Irving Tanning Co. v. American Classic, Inc., 89 3686.

• Decision Date: 05 April 1990
• Docket Number: No. 89 3686.,89 3686.
• Citation: 736 F. Supp. 161
• Parties: IRVING TANNING COMPANY, Plaintiff, v. AMERICAN CLASSIC, INC., and Uni-Fin Corporation, Defendants.
• Court: U.S. District Court — Northern District of Illinois

736 F. Supp. 161

IRVING TANNING COMPANY, Plaintiff, v. AMERICAN CLASSIC, INC., and Uni-Fin Corporation, Defendants.

No. 89 3686.

United States District Court, N.D. Illinois, E.D.

April 5, 1990.

Dan Brusslan and Angela M. Kalamaras, Fischel & Kahn, Ltd., Chicago, Ill., for plaintiff.

Dominic M. Serpico, Riverside, Ill., Julie L. Murphy, Levin & Funkhoufer, and Alan M. Depcik, Chicago, Ill., for defendants.

ORDER

NORGLE, District Judge.

Before the court is the motion of defendant, Uni-Fin Corporation for summary judgment on the claim of plaintiff, Irving Tanning Company.

Rule 56(c) of the Federal Rules of Civil Procedure provides that a summary judgment "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). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A plaintiff cannot rest on mere allegations of a claim without any significant probative evidence which supports his complaint. Id.; see First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims and defenses." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Accordingly, the nonmoving party is required to go beyond the pleadings, affidavits, depositions, answers to interrogatories and admissions on file to designate specific facts showing a genuine issue for trial. Id. Local Rule 12(l), (m) also places additional burdens upon the movant and respondent with respect to a motion for summary judgment.

Irving filed a two count complaint against American Classic, Inc., an alleged trade debtor, and Uni-Fin, American's guarantor. Uni-Fin's motion for summary judgment asserts that Irving's breach of a notice provision in the Letter of Guarantee (the "Guarantee"), compliance with which was a condition precedent to Uni-Fin's obligations under the Guarantee, entitles it to judgment as a matter of law.

Specifically, the Guarantee requires Irving to, "within fifteen days after due date of any unpaid invoice guaranteed herein, notify UFC Uni-Fin at 200 W. Adams Street, Chicago, Illinois 60606, by registered mail of the failure of American to pay Irving said invoice." The Guarantee contemplates sales from Irving to American with payment terms of net thirty days. The terms of all invoices were 30 days net—the balance of the invoice was due 30 days from invoice date. Thus, according to Uni-Fin, under the terms of the Guarantee, notice must be sent by registered mail within 45 days of the invoice date (15 days from the invoice due date, which was 30 days after the invoice date).

It is undisputed that Irving failed to provide notice of American's failure to pay on each of the invoices involved until more than forty-five days after each invoice date. In addition, Irving did not send the notice by registered mail. Instead, it was sent by Federal Express.

Irving asserts that Uni-Fin's motion should be denied on a procedural basis for noncompliance with Local Rule 12(l). As for the substance of the motion, Irving, under its interpretation of the Guarantee, contends genuine issues of material fact exist. Irving focuses on the following language in the Guarantee: "UFC Uni-Fin does hereby irrevocably guarantee to Irving payment for all leather delivered to and accepted by American." Irving argues that, just as Uni-Fin only guaranteed payment for goods accepted by American, invoices issued by Irving did not became "due" until acceptance by American of the goods shipped under the invoice. It then relies upon the alleged existence of a factual dispute over when American accepted the goods to create a genuine issue over the material fact of the respective invoices' "due date"—the date from which the notice period ran. Finally, Irving contends that Uni-Fin waived the notice defense when it failed to assert it in its initial communication to Irving in response to Irving's demand under the Guarantee.

Local Rule 12(l), (m) performs the important function of forcing the parties to focus on the facts material to a claim or defense as they are supported by the record. Compelling the parties to address the factual issues, or lack thereof, in a straight forward manner presents the matter to the court in an organized fashion. This court has not been hesitant to resolve a summary judgment motion based upon failure to comply with Local Rule 12(m). See Bell, Boyd & Lloyd v. Tapy, 896 F.2d 1101 (7th Cir.1990). After all, the Local Rule 12(m) expressly provides that failure of a responding party to submit a complying response will result in the material facts set forth in the movant's 12(l) statement being deemed admitted. From this result, granting the summary judgment motion may necessarily follow. However, failure to comply with 12(l) is only "grounds" for denial of the motion.

Here Uni-Fin has not fully complied with Local Rule 12(l). Yet, it has submitted a statement of short numbered paragraphs with specific references to supporting materials. To this Irving has been able to formulate a similarly structured response. Given that this dispute revolves around the interpretation of a single provision in a one page agreement and has been presented to the court in an organized fashion, to deny Uni-Fin's motion, only to have it file a nearly identical but complying one, would accomplish no real purpose at the expense of both judicial economy and the lives of an extra tree or two sacrificed to the paper mills. The court will not enforce Local Rule 12(l) "to the hilt", Bell, Boyd & Lloyd, 896 F.2d at 1103 (7th Cir.1990), and deny Uni-Fin's motion. However, counsel for Uni-Fin is admonished to comply with the Local Rules in the future.

The meaning of an unambiguous guarantee is a matter of law to be determined by the court.¹ Exchange Nat'l Bank of Chicago v. Bergman, 153 Ill. App.3d 470, 106 Ill.Dec. 445, 446; 505 N.E.2d 1236, 1237 (1st Dist.1987); Milwaukee Cheese Co. v. Cornerstone Inn, Inc., 142 Ill.App.3d 840, 97 Ill.Dec. 28, 30, 492 N.E.2d 231, 233 (2d Dist.1986). "Where the language of a guaranty is unambiguous, it will be given its natural and ordinary meaning as with any other contract." Heritage Bank of University Park v. Brutti, 141 Ill.App.3d 107, 95 Ill.Dec. 454, 455, 489 N.E.2d 1182, 1183 (3d Dist.1986); see Ford Motor Credit Co. v. Solway, 825 F.2d 1213 (7th Cir.1986) ("A guaranty is to be interpreted according to the standards that govern the interpretation of contracts in general; the court's task is to effectuate the intent of the parties"); United States v. Crispen, 622 F.Supp. 75, 78-79 (N.D.Ill. 1985); Milwaukee Cheese, 97 Ill.Dec. at 30, 492 N.E.2d at 233 (if unambiguous, a guarantee must be enforced as written). However, because "the guarantor is a favorite of the law ... the extent of his liability is not to be extended by construction." Brutti, 95 Ill.Dec. at 454, 489 N.E.2d at 1182. Thus, "a guarantor is to be accorded the benefit of any doubt which may arise from the language of the contract." A.D.E. Inc. v. Louis Joliet Bank and Trust Co., 742 F.2d 395, 396 (7th Cir.1984) quoting Telegraph Savings & Loan Ass'n v. Guaranty Bank & Trust Co., 67 Ill.App.3d 790, 794, 24 Ill.Dec. 330, 333, 385 N.E.2d 97, 100 (1st Dist.1978); see also Advance Process Supply Co. v. Litton Industries Credit Corp., 745 F.2d 1076, 1079 (7th Cir.1984) ("we must construe the guarantee strictly in favor of the guarantor"); Bergman, 106 Ill.Dec. at 447, 505 N.E.2d at 1238.

Just as with any contract, obligations under a guarantee may be subject to conditions established by the parties. See State Bank of East Moline v. Cirivello, 74 Ill.2d 426, 24 Ill.Dec. 839, 840, 386 N.E.2d 43, 45 (1978); Newman-Green, Inc. v. Alfonzo-Larrain R., 605 F.Supp. 793, 799 (N.D.Ill. 1985); Mortgage Associates, Inc. v. Cleland, 494 F.Supp. 683, 685 (N.D.Ill.1980) rev'd other grounds, 653 F.2d 1144 (7th Cir.1981). Although an unconditional guarantor is not, as a matter of law, absolutely entitled to notice of the...