Aumann Auctions Inc v. Fletcher

• Decision Date: 20 July 2021
• Docket Number: 17-cv-3156
• Parties: AUMANN AUCTIONS, INC., Plaintiff, v. CONRAD FLETCHER, Defendant.
• Court: U.S. District Court — Central District of Illinois

AUMANN AUCTIONS, INC., Plaintiff, v. CONRAD FLETCHER, Defendant.

No. 17-cv-3156

United States District Court, C.D. Illinois

July 20, 2021

OPINION

TOM SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE:

This matter comes before the Court on Plaintiff Aumann Auctions Inc.'s (Aumann) First Motion in Limine (d/e 73) (Motion). The parties consented to proceed before this Court. Consent to the Jurisdiction by a United States Magistrate Judge and Reference Order entered July 20, 2018 (d/e 12). The Court directed the parties to submit additional briefing in connection with the Motion and copies of the exhibits that Aumann seeks to bar from admission. The parties have done so. For the reasons stated below, the Motion is ALLOWED.

BACKGROUND

This is a breach of contract case. Aumann alleges that Defendant Conrad Fletcher entered into a contract with Aumann who agreed to conduct an auction for Fletcher in September 2017 to sell Fletcher's collection of antique automobiles tractors, and other related items and memorabilia, and Fletcher agreed to pay Aumann a commission on the sales. See First Amended Complaint (d/e 46), ¶¶ 5-17. Fletcher denies that the parties entered into a contract. See Proposed Pretrial Order (d/e 75) Defendant's Contested Issues of Fact ¶¶ 1-6.

Aumann filed the original Complaint (d/e 1) on July 18, 2017, and a corrected Complaint (d/e 2) on July 24, 2017. On August 24, 2017, counsel for Fletcher Theresa Powell sent an email to Aumann's co-counsel Edward Graham. The email offered to settle the case by allowing Aumann to sell some items at auction:

Ted,

Here is the spreadsheet of items that are for sale.

Fletcher needs to be out of the Colorado home by October 1, 2017.

Please review the document and talk to your client to see about getting this done by that date. I should be in the office tomorrow morning. I have a meeting in the afternoon at 2pm. The sooner we figure this out the better. Fletcher has to have the sale by the above date as he legally has to be off of his property shortly thereafter.

If you can send a proposed new contract that reflects these items, the reserves and a date for the auction, that would be great-with a notation which provides that signing this contract resolves any claims made in your lawsuit of course.

Thanks,

Theresa M. Powell

Plaintiff's Supplemental Brief in Support of Plaintiff's First Motion in Limine (d/e 87) (Plaintiff's Supplemental Brief), attached Defendant's Exhibit 1. Attached to Defendant's Exhibit 1 was a list of items that Fletcher offered to have Aumann sell at auction under the terms outlined in the August 24 Email. Plaintiff's Supplemental Brief, attached Defendant's Exhibit 1a.

On August 26, 2017, Attorney Graham responded by email rejecting the offer:

Theresa:

I did talk last night to Kurt Aumann who advises that he is likely not interested in an auction under such terms and that even if he were such would not be in the seller's best interests. I passed that information on to my associate [co-counsel] Aaron Calvert, and I expect that he will be in touch with you shortly to see what else we might do to try to resolve the matter.

Thanks,

ME

Plaintiff's Supplemental Brief, attached Defendant's Exhibit 2.

Fletcher intends to admit into evidence at trial Defendant's Exhibits 1, 1a, 2, and other evidence of Fletcher's offer to allow Aumann to sell certain items at auction to settle this case. Fletcher intends to use this evidence to show that Aumann's damages should be reduced by the amount he could have earned in commissions had he conducted the auction proposed in Exhibits 1 and 1a. Aumann is not entitled to recover damages that Aumann could have reasonably avoided. See Mayster v. Santacruz, 2020 IL App(2d) 190840 ¶¶ 40-42, 163 N.E.3d 246, 255-56 (Ill.App. 2^d Dist. 2020). Aumann moves to bar the evidence as inadmissible settlement evidence.

ANALYSIS

The Federal Rules of Evidence govern the admissibility of evidence in diversity cases in this Court. Fed.R.Evid. 1101; Hammond v. System Transport, Inc., 942 F.Supp.2d 867, 872 (C.D. Ill. 2013) (citing In re Air Crash Disaster Near Chicago, Ill. on May 25, 1979, 701 F.2d 1189, 1192-13 (7^th Cir. 1983). Rule 408 provides:

(a) Prohibited Uses. Evidence of the following is not admissible--on behalf of any party--either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:

(1) furnishing, promising, or offering--or accepting, promising to accept, or offering to accept--a valuable consideration in compromising or attempting to compromise the claim; and

(2) conduct or a statement made during compromise negotiations about the claim--except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory investigative, or enforcement authority.

(b) Exceptions. The court may admit this evidence for another purpose, such as proving a witness' bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

Fed. R. Evid. 408. Aumann argues that Fletcher seeks to use the evidence of Fletcher's offer to allow Aumann to conduct an auction described in Defendant's Exhibits 1 and 1a which is barred by Rule 408. The Court agrees. Fletcher's offer clearly was for settlement purposes. He offered to allow Aumann to sell certain items in exchange for complete settlement of all claims in this action. Fletcher intends to use this evidence to dispute the amount of Aumann's claim. Aumann is entitled under Illinois law to receive compensation or damages that he could not reasonably avoid as a result of the alleged breach of contract. Mayster, 163 N.E.3d at 256. The evidence, therefore, would be used to prove the correct amount of a disputed claim.

The cases cited by Fletcher do not apply because they do not concern settlement offers. In Mayster, the contract buyer of a business breached an asset purchase agreement immediately before the closing, and then offered to buy the business the next day, but the seller refused and sued. Mayster, 163 N.E.3d at 250-53. Fletcher also cites Lawrence v. Porter, 63 F. 62 (1894). In Lawrence, the seller agreed to supply lumber in regular shipments to the buyer's mill. In the middle of the term of the agreement, the seller refused to deliver the rest of the lumber on the contract terms but offered to deliver the rest of the lumber called for in the contract at a reduction of $.50 for each 1, 000 feet of lumber. The buyer refused and sued. Lawrence, 63 F. at 63. In both cases, the breaching party's subsequent offer to revive the transaction and the non-breaching party's refusal was evidence that the non-breaching party could have reasonably avoided some or all of the claimed damages.

The breaching party's offers in Mayster and Lawrence were not made as part of settlement discussions to resolve a pending lawsuit. The decisions in Mayster and Lawrence, therefore, do not apply to the...