448 F.Supp.3d 898
N.D. Ill.2019Background
- Allscripts (plaintiff) contracted with Etransmedia (defendant) as a reseller under a "Partner Agreement." They mediated disputes in New York in Sept. 2015 and signed a two-page "Term Sheet" listing proposed settlement terms.
- The Term Sheet addressed client transfers, payment, license returns, a two-year non-compete, and an MU 2014 implementation commitment, but said a comprehensive settlement agreement would be executed by October 1 and releases/indemnification issues would be addressed in that final agreement.
- The parties never signed the comprehensive settlement agreement. Allscripts nevertheless performed some acts (upgrading clients to MU 2014) after the Term Sheet.
- Etransmedia used a standard form requiring clients transferring data to agree that Allscripts could not host transferred data; at least one client signed such a form.
- Procedural posture: case removed to federal court, arbitration compelled and later dismissed, stay lifted, summary judgment motion by Etransmedia decided Dec. 24, 2019. The court granted summary judgment on some claims and denied it on others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Term Sheet is an enforceable contract (breach of Term Sheet) | Term Sheet contained material terms and therefore is binding absent an express "subject to" condition | Term Sheet was a preliminary, nonbinding document that left essential terms (payments, releases, indemnities) for a later comprehensive agreement | Term Sheet is not a binding contract; summary judgment for defendant on breach-of-Term-Sheet claim |
| Whether parties' conduct created an implied contract / unjust enrichment (part performance) | Allscripts partially performed (MU 2014 upgrades) and thus an implied contract or recovery for unjust enrichment is available | (Responded mainly by denying sufficiency; did not press a legal sufficiency challenge at summary judgment) | Trial issues remain: summary judgment denied as to implied contract and unjust enrichment based on Allscripts' evidence of performance and damages evidence |
| Whether Etransmedia tortiously interfered with Allscripts' prospective economic advantage and engaged in unfair/deceptive practices | Etransmedia's client form barred Allscripts from hosting transferred data, interfering with relationships and injuring Allscripts | Etransmedia argued Allscripts produced no evidence on liability or damages (largely undeveloped) | Summary judgment denied as to tortious interference and unfair/deceptive trade practices; factual disputes remain for trial |
| Defamation and declaratory judgment claims | (Allscripts did not develop argument in opposition) | Etransmedia argued Allscripts produced no evidence of defamatory false statements | Summary judgment granted to Etransmedia on defamation and declaratory judgment claims (Allscripts forfeited response) |
Key Cases Cited
- Ocean Atl. Dev. Corp. v. Aurora Christian Sch., 322 F.3d 983 (7th Cir. 2003) (factors and analysis for when a preliminary writing is binding vs. subject to a later agreement)
- Citadel Grp. Ltd. v. Wash. Reg'l Med. Ctr., 692 F.3d 580 (7th Cir. 2012) (preliminary promises can be enforceable but courts examine intent to be bound)
- Abbott Labs. v. Alpha Therapeutic Corp., 164 F.3d 385 (7th Cir. 1999) (release terms are often material in settlement agreements)
- Mays v. Trump Ind., Inc., 255 F.3d 351 (7th Cir. 2001) (indefiniteness of material terms defeats formation)
- Quake Constr., Inc. v. Am. Airlines, Inc., 565 N.E.2d 990 (Ill. 1990) (consider whether agreement contains many or few details and transaction complexity)
- Marcatante v. City of Chicago, 657 F.3d 433 (7th Cir. 2011) (conduct can create an implied contract under Illinois law)
- Ali v. Shaw, 481 F.3d 942 (7th Cir. 2007) (elements of tortious interference with prospective economic advantage under Illinois law)
- Batson v. Live Nation Entm't, Inc., 746 F.3d 827 (7th Cir. 2014) (scope of Illinois Consumer Fraud Act/unfair practices analysis)
- Wilson v. Wilson, 46 F.3d 660 (7th Cir. 1995) (enforcement of oral settlement agreements where intent to be bound is established)
- Doe v. Columbia Coll. Chicago, 933 F.3d 849 (7th Cir. 2019) (standard for breach-of-contract elements)