Corporation, and Shell Capital Inc., Defendants.

Bankruptcy No. 02 B 40045.

Bankruptcy No. 02 B 40046.

Adversary No. 03 A 04393.

United States District Court, N.D. Illinois, Eastern Division.

April 29, 2004.

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Kimberly J. Robinson, Barack, Ferrazzano, Kirschbaum, Perlman & Nagelberg, LLC, Chicago, IL, Attorney for Plaintiff.

Nathan A. Schultz, Stutman, Treister & Glatt, P.C., Los Angeles, CA, for Clark Retail Enterprises, Inc.

Michael C. Rupe, Jenner & Block, Chicago, IL, for GE Capital Franchise Finance Corporation.

Rudy A. Figueroa, Daley & Mohan, P.C., Chicago, IL, for National Real Estate Clearinghouse, Inc.

John F. Pollock, McGuire, Woods, Ross & Hardies, Chicago, IL, for Shell Capital, Inc.

MEMORANDUM OPINION

JOHN H. SQUIRES, Bankruptcy Judge.

These matters come before the Court on the cross-motions of Plaintiff Super Stop Petroleum, Inc. ("Super Stop") and Defendants Clark Retail Enterprises, Inc. ("Clark") and National Real Estate Clearinghouse, Inc. ("NRC") for summary judgment pursuant to Federal Rule of Bankruptcy Procedure 7056 and Federal Rule of Civil Procedure 56 on the complaint filed by Super Stop seeking turnover of deposits it paid on certain retail units for which Super Stop made bids that were not accepted by Clark.¹ For the reasons stated herein, the Court finds as a matter of law that NRC's reallocation, for Clark's benefit, of Super Stop's initial deposits for the bids for retail units that were not accepted to meet the additional earnest money requirement for units for which Super Stop's bids were accepted was invalid under the controlling contractual documents. The Court further finds that Clark's damages are limited to the initial deposits actually made by Super Stop for the retail units for which its bids were accepted. Accordingly, the Court grants Super Stop's motion for summary judgment, denies Clark and NRC's cross-motion, and directs Clark or NRC, its agent, to return to Super Stop the subject deposits that aggregate $499,200.00 on retail units for which Super Stop made bids that were not accepted.

I. JURISDICTION AND PROCEDURE

The Court has jurisdiction to entertain these matters pursuant to 28 U.S.C. § 1334 and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. They are core proceedings under 28 U.S.C. § 157(b)(2)(A) and (O).

II. APPLICABLE STANDARDS

In order to prevail on a motion for summary judgment, the movant must meet the statutory criteria set forth in Rule 56 of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056. Rule 56(c) reads in part:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Fed.R.Civ.P. 56(c). See also Estate of Allen v. City of Rockford, 349 F.3d 1015, 1019 (7th Cir.2003).

The primary purpose for granting a summary judgment motion is to avoid unnecessary trials when there is no genuine issue of material fact in dispute. Trautvetter v. Quick, 916 F.2d 1140, 1147 (7th Cir.1990); Farries v. Stanadyne/Chi. Div., 832 F.2d 374, 378 (7th Cir.1987) (quoting Wainwright Bank & Trust Co. v. Railroadmens Fed. Savs. & Loan Ass'n of Indianapolis, 806 F.2d 146, 149 (7th Cir.1986)). Where the material facts are not in dispute, the sole issue is whether the moving party is entitled to a judgment as a matter of law. ANR Advance Transp. Co. v. Int'l Bhd. of Teamsters, Local 710, 153 F.3d 774, 777 (7th Cir.1998) (citation omitted). On a motion for summary judgment, "the court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial." Payne v. Pauley, 337 F.3d 767, 770 (7th Cir.2003) (internal quotation omitted).

In 1986, the United States Supreme Court decided a trilogy of cases which encourages the use of summary judgment as a means to dispose of factually unsupported claims. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The burden is on the moving party to show that no genuine issue of material fact is in dispute. Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Celotex, 477 U.S. at 322, 106 S.Ct. 2548; Matsushita, 475 U.S. at 585-86, 106 S.Ct. 1348.

All reasonable inferences drawn from the underlying facts must be viewed in a light most favorable to the party opposing the motion. Parkins v. Civil Constructors of Ill., Inc., 163 F.3d 1027, 1032 (7th Cir.1998) (citation omitted). The existence of a material factual dispute is sufficient only if the disputed fact is determinative of the outcome under applicable law. Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Frey v. Fraser Yachts, 29 F.3d 1153, 1156 (7th Cir.1994) (citation omitted). "[S]ummary judgment is not an appropriate occasion for weighing the evidence; rather, the inquiry is limited to determining if there is a genuine issue for trial." Lohorn v. Michal, 913 F.2d 327, 331 (7th Cir.1990) (citation omitted). The Seventh Circuit has noted that trial courts must remain sensitive to fact issues where they are actually demonstrated to warrant denial of summary judgment. Opp v. Wheaton Van Lines, Inc., 231 F.3d 1060, 1065-66 (7th Cir.2000); Szymanski v. Rite-Way Lawn Maint. Co., Inc., 231 F.3d 360, 364 (7th Cir.2000).

The party seeking summary judgment always bears the initial responsibility of informing the court of the basis for its motion, identifying those portions of the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Once the motion is supported by a prima facie showing that the moving party is entitled to judgment as a matter of law, a party opposing the motion may not rest upon the mere allegations or denials in its pleadings; rather, its response must show that there is a genuine issue for trial. Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Matsushita, 475 U.S. at 587, 106 S.Ct 1348; Patrick v. Jasper County, 901 F.2d 561, 565 (7th Cir.1990) (citations omitted). The manner in which this showing can be made depends upon which party will bear the burden of persuasion at trial. If the burden of persuasion at trial would be on the non-moving party, the party moving for summary judgment may satisfy Rule 56's burden of production either by submitting affirmative evidence that negates an essential element of the non-moving party's claim or by demonstrating that the non-moving party's evidence is insufficient to establish an essential element of the non-moving party's claim. See Union Nat'l Bank of Marseilles v. Leigh (In re Leigh), 165 B.R. 203, 213 (Bankr.N.D.Ill.1993) (citation omitted).

The parties have filed cross-motions for summary judgment. Each motion must be ruled on independently and must be denied if there are genuine issues of material fact. ITT Indus. Credit Co. v. D.S. Am., Inc., 674 F.Supp. 1330, 1331 (N.D.Ill.1987). Cross-motions for summary judgment do not require the Court to decide the case on the motions; the Court can deny both motions if both parties have failed to meet the burden of establishing that no genuine issues of material fact exist and that they are entitled to judgment as a matter of law. Id.; Pettibone Corp. v. Ramirez (In re Pettibone Corp.), 90 B.R. 918, 922 (Bankr.N.D.Ill.1988) (citations omitted). Thus, on their respective motions, Super Stop and Clark each bear the burden of demonstrating the absence of material factual issues and establishing that judgment should be entered in its favor as a matter of law. See Lindemann v. Mobil Oil Corp., 141 F.3d 290, 294 (7th Cir.1998). "All inferences are construed in favor of the party against whom the motion under consideration is made." Solow v. United States (In re Johnson Rehab. Nursing Home, Inc.), 239 B.R. 168, 172 (Bankr.N.D.Ill.1999) (citing Andersen v. Chrysler Corp., 99 F.3d 846, 856 (7th Cir.1996)).

Summary judgment is particularly appropriate in cases involving the interpretation of contractual documents. United States v. 4500 Audek Model No. 5601 AM/FM Clock Radios, 220 F.3d 539, 543 (7th Cir.2000) (citations omitted); Anstett v. Eagle-Picher Indus., Inc., 203 F.3d 501, 503 (7th Cir.2000) (citation omitted); Ryan v. Chromalloy Am. Corp., 877 F.2d 598, 602 (7th Cir.1989) (citation omitted). "[S]ummary judgment should be entered only if the pertinent provisions of the contractual documents are unambiguous; it is the lack of ambiguity within the express terms of the contract that forecloses any genuine issues of material fact." Ryan, 877 F.2d at 602 (citation omitted). Construing the language of a contract is a question of law appropriate for summary judgment, unless the contract is ambiguous. Reaver v. Rubloff-Sterling, L.P., 303 Ill.App.3d 578, 236 Ill.Dec. 973, 708 N.E.2d 559, 561, appeal denied, 184 Ill.2d 573, 239 Ill.Dec. 614, 714 N.E.2d 533 (1999) (citation omitted); Ford v. Dovenmuehle Mortgage, Inc., 273 Ill.App.3d 240, 209 Ill.Dec. 573, 651 N.E.2d 751, 754 (1995) (citations omitted). These points are pertinent to...