Diguilio v. Goss Intern. Corp.
| Decision Date | 30 April 2009 |
| Docket Number | No. 1-07-1584.,1-07-1584. |
| Citation | 906 N.E.2d 1268 |
| Parties | Carmen S. DIGUILIO, Plaintiff-Appellant, v. GOSS INTERNATIONAL CORPORATION, a corporation, Defendant-Appellee, and Goss Graphic Systems, Inc., n/k/a, CGSI Liquidation, Inc.; CGSI Liquidation, Inc.; Rockwell Graphic System, Inc., a Corporation; Rockwell PMC, Inc., f/k/a Baker Perkins PMC, Inc., an Illinois Corporation; Rockwell PMC, Ltd., a Corporation; Baker Perkins Food Machinery, Inc., f/k/a Baker Perkins PMC, Inc.; Gary Hockley; and Hockley Mechanical Services, Inc., an Illinois Corporation, Defendants. |
| Court | United States Appellate Court of Illinois |
Morici, Figlioli & Associates (James J. Morici, Jr., of counsel), Novoselsky Law Offices (David A. Novoselsky, Leslie J. Rosen, of counsel), Chicago, for Plaintiff-Appellant.
The plaintiff, Carmen S. Diguilio, filed a strict liability and negligence complaint against one defendant, Goss International Corporation (Goss International), for injuries he sustained on July 1, 2004, while using a printing press at work. Later, Diguilio named several additional defendants: Goss Graphic Systems, Inc., n/k/a CGSI Liquidation, Inc.; CGSI Liquidation, Inc.; Rockwell Graphic System, Inc., a corporation; Rockwell PMC, Inc., f/k/a Baker Perkins PMC, Inc., an Illinois corporation; Rockwell PMC, Ltd., a corporation; Baker Perkins Food Machinery, Inc., f/k/a Baker Perkins PMC, Inc.; Gary Hockley; and Hockley Mechanical Services, Inc., an Illinois corporation. The printing press that Diguilio was injured on was sold to his employer by Rockwell Graphic Systems, which became Goss Graphic Systems (Goss Graphic). Goss Graphic was liquidated after filing for bankruptcy in 2001. Goss International was formed in 2002 and purchased Goss Graphic's assets but did not purchase its liabilities.
Goss International filed a motion for a summary judgment and argued that it had no liability as a successor corporation (1) because it was not incorporated until 2002, (2) because it did not design or manufacture the printing press, and (3) because it did not assume Goss Graphic's liabilities following the bankruptcy court's approval of the asset purchase agreement. The circuit court granted Goss International's motion for summary judgment.
The sole issue on appeal is whether Goss International was entitled to summary judgment because, according to the asset purchase agreement, Goss International did not assume Goss Graphic's liability for Diguilio's injuries. For the reasons that follow, we affirm.
The Baker Perkins G14 printing press was originally designed and manufactured by Baker Perkins, LLP. Banta Corporation acquired Brookshore Lithographers in April 1988. Rockwell Graphic Systems, Inc., sold the Baker Perkins G 14 press to Brookshore Lithographers on December 8, 1992, and installed it in 1993. Goss Graphic was the successor corporation to Rockwell Graphic Systems, Inc. Finally, the Banta Corporation has maintained ownership of the Baker Perkins G14 press since it was purchased on December 8, 1992.
On September 10, 2001, Goss Graphic filed a bankruptcy petition. In January 2002, Credit Suisse First Bank Global Partners, LP, later known as Matlin Patterson, placed a bid to repurchase the assets of Goss Graphic in a deal that would give (1) 67% of the shares of the new corporation to Matlin Patterson; and (2) the remaining 33% would be owned by investment banks, (a) J.P. Morgan Securities, Inc., (b) LBI Group, Inc., and (3) DK Acquisition Partners, L.P. In exchange for the ownership of their respective shares, Matlin Patterson contributed $50 million and the investment banks contributed $25 million to Goss International.
Goss Graphic attempted to reorganize but, because it was unsuccessful, filed a motion in the bankruptcy court for permission to sell its assets to Goss Acquisition Corporation, which later changed its name to Goss International. When Goss Graphic petitioned the bankruptcy court for leave to sell its assets, its shareholders were (1) Stonington Capital Appreciation 1994 Fund L.P., (2) Rockwell International Corporation, (3) Donald Gustafson, and (4) Cede & Company. When Goss Graphic petitioned the bankruptcy court to sell its assets, Goss International's shareholders were (1) CFSB Global Opportunities Partners, L.P., (2) J.P. Morgan Securities, Inc., (3) LBI Group, Inc., an affiliate of Lehman Commercial Paper, Inc., and (4) DK Acquisition Partners, L.P.
On February 8, 2002, the bankruptcy court approved the sale that was based on a proposed asset purchase agreement. In the bankruptcy court's order, the liabilities of Goss Graphic were specifically excluded from Goss International's purchase of its assets. The bankruptcy court's order was based on the asset purchase agreement which provided that Goss Graphic's liabilities arising out of the product litigation and related expenses were specifically excluded. In addition, the February 8, 2002 order provided (1) that the sale of assets "shall be free and clear of all interests," which was defined therein as "liens, claims, encumbrances or interests," and (2) that the asset purchase agreement was confirmed by the sale order.
On July 1, 2004, Diguilio was injured while working as a printer for Banta Direct Marketing, Inc. (Banta Corporation), when his right hand became trapped in the rollers of the company's Baker Perkins G14 printing press. On March 9, 2005, Diguilio filed a strict liability and negligence complaint against Goss International and alleged that Goss International participated in the design, preparation, advertisement, distribution, supply, maintenance, alteration and sale of the Baker Perkins G14 printing press in 1992. On June 29, 2006, Diguilio amended his strict liability and negligence complaint and added Goss Graphic Systems, Inc., n/k/a CGSI Liquidation, Inc.; CGSI Liquidation, Inc.; Rockwell Graphic System, Inc., a corporation; Rockwell PMC, Inc., f/k/a Baker Perkins PMC, Inc., an Illinois corporation; Rockwell PMC, Ltd., a corporation; Baker Perkins Food Machinery, Inc., f/k/a Baker Perkins PMC, Inc.; Gary Hockley; and Hockley Mechanical Services, Inc., an Illinois corporation, as additional defendants. None of the additional defendants appeared, so Diguilio filed a motion for a default judgment against each of the additional defendants. The circuit court granted Diguilio's motion and entered a default judgment.
On August 29, 2006, Goss International filed a motion for summary judgment (1) because Goss International was not incorporated until 2002, (2) because Goss International did not design or manufacture the Baker Perkins G14 printing press, and (3) because Goss International did not assume Goss Graphic's liabilities following the approval of the asset purchase agreement by the bankruptcy court. Therefore, Goss International argued that it had no liability.
Prior to responding to Goss International's motion for summary judgment, Diguilio filed a request for documents and took the deposition of Joseph Gaynor, the chief financial officer of Goss International. Gaynor testified that officers of Goss Graphic who were hired or elected as officers and directors of Goss International played no role in the credit bid process or the creation of the asset purchase agreement. According to Gaynor, Goss International assumed liabilities for the continuation of the business. Gaynor also testified that there was no cessation of Goss Graphic's business as a result of the asset purchase agreement. Gaynor and Brian Domer, an employee of Goss International, each testified that Goss International produced the same product lines, continued to do business with the same customers, and kept the same phone numbers. However, Gaynor also testified that the employees, officers and directors of Goss Graphic did not participate in the credit bid process of the asset purchase agreement because the negotiation was between senior secured creditors in the bankruptcy proceeding and Matlin Patterson, through the Global Opportunities Fund. Gaynor also testified (1) that the ownership interest that existed in Goss Graphic before the bankruptcy court had no economic value following the closing and liquidation, and (2) that Cede & Company, which was a stockholder in Goss Graphic before the bankruptcy, did not acquire an interest in Goss International. According to Gaynor, any money invested by entities that were constituent parts of Cede & Company when it owned stock in Goss Graphic was new money given in exchange for an ownership interest in the new company.
Julius Pohlenz, general counsel for Goss International, also provided an affidavit that was filed in this case. In his affidavit, Pohlenz averred (1) that Goss International closed on the asset purchase agreement on February 14, 2002; (2) that the sole shareholder of Goss Graphic was Goss Holdings, Inc., which consisted of (a) Cede & Company, (b) Donald Gustafson, (c) Rockwell International Corporation, and (d) Stonington Capital Appreciation 1994 Fund L.P. Pohlenz also averred (1) that Goss Graphic did not receive any stock in Goss International in exchange for its assets that were purchased, and (2) that no individual shareholder of Goss Graphic received any stock or other consideration for the assets purchased by Goss International.
On March 9, 2007, Diguilio responded to Goss International's motion for summary judgment after taking Gaynor's deposition. On May 21, 2007, the circuit court granted Goss International's motion for summary judgment. The circuit court found that Goss International merely purchased the assets of Goss Graphic and did not assume the debts, liabilities or obligations of Goss Graphic.
The purpose of summary judgment is to determine whether a genuine...
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