Johnson v. Gudmundsson

• Citation: 35 F.3d 1104
• Decision Date: 01 September 1994
• Docket Number: No. 93-2925,93-2925
• Parties: P.S. JOHNSON, Plaintiff-Appellant, v. Ragnar A. GUDMUNDSSON, Investment Company Thor, Inc., formerly known as Thor Developers and Consultants, and Thorspring Iceland America, Inc., Defendants-Appellees, and Thor Iceland, Inc., Counter-Plaintiff-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1104

35 F.3d 1104

P.S. JOHNSON, Plaintiff-Appellant, v. Ragnar A. GUDMUNDSSON, Investment Company Thor, Inc. formerly known as Thor Developers and Consultants and Thorspring Iceland America, Inc. Defendants-Appellees and Thor Iceland, Inc., Counter-Plaintiff-Appellee.

No. 93-2925.

United States Court of Appeals, Seventh Circuit.

Argued April 11, 1994.

Decided Sept. 1, 1994.

Michael L. Bolos, Joliet, IL and Michael J. Kedzie (argued), Olita, Kedzie, Tatooles & Foley, Chicago, IL, for plaintiff-appellant.

Alan Unikel and Bart A. Lazar (argued), Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, for Ragnar A. Gudmundsson and Thorspring Iceland America, Inc., defendants-appellees.

Before CUMMINGS, FLAUM, and KANNE, Circuit Judges.

FLAUM, Circuit Judge.

P.S. Johnson, an Illinois resident, sued Ragnar Gudmundsson, a resident of Iceland, two Icelandic corporations, and a Delaware corporation (we will refer to defendants collectively as "Thorspring") for damages arising from their alleged refusal to compensate Johnson for his assistance in establishing a marketing and distribution network through which bottled Icelandic spring water could be exported and sold in the United States. ¹ Johnson sought recovery under four theories: (1) breach of contract; (2) quantum meruit; (3) unjust enrichment; and (4) fraud. Thorspring counterclaimed, alleging a breach of fiduciary duty and seeking the return of $10,000 in legal fees paid to Johnson. After Johnson neglected to file in a timely fashion either the statement of material facts not in dispute, as required by Local Rule 12 N or a response to Thorspring's motion for summary judgment, the district court granted summary judgment for Thorspring. The court also entered a default judgment for Thorspring on their counterclaim. Johnson appeals both dispositions. We affirm the judgment for Thorspring on Counts I and IV of Johnson's complaint, and on the counterclaim, but we reverse on Counts II and III and remand the case for further proceedings consistent with this opinion.

I.

Rule 12 N of the Rules of the District Court for the Northern District of Illinois provides that "[a]ll material facts set forth in the statement required of the moving party [under Rule 12 M] will be deemed to be admitted unless controverted by the statement of the opposing party." The district court properly treated Johnson's failure to contest Thorspring's statement of uncontested facts as a binding admission of those facts. See Tobey v. Extel/JWP, Inc., 985 F.2d 330, 332 (7th Cir.1993); Appley v. West, 929 F.2d 1176, 1179-1180 (7th Cir.1991) (per curiam ). On numerous occasions, we have upheld the strict enforcement of Rule 12 N, even where the parties have not engaged in the type of willful conduct which ordinarily warrants a pure default judgment, see e.g., Wienco, Inc. v. Katahn Associates, Inc., 965 F.2d 565, 567 (7th Cir.1992), in order to uphold "the district court's significant interest in maintaining the integrity of its calendar." Id. at 568. Perhaps for this reason, Johnson does not appeal either the court's reliance on the uncontroverted facts stated in Thorspring's Rule 12 M statement or the court's denial of his motion for leave to file a (late) response thereto. Accordingly, in reviewing whether summary judgment was appropriate in this case, we depart from our usual posture of construing all facts in favor of the non-moving party, Martin v. Consultants and Administrators, Inc., 966 F.2d 1078, 1084 (7th Cir.1992); rather, we accept as true all material facts contained in Thorspring's Rule 12 M statement. See Tobey, 985 F.2d at 333.

P.S. Johnson, an attorney licensed in Illinois, serves as Honorary Consulate-General of Iceland for Chicago, a non-compensated position. Though the primary function of an Honorary Consulate-General is to maintain an official presence by representing Iceland at various functions and business meetings, Johnson's duties also include providing assistance and advice to Icelandic companies seeking to do business in the United States as well as occasionally attending meetings on their behalf. In this role, around February, 1990, Johnson came into contact with defendants, who were exploring the possibility of marketing bottled Icelandic spring water in the United States. Johnson expressed his willingness to assist the endeavor, but indicated that he would expect compensation for his efforts.

Johnson subsequently began making contact with parties whom he believed might be interested in marketing the imported water. Though it is not easy to determine the extent of his involvement from the record, correspondence between Johnson and the Icelandic principals suggests that, at the very least, Johnson was aware of ongoing negotiations with as many as seven possible distributors, including Pennsylvania Coca-Cola, White Rock, Canfields, Walgreens, New Horizons, Universal, and Kemmerer. From these discussions, Johnson alleges that his efforts, including making contacts, setting up meetings, and transmitting proposals, assisted in the consummation of at least three distribution arrangements, two on the East Coast (with Walgreens and Universal) and the other in the Midwest (with Kemmerer). Thorspring's letter of February 1, 1991, see infra at 1110, confirms that Johnson played a significant role in bringing about the agreement with Walgreens. Johnson's involvement, however, was much more limited in the Universal and Kemmerer deals. According to Thorspring's Rule 12 M statement, Johnson simply made a telephone call to schedule an appointment for Gudmundsson with the President of Universal, and, with someone else, took Kemmerer's Vice-President to lunch.

In addition to progress reports on the various marketing and distribution proposals, the issue of Johnson's compensation was discussed several times in the course of the correspondence between Johnson and Thorspring. On the basis of this correspondence, Johnson claims that he is entitled to some percentage of the "ex works" price ² of the bottled water sold to specific entities (Walgreens, Universal, and Kemmerer), though he is not certain of the exact percentage. He also appears to claim an additional 2% of the ex works price of water sold to Kemmerer and Universal over five years.

The relevant correspondence begins with a May 29, 1990, letter from Gudmundsson to Johnson noting that:

Last Friday I had an opportunity to present to my board of directors the proposal of you becoming our future partner and establishing Thor waters. I told them that your main role would be to help us to establish contacts that would lead to future contracts to sell and market our water in the United States.

The members of the board responded positively to this and decided that I should formulate a proposal with you on how this was going to be done. I told them that we had only discussed princips not details, and they were that you (Icerock) ³ would own 5% share of the equities of Thor's waters by contributing work to establish contracts. In all fairness I am not sure what amount of work is needed from you because all of us are only at the beginning of learning process of marketing Icelandic water.

Soon thereafter, on June 4, 1990, Johnson responded as follows:

You asked me to suggest what I might be able to do to help get the project moving. I would be willing to devote the next few months full time to discussions and negotiations with potential distributors, advertising and public relations agencies, and coordination of distributor channels. Supervise conformity with state and federal laws and regulations, and in general act as direct liaison between you in Iceland and the various entities here that are brought into the picture. I estimate that would require an initial commitment of $6000.00 a month for routine expenses and compensation which might increase marginally as the project develops. Our relationship would be reviewed after six months to determine what changes, if any, should be made.

A 5% interest in the North American marketing program seems to be fair. I have made inquiries among acquaintances in the beverage industry who have told me that a commission on sales is usually that amount or higher. I think we should agree on 5% with the understanding that it represents a continuing obligation to Icerock based on its efforts in bringing together the participants in the marketing structure.

The next letter from Johnson, drafted on law firm letterhead and dated November 13, 1990, ⁴ declared that "[f]or services in obtaining distribution channels, we have agreed that I am to be paid an amount equal to 5% of the ex-works price of the first 3 million bottles sold to sources obtained through my efforts, and 3% on all bottles sold thereafter." Thorspring countered on November 23 with a proposal of their own that they hoped would be "in harmony with your ideas." Johnson responded unfavorably by telefax on November 29, noting that the defendants' latest offer seemed "rather far from the general percentage we had agreed on early last summer and at our recent meeting in Chicago." The final correspondence regarding compensation for Johnson's marketing activities occurred on February 1, 1991, at which time Gudmundsson sent the following message:

We hereby confirm that Paul Johnson has through his fine effort broutght [sic] forward a business [sic] relationship between Thor-Iceland and Walgreens.... As agreed upon by Thor-Iceland it grants Paul Johnson 2% of ex works value of sold and paid bottled water to Walgreens. This arangement [sic] expires at the end of 1996....

In November, 1990, while Johnson was working to establish marketing contacts for the Icelandic water, he also entered into an additional relationship with the defendants--that of attorney and client. Johnson's complaint alleges that Gudmundsson asked him to research the legal aspects of raising the capital necessary to finance a nationwide marketing and...