Triumph Packaging Grp. v. Ward

TRIUMPH PACKAGING GROUP, an Illinois corporation, Plaintiff, v. SCOTT WARD, et al., Defendants.

SCOTT WARD, Counter-Claimant and Third-Party Plaintiff, v. TCG PACKAGING SERVICES, LLC d/b/a/ TRIUMPH PACKAGING GROUP,et al., Counterclaim and Third-Party Defendants.

Case No. 11 C 7927

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

Dated: March 11, 2014

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge:

On November 8, 2011, Plaintiff Triumph Packaging Group ("Triumph") filed a seven-count Complaint against Scott Ward ("Ward"), Vital-X Associates, LLC ("Vital-X"), and Creative Design Products, Inc. ("CDP"), alleging actual and threatened misappropriation of trade secrets under the Illinois Trade Secrets Act, 765 ILCS 1065, et seq. (Count I), a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c) (Count II), a common law breach of fiduciary duty claim (Count III), an Illinois tortious interference with prospective economic advantage claim (Count IV), an Illinois civil conspiracy claim (Count V),a common law breach of contract claim (Count VI), and a common law conversion claim (Count VII) pursuant to the Court's original and supplemental jurisdiction. See 28 U.S.C. §§ 1331, 1367(a). On December 3, 2013, the Court entered the parties' stipulation of dismissal as to Triumph's Illinois Trade Secrets Act claim alleged in Count I and its tortious interference with prospective economic advantage claim alleged in Count IV. Therefore, Triumph's remaining claims include its civil RICO claim in Count II and its state law claims in Counts III, V, VI and VII.

On July 27, 2012, Ward, as Counter-Claimant and Third-Party Plaintiff, filed a First Amended Counter-Claim and Third-Party Complaint against Triumph and Third-Party Defendants Randall Cecola ("Cecola"), DTG Services Group, Inc. ("DTG"), Kallahan Marketing Group, Inc. ("Kallahan"), Darwin Technology ("Darwin"), and Tesoro Realty Group, LLC ("Tesoro"). Specifically, Ward alleged a common law fraudulent inducement claim (Count I), a claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c) (Count II), a common law breach of fiduciary duty claim (Count III), an Illinois civil conspiracy claim (Count IV), a common law conversion claim (Count V), and two common law unjust enrichment claims (Counts VI and VII) pursuant to the Court's original and supplemental jurisdiction. See 28 U.S.C. §§ 1331, 1367(a). On October 29, 2012, the Court granted Triumph's and the Third-Party Defendants' motion to dismiss the First Amended Counterclaim and Third-Party Complaint as to Counts II, III, IV, and V and dismissed these counts with prejudice.¹ Therefore, Ward's remaining claims include his common law fraudulent inducementclaim as alleged in Count I and his two common law unjust enrichment claims as alleged in Counts VI and VII.

Before the Court are Triumph's motion for summary judgment, the Third-Party Defendants' motion for summary judgment, and Ward's motion for partial summary judgment all brought pursuant to Federal Rule of Civil Procedure 56(a). (R. 170, 172, & 176.) For the following reasons, the Court grants in part Ward's motion for partial summary judgment as to Triumph's civil RICO claim as alleged in Count II of Triumph's Complaint and dismisses Count II with prejudice. Because the Court is dismissing with prejudice the only claim in this lawsuit over which the Court has original jurisdiction, see 28 U.S.C. § 1331, the Court declines to exercise supplemental jurisdiction over the remaining state law claims. See 28 U.S.C. § 1367(c). Therefore, the Court dismisses the state law claims alleged in Counts III, V, VI and VII of Triumph's Complaint and Counts II, VI and VII of Ward's First Amended Complaint without prejudice for lack of subject matter jurisdiction. Last, because the Court considered the parties' arguments regarding any alleged Local Rule 56.1 violations in the context of determining the relevant facts, the Court denies Ward's motions to strike as moot. (R. 190, 199, & 201.)

BACKGROUND

I. Northern District of Illinois Local Rule 56.1

Local Rule 56.1 "is designed, in part, to aid the district court, 'which does not have the advantage of the parties' familiarity with the record and often cannot afford to spend the time combing the record to locate the relevant information,' in determining whether a trial is necessary." Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011) (citation omitted). Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to whichthe moving party contends there is no genuine issue." Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009). "The opposing party is required to file 'a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon." Id. (citing N.D. Ill. R. 56.1(b)(3)(B)). Local Rule 56.1(b)(3)(C) requires the nonmoving party to present a separate statement of additional facts that requires the denial of summary judgment. See Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643-44 (7th Cir. 2008).

In general, the purpose of Local Rule 56.1 statements and responses is to identify the relevant admissible evidence supporting the material facts, not to make factual or legal arguments. See Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006) ("statement of material facts did [] not comply with Rule 56.1 as it failed to adequately cite the record and was filled with irrelevant information, legal arguments, and conjecture"). "When a responding party's statement fails to dispute the facts set forth in the moving party's statement in the manner dictated by the rule, those facts are deemed admitted for purposes of the motion." Cracco, 559 F.3d at 632. It is well-established in this Circuit that "district judges are entitled to insist on strict compliance with local rules designed to promote the clarity of summary judgment filings." Stevo v. Frasor, 662 F.3d 880, 887 (7th Cir. 2011).

In sum, "[f]or litigants appearing in the Northern District of Illinois, the Rule 56.1 statement is a critical, and required, component of a litigant's response to a motion for summary judgment. The purpose of the local rule is to make the summary judgment process less burdensome on district courts, by requiring the parties to nail down the relevant facts and the way they propose to support them." Sojka v. Bovis Lend Lease, Inc., 686 F.3d 394, 398 (7th Cir.2012). With these standards in mind, the Court turns to the relevant facts of this case.

II. Relevant Facts

Triumph, a manufacturer of food product packaging, is an Illinois corporation with its principal place of business in Bolingbrook, Illinois. (R. 178, Ward's Rule 56.1 Stmt. Facts ¶¶ 1, 8.) Triumph has facilities in both Illinois and Georgia. (R. 175, Triumph-Third-Party Rule 56.1 Stmt. Facts ¶ 36.) Randall Cecola (Cecola") is the owner and Chief Executive Officer ("CEO") of Triumph. (Id. ¶ 2.) Ward is the former Chief Operating Officer ("COO") of Triumph. (Ward's Stmt. Facts ¶ 7.) Vital-X and CPD were Ward's companies of which he was the sole actor, owner, and representative. (Id. ¶¶ 4, 32.) Ward created Vital-X on February 16, 2010 and operated it until August 12, 2011 when the Illinois Secretary of State involuntarily dissolved it. (R. 183, Triumph-Third-Party Add'l Facts ¶ 1.) On June 2, 2011, Ward formed CDP and the parties do not dispute that the Illinois Secretary of State involuntarily dissolved it. (Id. ¶ 4; Ward's Stmt. Facts ¶ 4.) Mighty-Pac, Inc. ("Mighty-Pac") is a Palatine, Illinois business run by Mike Pastore. (Ward's Stmt. Facts ¶¶ 35, 36.) Silvestri Sweets, Inc. ("Silvestri Sweets") is a candy company based in Geneva, Illinois. (Id. ¶ 40; Triumph-Third-Party Stmt. Facts ¶ 40.)

As Triumph's COO, Ward ran Triumph's day-to-day operations. (Triumph-Third-Party Stmt. Facts ¶ 20; Ward's Stmt. Facts ¶ 56.) Triumph gave Ward considerable freedom and responsibility with respect to the management of Triumph and in his interactions with Triumph's customers, vendors, and other key business contacts. (Triumph-Third-Party Stmt. Facts ¶ 20.) At Triumph, Ward was also involved with sales, pricing, purchasing raw materials, production, manufacturing, marketing, and hiring and firing. (Ward's Stmt. Facts ¶ 57.) In addition to his responsibilities with respect to operations, Triumph tasked Ward with generating more businessfor Triumph. (Triumph-Third-Party Stmt. Facts ¶ 21; R. 193, Ward's Add'l Stmt. Facts ¶ 22.) It is undisputed that Triumph fired Ward on September 20, 2011. Ward is currently the General Manager of AGI North America, LLC's ("AGI") Indianapolis, Indiana facility. (Ward's Stmt. Facts ¶ 10.) AGI, now known as ASG-Shorewood Group, produces paper and plastic packaging. (Id. ¶ 12.)

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014) (quoting Fed.R.Civ.P. 56(a)). A genuine dispute as to any material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In determining summary judgment motions, "facts must be viewed in the light most favorable to the nonmoving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L.Ed.2d 265 (1986). After "a properly...