Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in dismissing on lack of standing grounds plaintiff-subcontractor's lawsuit alleging that it was entitled to proceeds of certain subdivision bonds issued by defendant in favor of City of Yorkville, where plaintiff had performed services with respect to improvements to subdivision required by local ordinance. While general contractor never paid plaintiff for work performed on subdivision, plaintiff could not seek recovery from said bonds where instant bonds did not contain language suggesting that surety's obligation to pay ran to unnamed third-parties for labor or materials.

Dist. Ct. did not err in granting plaintiff’s motion for summary judgment in action alleging that defendant breached contract calling for its payment for natural gas supplied by plaintiff. Ct. rejected defendant’s claims that plaintiff failed to establish damages through use of expert witness who examined invoices submitted by plaintiff, or that plaintiff improperly manipulated marketplace so as to affect price of natural gas in defendant’s market area. Moreover, Ct. rejected defendant's counterclaims, alleging that plaintiff breached oral agreements to offer natural gas at special price, to offer natural gas at fixed prices and to not charge defendant interest where defendant had failed to produce evidence establishing existence of mutual assent as to essential terms of any alleged oral agreement. Fact that plaintiff had failed to include interest charges in prior bills did not require different result where plaintiff at some point resumed practice of including said charges.

Dist. Ct. did not err in dismissing plaintiff's action alleging breach of contract or quantum meruit theory arising out of agreement in which plaintiff was to provide certain support services to defendant seeking to obtain contract to supply New York City with street furniture containing advertisements. Record showed that defendant had paid plaintiff amount called for in agreement, and while plaintiff performed tasks outside of contract in attempt to have defendant reconsider termination of subsequent contract it had no legal right to either greater payment under existing contract or to any payment under terminated contract. Ct. rejected plaintiff's argument that it was entitled to portion of additional two million proposed settlement that was never consummated and also found that plaintiff could not seek quantum meruit remedy to either increase contract price on existing contract or to obtain recovery for volunteered services done with respect to terminated contract, especially where plaintiff failed to show that said termination violated any term of said contract.

Bankruptcy Ct. did not err in denying motion by owners of debtor-corporation to set aside prior grant of bankruptcy petition and sale of golf course on claim that former shareholder in corporation had committed fraud when signing bankruptcy petition involving corporation and forcing emergency sale of golf course. Instant motion was untimely as: (1) it was filed more than one year after entry of order approving bankruptcy petition and sale of golf course; and (2) alleged fraud (i.e. perjury by witness) did not meet definition of "fraud on the court", so as to constitute exception to one-year rule. Fact that alleged fraud involving accusation of perjury committed by attorney did not require different result where attorney was not acting in role of attorney at time of alleged perjury.

Dist. Ct. erred in granting defendant's motion for summary judgment in action to recover $200,000 "break-up" fee under contract where plaintiff alleged that defendant acted in bad faith in terminating negotiations for sale of defendant's business prior to end of exclusive negotiating period set forth in parties' agreement. While defendant continued to negotiate beyond deadline set forth in agreement for consummating sale of business, entry of summary judgment was not proper where record also contained evidence from defendant's owner indicating that he did not want to go through with proposed sale, as well as owner's insistence on additional demands designed to preclude any possibility of closing proposed sale.

Bankruptcy Ct. did not err in granting debtor's motion to enforce automatic stay and to hold creditor-utility company in contempt for attempting (while stay was in force) to collect on $1.3 million in unpaid utility bills by sending delinquency notices and reporting delinquencies to City as part of first steps to obtain lien on debtor's property. Automatic stay provisions generally prohibit acts to either create liens or collect on claim during bankruptcy proceedings, and creditor's actions did not fall within any exception to stay provisions under section 546(b) of Bankruptcy Code. Moreover, Ct. found that creditor had not acquired any pre-petition interest in debtor's property by merely sending debtor utility bills and providing utility services, and that creditor's action in sending utility bill was not sufficiently akin to generating tax assessment or creating tax lien so as to qualify as exception to stay provisions.

Dist. Ct. did not err in granting defendant's motion for summary judgment in common law fraud action alleging that defendant made misrepresentations during negotiations that led plaintiff to contract for sale of infant formula with third-party Chinese entity (which in turn was purchasing said formula on behalf of fourth-party), where Dist. Ct. found that plaintiff's lawsuit was barred under Wisc. law by economic-loss doctrine. Plaintiff cannot sue in tort where plaintiff has contract with defendant and where contract law provides adequate remedy for type of injury alleged, and record otherwise showed that plaintiff unilaterally sent formula to third-party that was different than what was in contract. Moreover, even if defendant had made fraudulent misrepresentation as to whether fourth-party would accept shipment of proper formula, plaintiff had failed to negotiate contract that would have included steps to protect itself against range of risks of nonpayment from third-party.