Home   Federal Cases   State Cases   News   Search   Cart   Log In 
 
Search 591,344 Cases and Articles on TJV!
 
Federal Case Categories







VLM Food Trading International, Inc. v Illinois Trading Company

Case No. 13-1799 (C.A. 7, Apr. 10, 2014)

VLM Food Trading International, Inc., is a Canadian agricultural supplier. Illinois Trading Company, a reseller of agricultural produce, bought frozen potatoes from VLM but encountered financial difficulty and did not pay for them. VLM sued Illinois Trading, its president, and another entity in a position to control the company (collectively, “Illinois Trading”) for the outstanding balance—about $184,000—owed on the contract. The complaint alleged four counts, two of which were based on the Perishable Agricultural Commodities Act (“PACA”), a depression-era law that creates a statutory trust in favor of the seller when a buyer purchases agricultural goods on short-term credit. 7 U.S.C. § 499e(c)(2). To protect the assets of the statutory trust, VLM also moved for a preliminary injunction. See id. § 499e(c)(5).

Illinois Trading had tried to stem its financial troubles by obtaining loans from the Transportation Alliance Bank (“TAB Bank”), giving the bank a security interest in its assets. By the time VLM brought its lawsuit, TAB Bank had already seized all of Illinois Trading’s assets. But the PACA-created trust made VLM’s claim superior to the bank’s security interest. See Patterson Frozen Foods, Inc. v. Crown Foods Int’l, Inc., 307 F.3d 666, 669 (7th Cir. 2002). VLM amended its complaint to add a fifth claim—against TAB Bank—for seizing and converting PACA trust assets.

Prior to this amendment, however, VLM had moved for a consolidation of the preliminary-injunction hearing with a trial on the merits. The district court granted the motion. Everyone understood that the consolidated injunction and merits hearing pertained only to Counts I through IV—the claims by VLM against Illinois Trading—and not Count V, which pertained to the bank. When the district court issued its opinion, however, it not only resolved Counts I through IV, it also entered judgment for TAB Bank on Count V, holding that VLM failed to present any evidence on that claim. VLM appeals the judgment on Count V, arguing that it had insufficient notice that the court would treat the consolidated preliminary-injunction/ merits hearing as a final hearing on that claim. We agree and reverse with respect to Count V.
 

 

Judge(s): Diane Sykes
Jurisdiction: U.S. Court of Appeals, Seventh Circuit
Related Categories: Civil Procedure , Civil Remedies , Communications , Constitutional Law , Contracts , International , Maritime , Transportation
 
Circuit Court Judge(s)
William Bauer
Daniel Manion
Diane Sykes

 
Trial Court Judge(s)
Harry Leinenweber

 

CUSTOM EMAIL ALERTS!

With your FREE registration, you can select an unlimited number of Alert categories for daily, weekly or monthly deliveries of the Federal and State Cases most relevant
to you!

Click Here to sign up.

 



Click the maroon box above for a formatted PDF of the decision.
i. background tab bank seized the opportunity to secure the advantage a canadian business, the controlling law is the united nations d/b/a tab bank, a purported acceptance become a part of the contract, see mercial code.” chi. prime packers, inc. v. northam food trading, sale of goods, april 11, 1980, s. treaty doc. no. 98-9 (1983), entity in a position to control the company (collectively, article 19 of the convention reads in its entirety:3 defendant/cross-appellee. the judge granted the default judgment and rescheduled the different from those of the uniform commercial code. the tion art. 19(1), (2). if the contracts were formed before illinois its motion, tab bank stated that there was near montreal, including its performance of the contract with court to consolidate the injunction hearing with a trial on the district court applied illinois law and found that the invoice nos. 13-1799 & 13-1697 5 mirror-image rule and listing cases holding the same); see also obtaining loans from the transportation alliance bank (“tab (continued...) hearing because it would be narrowly focused on the attor- nos. 13-1799 & 13-1697 and uniform commercial code are the same. e.g., chi. prime convention’s battle-of-the-forms provision, article 19, is application to this case. code] and the [convention] are the same or similar,” id., the a. count v hearing. vlm’s lawyer did not object, but requested that the illinois trading had tried to stem its financial troubles by and awarding attorney’s fees and interest. surprisingly, waukesha foundry, inc. v. indus. eng’g, inc., 91 f.3d 1002, 1007 (7th cir. with a trial on the merits, though he did not at this time remind count v. considered to alter the terms of the offer materially. in its motion for continuance and limiting the judgment for tab bank on count v, holding that vlm failed hearing. pughsley v. 3750 lake shore drive coop. bldg., 463 f.2d evidence. after the hearing the district court set a deadline for and those that arrive after a separate written acceptance and performance. default judgment with respect to illinois trading’s president parties’ contract. complicating this question is a choice-of-law with a shipment of goods or are the only written confirmation of a contract v. based on a paca statutory trust arising from vlm’s shipment cally denied. of the contract. we hold that the convention controls and withdrew, so the court againrescheduledthe hearing, this time interestprovisionsare not materialandthusbecame part of the the whole point of the motion. we fully expected illinois law, the district court held that the attorney’s fees and 12 nos. 13-1799 & 13-1697 provisions,see convention art. 19(3) (“[t]ermsrelating, among under the uniform commercial code. the relevant code closest relationship to the contract and its performance.” as any ruling made on counts i[] and iv would be we’ve noted, it’s undisputed that vlm conducts most of its judgment on count v, and illinois trading’s cross-appeal magellan int’l corp. v. salzgitter handel gmbh, 76 f. supp. 2d would be decided later. the continuance was denied and the nos. 13-1799 & 13-1697 3 inadequate notice for a trial in this matter, that for a temporary restraining order and preliminary injunction the obee family partnership, and butonly whethercertainattorney’sfeesandinterestprovisions shipped the produce and thereafter sent invoices containing counter-offer.” id. art. 19(1); see roser techs., inc. v. carl would be binding on the bank. the judge said he didn’t know and consolidated with a hearing on the merits as to the [illinois ship to the performance of vlm’s contracts with illinois and the dispute over attorney’s fees and interest. applied illinois law, it did not address the convention’s trading. accordingly, vlm’s place of business is clearly repeatedly communicated that he understood the february 19 posthearing briefing. and would[] in effect become the rule of law of available at https://treaties.un.org/doc/publication/unts/volume%201489/1 on count v either during the february 19 hearing or in the the narrow hearing next week. then we can just leave the bank (...continued)2 in vlm’s invoices. illinois trading cross-appeals on this issue, unwittingly bestowed on it by the court. opposing vlm’s 504–06 (2008); hauenstein v. lynham, 100 u.s. 483, 490 (1880) of illinois trading’s assets. but the paca-created trust made count v because vlm “failed to present any evidence or either way. rights in defending count v would be severely prejudiced” explicitly covers additional terms in an acceptance or written confirmation, vlm filed its complaint against illinois trading on trading would prejudice its ability to defend itself against parties’ contract. illinois trading argues that because vlm is lawrence n. oberman, on unpaid invoices. two of the claims (counts i and iv) were vlm but encountered financial difficulty and did not pay for october 10, 2012, stating four separate claims for money owed injunction/merits hearing as a final hearing on that claim. we “mirror image” rule: “a reply to an offer which purports to be was necessary. the [c]ourt denied this motion at as “a self-executing [treaty] between the united states and review to a mixed question of law and fact under the hague an entry of default judgment. tab bank objected because it request, there were three defendants.so that was preliminary-injunction hearing for february 19. the judge additional terms in a written confirmation, but only those in “a and would rule on the matter later, but that the hearing on the of the offer materially.”). arguing that these provisions never became a part of the hearing for october 25. on october 22 vlm amended its so the choice-of-law question is significant here, unlike trading received vlm’s invoices—possibly via illinois at the beginning of the hearing on february 19, the district the “international analogue to article 2 of the uniform com- merits. see fed. r. civ. p. 65(a)(2). the court granted a tempo- only and declined to postpone the february 19 date for the alleged in counts i and iv, but tab bank disputes the validity february 19. indeed, vlm’s consolidation request was made error. actually, neither the facts nor the law are in dispute; the business are in different states.” convention art. 1(1). “[i]f a reversed and remanded. co., 408 f.3d 894, 898 (7th cir. 2005).2 although “[m]any provisions of the [uniform commercial related to the bank would be resolved separately at a later convention on contracts for the international sale of goods, to present any evidence on that claim. vlm appeals the counts,twoof whichwere basedontheperishableagricultural united nations convention on contracts for the international a preliminary injunction. see id. § 499e(c)(5). fifth claim—against tab bank—for seizing and converting attorney asked the judge to clarify whether the judgment bank”), giving the bank a security interest in its assets. by the our conclusion on the choice-of-law question requires a 1996)). we do not need to address this issue because we find that the hearing proceeded on counts i through iv, while count v hearing to be limited to the claims against illinois trading only, feared that a final resolution of counts i and iv against illinois proposedmodificationsto the contracts and article 19 may not amend the judgment, the judge could have corrected his nos. 13-1799 & 13-1697 13 plaint, and discussed, at length, count v of the agree, opposed that motion, and it was denied february 12,during a hearing on this motion, illinois trading’s for the northern district of illinois, eastern division. nos. 13-1799 & 13-1697 11 illinois trading’s cross-appeal concerns the question of potatoes to illinois trading. the following day vlm moved iv and that count v would be heard at a later time: count v against the bank. tab bank itself presented no tab bank been forthright in response to vlm’s motion to judgment on count v, arguing that it had insufficient notice as much a part of the law of every state as its own local laws of n.j., inc. v. u.s. merchs. fin. grp., inc., 741 f. supp. 2d 651, 677–80 (d.n.j. remand for further proceedings. because the district court posthearing briefs. both vlm and illinois trading filed briefs therefore reverse and remand for further proceedings. applies, u.s.const. art. vi, cl. 2; medellin v. texas, 552 u.s. 491, hearing be limited to counts ii and iii. the bank again ex- district judge responded by saying that he didn’t know what acceptance but contains additions, limitations or other 1993) (refusing to decide whether the convention or texas law an acceptance but contains additions, limitations or other that would appear to cover attorney’s fees and interest and neither the district court nor tab bank disagreed. in fact, the limitations and the [c]ourt was very clear in plained that it planned to contest the validity of vlm’s paca tance or confirmation of a contract between merchants become on appeal tab bank continues to mischaracterize the 2005) (citing echo, inc. v. whitson co., 121 f.3d 1099, 1103–04 (7th cir. 1997)). (2) however, a reply to an offer which purports to be undue delay, objects orally to the discrepancy or a part of the contract unless one of three exceptions applies. agricultural goods on short-term credit. 7 u.s.c. § 499e(c)(2). before bauer, manion, and sykes, circuit judges. and converting assets subject to a paca trust (count v). illinois trading company, 919, 925 (n.d. ill. 1999) (holding the same); filanto, s.p.a. v. license and reiterated its fears about preclusion. the contents count v. count v depends on the existence of the paca trust an acceptance but contains additional or different terms but most involve constitutional questions. see id. but see koch paca trust assets. had asked the court to limit the hearing to counts ii and iii and other things, to the … extent of one party’s liability to the other to contracts of sale of goods between parties whose places of ney’s fees and interest provisions. the judge vacated the binding upon tab bank[,] and any finding of just to make it very clear, what is not pointed out responded to the complaint by january 15, so vlm requested transportation alliance bank, inc., patterson frozen foods, inc. v. crown foods int’l, inc., 307 f.3d trading’s request. at some point illinois trading’s counsel things, to the price, payment, quality and quantity of the mischaracterization continued: the only exception relevant to this case excludes terms that controlledbecausetheparol-evidencerule appliedeither way). as alegal conclusion subject to denovoreview;vlm character- by the [c]ourt. now, vlm food trading is claim involving the bank—was not consolidated and heard on understood that the hearing would address counts i through acceptance or is necessary to satisfy the statute of frauds. see rocheux int’l testimony” and“ha[d]not presentedanyargumentsregarding judgment in favor of vlm on all claims against illinois trading illinois trading also argues that even if illinois law controls, u.c.c.2 invoices should be treated as proposed modifications. although § 2-207 paca rights would be prejudicial to tab bank rary restraining order and scheduled a preliminary-injunction ness is that which has the closest relationship to the contract that’s for another day. it’s not part of this case, so let’s 2010) (listing cases). these courts distinguish between invoices that arrive asking this court to enter an order limiting the the terms of the contract are the terms of the offer with the interest on the unpaid balance based on contractual provisions 6 nos. 13-1799 & 13-1697 reserves its rights to litigate all issues in dispute.” our default standard of review for such “mixed” questions of izes it as a factual finding, which we review only for clear and that vlm was “seeking a judgment on all counts against amended complaint, and what vlm food trading (3) additional or different terms relating, among other section—u.c.c. § 2-207, enacted in illinois at 810 ill. comp. the relevant provisions in the convention are materially mistake, and this issue would not have needed an appeal. we few remaining issues on counts i through iv, but nothing on 666, 669 (7th cir. 2002). vlm amended its complaint to add a challenges the award of attorney’s fees and interest on vlm’s precluded from objecting to that determination proceedings. in the lead-up to the hearing, vlm’s lawyer applies to that determination. illinois trading characterizes it allow the company to maintain a paca license. the district limiting the trial. vlm food trading would not here is that we filed a motion, a motion to limit the parties disagree about the standard of review that court concluded that it was the united states. remaining issues between vlm and illinois trading would go the court: and it was denied. liability to the other or the settlement of disputes are and constitution.”).by its own terms, the convention “applies volume-1489-i-25567-english.pdf. no. 12 c 8154 — harry d. leinenweber, judge. appeals from the united states district court a single office in new jersey that appears to exist primarily to many cases in which the relevant provisions of the convention in vlm’s invoices became a part of the contract. on count v would be addressed at a later stage in the litigation. count v because the scope of the hearing had been limited to scope of the trial, even though it argued against a reseller of agricultural produce, bought frozen potatoes from e.g., enpro sys., ltd. v. namasco corp., 382 f. supp. 2d 874, 882–84 (s.d. tex. court denied tab bank’s continuance motion. the bank’s even apply. second, article 19 defaults to the old common-law plaintiff-appellee/cross-appellant, a statutory trust in favor of the seller when a buyer purchases effect a default judgment would have on the bank, but that is a canadian agricultural supplier. illinois trading company, the bank. when the district court issued its opinion, however, commodities act (“paca”), a depression-era law that creates mischaracterized the motion for a continuance: and its performance … .” id. art. 10(a). contracting parties can modifications is a rejection of the offer and constitutes a [the illinois trading] [d]efendants.” contract. the basic facts about the parties’ course of conduct granted the request, he explicitly stated that the claim against tab bank was not included in the scope of the consolidated agree and reverse with respect to count v. forward. with respect to the bank’s argument about the dispatches a notice to that effect. if he does not so object, dants at the time we filed that motion, but when for the seventh circuit then the attorney’s fees and interest provisions would be nos. 13-1799 & 13-1697 9 fact relating to vlm food trading’s alleged (w.d. pa. sept. 10, 2013) (holding that article 19 embodies the court “keep all three [illinois trading] defendants together for tab bankrequested acontinuance ofthe trial illinois trading neither retained new counsel nor the court: well, it definitely was dis- prior to this amendment, however, vlm had moved for a proceed.” v. koch, 450 f.3d 703, 710 (7th cir. 2006) (applying de novo of the continuance motion make it clear that the bank’s counsel which do not materially alter the terms of the offer schreiber gmbh, no. 11cv302 erie, 2013 wl 4852314, at *3–5 be resolved to finality in a consolidated preliminary-injunction over the next few months, the district court repeatedly consolidation request, specifying that the hearing “shall be sykes, circuit judge. vlm food trading international, inc., preclusive effect on count v, which everyone understood convention, rather than illinois law, controls. vacate the entry of default. it did not dispute the amount owed 4 nos. 13-1799 & 13-1697 modifications contained in the acceptance. the invoices on receipt for its first nine transactions with vlm, iv were resolved, it would be precluded from defending on whether certain attorney’s fees and interest provisions in constitutes an acceptance, unless the offeror, without trading did not. the sole question, then, is whether vlm’s united states court of appeals convention art. 19(2), but defines “materiality” in a broad way kind of off on its own.” consolidationof the preliminary-injunction hearing with atrial to january 15, 2013. in the same order, the court granted vlm’s invoices. on february 15 tab bank filed a motion for a continuance matter was proceeding on a trial on the merits. nos. 13-1799 & 13-1697 7 reply to an offer which purports to be an acceptance.” conven- court specifically reserved the latter “for another day.” had its initial ruling on february 19, 2013 that this chilewich int’l corp., 789 f. supp. 1229, 1238 (s.d.n.y. 1992) produce tobeshipped.vlm responded to eachpurchase order its claims against illinois trading and did not include its claim [vlm’s lawyer]: well, at the time i made that ately moved to alter or amend the judgment with respect to following the hearing, the record is clear that count v—the the case, and in essence tab bank would be significantly different from § 2-207. first, it does not address3 denied. [sic] place of business, the place of business is that which has the law and fact is clear error. see thomas v. gen. motors acceptance the district court treated this as a “battle of the forms” denial of its february 15 motion for a continuance. but the of this matter or, in the alternative, an order $184,000—owed on the contract. the complaint alleged four motion to amend the judgment. § 2-207 does not apply because vlm accepted its offers (purchase orders) reiterated that the injunction proceedings were consolidated pertained only to counts i through iv—the claims by vlm time. no party presented any evidence or made any argument there was later-added parties and later-added vlm food trading’s request, and should be [tab bank’s lawyer]: in fact, your honor, at a hearing on vlm’s motion to amend the judgment, the trading] [d]efendants only and not the bank. the bank cussed at the time of the hearing that it was a remained in the background, reserved “for another day.” the are undisputed. illinois trading sent purchase orders specify- standard of review because our decision would be the same some courts have held that it only applies to a confirmation that acts as an (“[t]he constitution, laws, and treaties of the united states are b. attorney’s fees and interest provisions goods, place and time of delivery, extent of one party’s we require “clear and unambiguous notice” that a claim will provisionsregardingattorney’sfeesandinterestbecame apart canada, and the convention controls. dispute: illinois trading argues that the controlling law is the stat. § 5/2-207—provides that additional terms in an accep- nos. 13-1799 & 13-1697 15 counter-offer. business in canada, and the new jersey office had no relation- via the email confirmations and that the additional terms on subsequent but failed to pay the next nine invoices, generating this lawsuit time vlm brought itslawsuit, tab bank had already seized all that a continuance of the or limitation of the trial injunction/merits hearing was final with respect to count v. the outset of the trial. packers, 408 f.3d at 898; beijing metals & minerals imp./exp. these representations were misleading because tab bank 8 nos. 13-1799 & 13-1697 understood that the consolidatedinjunctionandmeritshearing defendants-appellants/cross-appellees, this basis when the court addressed the merits of count v. the vlm food trading international, contra monarch nutritional labs., inc. v. maximum human performance, inc., at a later date based on the theory of res judicata. opt out of the convention, see id. art. 6, but vlm and illinois district court’s mistake, placing great weight on the court’s the attorney’sfeesandinterestprovisions.illinoistradingpaid new lawyer also requested an extension to get up to speed. in (emphases added.) of vlm’s paca license. tab bank feared that if counts i and the trial to not have evidence on count [v]. that in the must prove in order to prevail on that count. in parties disagree about the application of the law to the facts, and 1055, 1057 (7th cir. 1972). although the district court resolved rather than acknowledging the district court’s mistake, corp. v. am. bus. ctr., inc., 993 f.2d 1178, 1182 n.9 (5th cir. record for favorable quotes while conveniently ignoring the materially alter the contract. u.c.c. § 2-207(2)(b). applying claims, that wasn’t part of the motion. everyone that the consolidation concerned only the claims against illinois trading—and not count v, which pertained to motion to amend the judgment, the bank’s lawyers grossly focusing solely on counts i through iv. tab bank did not argued november 7, 2013 — decided april 10, 2014 “illinois trading”) for the outstanding balance—about inc., court thought that the new jersey office sufficed to make to protect the trust assets. at the same time, vlm asked the on the merits. the district court granted the motion. everyone party has more than one place of business, the place of busi- trading’s purchase orders and vlm’s email confirmations— which included count v of the amended com- the district court also awarded vlm its attorney’s fees and was heard. it not only resolved counts i through iv, it also entered illinois’s version of the uniform commercial code controls. trial, tab bank outlined the causes of action, distinction between counts i through iv and count v; the motion was filed on a friday, and that motion vlm’s invoices became an enforceable part of the parties’ 408 f.3d at 897, the convention supersedes state law when it against illinois trading, not the claim involving the bank. them. vlm sued illinois trading, its president, and another that the court would treat the consolidated preliminary- (same). article 19 provides that nonmaterial additional terms in on several occasions the judge assured the parties that issues [tab bank’s lawyer]: and that was specifi- on march 5 the district court issued an order entering final bank misrepresents the judge’s ruling, cherry-picking the vlm’s claim superior to the bank’s security interest. see modifications is a rejection of the offer and constitutes a corp., 288 f.3d 305, 307–08 (7th cir. 2002). there are exceptions, convention on the civil aspects of international child tab bank’s liability in its post-hearing brief.” vlm immedi- most of vlm’s businessisconducted from its headquarters (1) a reply to an offer which purports to be an 14 nos. 13-1799 & 13-1697 illinois trading. vlm’s only connection to the united states is of the february 19 hearing, or in the alternative, asked that the this appeal is limited to two issues. vlm challenges the other signatories, including canada,” chi. prime packers, 16 nos. 13-1799 & 13-1697 legitimacy of the paca license, the judge said: “anyway, place of business is canada or the united states. the district to protect the assets of the statutory trust, vlm also moved for however, the court also found in favor of tab bank on ii. discussion no. 2:03cv474tc, 2005 wl 1683734, at *5 (c.d. utah july 18, 2005) (citing submit a brief. illinois trading finally got a new lawyer and moved to have no trouble reversing the judgment with respect to 1489 u.n.t.s. 3 (“the convention”), while vlm argues that1 (emphases added.) the motion also stated that “tab bank’s vlmandillinoistrading presented evidence regarding the postpone a hearing on counts i and iv because of the possible it to be a final day in court as to the three defen- abduction). we don’t need to resolve the dispute about the there had been no discovery, and as a result, felt 10 nos. 13-1799 & 13-1697 before count v was added to the complaint. when the judge ing the item, quantity, price, and place of delivery of the against the bank. with an email confirming the terms of the order. vlm then the parties dispute whether the consolidated preliminary- bank’s subterfuge worked. the district court denied vlm’s or the settlement of disputes are considered to alter the terms hearing on the merits. response vlm’s lawyer proposed going forward with the all claims between vlm and illinois trading on the merits 2 nos. 13-1799 & 13-1697 complaint, adding a fifth claim against tab bank for seizing vlm’s place of business the united states. but article 10(a) of postponed the preliminary-injunction hearing at illinois the convention provides that “if a party has more than one


All Content © 2007-2012 The Judicial View, L.L.C. All Right Reserved.
About The Judicial View ®  | Privacy Policy   |  Terms of Use   |  Contact Us  |  Advertise