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Saratoga Potato Chip Co., Inc. v. Classic Foods, Inc.

United States District Court, N.D. Indiana, Hammond Division

March 27, 2014

Saratoga Potato Chip Company, Inc., a/k/a Olde York Potato Chips; and Saratoga Potato Chips, LLC; Plaintiffs,
v.
Classic Foods, Inc.; and Cuetara Holdings, Inc.; Defendants.

OPINION AND ORDER

JOSEPH S. VAN BOKKELEN, District Judge.

In this lawsuit Plaintiffs allege that Defendants have failed to abide by the terms of a settlement agreement. Plaintiffs moved for partial summary judgment on this issue. Additionally, they are asking attorneys' fees for the enforcement of the settlement agreement.

In response, Defendant Cuetara Holdings Inc., moved for judgment on the pleadings. Cuetara contends that Plaintiffs' claims regarding the relationship between Cuetara Holdings and Classic Foods, specifically the direct claims, alter ego claims, and the piercing of the corporate veil claims, are insufficient to state a claim under Federal Rule of Civil Procedure 8(a). Defendant Classic Foods filed a Response to Plaintiffs' Motion for Partial Summary Judgment that disputes some of the attorneys' fees, but does not dispute breaching the settlement agreement.

A. Standard for Evaluating a Motion for Judgment on the Pleadings

Judgment on the pleadings on a legal issue is appropriate when, after the pleadings are closed, the court determines that there is no material issue of fact presented and that one party is clearly entitled to judgment. See Flora v. Home Federal Sav. & Loan Assoc., 685 F.2d 209, 211 (7th Cir. 1982). Such a motion may be granted only if the moving party clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law. Nat'l Fid. Life Ins. Co. v. Karaganis, 811 F.2d 357, 358 (7th Cir. 1987). The court may consider only matters presented in the pleadings and must view the facts in the light most favorable to the non-moving party. Republic Steel Corp. v. Pa. Eng'g Corp., 785 F.2d 174, 177 n.2 (7th Cir. 1986). A clearly meritorious affirmative defense may serve as the basis for a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), which is a motion for dismissal on the merits. Carr v. Tillery, 591 F.3d 909, 919 (7th Cir. 2010).

B. Standard for Evaluating a Motion for Summary Judgment

A motion for summary judgment must be granted "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). "Material facts" are those under the applicable substantive law that "might affect the outcome of the suit." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over a "material fact" is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. Rule 56(c) further requires the entry of summary judgment after adequate time for discovery against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

A party seeking summary judgment bears the initial responsibility of informing a court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If the moving party supports its motion for summary judgment with affidavits or other materials, it thereby shifts to the non-moving party the burden of showing that an issue of material fact exists. Keri v. Bd. of Tr. of Purdue Univ., 458 F.3d 620, 628 (7th Cir. 2006).

Rule 56(e) specifies that once a properly supported motion for summary judgment is made, "the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts to establish that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). To successfully oppose the motion, the non-movant must present "definite, competent evidence in rebuttal." Salvadori v. Franklin Sch. Dist., 293 F.3d 989, 996 (7th Cir. 2002). In viewing the facts presented on a motion for summary judgment, a court must construe all facts in a light most favorable to the non-moving party and draw all legitimate inferences and resolve all doubts in favor of that party. Keri, 458 F.3d at 628. A court's role is not to evaluate the weight of the evidence, to judge the credibility of witnesses, or to determine the truth of the matter, but instead to determine whether there is a genuine issue of triable fact. Anderson, 477 U.S. at 249-50.

C. Background

In mid-2011, Florencio Cuetara, the President of Classic Foods, visited Plaintiffs' snack food manufacturing facilities and contracted for the delivery of Plaintiffs' products. (DE 1, Compl. at 2.) Following this visit, in August 2011, Defendants, "Classic Foods and/or Cuetara, " completed a credit application form with Plaintiffs and subsequently began issuing purchase orders for Plaintiffs' products. ( Id. ) Over the next three months Plaintiffs fulfilled and shipped thirty-four purchase orders issued by Defendants, which Defendants never paid for. (DE 1, Compl. at 2-3.)

Following Defendants' failure to pay, Plaintiffs filed a complaint in March 2012 against them for breach of contract and unjust enrichment.[1] (DE 1, Compl. at 3.) In August 2012, Plaintiffs and Defendants executed a Settlement Agreement and jointly stipulated to the dismissal of the case. ( Id. ) The Settlement Agreement required Defendants to satisfy their almost $370, 000 obligation over the course of eight payments. (DE 1, Compl. at 6.) Plaintiffs did not receive the first payment of $25, 000, which was due by September 15, 2012, or the second payment of $50, 007, which was due by October 1, 2012. ( Id. )

When Defendants failed to abide by the Settlement Agreement, Plaintiffs filed a new Complaint to enforce the Settlement Agreement and reasserted the breach of contract and unjust enrichment claims from their previous Complaint. Plaintiffs then moved for partial summary judgment requesting a judgment to enforce the Settlement Agreement and award court costs and attorneys' fees. (DE 18, Pl.'s Mot. For Summ. J.) Plaintiffs attached affidavits to their Motion for Partial Summary Judgment that outline the payment plan agreed to by the parties, Defendants' failure to make the payments, and the attorneys' fees incurred enforcing the Settlement Agreement. (DE 18-1, Margie Aff. 2; DE 18-2, Pls.' Attorney Aff. 1, 3-4.)

In response, each Defendant took a different path. Classic Foods, in their Answer, argues that there are genuine issues of material fact regarding some of the attorneys' fees sought by Plaintiffs. (DE 31, Def.'s Resp. Br. 1-2.) On the other hand, Cuetara Holdings, filed a Motion for Judgment on the Pleadings. (DE 33, Def.'s Mot. J. Plead. 1.) Cuetara Holdings asserts that Plaintiffs' pleadings are insufficient and do ...


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