Dist. Ct. erred in granting defendants’ motion for summary judgment in action by plaintiff-buyer of business owned by defendants seeking $2 million held in escrow fund created by instant sale of business to resolve disputes relating to purchase of business. Record showed that plaintiff spent over $1 million to compensate each of its current customers of business for alleged improper billing practices of defendants, as well as several hundred thousand dollars spent in investigating said practices. Dist. Ct. held that plaintiffs had failed to meet strict 10-day deadline for claiming indemnification from escrow account. However, Ct. of Appeals, in reversing Dist. Ct., found that issue of whether plaintiff’s demand for indemnification came within 10-day limitations period could not be resolved via summary judgment motion. Moreover, record otherwise demonstrated that, even if plaintiff was late in making instant demand, defendants could not use said fact to defeat instant indemnification claim, since undisputed facts showed that defendants did not irrevocably forfeit any rights or defenses to underlying disputes at issue in indemnification claim by reason of timing of plaintiff’s demand, as required by language in purchase agreement.
Federal 7th Circuit Court
Civil Court
Contracts