Control Solutions, LLC v. Elecsys

13 N.E.3d 302

CONTROL SOLUTIONS, LLC, Plaintiff–Appellant and Cross–Appellee

v.ELECSYS, a Division of DCX–CHOL Enterprises, Inc., Defendant–Appellee and Cross–Appellant.

No. 2–12–0251.

Appellate Court of Illinois, Second District.

June 23, 2014.

Thomas I. Matyas, Tracy A. Hannan, and Erin L. Brechtelsbauer, all of Edwards Wildman Palmer LLP, of Chicago, for appellant.

James F. McCluskey, James S. Harkness, Jennnifer L. Friedland, and Patrick R. Boland, all of Momkus McCluskey, LLC, of Lisle, for appellee.

OPINION

Justice HUDSON delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Control Solutions, LLC, filed a complaint in the circuit court of Du Page County, alleging breach of contract by defendant, Elecsys, a division of DCX–CHOL Enterprises, Inc. The matter proceeded to a jury trial. The jury returned a verdict in favor of plaintiff and awarded damages in the amount of $106,950. Following the denial of the parties' posttrial motions, plaintiff filed a notice of appeal and defendant filed a notice of cross-appeal. In its appeal, plaintiff argues that the trial court committed reversible error by admitting settlement communications at trial in violation of Illinois Rule of Evidence 408 (eff. Jan. 1, 2011). Plaintiff also contends that, for various reasons, it was “deprived of a true jury trial” and therefore the jury's award of damages should be reversed and the matter remanded for a new trial on damages alone, or in the alternative a new trial on liability and damages. In its cross-appeal, defendant asserts that, if this court grants plaintiff's request for a new trial, the trial court's order finding moot defendant's “Unconscionability Motion” should be reversed and the motion should be considered on remand. For the reasons set forth below, we affirm the trial court's judgment and dismiss defendant's cross-appeal.

¶ 2 I. BACKGROUND

¶ 3 In February 2008, the Department of the United States Army (Army) solicited bids for the purchase of controllers to be delivered to the Rock Island Arsenal. The controllers are used in military equipment to assist in opening the doors of vehicles damaged in attacks. Under the terms of the Army's solicitation, the controllers were required to be obtained from a “sole source” supplier. The “ sole source” supplier for the controllers at issue was plaintiff. As a result, any party wishing to contract to sell the controllers to the Army was required to first purchase the controllers from plaintiff.

¶ 4 Defendant decided to bid on the Army's contract. To this end, on February 20, 2008, Jill Hoover, defendant's contract administrator, requested a quote from plaintiff for the purchase of 4,010 controllers, part number CS3225N. Later that same day, George Roy Kell, then plaintiff's director of business development, sent an email to Hoover that provided in relevant part:

“THe [sic ] price for the CS3225N is $930 @ at the 4–5K qtys. I will get you a formal quote tomorrow, the terms are FOB Origin, Net 30, NCNR [noncancellable, nonreturnable]. Delivery is 200/week, with a 10–12 week standard leadtime ARO [after receipt of order]. We understand this may be a DX rated contract, in which case we will typically do much better on the lead time with the contract and DX letter.”¹

In the same email, Kell asked Angelica Martinez, an employee in plaintiff's accounting department, to provide Hoover a formal quote the following day, noting that the “destination is Rock Island.”

¶ 5 On February 21, 2008, Martinez provided Hoover a formal quote, quote No. Q020800004, incorporating the same terms as Kell's email, including the noncancellable language. Attached to the quote was a document entitled “Quotation Terms,” which included an “Exceptions” clause providing in relevant part:

“If Buyer's acceptance of a quotation, proposal, acknowledgment of an order, or order itself contains verbal, written, printed, or stamped provisions or conditions inconsistent with the verbal, written, printed or stamped provisions and conditions of the quotation, proposal or acknowledgment of order, the provisions and conditions of Control Solutions, Inc., shall prevail.”

¶ 6 On or about March 3, 2008, after receiving plaintiff's formal quote, defendant entered into a contract with the Army, designated as contract number W9098S–08–P–0430, for the sale of 4,010 controllers, part number CS3225N. Under the terms of defendant's contract with the Army, the Army expected the first shipment of 200 controllers to be delivered to the Rock Island Arsenal by May 30, 2008.

¶ 7 On March 5, 2008, Shauna Shay, an employee in defendant's purchasing department, sent Kell the following email:

“Per our convo [sic ] this afternoon here is Purchase Order ELE0021671—for Quotation Number Q020800004[.] I have also attached a copy of [the] Government Rating Letter[.] Packaging Requirements (52.0000–4148) attached—per convo [sic ] please send quotation to [my email address].”

Defendant's purchase order requested delivery of the first shipment of 200 controllers on May 13, 2008. In addition, the purchase order made the following reference: “THIS PO IS GOVERNED BY THE TERMS AND CONDITIONS FOUND AT HTTP://WWW.DCXCHOL.COM/DCX/SUP.HTML[.]” The terms and conditions on defendant's website provided that they “supersede any submitted by the Seller in any proposal or acknowledgment.” The terms and conditions also provided that “[t]he Buyer may terminate this order in whole or in part at any time upon written or telegraphic notice to the Seller” and that the contract is subject to Federal Acquisition Regulations (FAR), including a termination-for-convenience provision under FAR 52.249 (48 C.F.R. § 52.249–2 (2006) ). In addition, the terms and conditions set forth specific remedies for the seller in case the contract is terminated for convenience.

¶ 8 On March 6, 2008, Kell sent Shay an email notifying her that the price per controller with packaging, handling, and insurance was $946 each and that a formal quote would follow. Later that day, Martinez sent Shay a revised quote. As with the original quote, the revised quote advised that “[a]ll orders are non-cancelable.” Attached to the revised quote were the same “Quotation Terms” that accompanied the original quote.

¶ 9 On March 14, 2008, Martinez sent Shay an email asking if she had revised the purchase order to reflect the new pricing of $946 per controller. Martinez also stated in the email that plaintiff would start shipping 200 pieces per week starting on May 13, 2008. On March 17, 2008, Shay responded that she had been asked by Mike Jamison, defendant's vice president, “to advise that parts should be wrapped in bubble wrap * * * and sent in regular packaging box.”

¶ 10 On March 20, 2008, defendant submitted a revised purchase order ELE0021671 for 4,211 controllers at $930 each. The revised purchase order requested that “order confirmation of increase” be sent to Shay's email address. In addition, as with the original purchase order, the revised purchase order referenced that it was governed by the terms and conditions found on defendant's website. On April 3, 2008, Martinez sent an email to Shay with the subject line “Revised Purchase order ELE0021671.” In the email, Martinez wrote: “[P]lease take this email as confirmation of the above PO. I also attached a shipping schedule.” The shipping schedule provided that weekly shipments of 200 controllers would commence on May 13, 2008, and continue through September 30, 2008, when a final shipment of 211 controllers would be made.

¶ 11 On April 24, 2008, Michael McKee, plaintiff's chief technology officer, sent the following email to Kell:

“Please make sure we have not accepted [defendant's] PO. If we have, please let me know immediately. Their terms and conditions are unacceptable in their present form * * * and we'll have to resolve the discrepancies before we give them any product.”

Later the same morning, Kell emailed Martinez in reference to her April 3, 2008, email to Shay, stating, “This is an acknowledgment of the modified PO, do you have any record of acknowledgment of the original PO?”

¶ 12 On April 25, 2008, Shay sent Kell a revised purchase order ELE0021671, which contained a new shipping address. On May 12, 2008, Kell informed Shay by email that 200 controllers were scheduled to ship that week. However, in an email dated May 15, 2008, Shay noted that she received a call from Kell to inform her that, due to production delays, manufacture of the controllers was a week behind schedule.

¶ 13 Meanwhile, on May 19, 2008, Carrie Kammer, a contract specialist with the Army, sent an email to Nancy Melton, a representative of defendant. Kammer asked Melton to provide a cost estimate to the government for cancelling the contract for the controllers. Kammer advised that she was not sure that the Army would be cancelling, but that she needed the information to take to her superiors. Kammer further advised defendant to keep working on the order until further instruction. In response to Kammer's email, Melton wrote, “No parts can be cancelled. Our cost will be the total contract.”

¶ 14 On May 20, 2008, Shay sent Kell an email requesting an update on defendant's order. In response, Kell wrote that plaintiff was “planning on a shipment of 200 pcs on Friday.” The email further provided, “Attached is our standard order acknowledgment, we need your acceptance of that prior to shipping.” The order acknowledgment provided in part that “[a]ll orders are non-cancelable and non-returnable” and that “[c]ustomer acceptance of shipments or any other customer action from this acknowledgment shall signify acceptance of Control Solutions' general Terms and Conditions of Sale that have been provided (see attached).” The “Terms and Conditions of Sale” included a “Cancellation” clause that stated:

“In the event that a contract is cancelled by Buyer, or by Control Solutions, Inc., because of default by the Buyer, then Buyer shall pay Control Solutions, Inc. for all damages sustained,

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