Tabfg, LLC v. Richard Pfeil
746 F.3d 820
7th Cir.2014Background
- TABFG and NT Prop formed a joint venture in April 2003: TABFG provided trading expertise (three trader-members: Fishkin, Chernomzav, Spellman); NT Prop (funded largely by Pfeil via Pfeil Commodities) provided capital.
- The Traders had restrictive-covenant disputes with former employer SIG; SIG obtained a 9‑month injunction that effectively ended the joint venture and triggered contractual reconciliation/distribution provisions.
- Parties disputed the final accounting; after months of negotiation, on January 6, 2004 Pfeil caused NT Prop to distribute most funds: $360,000 to TABFG, $533,023.69 to NT Financial, and $2,742,182.02 to Pfeil Commodities (Pfeil’s personal entity).
- TABFG sued Pfeil, alleging tortious interference with the Joint Venture Agreement by engineering a self‑serving distribution that caused NT Prop to breach its contract obligations to TABFG.
- After a bench trial the district court found Pfeil not credible, held he acted for personal benefit (not NT Prop’s), and entered judgment for TABFG for $957,659.68; Pfeil appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the tortious‑interference claim is time‑barred | TABFG: claim timely; breach occurred when Pfeil distributed funds (Jan 6, 2004) | Pfeil: statute of limitations ran from Oct 2, 2003 (failure to timely disburse after contract termination) | Court held limitations began on Jan 6, 2004 (breach when Pfeil distributed funds refusing proper allocation) |
| Whether Pfeil is protected by the corporate/qualified privilege (business judgment rule) | TABFG: privilege inapplicable because Pfeil acted solely for personal benefit and lacked authority to act for NT Prop | Pfeil: acted to protect NT Prop’s interests and thus is privileged from tort liability | Court held privilege overcome: Pfeil acted for personal benefit, lacked authority/credibility to show corporate purpose, so no privilege shield |
| Whether Pfeil had authority to act for NT Prop (affecting privilege) | TABFG: Pfeil was not an NT Prop manager and had no authority; his distribution was unilateral | Pfeil: impliedly relied on his role as major funder/member to act for NT Prop | Court found no basis to treat Pfeil as a corporate officer/authorized agent and relied on district court findings that his acts were personal |
Key Cases Cited
- Stafford v. Puro, 63 F.3d 1436 (7th Cir. 1995) (elements of tortious interference with contract)
- Dallis v. Don Cunningham & Assoc., 11 F.3d 713 (7th Cir. 1993) (personal‑benefit exception to corporate privilege)
- Arrow Master, Inc. v. Unique Forming Ltd., 12 F.3d 709 (7th Cir. 1993) (material breach requires more than trivial or acquiesced delay)
- HPI Health Care v. Mt. Vernon Hosp., 545 N.E.2d 672 (Ill. 1989) (conditional privilege for corporate officers/agents; limits on personal‑benefit actions)
- Nation v. American Capital, Ltd., 682 F.3d 648 (7th Cir. 2012) (business judgment rule basis for privilege; limits on officer liability)