Steiner Electric Co. v. Nuline Technologies, Inc. ( 2006 )

FIFTH DIVISION
March 24, 2006
No. 1-05-0424
STEINER ELECTRIC COMPANY, an Illinois ) Appeal from the
Corporation, ) Circuit Court of
) Cook County
Plaintiff-Appellee, )
)
v. )
) Honorable
NULINE TECHNOLOGIES, INC., an Illinois Corporation, ) Paddy McNamara,
) Judge Presiding.
Defendant-Appellant. )
PRESIDING JUSTICE GALLAGHER delivered the opinion of the court:
This case is a collection action involving nonpayment for goods invoiced and received.
Defendant, NuLine Technologies, Inc. (NuLine), appeals from the orders of the trial court
granting summary judgment to plaintiff, Steiner Electric Company (Steiner) and awarding
Steiner's attorney fees and court costs. 1 We affirm.
1
Supreme Court Rule 341(e)(7) provides that an appellant's brief Ashall contain@
A[a]rgument, which shall contain the contentions of the appellant and the reasons
therefor, with citation of the authorities and the pages of the record relied on.@ 188 Ill. 2d
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R. 341(e)(7). NuLine has not addressed the order awarding attorney fees in its briefs.
Thus, we consider this argument waived pursuant to Supreme Court Rule 341(e)(7) and
we need not address it. American Service Insurance Co. v. Pasalka, No. 1-04-3571 (Ill.
January 26, 2006); Mercury Indemnity Co. of Illinois v. Kim, 358 Ill. App. 3d 1, 18, 830
N.E.2d 603, 617 (2005).
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BACKGROUND
Steiner is engaged in the sale and distribution of electrical supplies and equipment. From
approximately March 31, 2000, through December 31, 2002, Steiner, at the oral request of
NuLine, sold and delivered various electrical supplies and equipment to NuLine. On February 7,
2003, Steiner filed a verified complaint for damages against NuLine. 2
Steiner alleged in its complaint that when NuLine orally requested that Steiner sell and
deliver various products to NuLine, it agreed to pay Steiner at its then prevailing prices for such
products within 30 days after NuLine's receipt. Steiner attached invoices and debit memos to its
complaint, showing an indebtedness of $53,989.56. According to the terms of the invoices,
NuLine allegedly agreed to pay finance charges of 1.5% per month on all past-due accounts, as
well as Steiner's costs of collection, including its attorney fees and expenses. After allowing all
credits and deductions as of June 11, 2003, Steiner alleged that there was due and owing
$118,002.09, which included the unpaid principal of $53,989.56, accrued finance charges of
$64,012.53, through and including June 11, 2003, and a finance charge which continued to
accrue at the rate of $7.19 per diem after June 11, 2003.
NuLine, in its answer, denied that it agreed to pay Steiner for all such products at its then
prevailing prices and, instead, stated that many of the purchases were negotiated at a discount.
Along with its answer denying most of the allegations, NuLine filed an affirmative defense for
2
Steiner later filed an amended complaint on June 11, 2003.
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setoff alleging that some of the invoices exceeded the amount of NuLine's purchase orders and
that NuLine had returned items for which Steiner had not issued credit.
During discovery, Steiner issued a lengthy request to admit facts containing 1,134
individual requests. 3 In response, NuLine submitted an itemized spreadsheet of the invoices and
debit memos that set forth explanations as to why or why not NuLine owed the specific amounts
that Steiner claimed. The spreadsheet was verified by NuLine's accounts payable manager,
Patricia Rauth. 4
3
While the number may indicate that this was an onerous burden, we note that
the request contained simple questions, although repetitive, and mainly included the
same or similar questions regarding each and every individual invoice that had been
generated during the parties' relationship. The request asked whether, e.g., the invoice
attached to the complaint was a true and correct copy, Steiner sent NuLine the invoice
on a certain date, NuLine received the invoice within seven days, NuLine had contacted
Steiner requesting it to sell and deliver the specific products depicted in the invoice,
NuLine agreed to pay for the specific products after it received them, NuLine agreed to
pay the price listed in the invoice, NuLine received and accepted the products, NuLine
then sold the products to a third party, NuLine did not pay Steiner, NuLine owed a
finance charge, etc. The request also included questions relating to finance charges
and debit memos.
4
NuLine subsequently submitted an updated spreadsheet in which it revised some of its
previous explanations and position on whether payment was due on certain disputed invoices.
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Steiner took Rauth's deposition, as well as the depositions of NuLine's president, Robert
Traub, and NuLine's purchasing manager, Janet Camarata. In the depositions, all three testified
that they knew of no agreement which authorized the credits or offsets that NuLine claimed.
During her deposition, Rauth also admitted that she was not involved in the purchasing,
return or pricing of materials that NuLine purchased. She further admitted that she had no
involvement with the approval of payments to Steiner or any matters related to handling or
finance charges. Additionally, she testified that she had no personal knowledge regarding
NuLine's claims for credits, discounts and offsets or any related agreements including any
purported agreement between Steiner and NuLine permitting NuLine to take a 2% discount off
the gross amount of any invoice. Rauth also admitted that she had no authority from Steiner to
take 2% discounts off the gross amount of any invoice or to take accounts payable adjustments
or so-called AAPA@ discounts. She acknowledged that NuLine took unauthorized discounts for
freight, handling, restocking and pricing. Rauth further stated that Traub was the person who
was responsible for the pricing of materials ordered from Steiner and the approval of payments
to Steiner.
Traub testified in his deposition that NuLine took unauthorized discounts for freight,
handling, restocking and pricing. He also stated that he knew of no document or agreement
This updated spreadsheet was also verified by Rauth.
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which authorized NuLine to take 2% discounts off the gross amount of any invoice. He further
admitted that NuLine had accepted products from Steiner for which NuLine had not paid.
Camarata also testified in her deposition that she had no personal knowledge of the
pricing of materials purchased by NuLine from Steiner or of any document or agreement
authorizing NuLine to take a 2% discount off the gross amount of NuLine's invoices from
Steiner.
Steiner filed its motion for summary judgment on August 6, 2004. Steiner asserted that
there was never any agreement that NuLine could take the discounts that it was routinely and
arbitrarily taking and that NuLine's claims for credits and offsets lacked any basis. In support of
its argument, Steiner relied upon (1) the deposition testimony, previously discussed, of Rauth
and Traub; (2) Steiner's request for admission of facts, as well as NuLine's response; and (3) the
affidavit of Steiner's credit manager, Joe Dible, which Steiner attached to its motion.
In his affidavit, Dible stated the following:
(1) There was no written or oral agreement between Steiner and NuLine
that authorized NuLine to take a 2% discount off the gross amount of the invoices
issued to NuLine;
(2) There was no written or oral agreement between Steiner and NuLine
that provided that NuLine was not obligated to pay freight, restocking or handling
charges on materials sold and delivered, finance charges on past-due invoices, or
Steiner's costs on collections;
(3) NuLine never objected to any of the terms and conditions contained in
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the invoices issued by Steiner to NuLine; and
(4) Notwithstanding Steiner's oral and written demands on NuLine to pay all amounts
due it, NuLine has failed and refused to pay those amounts in breach of the oral agreement and
as required under the invoices.
NuLine filed a written response to Steiner's motion for summary judgment which was
accompanied by NuLine's spreadsheet, NuLine's answer and affirmative defenses, portions of
Rauth's and Camarata's deposition transcripts, and Rauth's affidavit. Rauth stated in her affidavit
that NuLine was owed refunds for returned materials and overbillings. Rauth also stated in her
affidavit that NuLine had claimed these setoffs as affirmative defenses in its answer to the
amended complaint and that information concerning the setoffs was provided to Steiner as part
of NuLine's response to Steiner's request to admit. NuLine argued that the spreadsheet refuted
the amounts claimed and that NuLine was entitled to certain credits for materials NuLine
returned to Steiner as set forth in NuLine's affirmative defense.
Steiner filed a reply brief, along with a motion to strike Rauth's affidavit for its failure to
comply with Illinois Supreme Court Rule 191 (Official Reports Advance Sheet No. 8 (April 17,
2002), R.191, eff. July 1, 2002) (Rule 191). Steiner argued that Rauth's affidavit should be
stricken because, like NuLine's affirmative defenses, it contained generalized conclusions and
did not set forth any facts to support her claim. Steiner also filed a supplemental affidavit of
Dible.
NuLine responded to the motion to strike Rauth's affidavit, arguing that the requisite facts
were contained in NuLine's answer, affirmative defenses and answers to the request to admit
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facts that were attached as exhibits to the response in opposition to the motion for summary
judgment and incorporated by reference into Rauth's affidavit.
NuLine did not take the deposition of Dible, who had verified Steiner's complaint and
who had also provided the two affidavits in support of Steiner's motion for summary judgment.
NuLine took the depositions of only two Steiner representatives, Tom Treichel and Daniel
White.
On November 22, 2004, the trial court granted Steiner's motion to strike the affidavit of
Rauth and Steiner's motion for summary judgment. On December 14, 2004, the trial court
denied NuLine's motion for reconsideration. On December 30, 2004, the court issued an order
granting Steiner its attorney fees and costs. NuLine now appeals.
ANALYSIS
Our standard of review of an order granting summary judgment is de novo. Espinoza v.
Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 113, 649 N.E.2d 1323, 1326 (1995). We must
consider the affidavits, depositions, admissions, exhibits, and pleadings on file and construe
them strictly against the movant. Espinoza, 165 Ill. 2d at 113, 649 N.E.2d at 1326. Summary
judgment is properly granted where the pleadings, depositions, admissions, affidavits and
exhibits on file, when viewed in the light most favorable to the nonmoving party, show that there
is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter
of law. Petrovich v. Share Health Plan of Illinois, Inc., 188 Ill. 2d 17, 30-31, 719 N.E.2d 756,
764 (1999). Although summary judgment has been called a Adrastic measure,@ it is an
appropriate tool to employ in the expeditious disposition of a lawsuit in which A 'the right of the
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moving party is clear and free from doubt.' @ Morris v. Margulis, 197 Ill. 2d 28, 35, 754 N.E.2d
314, 318 (2001), quoting Purtill v. Hess, 111 Ill. 2d 229, 240, 489 N.E.2d 867 (1986); see also
Robertson v. Sky Chefs, Inc., 344 Ill. App. 3d 196, 199, 799 N.E.2d 852, 855 (2003).
The only Aevidence@ presented by NuLine in opposition to Steiner's motion for summary
judgment is the spreadsheet produced in response to the request to admit facts. The spreadsheet
contained explanations as to why NuLine believed it did not have to pay the outstanding invoices
and debit memos. Nonetheless, as Steiner aptly notes, nobody from NuLine has any personal
knowledge of the facts alleged in the spreadsheet to support NuLine's conclusory claims that it
does not have to pay the outstanding invoices and debit memos. This includes Patricia Rauth,
who verified the spreadsheet.
Moreover, NuLine failed to provide a counteraffidavit to contradict the well-pleaded
facts contained in the Dible's affidavit. Although NuLine submitted the affidavit of Rauth in
support of its response to Steiner's summary judgment motion, the trial court properly struck
Rauth's affidavit for failing to comply with Rule 191.
Rule 191 provides, in pertinent part, that A[a]ffidavits in support of and in opposition to a
motion for summary judgment * * * shall not consist of conclusions but of facts admissible in
evidence.@ Official Reports Advance Sheet No. 8 (April 17, 2002), R.191, eff. July 1, 2002; see
also Roe v. Jewish Childrens' Bureau of Chicago, 339 Ill. App. 3d 119, 128, 790 N.E.2d 882,
890 (2003) (affidavits offered in support of or in opposition to a motion for summary judgment
that merely set forth legal conclusions or opinions without stating supporting facts are
insufficient and must be stricken). Rauth stated in her affidavit, ANuLine is owed $51,622.30 for
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materials it returned to Steiner for which it has not received credit.@ She also stated that ANuLine
is owed $71,484.12 in credit for over billings on invoices.@ However, the affidavit failed to
provide any facts or admissible evidence to support these conclusory statements. Rauth failed to
aver, much less establish with competent admissible facts, the basis of NuLine's authority to
claim these credits. The trial court here correctly ruled that Rauth's affidavit failed to comply
with Rule 191(a) because Rauth's affidavit contained mere legal conclusions and opinions. The
affidavit failed to set forth with particularity any facts upon which her conclusions were based.
Furthermore, Rauth had no personal knowledge of the matters contained in her affidavit.
In her deposition, Rauth stated that she did not know of any agreement that would allow NuLine
to take deductions for freight charges. She also stated that she did not know of any agreement
that would allow NuLine to take deductions or discounts for handling charges, or that would
allow NuLine to take discounts or deductions for restocking charges. Rauth has not alleged that
she negotiated any agreement to receive credit for returned materials. In her deposition, she
admitted that she had no involvement with the purchasing or return of materials. Finally, she
admitted that there was no agreement authorizing NuLine to take accounts payable adjustments
and, instead, it was her unilateral decision to do so. Indeed, when asked the basis of her
authority to take these deductions, she answered, ANone, actually.@
Although Rauth holds the title of AAccounts Payable Manager,@ her deposition testimony
demonstrated that she has an utter lack of knowledge regarding NuLine's claims for credits,
discounts and offsets. NuLine's purported Adisputes@ are based upon specific circumstances of
which she admittedly had no knowledge. Rauth's earlier deposition testimony as to her complete
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lack of knowledge constitutes a binding judicial admission, which cannot be controverted on
appeal or used to create a question of fact on summary judgment. See, e.g., Hansen v. Ruby
Construction Co., 155 Ill. App. 3d 475, 480, 508 N.E.2d 301, 303-04 (1987) (unequivocal
assertions made in a deposition constitute binding judicial admissions that a party may not
subsequently contradict in order to create a factual dispute). A party deponent cannot avoid the
consequences of a deposition by subsequently changing or reconstructing testimony. In re Estate
of Rennick, 181 Ill. 2d 395, 407, 692 N.E.2d 1150, 1156 (1998).
In her deposition, Rauth stated that A[t]he agreements were all between Steiner and Bob
Traub.@ As the trial court correctly noted, this statement implies that if there was any agreement,
it is Traub who would be in possession of the material facts to support its existence.
Nonetheless, no affidavit of Traub was submitted by NuLine in support of its response to
Steiner's summary judgment motion. Thus, without the affidavit of Rauth, the facts set forth in
Dible's affidavit stand uncontested.
NuLine asserts, however, that its answer to Steiner's requests to admit facts was part of
the record, that it created disputed issues of fact, and that the trial court erred in failing to
consider it. We disagree. Assuming, without deciding, that NuLine's answer to Steiner's request
to admit facts complied with Illinois Supreme Court Rule 216 (134 Ill. 2d R. 216), a party
opposing a summary judgment motion cannot rely on its pleadings alone to raise issues of
material facts. Our supreme court has explained that where the party moving for summary
judgment supplies well-alleged facts in an affidavit that are not contradicted by counteraffidavit,
such allegations must be taken as true, notwithstanding the existence of contrary averments in
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the nonmovant's pleadings which merely purport to establish bona fide issues of fact. Fooden v.
Board of Governors of State Colleges & Universities, 48 Ill. 2d 580, 587, 272 N.E.2d 497, 500-
01 (1971).
NuLine's answers to requests to admit facts are mere pleadings. See Golf Trust of
America, L.P. v. Soat, 355 Ill. App. 3d 333, 336, 822 N.E.2d 562, 565 (2005) (request to admit
and response are pleadings). Thus, NuLine cannot rely on its answer to Steiner's request to
admit facts to counter the facts set forth in Dible's affidavit. The trial court correctly declined to
consider NuLine's answer to Steiner's request to admit facts as competent factual evidence to
create a genuine issue of material fact. Because those facts stand uncontested, the trial court
correctly granted summary judgment in favor of Steiner.
For the foregoing reasons, we affirm the November 22, 2004, order of the circuit court of
Cook County granting summary judgment.
Affirmed.
O'BRIEN and O'MARA FROSSARD, JJ., concur.
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