ExactLogix, Inc. v. JOBPROGRESS, LLC
| Decision Date | 04 April 2022 |
| Docket Number | 3:18-cv-50213 |
| Parties | ExactLogix, Inc. d/b/a Acculynx.com, Plaintiff, v. JobProgress, LLC, Double D Construction, LLC, Dennis A. Darrow, and David Buzzelli, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Before the Court is the parties' supplemental briefing regarding whether Dennis Darrow, David Buzzelli, and JobProgress, LLC are affiliates within the meaning of the relevant contract which would allow them to invoke the bargained-for jury waiver. For the reasons explained in further detail below the Court holds that Dennis Darrow, David Buzzelli, and JobProgress, LLC are not affiliates within the meaning of the contract and are, therefore, not entitled to invoke the contractual jury waiver.
The business relationship between ExactLogix and Double D Construction was governed by a master subscription agreement (“the contract”). In that contract, the parties bargained for an express limitation on third-party beneficiaries:
9.5 No Third-Party Beneficiaries. The representations, warranties, covenants, and agreements contained in this Agreement are for the sole benefit of the parties, their affiliates and their respective successors and permitted assigns, and they are not to be construed as conferring any rights on other persons.
Dkt. 212-1, at 14 (Defendants' Ex. 1) (emphasis added). So, the contract expressly denounced the existence of any third-party beneficiaries that could invoke the benefits of the contract unless they are affiliates, successors, or permitted assigns. The Court already held that Double D Construction is the only Defendant in this action that is a party to the contract. ExactLogix, Inc. v. JobProgress LLC, 508 F.Supp. 254, 275 (N.D. Ill. 2020) ( ). And Darrow, Buzzelli, and JobProgress are undisputedly not successors to Double D Construction. That leaves only permitted assigns and affiliates.
Furthermore, no party argues that Darrow, Buzzelli, or JobProgress are permitted assigns. Indeed, the express terms of the contract prevent parties from assigning their interests without prior written consent:
9.3 Assignment; Binding Agreement. You may not assign this Agreement or any User license granted or created hereunder whether by operation of law, change of control, or in any other manner, without the prior written consent of AccuLynx. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the parties, their affiliates, their respective successors and permitted assigns.
Dkt. 212-1, at 14. Thus, the Court ordered supplemental briefing to determine whether Darrow, Buzzelli, or JobProgress were affiliates under the meaning of the above contractual provisions. ExactLogix, Inc. v. JobProgress, LLC, No. 18-cv-50213, 2022 U.S. Dist. LEXIS 28772, at *14 (N.D. Ill. Feb. 17, 2022).
In response to the Court's order of supplement briefing, Defendants argue that Dennis Darrow is an affiliate. They concede, however, that David Buzzelli and JobProgress are not affiliates. Dkt. 224, at 2 (“Defendants Job Progress and Mr. Buzzelli are not affiliates of Double D in the corporate sense.”). Thus, the Court holds that David Buzzelli and JobProgress are not able to invoke the contractual jury waiver because they are not parties to the contract, they are not successors or permitted assigns of a party to the contract, and they have conceded that they are not affiliates. Thus, the plain text of section 9.5 of the master subscription agreement prevents them from invoking the terms of the agreement, including the jury waiver.
That leaves Dennis Darrow as a possible affiliate to Double D Construction. Though the Court asked Defendants to brief the question of whether Darrow is an affiliate, Defendants have cited no cases interpreting that word in Illinois contracts, or any contracts. In support of their contention that Dennis Darrow is an affiliate of Double D Construction, Defendants rely entirely on definitions of the word “affiliate” that they found on the Internet. First, they cite uslegal.com, which defines affiliates as “business concerns, organizations, or individuals that control each other or that are controlled by a third party.” Dkt. 224-1, at 2. They next cite upcounsel.com, which defines affiliates as “organizations, individual persons, or business concerns that are controlled by a third party or each other.” Id. at 9. Next, they cite investopedia.com, which explains that companies are “affiliated when one company is a minority shareholder of another.” Id. at 12. None of these websites cite authority for their definitions. Based on these definitions, Defendants summarily conclude that Dennis Darrow must be an affiliate because he wholly owned Double D Construction during all relevant times, and thus fully controlled it. Dkt. 224, at 2.
In contrast, ExactLogix relies on Black's Law Dictionary which defines an affiliate as “[a] corporation that is related to another corporation by shareholdings or other means of control; a subsidiary, parent, or sibling corporation.” Dkt. 228, at 3; Affiliate, Black's Law Dictionary (11th ed. 2019). ExactLogix further cites to a variety of cases employing that definition. When presented with dual definitions, the Court has no trouble accepting the definition presented in Black's Law Dictionary over various Internet sources of questionable (at best) persuasive value. Quoting a case from the Indiana Supreme Court, the Seventh Circuit has explained that ...
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