Toll Processing Services, LLC v. Kastalon, Inc.
880 F.3d 820
7th Cir.2018Background
- Toll Processing bought a used pickle line (including 57 rolls) and, lacking storage, orally arranged with Kastalon in early 2008 for Kastalon to move and store the rolls at no cost until Toll Processing issued a purchase order to recondition them.
- The parties did not agree on a specific storage duration; both expected reinstall within months but never reduced the agreement to writing.
- Kastalon moved and stored the rolls (indoors, later wrapped and stored outside); contact between the companies ceased after March 2008 and resumed intermittently only years later.
- In late 2010 Kastalon concluded the rolls were abandoned, scrapped them via a recycler, and received $6,380.80; Toll Processing learned of the scrapping in 2011 when seeking refurbishment quotes.
- Toll Processing sued for conversion, negligence, and breach of contract; the district court granted summary judgment for Kastalon on all claims. The Seventh Circuit affirmed dismissal of the contract claim but reversed summary judgment on conversion and negligence and remanded for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conversion: whether Toll abandoned the rolls | Toll did not intend to abandon; continued negotiations and later contact (2011) show retained ownership | Kastalon argues Toll’s prolonged silence and conduct amounted to abandonment | Reversed summary judgment for defendant; abandonment is a fact question for jury |
| Applicability of Moorman (economic loss) to conversion | Moorman shouldn't bar conversion; duty may be extra-contractual and exceptions (sudden tortious loss) apply | District court applied Moorman to bar conversion | Reversed: court found district court erred to apply Moorman without deciding whether a non-contract duty or exception applied; remand for further analysis |
| Negligence (bailment): whether Kastalon rebutted presumption of negligence | Toll: prima facie bailment creates presumption of bailee negligence; Kastalon failed to rebut | Kastalon: either no enforceable bailment or it acted reasonably and disposed after abandonment | Reversed summary judgment for defendant; negligence issues (bailment, reasonableness) are for the factfinder |
| Breach of Contract: enforceability of oral storage agreement | Toll: parties agreed material terms and consideration (expectation of refurbishment) | Kastalon: no meeting of minds on duration; agreement indefinite and lacking consideration | Affirmed district court: oral agreement indefinite as to duration (material term), so no enforceable contract |
Key Cases Cited
- Gen. Motors Corp. v. Douglass, 565 N.E.2d 93 (Ill. App. Ct. 1990) (elements of conversion under Illinois law)
- Bell Leasing Brokerage, LLC v. Roger Auto Serv., Inc., 865 N.E.2d 558 (Ill. App. Ct. 2007) (definition of abandonment as defense to conversion)
- Pieszchalski v. Oslager, 470 N.E.2d 1083 (Ill. App. Ct. 1984) (abandonment in oil/gas lease context; courts may find abandonment after prolonged inactivity)
- Moorman Mfg. Co. v. Nat’l Tank Co., 435 N.E.2d 443 (Ill. 1982) (economic-loss doctrine limiting tort recovery for purely contractual harms)
- Fireman’s Fund Ins. Co. v. SEC Donohue, Inc., 679 N.E.2d 1197 (Ill. 1997) (recognizing exceptions to Moorman, e.g., sudden or dangerous occurrences causing property damage)
- Wait v. First Midwest Bank/Danville, 491 N.E.2d 795 (Ill. App. Ct. 1986) (oral agreements enforceable if offer, acceptance, and meeting of minds; duration must be definite)