Jackson v. N'genuity Enters. Co.
| Decision Date | 30 September 2011 |
| Docket Number | No. 09 C 6010,09 C 6010 |
| Parties | VINCENT E. JACKSON, Plaintiff, v. N'GENUITY ENTERPRISES CO., IMPACT MARKETING GROUP LLC, GLOBAL FINANCIAL INVESTMENTS LLC, LITTLECHIEF SPECIALTIES, INC., and N'GENUITY-LITTLECHIEF ENTERPRISES CO., Arizona Corporations; VALERIE LITTLECHIEF, ALFRED BOWEN; and DUSTIN THOMAS BOWEN. Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Vincent E. "Bo" Jackson achieved fame as a professional football and baseball player for the Los Angeles Raiders, Kansas City Royals, Chicago White Sox, and California Angels. Attempting to defy F. Scott Fitzgerald's dictum that "[t]here are no second acts in American life," Mr. Jackson formed a company called N'Genuity Enterprises, along with defendant, Valerie Littlechief. Things have not gone smoothly. He blames Ms. Littlechief, her husband, Alfred Bowen, and his son, Dustin, all of whom he accuses of looting the company of millions of dollars through payments to related corporations and through the less subtle device of direct payments to Ms. Littlechief that were disguised and concealed on N'Genuity's books. The defendants have denied any wrongdoing and have their own grievances against Mr. Jackson, whom they accuse of having abandoned the Company in favor of a national, fast-food chain.
The case began in the Circuit Court of Cook County and was removed to this court onSeptember 25, 2009. [Dkt. #1]. The parties are of diverse citizenship, the matter in controversy exceeds the sum or value of $75,000, exclusive of interests or costs, and the court has subject matter jurisdiction under 28 U.S.C. § 1332. (First Amended Complaint, ¶21).
Mr. Jackson seeks a preliminary injunction to prevent any further diversions and to stop any action that dilutes or divests his ownership interest in N'Genuity through a contemplated merger with Impact Marketing Group LLC ("IMG")(a/k/a Global Financial Inv.), a company at least nominally owned by Ms. Littlechief's husband's sons, Dustin and Chad Bowen, and which purportedly is the exclusive marketing agent for N'Genuity. It is Mr. Jackson's contention that IMG has received $5 million from N'Genuity without having performed any services on its behalf. He also asks for the appointment of a temporary receiver to monitor N'Genuity's financial transactions. In light of events occurring on September 19, 2011, some further discussion is needed in order to explain the present posture of the case.
On March 3, 2011, Judge Lefkow entered a TRO, in which she found, inter alia, that there was credible evidence that the defendants had dissipated assets of N'Genuity in violation of their common law and statutory fiduciary duties, that there was no adequate remedy at law, and that without a TRO the plaintiff would suffer immediate and irreparable injury. [Dkt. #198]. On April 1, she entered an Agreed Order extending the TRO and instructing the parties to appear before me on April 1 at 9:30 to set a date and time for a hearing on the Motion for Preliminary Injunction. The Order recited that "[t]he parties agreed to extend the TRO to that date." [Dkt. ## 218, 219].
Pursuant to 28 U.S.C.§ 636 (c), the parties, on March 31, 2011, consented to jurisdiction here for resolution of Plaintiff's Motion for Preliminary Injunction and Motion for Appointment of a Temporary Receiver. [Dkt. # # 215, 220]. Thereafter, in various hearings counsel for all the partiesexpressly agreed to extend the TRO until ruling on the motion for preliminary injunction. Without the agreement the TRO would have ended, or, if extended by the court without agreement, would have automatically become a preliminary injunction and immediately appealable. Chicago United Industries, Ltd. v. City of Chicago, 445 F.3d 940, 942 (7th Cir. 2006); United Airlines, Inc. v. U.S. Bank N.A., 406 F.3d 918, 923 (7th Cir. 2005).
In preparing the opinion on the motion for preliminary injunction, it became apparent that no order had been entered on the docket reflecting the parties' agreement. I informed counsel and asked that they prepare an appropriate agreed order. In a recent exchange of e-mails between the court and counsel, Mr. Miller, co-counsel for the defendants, did not dispute the existence of such an agreement; he merely thought Judge Lefkow's order of April 1, 2011 made unnecessary any further order. A copy of that email was sent to all counsel, including his co-counsel, Messrs. Glover and Krasnow, who had made the agreement in the first place. Mr. Miller said in his email to me:
Although the language if [sic] of the April 1 Order [of Judge Lefkow] is less than clear it is my understanding that the parties have behaved in a manner consistent with the language stating, "The parties agree to extend the TRO to that date" as meaning that the TRO is extended until the time of a hearing and ruling on the plaintiff's Motion for Preliminary Injunction.
[Dkt. #332](Emphasis supplied).
I did not share his reading of Judge Lefkow's order and explained why in a responsive email, but noted that the matter is "academic" since, as the defendants' email confirms, I asked that counsel send me an appropriate agreed order reflecting the agreement "so that in the event the case goes to the court of appeals, that court will be under nomisapprehension as to what happened." [Dkt. #332].
A dispute then arose between the parties, with the defendants taking the position that they were no longer bound by the TRO because a ruling on the motion was taking longer than they were comfortable with. All of this and the effect of the discovery disputes which necessitated updating of filings as information was obtained is explained in detail in the Memorandum Opinion and Order dated September 19, 2011, Jackson v. N'Genuity, 2011 WL 4375882 (N.D.Ill. 2011)[Dkt. ## 337, 338], which is attached as an Appendix to this opinion. See also Jackson v. N'Genuity, 2011 WL 4928912 (N.D.Ill. 2011).
Relevant briefing continued through mid-September. Among the issues was whether Ms. Littlechief and other of the defendants had violated the TRO by paying a large bill to a lawyer who did not represent N'Genuity. [# 331]. See infra at 26. In any event, as explained in the September 19th Memorandum Opinion and Order, all parties agreed to the extension of the TRO until ruling on the motion for preliminary injunction.
N'Genuity is an Arizona C-corporation, engaged in the distribution of wholesale food products throughout the United States. Mr. Jackson and Ms. Littlechief formed and incorporated N'Genuity in April of 2001, with Mr. Jackson owning 49% of the shares and Ms. Littlechief 51%. Alfred Bowen is married to Ms. Littlechief and has been integrally involved with her in the operation and administration of N'Genuity's business and finances. (Memorandum in Support ofMotion for Preliminary Injunction, Ex. AA). And, as discussed infra, at 20, Alfred Bowen has held himself out as an officer of N'Genuity and has been held out as a corporate officer by Ms. Littlechief, herself, in filings with the United States Government. Nonetheless, the defendants deny that he is an officer of the company. Mr. Jackson's role in N'Genuity has been in marketing. While neither Mr. Jackson nor Ms. Littlechief drew a salary from their company in its first few years, starting in 2005, Mr. Jackson received $120,000 per year and Ms. Littlechief made $132,000 per year. [Dkt. # 244, ¶ 17].
The defendants, through an affidavit from Alfred Bowen complained that Mr. Jackson didn't make any financial contribution in return for his 49% of the company. [Dkt. #200-1]. But Mr. Bowen doesn't suggest that Mr. Jackson was supposed to have done so. It is apparent that the defendants were content to give Mr. Jackson his 49% in exchange for his celebrity. And they did so with the knowledge that the previous venture they undertook with Mr. Jackson - selling energy bars through a company called Gamer - in defendants' own words, "failed miserably despite Mr. Jackson's name and picture appearing on all the bars and packaging." (Defendants' Response, at 2).2 If Gamer failed miserably - defendants' words - or "[f]elt like a Titanic" - Mr. Jackson's words (Defendants' Response, Ex. C, Jackson Dep., at 159) - N'Genuity wasn't much better in the beginning and still seems to be fairing poorly in terms of profit as opposed to revenue. The tax returns that the defendants have produced show profits of $142,000; $23,000; $101,000;$425,000; and $115,000 for the years 2002, 2004, 2005, 2007, and 2008, respectively. (Defendants' Response, Exs. CC, DD, EE, FF, GG).3 These profits were derived from revenues of $1.4 million, $4.3 million, $14.8 million, $44.2 million, and $26.2 million for those same years. (Defendants' Response, Exs. CC, DD, EE, FF, GG).
Mr. Jackson's unrest about the situation grew when, according to him, the defendants repeatedly refused to let him see N'Genuity's financial records. The defendants, however, contend that every December, N'Genuity provided Mr. Jackson with the company's financial records. Upon the request of Mr. Jackson's accountant, N'Genuity forwarded some financial records in 2003 and 2006-2009 - although Mr. Jackson says that he did not get "all of the documents to which he was entitled as a 49% shareholder and director prior to litigation." (Plaintiff's Reply, at 19).
As this was going on, Mr. Jackson contracted in April 2008 with the fast-food, chicken sandwich dynasty, Chick-Fil-A, to use his name and likeness in its marketing efforts. [Dkt. # 75].4 The campaign included Chik-Fil-A's slogan, "Eat More Chicken." For the defendants, touting chicken sandwiches directly...
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