Trade Finance Partners, LLC v. AAR Corporation

In the
United States Court of Appeals
For the Seventh Circuit
No. 08-2013
T RADE F INANCE P ARTNERS, LLC,
Plaintiff-Appellant,
v.
AAR C ORPORATION, d/b/a AAR A IRCRAFT
C OMPONENT S ERVICES, and AAR A LLEN S ERVICES, INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 C 3466—Rebecca R. Pallmeyer, Judge.
A RGUED JANUARY 6, 2009—D ECIDED JULY 16, 2009
Before K ANNE, W OOD , and SYKES, Circuit Judges.
K ANNE, Circuit Judge. This is a case involving a com-
plex business arrangement and technical terminology,
but it presents a remarkably simple question: did the
plaintiff company secure a contract on behalf of its client,
the defendant company? If so, the plaintiff gets paid; if
not, it has earned nothing.
2 No. 08-2013
On June 29, 2005, Northwest Airlines awarded a contract
to the defendant in this case, AAR Allen Services, Inc., for
maintenance, repair, and overhaul services on its air-
crafts’ avionic, hydraulic, and pneumatic components. The
plaintiff, Trade Finance Partners, LLC, claims that its
efforts led Northwest to award that contract to AAR
Allen, a Trade Finance client. Trade Finance sought
payment from AAR Allen for securing Northwest’s
business, as purportedly provided by the parties’ agree-
ment. AAR Allen refused, and Trade Finance sued for
breach of contract and fraud. The district court granted
summary judgment against Trade Finance on all counts.
We agree that summary judgment was appropriate.
I. B ACKGROUND
Trade Finance Partners, LLC, is comprised of a single
“member,” Callen Cooper, and it describes itself as a
“trade finance firm” that provides asset recovery
programs for its clients. Trade Finance’s business model
is somewhat complex, but it essentially acts as a broker
between its client, a product or service supplier, and
companies with whom the client desires to do business.
Trade Finance offers the target company a unique financ-
ing arrangement, the details of which are not pertinent
to this case. Trade Finance benefits by earning a
percentage of the business it secures for its clients.
One of Trade Finance’s clients was defendant AAR
Allen, a subsidiary of defendant AAR Corp., which is
a leading aviation support company that provides a broad
No. 08-2013 3
range of products and services to the aviation industry.1
A. The Trade Finance-AAR Allen Business Relationship
Trade Finance approached AAR Allen in the fall of
2004 seeking to establish a business relationship. After
preliminary discussions, Trade Finance proposed a draft
agreement on September 2, but the two parties began
working together without a finalized contract “on the
assumption” that a final agreement would be forthcom-
ing. During this time, Trade Finance claims that AAR Allen
orally identified Northwest Airlines, among others, as
a desired business account.
Trade Finance and AAR Allen did not reach a finalized
contract until mid-January 2005, when they executed the
Strategic Trade Agreement (“Agreement”).2 Consistent
with Trade Finance’s business model, the parties agreed
that Trade Finance would solicit business on AAR Allen’s
behalf from companies identified as “Target Accounts.”
1
The parties disputed whether AAR Corp., which was not a
party to the agreement at issue, was a proper defendant. The
district court did not address this dispute because it deter-
mined that Trade Finance’s claims failed on the merits. We
reach the same conclusion and therefore refer solely to AAR
Allen for the remainder of the discussion, except when
referring to AAR Corp. specifically.
2
Robert Bruinsma, then a vice president and general manager
at AAR Allen, signed the Agreement on January 10, 2005;
Trade Finance’s Callen Cooper signed on February 1.
4 No. 08-2013
Upon securing such business, AAR Allen would pay Trade
Finance a previously agreed-upon percentage of the
earnings, an amount the Agreement dubbed the “Business
Development Fund.” Because Trade Finance bases its
claims on an alleged breach of the Agreement, we
examine its provisions in more detail.
According to section 1 of the Agreement, AAR Allen
retained Trade Finance to “secure” business from Target
Accounts that AAR Allen specifically identified in a
Request for Information (“RFI”). The Agreement stipu-
lated that “no companies shall be deemed a Target
Account until it has been agreed as such by both Client
and Trade Finance in a written Target Account RFI.” 3 A
completed RFI must specifically detail the material terms
of Trade Finance’s authority to negotiate on AAR Allen’s
behalf, including the volume of business, the “Option
Period,”4 and the amount Trade Finance would earn
from the transaction. The RFI must be in writing and “in
substantially the form and substance as attached” to the
3
Furthermore, the provisions defining the Business Develop-
ment Fund (section 2.1) and the Option Period (section 2.2) both
stated that those terms “shall be set forth in the Target Account
RFI (or a supplement thereto) and shall be agreed upon prior
to Trade Finance’s discussions with Target Account regarding
securing a contract with the Target Account on behalf of the
Client.”
4
Section 2.2 of the Agreement defines the “Option Period” as
the agreed-upon period of time during which Trade Finance
has the exclusive right to secure a contract with the Target
Account on AAR Allen’s behalf.
No. 08-2013 5
Agreement.5 The parties also agreed, however, that AAR
Allen may identify a Target Account through other oral
or written communications, “subject to further confirma-
tion in a written Target Account RFI.”
Once a Target Account had been identified, Trade
Finance’s right to payment arose after it “secured” the
business specified in the RFI. In addition to a percentage
of the new business, Trade Finance received the
first $25,000 of a $60,000 retainer fee within ten days of
executing the Agreement and would obtain the re-
maining $35,000 within thirty days after Trade Finance
secured the first supply contract with a Target Account.
B. The AAR Allen-Northwest Contract
In 2004, Northwest Airlines sought bids for main-
tenance, repair, and overhaul services on avionic, hydrau-
lic, and pneumatic aircraft components. As part of the bid
process, Northwest issued to AAR Allen a Request for
Proposal.6 AAR Allen responded by submitting to North-
west an initial bid around October 2004, approximately
5
The parties dispute whether the sample RFI was appended
to the final, executed version of the Agreement. The district
court did not address this issue because it found that Trade
Finance did not secure the contract in question, eliminating
the need to consider whether the parties properly designated
Northwest as a Target Account in an RFI.
6
The record is unclear whether Northwest sent Requests for
Proposal to other companies, and, if so, to whom, their content,
and when Northwest sent them.
6 No. 08-2013
three months before it signed the Agreement with Trade
Finance in January 2005. As the district court noted, the
record is remarkably undetailed regarding the develop-
ment of AAR Allen’s relationship with Northwest from
October 2004 onward. As of January 2005, Northwest’s
Request for Proposal was its only outstanding request
to AAR Allen related to avionic, hydraulic, and
pneumatic services.
According to Trade Finance, AAR Allen indicated as
early as the fall of 2004 that it was interested in business
with Northwest. In December 2004, AAR Allen’s general
manager, Robert Bruinsma, allegedly informed Trade
Finance’s Callen Cooper that AAR Allen had been unsuc-
cessful in obtaining long-term business from Northwest
in the past and that Trade Finance should treat Northwest
as a Target Account under the Agreement. Bruinsma sug-
gested that Trade Finance contact AAR Allen’s vice
president for sales and marketing, Frank Boni, to obtain
a copy of the bid that AAR Allen submitted in
October 2004. According to Cooper, Boni told Trade
Finance that the October 2004 proposal was currently
outstanding and that AAR Allen would like to procure
that business. Despite the absence of an executed agree-
ment or a completed RFI, Trade Finance began to reach
out to Northwest.
By January 2005, Trade Finance had established
contact with Timothy Johnson, Northwest’s director of
technical commodity management. Johnson was
involved in selecting the winning bid for Northwest’s
pending maintenance, repair, and overhaul contract, and
No. 08-2013 7
he was also a decision-maker regarding whether North-
west would agree to Trade Finance’s proposed business
model in any future dealings.
The precise subject of Trade Finance’s early communica-
tions with Northwest is unclear. In January 2005, Trade
Finance outlined, in general terms and without reference
to AAR Allen, its business model and the alleged benefits
it could offer. Northwest responded by seeking specific
examples of the possible savings Trade Finance could
provide and the companies it represented. Trade Finance
also met with Northwest representatives. After AAR
Allen signed the Agreement on January 10, Trade
Finance divulged its new client to Northwest. It also
appears that Trade Finance proposed that Northwest
award AAR Allen a landing gear contract. On January 13,
as a result of these initial communications, Northwest’s
Johnson sent Trade Finance’s Cooper the following e-mail:
The landing gear contracts have been signed and
no further sourcing is required.
I don’t agree that AAR’s pricing is competitive. We
have not been able to reach agreement with AAR
on a [sic] several projects for a number of reasons.
Due to confidentially [sic] reasons, I cannot divulge
the specific causes.
Any other companies and/or services you’d like to
discuss.
Tim
Trade Finance claims that it relayed Northwest’s re-
sponse to Boni, Bruinsma, and other AAR Allen per-
sonnel, who encouraged Trade Finance to continue its
8 No. 08-2013
efforts. AAR Allen purportedly indicated that it would
complete a Target Account RFI after it received an
updated Request for Proposal from Northwest. It also
allegedly encouraged Cooper to convince Northwest
representatives to visit AAR Allen’s New York facility.
Spurred by this encouragement, Cooper claims to have
called Craig Reidlinger, Northwest’s mechanical commod-
ity manager, on February 9. Reidlinger was Johnson’s
subordinate and had no formal decision-making
authority regarding service contracts. According to
Cooper, Reidlinger explained some reasons for North-
west’s reluctance to award business to AAR Allen. Trade
Finance asserts that the comments by Johnson and
Reidlinger revealed that a “secret barrier” prohibited
business between Northwest and AAR Allen.
Cooper supposedly responded to Reidlinger that AAR
Allen remained interested and would “do whatever it
takes” to be Northwest’s long-term partner, to which
Reidlinger responded that “AAR is not out of the
game” and that he expected to speak with Frank Boni to
arrange a visit to AAR Allen’s New York facility. Cooper
relayed this conversation in an e-mail to Boni, but ap-
proximately one hour before Cooper sent this e-mail,
Reidlinger had already contacted Boni.
Around this time, in February 2005, Northwest updated
its 2004 Request for Proposal by issuing to AAR Allen a
“Phase 2” Request for Proposal for avionic, hydraulic, and
pneumatic services. The record does not indicate what
precipitated this second Request or to which companies
Northwest sent it. According to Trade Finance, AAR Allen
No. 08-2013 9
did not divulge the Phase 2 Request, nor did it divulge
its direct communications with Northwest. Unbeknownst
to Trade Finance, AAR Allen responded to the Phase 2
Request by submitting a new proposal updating its
October 2004 bid.
From this point forward, Trade Finance claims that AAR
Allen refused to cooperate in pursuing Northwest’s
business. Trade Finance purportedly presented a draft
RFI formally designating Northwest as a Target Account,
which AAR Allen ignored. On April 22, 2005, Trade
Finance proposed a joint letter encouraging Northwest
to award the contract to AAR Allen, but AAR Allen
refused to sign it. Boni indicated at that time that he
did not believe Northwest would shift business to AAR
Allen based on Trade Finance’s business model and
that AAR Allen would have a better chance to win the
contract by simply reducing its prices. After April 22,
Trade Finance claims that AAR Allen gave it the “silent
treatment.”
Northwest ultimately selected AAR Allen’s revised
proposal, and on June 29, 2005, the two parties executed
a contract for services on Northwest’s avionic, hydraulic,
and pneumatic components (the “Northwest Contract”).
The terms of the Northwest Contract reflected AAR
Allen’s discounted prices and other incentives, not terms
similar to Trade Finance’s business model. Trade
Finance did not learn of AAR Allen’s successful bid until
after AAR Allen executed the Northwest Contract.
Northwest’s Tim Johnson stated that he determined
early on that Trade Finance’s approach would not benefit
Northwest, and he expressly declared that Trade
10 No. 08-2013
Finance’s efforts had no effect on Northwest’s final deci-
sion. Both Johnson and Reidlinger recalled that Trade
Finance’s initial communications related to landing gear
services, not avionics, hydraulic, and pneumatic work,
although Reidlinger acknowledged that it was possible
that the parties discussed other subjects. Johnson testified
that Northwest had conducted significant business with
AAR Corp. in the past, including work at its New York
facility; that airlines cannot help but use AAR Corp.
because of its size and attractive prices; and that
Northwest had no reason to categorically refuse bids
from AAR Allen.
Based on this sequence of events, Trade Finance
believes that its efforts caused Northwest to award the
contract to AAR Allen, or, at a minimum, that Trade
Finance was a catalyst for AAR Allen’s successful bid.
Trade Finance filed suit in the Northern District of
Illinois, alleging breach of contract and fraud. On
March 21, 2008, AAR Allen moved for summary judg-
ment on all claims. The district court determined that no
reasonable juror could conclude that Trade Finance
secured the Northwest Contract. Without a triable
issue regarding this crucial fact, the district court held that
Trade Finance was not entitled to payment under the
parties’ Agreement or damages for the alleged fraud, and
it granted summary judgment in AAR Allen’s favor.
II. A NALYSIS
On appeal, Trade Finance asserts that the district court
improperly granted summary judgment against it. We
No. 08-2013 11
review de novo the grant of summary judgment and
construe all facts in the light most favorable to Trade
Finance, the nonmoving party. See Jones v. City of Spring-
field, Ill., 554 F.3d 669, 671 (7th Cir. 2009). Summary judg-
ment is proper if the record shows “that there is no genu-
ine issue as to any material fact.” Fed. R. Civ. P. 56(c); see
also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). To
survive summary judgment, “there must be evidence on
which the jury could reasonably find for the [nonmoving
party],” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986), and the nonmoving party must point to specific
facts showing that there is a genuine issue for trial; infer-
ences relying on mere speculation or conjecture will not
suffice, Argyropoulos v. City of Alton, 539 F.3d 724, 732 (7th
Cir. 2008). Trade Finance raises a number of issues on
appeal, but its success hinges on whether it presented
sufficient evidence that its efforts secured the Northwest
Contract for AAR Allen.
A. Breach of Contract
The parties’ Agreement stipulates that it is governed
by New York law, which identifies four elements for a
breach of contract claim: (1) existence of a contract;
(2) performance by the plaintiff; (3) breach by the defen-
dant; and (4) resulting damages. Nathel v. Siegal, 592
F. Supp. 2d 452, 470-71 (S.D.N.Y. 2008). A contract cer-
tainly existed, but the parties dispute the remaining three
elements. According to the Agreement, Trade Finance
was entitled to compensation only if it secured business
with a Target Account on AAR Allen’s behalf.
12 No. 08-2013
Trade Finance’s position is that prior to its efforts in
early 2005, Northwest was unwilling to award new busi-
ness to AAR Allen, including the services that later
became the subject of the Northwest Contract. Trade
Finance contends that as a direct result of its efforts,
Northwest reconsidered this position, took a fresh look
at AAR Allen’s proposal, scheduled a site visit to AAR
Allen’s New York facility, and subsequently awarded it
the Northwest Contract. Callen Cooper admitted, how-
ever, that he has no personal knowledge of Northwest’s
reasons for its decision. Instead, to demonstrate its role,
Trade Finance relies heavily on statements made by North-
west’s Tim Johnson and Craig Reidlinger, which Trade
Finance claims reflect a “secret barrier” between AAR
Allen and Northwest.
AAR Allen naturally takes a different position. First, it
argues that the statements upon which Trade Finance
relies are inadmissible hearsay. Second, even if admissible,
it asserts that Trade Finance did not secure the
Northwest Contract. According to AAR Allen, Trade
Finance’s initial communications with Northwest related
primarily to landing gear services, and any subsequent
discussions had no effect on Northwest’s decision mak-
ing. AAR Allen had already submitted a bid for the
Northwest Contract when it engaged Trade Finance, and
AAR Allen submitted a revised bid in 2005 without
Trade Finance’s assistance. AAR Allen realized that
Trade Finance’s business model did not make it competi-
tive and chose instead to reduce its prices.
The communications from Northwest employees are at
the heart of Trade Finance’s theory, for they represent the
No. 08-2013 13
only evidence of why Northwest accepted AAR Allen’s
proposal. Trade Finance claims that two communications
in particular suggest that it facilitated the Northwest
Contract: (1) a January 13, 2005, e-mail from Johnson to
Callen Cooper; and (2) statements that Reidlinger
allegedly made to Cooper during a telephone conversa-
tion on February 9. The district court determined that
Johnson’s January 13 e-mail was admissible for purposes
other than the truth of the matters asserted and that
Cooper’s February 9 e-mail recounting his alleged phone
conversation with Reidlinger, as well as Reidlinger’s e-
mail to Boni on the same day, were inadmissible hearsay.
We do not believe that the district court abused its dis-
cretion in making its evidentiary determinations, see
Griffin v. Foley, 542 F.3d 209, 217-18 (7th Cir. 2008) (noting
that a district court does not abuse its discretion unless
no reasonable person would agree with its ruling), but we
need not address them. Trade Finance cannot
demonstrate a triable issue of whether it secured the
Northwest Contract even with the disputed communica-
tions in evidence.
Trade Finance’s theory that its efforts “secured” the
Northwest Contract proceeds along a chain of logical
links, each of which AAR Allen disputes. First, AAR Allen
claims that Trade Finance’s initial communications with
Northwest were limited solely to a landing gear con-
tract. Second, even if the communications were not so
limited, there was no “secret barrier” preventing AAR
Allen from obtaining long-term business with Northwest.
Third, even if there was such a barrier, Trade Finance’s
efforts did not vault AAR Allen over it and cause North-
14 No. 08-2013
west to award it the contract. And finally, even if there
was a secret barrier, there is nothing in the record to
suggest that Trade Finance facilitated Northwest’s visit
to AAR Allen’s New York facility or that this visit
sealed the deal for AAR Allen. We address each link in
this chain and ultimately find them all to be faulty.
1. The parties’ initial communications related to landing gear.
First, Trade Finance suggests that it contacted
Northwest to solicit business of many varieties, including
the services that later became the Northwest Contract. We
know that Trade Finance initially approached Northwest
by generically outlining its business model without
referring to AAR Allen. After Trade Finance divulged that
it represented AAR Allen, the subject of the parties’
communications became more muddled.
AAR Allen maintains that Trade Finance’s initial over-
tures related solely to a landing gear contract. On
January 13, Northwest’s Johnson e-mailed Cooper, stating
that “[t]he landing gear contracts have been signed and
no further sourcing is required.” The logical inference
from this statement is that Northwest and Trade Finance
had previously discussed a landing gear contract. Johnson
confirmed this by testifying that he recalled that his
initial discussions with Trade Finance related to landing
gear services only,7 and Reidlinger recalled the same.
7
Trade Finance claims that the district court made an improper
credibility determination by crediting Johnson’s testimony
(continued...)
No. 08-2013 15
Cooper himself indicated that at least one focus of the
initial communications related to a landing gear con-
tract; responding to Johnson’s January 13 e-mail, Cooper
suggested that Trade Finance represented companies
other than AAR Allen and asked what contracts were
still “out for bid,” specifically stating that it was “disap-
pointing to know that we missed landing gear in the
interim since our meeting.”
The district court accepted as an undisputed fact that
Northwest’s initial meetings with Trade Finance—and
therefore Johnson’s January 13 e-mail—related to a
landing gear proposal. We see no error in this determina-
tion. Local Rule 56.1(b) requires a party in the Northern
District of Illinois 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.”
7
(...continued)
about the subject matter of the January 13 e-mail, which it
claims contradicts the e-mail itself. But Trade Finance has not
demonstrated any contradiction. The e-mail expressly begins
by referring to a landing gear proposal, and nothing in the
remainder of the e-mail suggests that Northwest disfavored
AAR Allen for all services. Johnson explained that his reference
to pricing and other undisclosed reasons for failing to reach
an agreement with AAR Allen related to a landing gear
contract and that most airlines cannot avoid using AAR Corp. or
its subsidiaries for at least some repair services. Trade Finance
has produced no evidence to the contrary, and the district
court did not improperly credit Johnson’s testimony.
16 No. 08-2013
Paragraph sixty-five of AAR Allen’s Statement of Undis-
puted Material Facts asserted that Northwest understood
Trade Finance’s proposal to relate to AAR Allen’s ability
to service landing gear, citing as support the admissible
testimony of Reidlinger and Johnson. In response, Trade
Finance stated only that “Reidlinger and Johnson
admitted incomplete recollection of their communica-
tions and meetings with Trade Finance.” The district
court did not abuse its discretion by determining that this
was inadequate to dispute the subject matter of Trade
Finance’s proposal. Cf. O’Regan v. Arbitration Forums, Inc.,
246 F.3d 975, 987 (7th Cir. 2001) (“We review the
district court’s rulings on [Local Rule 56.1] statements for
an abuse of discretion. And the district court has the
discretion to enforce [Rule 56.1] strictly or somewhat
leniently.” 8 (citation and quotations omitted)).
If Johnson’s January 13 e-mail related solely to a
landing gear proposal, it is not probative of Trade Fi-
nance’s role in securing the subsequent avionics, hydrau-
lics, and pneumatics contract, and we find no error in
the district court’s determination to this effect.
2. No other evidence suggests that a “secret barrier” existed
between Northwest and AAR Allen.
Next, even if Trade Finance’s early discussions and
Johnson’s January 13 e-mail included topics beyond the
8
The Northern District of Illinois re-labeled its Local Rules
12(M) and 12(N) as Local Rules 56.1(a) and 56.1(b), respectively.
See O’Regan, 246 F.3d at 987 nn. 5-6.
No. 08-2013 17
landing gear contract, a possibility the record does not
foreclose entirely, the evidence does not create a
triable issue of material fact. Trade Finance proffers John-
son’s e-mail to show that a “secret barrier” prevented
new business between Northwest and AAR Allen. But
nothing in the e-mail refers to a broad reluctance to deal
with AAR Allen, nor does it refer to the specific services
that later became the Northwest Contract. Johnson and
Reidlinger both testified that Northwest had previously
awarded a significant amount of work to AAR Allen’s
New York facility (which would be performing the North-
west Contract services), and it had no reason to refuse to
deal with AAR Allen now. Johnson explained that “most
airlines cannot help but use AAR for repair services
because of their breadth of capabilities and their attractive
pricing in the marketplace.” Although Trade Finance
asserts that this prior work was only short-term, Johnson’s
e-mail does not reveal an insurmountable hurdle for AAR
Allen, nor is the e-mail probative of Trade Finance’s efforts
to secure Northwest’s business.
Similarly, Reidlinger’s comments in his February 9
conversation with Cooper do not suggest that Northwest
disfavored AAR Allen as a vendor, nor are they probative
of Trade Finance’s eventual role in securing the
Northwest Contract. According to Cooper, Reidlinger
stated that AAR Allen’s pricing was not competitive and
that Northwest had trouble with AAR Allen’s legal counsel
in the past, but that “AAR is not out of the game.” Not-
withstanding that Reidlinger’s statements are clearly
hearsay and that Reidlinger testified that these state-
ments were strictly related to the landing gear contract,
there is mention of neither the subject matter of the discus-
18 No. 08-2013
sion nor a categorical reluctance to work with AAR Allen.
The unclear context of the discussion suggests, at most,
that AAR Allen had not been a competitive bidder in
the past.
Consequently, we find nothing in the record that creates
a genuine issue of whether Northwest was predisposed to
deny new long-term business to AAR Allen.
3. Trade Finance did not “secure” the Northwest Contract
for AAR Allen.
Third, even if we accept Trade Finance’s argument that
it proposed the relevant services and that AAR Allen
faced a preexisting barrier to business with Northwest,
Trade Finance cannot show that its efforts vaulted AAR
Allen over that barrier. AAR Allen presented admissible
evidence from a decision-maker at Northwest that Trade
Finance played no role in the decision to award the con-
tract to AAR Allen. After hearing Trade Finance’s propos-
als, Northwest’s Johnson determined that Trade
Finance’s “financing schemes” were undesirable and
“would not bring value to Northwest Airlines in a rea-
sonable manner.” Thus, Northwest did not award AAR
Allen the landing gear contract and subsequently
rebuffed additional solicitations by Trade Finance. Re-
garding the decision to award the Northwest Contract
to AAR Allen, Johnson stated: “Nothing that [Trade
Finance] did influenced our decisions with AAR, or could
influence our decisions with AAR.” Furthermore, AAR
Allen submitted its first bid for the Northwest Contract
in October 2004, before Trade Finance’s involvement,
No. 08-2013 19
and it submitted its revised bid in early 2005, without
input from Trade Finance or financing terms similar to
Trade Finance’s model. In light of such evidence, Trade
Finance must present specific evidence, not mere specula-
tion, to properly dispute whether Trade Finance
secured the Northwest Contract.
As noted above, the parties’ initial communications lend
no support to Trade Finance’s cause. Trade Finance
approached Northwest, engaged in a few dispersed
discussions, and proposed a unique financing arrange-
ment, which Northwest ultimately rejected.9 After John-
son’s e-mail on January 13, 2005, the record indicates that
9
Although not the basis of our decision, we are unconvinced
that AAR Allen and Trade Finance solidified Northwest as a
“Target Account” pursuant to the Agreement. Nearly all of
Trade Finance’s obligations were predicated on a completed
RFI detailing the terms of Trade Finance’s negotiations on AAR
Allen’s behalf. Even if the parties orally agreed to establish
Northwest as a Target Account, the contract required a written
RFI confirming this, something the parties never completed. As
far as we can tell, Trade Finance would have been justified in
refusing to do any work on AAR Allen’s behalf until an RFI
was completed for the Northwest account. Although Trade
Finance claims that AAR Allen wrongfully refused to complete
such an RFI, at the very least, the lack of a formal document
creates further ambiguity about (1) AAR Allen’s interest in
Trade Finance’s business model; (2) AAR Allen’s desire to use
Trade Finance to propose the specific services that were the
subject of the Northwest Contract; and, most importantly,
(3) the subject matter and specificity of Trade Finance’s com-
munications with Northwest.
20 No. 08-2013
Trade Finance contacted Northwest sporadically for
approximately three weeks. Nothing in the record
suggests that Trade Finance’s conversations with North-
west involved the subject-matter of the Northwest Con-
tract, nor has Trade Finance presented any specific pro-
posal that it offered to Northwest for any services, much
less the Northwest Contract.
To the contrary, the record indicates that Northwest
saw no benefit to Trade Finance’s business arrangement,
and it repeatedly rejected Trade Finance’s overtures. Trade
Finance claims that it persuaded Northwest to deal with
AAR Allen, but the timing of events suggests otherwise.
Trade Finance insists that its conversation with Reidlinger
on February 9 helped warm Northwest to AAR Allen,
but Northwest solicited an updated bid from AAR Allen
over a week earlier, on February 1. This means that to
support Trade Finance’s claims, its efforts on AAR Allen’s
behalf must have had at least some effect before that date,
something the record does not support. Trade Finance
has not explained any actions it took that precipitated the
updated Request for Proposal. In fact, AAR Allen never
informed Trade Finance that it received the Phase 2
Request for Proposal, the details of that request, or the
deadlines for submitting a proposal. Trade Finance did not
learn until later that AAR Allen submitted an updated
proposal on March 8. Without knowledge of the Phase 2
Request or AAR Allen’s new proposal, Trade Finance
can hardly claim that it caused Northwest to award
business to AAR Allen.
Trade Finance’s fundamental problem in this case is
that it cannot support its argument that it secured the
No. 08-2013 21
Northwest Contract. The evidence in the record, even
when viewed in the light most favorable to Trade
Finance, indicates that Northwest rejected Trade
Finance’s propositions and independently awarded the
Northwest Contract to AAR Allen.
4. Trade Finance did not facilitate Northwest’s visit to
AAR Allen’s New York facility.
Finally, Trade Finance asserts that (1) it caused North-
west to schedule a site visit to AAR Allen’s New York
facility, and (2) the visit caused Northwest to award
its contract to AAR Allen. But Trade Finance can support
neither assertion. First, there is no evidence that Trade
Finance caused Northwest to schedule a site visit. For
all the district court knew, Northwest might have sched-
uled a visit for every company that submitted a bid for
the Northwest Contract. But more importantly, even if
we accept that Trade Finance caused Northwest to sched-
ule the visit, Trade Finance has not demonstrated that
the visit influenced Northwest’s decision. Trade Finance
presented no evidence about the visit, despite having
deposed both Johnson and Reidlinger. Trade Finance did
not ask whether Trade Finance played a role in
scheduling the visit, what factors Northwest typically
considered when visiting a site, what Northwest may
have discovered when it toured AAR Allen’s facility,
what Northwest and AAR Allen might have discussed at
that time, or whether the visit had any impact on the
decision to award the Northwest Contract.
* * *
22 No. 08-2013
Of course, we must construe all reasonable inferences
from the evidence in Trade Finance’s favor. See Jones, 554
F.3d at 671. And we have entertained all of Trade
Finance’s arguments, despite our finding that—even
assuming that many of its assertions are true—it cannot
support the pivotal fact that it “secured” the Northwest
Contract. After lengthy discovery and thorough
briefing, however, Trade Finance simply cannot produce
anything but speculation that it caused Northwest to
award business to AAR Allen. The undisputed facts
show that AAR Allen submitted two bids for avionic,
hydraulic, and pneumatic services without Trade
Finance’s involvement and without referring to Trade
Finance’s business model. Trade Finance has not demon-
strated that Northwest was disinclined to award work
to AAR Allen, nor has Trade Finance produced evidence
that it discussed the terms of the Northwest Contract
with Northwest. Had Trade Finance engaged in such
discussions, it should have had ample evidence of its
role in procuring the contract on AAR Allen’s behalf. To
the contrary, the record suggests that AAR Allen
realized it was not competitive for the Northwest
Contract using Trade Finance’s approach, and it chose
instead to reduce its prices to secure that business.
The parties’ Agreement required Trade Finance to do
more than merely contact or proposition Northwest, or
“facilitate” communication or a site visit. The picture
painted by the record is not one in which AAR Allen
took advantage of Trade Finance’s efforts on its behalf,
but one in which Trade Finance attempted to benefit
from a contract that AAR Allen secured on its own. In a
No. 08-2013 23
business arrangement so reliant on documentation, Trade
Finance left too many t’s uncrossed and i’s undotted. From
this record, no reasonable juror could find that Trade
Finance secured the Northwest Contract on AAR Allen’s
behalf.
B. Alternative Basis for Breach of Contract Claim
Trade Finance also argued below that AAR Allen
breached the Agreement by failing to complete an RFI
for the Northwest account. The district court found that
Trade Finance waived this claim by raising it for the
first time in its sur-reply during summary judgment
proceedings and that, regardless, the claim failed on the
merits because Trade Finance did not identify damages
resulting from the breach. Trade Finance challenges
both decisions.
First, the district court did not err by concluding that
Trade Finance waived this alternative basis for its
breach claims by raising it for the first time in its sur-reply
during summary judgment proceedings. See Grayson
v. O’Neill, 308 F.3d 808, 817 (7th Cir. 2002) (“[A] plaintiff
may not amend his complaint through arguments in
his brief in opposition to a motion for summary judg-
ment.” (quotations omitted)).
Trade Finance attempts to overcome waiver by
pointing to a single mention of AAR Allen’s refusal to
complete an RFI in the facts section of its complaint,
claiming that its allegation met our notice-pleading
requirements. See Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (citing Fed. R. Civ. P. 8(a)(2)). But Trade
24 No. 08-2013
Finance confuses a motion to dismiss and summary
judgment. Even if the reference to AAR Allen’s action
would have survived a motion to dismiss, Trade Finance
was required to present more than a mere allegation to
survive summary judgment—it must point to evidence
creating a genuine issue of material fact. See Burrell v. City
of Mattoon, 378 F.3d 642, 648 (7th Cir. 2004) (“[M]ere
allegations in the pleadings, unsupported by record
evidence, cannot create an issue of fact defeating
summary judgment.”). After lengthy discovery, raising
an alternative basis for its breach of contract claim in
its sur-reply was inadequate.
Second, and more importantly, even if Trade Finance
did not waive this claim, it fails on the merits for the
same reason that Trade Finance’s other breach claims fail.
Trade Finance is entitled to compensation only if it
“secured” the Northwest Contract. According to Trade
Finance, it treated Northwest as a Target Account, which
is precisely what a completed RFI would have formal-
ized. AAR Allen refused to pay Trade Finance because it
did not secure Northwest’s business, not because a formal
Target Account RFI was missing. Had Trade Finance
secured the contract, and AAR Allen’s sole basis for
refusing to pay was the lack of an RFI, then our analysis
might be different. But without securing the contract,
Trade Finance’s claims based on this theory must also fail.
C. Fraud Claim
In addition to its breach of contract claims, Trade Finance
alleged that AAR Allen engaged in fraud by falsely promis-
No. 08-2013 25
ing that it would complete an RFI identifying Northwest
as a Target Account. Trade Finance, relying on this prom-
ise, treated Northwest as a Target Account, even
without written confirmation, and continued to solicit
Northwest’s business. The district court granted sum-
mary judgment, and we agree that it was merited.
A plaintiff alleging fraud must prove by clear and
convincing evidence that (1) the defendant made a false
statement of material fact; (2) the defendant knew that
the statement was false; (3) the defendant intended that
the statement induce plaintiff to act; (4) the plaintiff
justifiably relied upon the statement’s truth; and (5) the
plaintiff suffered damages as a result of relying on the
statement. Davis v. G.N. Mortgage Corp., 396 F.3d 869, 881-
82 (7th Cir. 2005) (applying Illinois law); see also City of
New York v. Smokes-Spirits.com, Inc., 541 F.3d 425, 454 (2d
Cir. 2008) (applying New York law).1 0
Trade Finance’s fraud claim fails for a number of reasons.
First, promissory fraud, i.e., a false statement of intent
regarding future conduct rather than present or past
facts, “is generally not actionable under Illinois law
unless the plaintiff also proves that the act was a part of a
scheme to defraud.” Ass’n Benefit Servs., Inc. v. Caremark Rx,
Inc., 493 F.3d 841, 853 (7th Cir. 2007) (citing Bradley
10
Although the Agreement is governed by New York law, the
parties did not address the governing law for Trade Finance’s
fraud claims. The district court, however, noted that the
elements for a common law fraud claim are the same under
Illinois and New York law, and it held that summary judg-
ment was appropriate under the laws of either state.
26 No. 08-2013
Real Estate Trust v. Dolan Assocs. Ltd., 640 N.E.2d 9, 12-13
(Ill. App. Ct. 1994)). Similarly, under New York law,
“[t]hough misrepresentations of present or past fact have
the potential to create liability for the speaker, ‘[m]ere
unfulfilled promissory statements as to what will be done
in the future are not actionable.’ ” Matsumura v. Benihana
Nat’l Corp., 542 F. Supp. 2d 245, 253 (S.D.N.Y. 2008) (quot-
ing Brown v. Lockwood, 432 N.Y.S.2d 186, 194 (N.Y. App.
Div. 1980)). Trade Finance has not alleged, much less
proven, a scheme by AAR Allen to defraud it, nor has it
identified any misrepresentation apart from an unful-
filled promissory statement.
Second, Trade Finance has produced no evidence, other
than AAR Allen’s mere failure to complete a Target
Account RFI, that AAR Allen did not intend to fulfill its
promise at the time it executed the Agreement. Neither
Illinois nor New York law “allow[s] the plaintiffs to
proceed on a fraud claim when the evidence of intent
to defraud consists of nothing more than unfulfilled
promises and allegations made in hindsight.” Caremark Rx,
493 F.3d at 853 (applying Illinois law); see also Merrill
Lynch & Co. v. Allegheny Energy, Inc., 500 F.3d 171, 184
(2d Cir. 2007) (applying New York law and distinguishing
between a promissory statement of future conduct,
which gives rise only to a breach of contract claim, and a
misrepresentation of present fact collateral to the con-
tractual obligations, which permits a fraudulent induce-
ment claim); Grappo v. Alitalia Linee Aeree Italiane, S.p.A., 56
F.3d 427, 434 (2d Cir. 1995) (“A cause of action for
fraud does not generally lie where the plaintiff alleges
only that the defendant entered into a contract with no
intention of performing.”).
No. 08-2013 27
Trade Finance has alleged nothing more than an unful-
filled contractual promise and has not provided any
evidence that AAR Allen did not intend to perform its
obligations at the time it signed the Agreement. Its
fraud claim must fail.
D. Quantum Meruit
Last, to the extent that Trade Finance requests quantum
meruit recovery for the work it performed as a result of
AAR Allen’s allegedly fraudulent statements, this
dispute is fully governed by the parties’ contract. When
a contract governs the parties’ relations on a particular
issue, a party may not recover in quasi-contract for
events arising out of the same subject matter. Keck Garrett
& Assocs. v. Nextel Commc’ns, Inc., 517 F.3d 476, 487 (7th
Cir. 2008); see also Beth Isr. Med. Ctr. v. Horizon Blue Cross &
Blue Shield of N.J., Inc., 448 F.3d 573, 587 (2d Cir. 2006).
The Agreement, which fully governs the parties’ relation-
ship, expressly states that Trade Finance is entitled to
payment only if it secures an executed contract for AAR
Allen. It has not done so.
III. C ONCLUSION
The frequency of the phrase “even if” in our opinion is
indicative of the multiple leaps we would be required to
take to find in Trade Finance’s favor. The record, however,
does not provide us a platform from which to jump. Trade
Finance is not entitled to payment under its agreement
with AAR Allen because no reasonable juror could find
28 No. 08-2013
that it secured the Northwest Contract for AAR Allen.
Trade Finance’s additional claims fail as well, and
we A FFIRM .
7-16-09