Dist. Ct. did not err in entering $3,026,361.60 judgment in favor of plaintiff in action alleging that defendant breached contract to manage plaintiff’s corporate re-branding program that called for replacement of signage at plaintiff’s location, as well as locations of plaintiff’s dealers, where vinyl used in new signs proved to be defective, and where third-party used by defendant to replace original signs eventually reneged on its commitment to replace its own defective signs. Dist. Ct. had jurisdiction to resolve instant contract dispute between instant diverse parties, even though 16 of 260 dealer claims acquired by plaintiff came from dealers who shared their citizenship with defendant, and even though defendant argued that said assigned claims amounted to improper collusion under 28 USC section 1359 to have Dist. Ct. acquire diversity jurisdiction over instant lawsuit. Plaintiff had its own contractual claims against defendant, which constituted main thrust of instant lawsuit, and vast majority of assigned claims came from dealers who did not share their citizenship with either plaintiff or defendant. Also, record supported Dist. Ct.’s finding that defendant had breached instant contract where defendant had failed to either document any warranty given by third-party, as required by contract, or to negotiate best possible warranty, where record reflected that defendant made no effort to negotiate more favorable warranty. Dist. Ct. could also find that defendant’s failure to control third-party’s manufacturing process that produced defective signs constituted breach of party’s contract.
Federal 7th Circuit Court
Civil Court
Contracts