Unipro Graphics, Inc. v. Vibrant Impressions, Inc.
| Decision Date | 23 August 2021 |
| Docket Number | 21-cv-1700 |
| Parties | UNIPRO GRAPHICS, INC., Plaintiff, v. VIBRANT IMPRESSIONS, INC., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Defendant Vibrant Impressions, Inc. (“Vibrant”) has moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing that a judgment rendered by a Wisconsin state court against Plaintiff Unipro Graphics, Inc. (“Unipro”) in a prior lawsuit precludes Unipro from pursuing its claims in this case. (Dkt. No. 15 Vibrant's Mot. for J. on the Pleadings (“Mot.”).)[1] Unipro opposes the motion. For the following reasons, we deny Vibrant's motion.
The following background is based on the pleadings “documents incorporated by reference to the pleadings ” and matters that are the subject of judicial notice. See Milwaukee Police Ass'n v. Flynn, 863 F.3d 636, 640 (7th Cir. 2017) (citation omitted). We have accepted all well-pleaded allegations from Unipro's complaint as true and have drawn all reasonable inferences in Unipro's favor. St. John v. Cach, LLC, 822 F.3d 388, 389 (7th Cir. 2016).
Unipro is an Illinois corporation that uses intellectual property, artwork, and designs from its clients to print and produce product labels. Vibrant is a Wisconsin printing company. (Id. ¶ 2.) Unipro and Vibrant did business together for more than thirty years. (Id.) Unipro provided Vibrant with intellectual property, design files, and artwork from its clients, as well as printing equipment, such as printing plates and dies; Vibrant, in turn, carried out print jobs for Unipro and, by extension, Unipro's clients. (Id. ¶¶ 4-6.) Unipro provided its clients' intellectual property, design files, and artwork to Vibrant in confidence, and Vibrant knew that these materials were sensitive and private. (Id. ¶ 6.) Vibrant also knew it was supposed to only use the design materials and printing equipment to complete Unipro's print jobs. (Id. ¶¶ 7, 9.)
The relationship between Unipro and Vibrant began to sour in mid-2018. At this time, the parties had agreements where Vibrant would perform print jobs for two Unipro clients, Kraft-Heinz and Smithfield. (Id. ¶ 10.) Unipro had paid for these jobs and provided the necessary materials for them. (Id. ¶ 11.) On July 4, 2018, however, Vibrant's owner demanded an immediate payment of $50, 000 from Unipro's owners; otherwise, Vibrant would not complete the pending print jobs. (Id. ¶¶ 12, 13.) Despite being current on all payments due to Vibrant, Unipro's owners paid Vibrant the demanded amount so that Vibrant would finish the pending print jobs. (Id. ¶¶ 14, 15.) But even after the payment, Vibrant failed to complete the Smithfield print job as promised. (Id. ¶ 16.) Then, on August 29, Vibrant again advised Unipro that it needed an additional immediate payment before it would perform any more work on pending print jobs, even though Unipro had performed everything required by the parties' contracts and had made all payments due. (Id. ¶¶ 18, 19.) Although not pleaded, we presume Unipro did not make the payment requested by Vibrant on August 29 because Vibrant did not complete the pending print jobs or otherwise perform any more work for Unipro. (Id. ¶ 20.)
Unipro thereafter demanded that Vibrant return the designs, artwork, and printing equipment it had provided to Vibrant in connection with the print jobs, which are collectively worth more than $80, 000. (Id. ¶¶ 22, 24, 26, 28, 29.) Vibrant refused. (Id. ¶¶ 23, 25, 27.) Not only that, Vibrant has used these materials to try to poach Unipro's clients. (Id. ¶¶ 30-32.) Because of Vibrant's actions, Unipro suffered more than $500, 000 in lost profits and business losses. (Id. ¶¶ 33, 34.)
However, it was Vibrant, not Unipro, that first sought relief from the courts. On February 18, 2019, Vibrant sued Unipro in the Circuit Court of Brown County, Wisconsin, alleging that Unipro owed $19, 115.66 for goods and services provided by Vibrant on an open account (the “Wisconsin Action”). .) Vibrant requested judgment against Unipro in that amount, plus interest, and for an award of costs, expenses, and reasonable attorneys' fees. (Id. at 5.) Unipro was served with the complaint on February 20, but it did not respond to the complaint within twenty days, as required by Wisconsin law. (Id. at 7, 9, 16); see Wis. Stat. § 802.06(1)(a). On March 14 (twenty-two days after service), Vibrant moved for default judgment. (Mot. Ex. A at 7-8.) The following day, the circuit court granted Vibrant's motion and entered default judgment against Unipro for $19, 176.86, plus interest, costs, disbursements, and fees (the “Wisconsin Judgment”).[2] (Id. at 14-15.)
Unipro immediately moved to vacate the Wisconsin Judgment. (Id. at 16-18.) After the circuit court denied the motion, Unipro moved for reconsideration. (Id. at 23, 25-29.) In seeking reconsideration, Unipro made several representations and arguments that sought to convince the circuit court that its Affirmative Defenses and Counterclaim[3] were “inseparable” from Vibrant's claim against Unipro and should be addressed in the same case. (Id. at 27.) For instance, Unipro argued that if the circuit court did not vacate the Wisconsin Judgment, Unipro would be forced to immediately file “a separate lawsuit [that] will involve the same breach of contract issues alleged by [Unipro] in its Affirmative Defenses and Counterclaim; and those breach of contract issues pertain to the same services to which [Vibrant] makes a claim for payment here.” (Id. (emphases added).) Moreover, according to Unipro, its Affirmative Defenses and Counterclaim involved Vibrant's “failure to properly perform all of its services, ” which was an issue that “must be adjudicated before” the court could determine that Unipro owed any money to Vibrant. (Id. at 28 (emphasis added).) Unipro also contended that Vibrant had taken control of Unipro's property “in conjunction with its failure to fulfill its obligations and the agreement for its services” and that Vibrant's improper retention and use of Unipro's property was “inseparable to the issues of the parties and their duties and obligations to each other, and the services and contract that was to be performed, and any monies that may be owed in relation thereto.” (Id. (emphasis added).) In sum, Unipro's counterclaim and Vibrant's complaint “arise from the same facts and should be resolved simultaneously.” (Id. at 50 (emphasis added).) But the circuit court was not persuaded-it denied Unipro's motion for reconsideration. (Id. at 53-54.)
Unipro appealed. (Id. at 55.) On appeal, Unipro again represented that its counterclaim and Vibrant's complaint “arise from the same facts.” (Id. at 85.) Unipro further insisted that if it succeeded on its counterclaim, it likely would not owe any money to Vibrant; instead, Vibrant possibly would need to pay Unipro. (Id. at 87.) Unipro fared no better on appeal, as the Wisconsin Court of Appeals summarily dismissed Unipro's appeal for lack of jurisdiction on February 2, 2021. (Id. at 98-103.)
Three weeks later, Unipro sued Vibrant in the Circuit Court of Cook County, Illinois, alleging claims for breach of contract (Count I), conversion (Count II), tortious interference with business relations (Count III), and unjust enrichment (Count IV). (Compl. ¶¶ 35-74.) After removing Unipro's lawsuit to this Court based on diversity jurisdiction (Dkt. No. 1), Vibrant answered Unipro's Complaint (Dkt. No. 12). In its Answer, Vibrant asserts claim preclusion based on the Wisconsin Judgment as an affirmative defense. (Id. at 13-14.)
In most circumstances, the proper way for a defendant to seek dismissal at the outset of a case based on claim preclusion[4] is to answer the complaint “and then move under Rule 12(c) for judgment on the pleadings.” See Burton v. Ghosh, 961 F.3d 960, 964-65 (7th Cir. 2020); Walczak v. Chi. Bd. of Educ., 739 F.3d 1013 1016 n.2 (7th Cir. 2014). Rule 12(c) provides a way to resolve “cases when the material facts are not in dispute and a judgment on the merits can be achieved by focusing on the content of the pleadings and any facts of which the court will take judicial notice.” Bank of N.Y. Mellon v. Estrada, No. 12 C 5952, 2013 WL 3811999, at *1 (N.D. Ill. July 22, 2013) (citation omitted). For purposes of a Rule 12(c) motion, the “[p]leadings include the complaint, the answer, and any written instruments attached as exhibits.” Id.; Federated Mut. Ins. Co. v. Coyle Mech. Supply Inc., 983 F.3d 307, 312 (7th Cir. 2020) (internal quotation marks omitted).
We review Rule 12(c) motions using the same standards applicable to Rule 12(b)(6) motions. Landmark Am. Ins. Co. v Hilger, 838 F.3d 821, 824 (7th Cir. 2016). The complaint must state a claim that is plausible on its face, St. John, 822 F.3d at 389, which means that “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009). We accept all well-pleaded allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. St. John, 822 F.3d at 389. To succeed on a Rule 12(c) motion, “the moving party must demonstrate that there are no material issues of fact to be resolved.” Federated Mut., 983 F.3d at 313 (citation omitted); see also Unite Here Loc. 1 v. Hyatt Corp., 862 F.3d 588, 595 (7th Cir. 2017) (“Judgment on the pleadings is appropriate when there are no disputed issues of material fact and it is clear that the moving party . ....
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