Performance Food Group v. ARBA Care Center of Bloomington, LLC
86 N.E.3d 1042
Ill. App. Ct.2017Background
- Performance Food Group (plaintiff) sold food on open account to seven ASTA nursing‑home LLCs; ASTA ran into financial trouble and operations for four facilities were transferred to newly formed ARBA LLCs controlled by the same principal (Michael Gillman).
- Plaintiff learned of the change, opened accounts for the ARBA entities, and transferred the ASTA account balances to corresponding ARBA accounts; ARBA was required to pay COD near the end but failed to satisfy outstanding balances.
- ASTA Ford County, ASTA Pontiac, and ASTA Rockford later filed for bankruptcy; ARBA entities did not file for bankruptcy.
- Plaintiff sued the ARBA and ASTA entities for breach of contract and moved for summary judgment against the four ARBA defendants; plaintiff attached customer account applications, operations transfer agreements, Gillman’s deposition, and an affidavit from its credit manager (Spear).
- Defendants answered admitting contracts/deliveries but raised three bare affirmative defenses (bankruptcy, payment, unjust enrichment) and opposed summary judgment arguing factual disputes (successor/alter‑ego status, accounting/application of payments) and that the automatic bankruptcy stay barred recovery.
- The trial court granted summary judgment for plaintiff against the four ARBA entities (principal balances, interest, costs, attorney fees); the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Initial burden of production / entitlement to summary judgment | Plaintiff had written account contracts, proved delivery and amounts via Spear affidavit and Gillman deposition; thus met initial burden and defendants produced no admissible contrary evidence | Genuine issues remained about successor/alter‑ego status, liability for ASTA debts, and the amounts/payments; Spear affidavit insufficient without invoices | Affirmed: plaintiff met its initial burden; defendants failed to present admissible contradictory evidence; objections to affidavit were forfeited for not being raised below |
| Effect of ASTA bankruptcies / automatic bankruptcy stay | The stay protects only debtors; ARBA did not file bankruptcy so the stay does not automatically bar plaintiff’s suit against ARBA | Plaintiff’s claim sought to collect ASTA debts through ARBA (alter‑ego theory), so the automatic stay should apply to prevent end‑running bankruptcy | Affirmed: automatic stay does not apply to nondebtor ARBA absent a federal injunction or ARBA’s own bankruptcy filing; state court may decide scope of stay absent bankruptcy court order |
| Unjust enrichment / application of payments to ASTA debts | Plaintiff legitimately sold and delivered goods and was entitled to recover under contract terms (including interest and fees) | Granting judgment would unjustly enrich plaintiff at the expense of the bankruptcy estate because payments were applied to ASTA debts in bankruptcy | Rejected: defendants inadequately pleaded unjust enrichment (forfeited) and factual circumstances did not support unjust enrichment relief |
| Sufficiency of affirmative defenses | Plaintiff: defenses were conclusory and lacked factual support so were forfeited | Defendants: raised bankruptcy, payment, unjust enrichment defenses | Affirmed: affirmative defenses inadequately pled and therefore forfeited; plaintiff had no duty to negate them |
Key Cases Cited
- Adams v. Northern Illinois Gas Co., 211 Ill. 2d 32 (Ill. 2004) (summary judgment standard; de novo review)
- Purtill v. Hess, 111 Ill. 2d 229 (Ill. 1986) (unchallenged affidavit statements taken as true on summary judgment when not contradicted)
- Cordeck Sales, Inc. v. Construction Systems, Inc., 382 Ill. App. 3d 334 (Ill. App. Ct. 2008) (objections to summary judgment affidavits must be raised below or are forfeited)
- Kaufman & Broad Homes, Inc. v. Allied Homes, Inc., 86 Ill. App. 3d 498 (Ill. App. Ct. 1980) (affirmative defenses must plainly set forth facts)
- People ex rel. Hartigan v. E&E Hauling, Inc., 153 Ill. 2d 473 (Ill. 1992) (elements and limitations of unjust enrichment recovery)