*1 оf concerns important and the issue at bar to construction entitled it is policy, public Boles, court a expressed.” when federal apparent enforcement federalism and added). Of- (emphasis statute”). at 1098 N.E.2d a state interpret is asked to of the amount only to is entitled ficer III. Conclusion paid. premiums concluded properly court district Motion for Certification D. and was valid limitation suicide that ques certify two we moved Officer the district We enforceable. Affirm pursu Court Supreme the Indiana tions to Deny mo- Officer’s court’s 52: whether Rule our Circuit ant to to the questions of tion for certification and substan illegal of forfeiture doctrines Court. Supreme Indiana insurance to this apply performance tial certi appropriate is “A case contract. vital a matter of it concerns
fication where likely issue will concern, where the
public cases, resolution in other where
recur is outcome to be certified question EQUIPAMENTOS E EXTRA case, and where determinative LTDA., EXPORTAÇÁO to yet have court has supreme state Plaintiff-Apрellant, path on a clear illuminate opportunity [to] Liberty v. Eng’g Co. Plastics issue.” v. (7th Cir. Co., Ins. Mut. CORPORATION, Defendant- CASE omitted). The 2008) (internal quotation Appellee. a permits federal Court Supreme Indiana 07-1794, 06-4389, 07-2484. Nos. appears when certify question an issue of presents “a proceeding Appeals, Court States United case of the that is determinative law state Seventh Circuit. controlling no clear there is on which 1, 2008. April Argued 64(a). P. R.App. Ind. precedent.” Indiana Supreme Indiana believe We 3, 2008. Sept. Decided path,” a clear “illuminate[d] has Court Banc Rehearing En Rehearing Co., for us F.3d at Eng’g Plastics Sept. 2008.* Denied under claim Officer’s confidently resolve certi such, we decline As Indiana law. v. McWaters Compare questions.
fy the (7th n. 4 Cir.
Parker, F.2d ques
1993) certify motion (denying a forego “[u]nderlying the
tion, noting that the Indiana is our belief analysis
ing mis on mutual position Court’s Supreme discernable”) type case
take this Affecting Patrons Brownsburg Area
with Baldwin,
Change Cir.1998) question (certifying the Indiana Court Supreme
Indiana Com Action of Political definition
Code’s impact to the breadth
mittee “due * rehearing, partid- did not Judge Joel M. Flaum Circuit pate petition for of this considеration *3 R. Gold- Doyle (argued), William
Paul F. Warren, York, en, Jr., Drye & New Kelley, NY, Plaintiff-Appellant. Kirkland (argued), Landau
Christopher Sieve, DC, D. Ellis, Brian Washington, & IL, Ellis, for Defen- Chicago, Kirkland & dant-Appellee. POSNER, RIPPLE, and
Before ROVNER, Judges. Circuit POSNER, Judge. Circuit distributor, sued a Brazilian of farm Case, manufacturer large U.S. the federal equipment, and construction fraud. charging Chicago, court district on 28 U.S.C. based Jurisdiction was between 1332(a)(2), the suit § because (Case) of a citizens citizen of a state (Extra boss—the and its country foreign govern- law party). longer no latter case is issues in substantive ing the The district Illinois. agreed to be that ground on the the suit judge dismissed wholly & Cia—Case’s that Case an indis- subsidiary Brazilian owned —was Fed.R.Civ.P. to the suit. pensable party reversed, 19(b). we appealed (7th Cir.2004), and the case F.3d 359 for discov- to the district went back summary moved for Eventually Case ery. granted, which was judgment, appeals. It appeals also from the district claiming not to be bound court’s awarding order costs to Case as the release because it hadn’t authorized its prevailing party. parent indeed, to make contending that it— it had had no wind negotiations or оf
In 1992 Case Brasil had hired Extra to signing of the release —terminated Ex- distribute products in Brazil. tra’s distributorship and recog- refuses to 1999 Extra sued Case Brasil in a Brazilian nize the million limit in the $2 release on court, claiming corrupt employees money Thus, claims. Extra charges, subsidiary had caused it to overcharge “manipulated Case had corporate dis- *4 Extra. Later year, that a “Release of tinction between itself and Case Brasil” by Claims and Settlement of Certain Obli- falsely representing that the Case (we’ll official “release”) gations” it the call who the signed release was authorized to negotiated signed and in Illinois by Persio sign on behalf of Case Brasil. Briante, Extra con- president, on behalf of tends that as a result of Extra, manipulation, the by James Sharman on behalf Case obtained the benefits of the Case Brasil. Sharman release presi- was a vice honoring without obligations dent either the of Case Corporation, not of Case Brasil; the placed release no on or employed by one the Sharman’s latter was promise oral to retain present at negotiation the as a signed or the Brasil distributor. release. Instead Case Brasil quickly distributor, terminated Extra as a The release ended the litiga- Brazilian precipitating a second Brazilian suit by provided among other things Extra, in which Extra claimed that the (most case) pertinent to this that Case termination violated the 1992 contract. Brasil would no seek more than million $2 The Brazilian agreed courts that there had past-due payments that it claimed Extra been a contract; breach of specific but owed it under the 1992 distributorship con- performance was refused the Brazilian tract. exchange, agree- besides litigation is now in damages-determi- ing to drop its against suit Case Brasil and nation phase. drop objection also an it had lodged with Brazilian to a merger authorities that Case The district court’s principal make, wanted to agreеd give infor- ground for dismissing the present suit is a mation about the corrupt conduct of Case provision in the captioned release “No Re employees Brasil’s that would enable Case liance The Party.” On Other It states that (thus to have them removed avoiding pos- “Both parties represent and warrant sible trouble with the govern- Brazilian in making this they Release are relying on ment) parent without the or the subsidiary their judgment, own belief and knowledge incurring liability to the terminated em- and the counsel of attorneys their ployees. choice. parties The are not relying on present suit, which Extra filed in representations or by statements made 2001, charges at the negotiation of the other party any person representing release representative, Case’s Sharman, them except for the representations and promised had if agreed expressed warranties in this Release.” A release, Case Brasil would retain Extra as claim requires of frаud proof that the vic a Case Brasil distributor in good standing; tim of the fraud relied representa on the promise that the was fraudulent because tions that he contends are fraudulent. Case had no it; intention of fulfilling and E.g., Services, HPI Health Care Inc. v. that after the signed, release was Case Mt. Inc., Vernon Hospital, 131 Ill.2d Contracts, (Ill. Farnsworth, Farnsworth 672, 681 N.E.2d Ill.Dec. (3d ed.2004). 7.2, § p. 224 Products, v. PM Inc. 1989); Vigortone AG Products, Inc., sure, AG doubly parties To make assurance law). (Illinois he Cir.2002) Otherwise commonly include contract to a written If the fraud. by been hurt clause; they have if do cannot “integration” it an state fraudulent allegedly not, the invocation party resisting rebanee to Briante judge made rule can ask that Sharman evidence parol ments negated bearing on release is 'consider extrinsic evidence negotiation really did clause, parties claim whether the question Extra’s fraud no-reliance to be the com- contract ruled. intend the written as the district evaporates, аgree- of their articulation plete and final Coal Vigo Co. v. worry lest in Mutual Ins. ment. Utica of contracts Drafters Co., The parties at 714. supra, 393 F.3d one of the dispute aof the event in the clause integration include did terms of from the to depart the court ask *5 consti- Release states: “This release. It that it ground the contract the written the agreement between the tutes entire agreement entire parties’ not the is —there all supersedes and this Release parties, had they to which terms are additional be- agreements negotiations and prior up leading negotiations during the agreed subject of to the relating the tween If a such contract. making of the to the of what So evidence this Release.” it to obtain making party the claim enabled up led to the negotiations in the said contract, meaning of the the jury a trial admis- not be of release would signing the by riven would be process the contractual contract. breach оf suit for sible—in a to this response law’s uncertainty. The par- qualification. The That is critical rule, which, a evidence parol is the problem law, of contract rule is a rule ol evidence case, on this forbids far as bears so pri is a integration clause a contract and (whether oral or of introduction evidence rule, supplement vately negotiated of written) process, in the said what was of courts, as including, we have most and of vary terms a contract negotiating from is not free (though the matter sumed negoti from the contract resulted rule doubt), Ilbnois, neither the hold that clear ation, contract seems provided a prevents disappointed the clause nor Sons, Inc. & complete. A.W. Wendell and basing a tort contract from party to the 247, 97, 193 Ill.Dec. Qazi Ill.App.3d 254 v. of in the course proof suit on 280, Maas (Ill.App.1993); 287 626 N.E.2d made fraudu party the other negotiations Community Col Trustees v. Board Prod Vigortone AG representations. lent 562, 529, 50 Ill.App.3d No. 94 lege District Products, Inc., supra, ucts, Inc. v. PM AG (Ill. 1029, 35, N.E.2d 1042-44 418 Ill.Dec. 643-44; Casualty Co. General F.3d at 316 Vigo Ins. v.Co. Utica Mutual App.1981); Service, Inc., Ill. 342 Tiling v. Carroll (7th 707, Co., 713-14 Cir. 393 F.3d Coal 616, 883, 796 277 Ill.Dec. N.E.2d App.3d 2004). parties’ implements The rule v. Pinken 702, (Ill.App.2003); 708-09 administration “simplify the intention (8th 1019, Cir. Frank, 1022-23 704 and to facilitate resulting contract 245, 7.4, Farnsworth, § 1983); supra, pp. by exclud disputes possible resolution agreement of their ing scope from not a Granted, for fraud is a suit were raised matters those for for suit breach super perfect substitute upon agreed or even dropped pleading are additional There contract. E. Allan negotiations.” during the seded requirements, see, 9(b), e.g., Fed.R.Civ.P. No-reliance clauses serve a legiti and in mate proved purpose Illinois fraud must be in by closing loophole in con (thus tract law evidence, resisting, Judge clear convincing just Kozin- and not expression, ski’s colorful the metastasizing preponderance evidence, Hof law, America, of contract law into tort Oki Hofmann, 205, mann v. 94 Ill.2d 68 Ill. Int’l, Inc., Inc. v. 312, Microtech 872 F.2d 593, 499, (Ill.1983); Dec. 446 N.E.2d (9th Cir.1989)). are, They we have Chicago Williams v. Osteopathic Health held, Illinois, Vigortone enforceable AG Systems, 1039, Ill.App.3d 211 Ill.Dec. Products, Products, v. Inc., Inc. PM AG 151, 613, 654 N.E.2d (Ill.App.1995); supra, 644-45, 316 F.3d at as elsewhere. Services, Association Inc. v. Care Benefit Sundown, Co., Inc. v. Pearson Real Estate Rx, Inc., (7th mark 841, 493 F.3d 852-53 324, 8 P.3d (Wyo.2000); 331-32 Haygood Cir.2007) (Illinois law), which all that is Inc., v. Burl Realty, Pounders 571 So.2d required prove a breach of contract. (Ala.1990); 1088-89 Rissman v. Also, the statute of limitations is shorter Rissman, (7th 213 F.3d 383-85 Cir. a tort suit than in a suit breach of a 2000); Hanover Trust Co. Manufacturers written years contract —five rather than Yanakas, (2d 7 F.3d 315-18 Cir. ten. 5/13-205, -206; 735 ILCS LeBlang 1993); First Financial Savings Federal & Motors, America, Inc., Ltd. v. Subaru of Loan Ass’n v. E.F. Mortgage Hutton (7th Cir.1998) (Illi 148 F.3d 690-91 Corp., Cir.1987); law). hand, nois On the other punitive *6 Enterprises, Landale Inc. Berry, v. 676 damages can be awarded in a suit for an 506, (11th Cir.1982) F.2d 507-08 (per cu tort, intentional fraud, such as but not riam). But that is in general rather than (with exceptions, rare Morrow v. L.A. in every case. purpose The of such a Associates, Inc., Goldschmidt 87, 112 Ill.2d clause is to head fraud, off a suit for but 939, 96 181, Ill.Dec. 492 N.E.2d 183-86 the that; clause say doesn’t it uses the (Ill.1986); Zapata Sucesores, anodyne Hermanos term lay “reliance” and a person S.A. v. Co., might Hearthside not realize Baking how much F.3d he was giving 385, up by (7th Cir.2002) (Illinois agreeing law)) 389-91 to the inclusion of in the clause in his contract. a suit for breach of contract. trade, In the no-reliance clauses are complex. tradeoffs are But as this (as “big boy” called clauses big “we’re case, in which the claim of fraud is based boys ourselves”). and can look after But if on statements made in a negotiation that someone who is not a big boy —indeed contract, resulted in a illustrates, a suit for not represented even by signs a counsel— fraud can abe device for trying to get big-boy clause, there can a problem, be around the limitations that parol the evi- and this has led some to require, courts dence rule and contract integration clauses before such a clause can enforced, be an place on efforts to vary a written contract inquiry into the of its nego circumstances on the basis oral statements made the tiation, to make sure that signatory negotiation phase. The release nowhere knew what doing. he was Brown See v. promises to retain Extra aas distributor Inc., Earthboard Sports 481 F.3d USA products; suit is based 901, (6th Cir.2007); 920-21 AES Corp. v. on an alleged oral promise to that effect— Co., Dow 174, Chemical 325 F.3d 180-81
made en route to the
signing
(3d
a contract
Cir.2003); see also Rissman v. Riss
(the release) that did not
any
contain
man,
such
(concur
supra,
very large that while argue to Extra is driven by release negotiation at the sign ed to the re- authorized was Sharman lawyers, expe Brasil, all repre- and New York Brazilian of Case lease on behalf complaining Extra about transactions. Extra is in commercial rienced sentations on behalf he made It through representations counsel. are boy and acted big is a and there- Brasil rather than Case of Case unfa lawyers were argue its does not representa- a speaking as he was not fore failed to clauses or no-reliance miliar with wordplay bit of This tive of the latter. to the release all terms explain of the no- language violence does Briante, representatives or that Case’s representa- clаuse, refers to which reliance no- meaning of the misrepresented representative by party’s tions —and among not is reliance clause—that Brasil, a representing Sharman was alleged. frauds Extra). (the It only besides party, party representa- instead that argues It argues that itself also unrealistic. is not fraud claim were underlie its tions that a distribu- Extra as to retain promising in is, by party” to by get “made the other to tor, trying was Sharman —that represent- could any person “or Brasil— release so that sign corruption no-reliance it, by the evidence required at no cost ing” obtain misbehaving it fire its party, other to was the that would enable Case Brasil clause. into getting avoid employees and thus Sharman, signed for Case who government the Brazilian with by trouble company, but by that employed is incurring liability without lawyers represent them. If companies in mergers contends, lying, Sharman was as Extra he having apparent without authority to con- lying employer behalf of both his summate the transaction. employer’s wholly and the owned subsid- Case’s written disclosure the no-reli- iary special which he had a interest —in clause, short, ance made Extra’s reli- charge because he was in of Case’s Latin ance on representations oral unreasonable subsidiaries, American which included (or Sharman’s) no matter what Case’s au- Case Brasil. thority, actual apparent, or was vis-a-vis
So the no-release clause is valid Case Brasil. If authority, Case had actual weren’t, applicable. if And apparent, then Extra was bound day would not save the for Extra. For its clause; no-reliance if Case didn’t even fraud, suit is a suit significance for and the apparent have authority, Extra was unrea- clause, of the no-reliance which does not sonable in relying on its oral representa- depend enforceability on its in contract tions. law, language is that its and the circum There is more that is wrong with stances of negotiation render Extra’s Extra’s suit. theоry is that Shar- reliance on supposed Sharman’s oral mis man misrepresentations made oral in the representations unreasonable as a matter negotiation in order to induce Extra to of law. principle behind a no-reliance agree to the release. That sounds like a is, clause as this court explained in Riss- fraud designed to induce the victim sign Rissman, man supra, v. 213 F.3d at contract; remedy and the “functionally the same aas doctrine long the inducement is to rescind the contract. accepted in this circuit: that a person who Investors, Tower LLC v. 111 East Chest has received written disclosure of the truth Consultants, Inc., nut Ill.App.3d may not claim rely contrary oral (Ill. 309 Ill.Dec. 864 N.E.2d Thus, falsehoods.” person whether a rea App.2007); Kochert Adagen Medical sonably appears to have authority sign Inc., Cir. Int'l contract on behalf of a party is a different 2007). But Extra emphatic that it is not question from whether a per reasonable charging fraud in the inducement and has rely son would person’s on such a repre no desire to rescind the release. The sentations. Had Sharman disclaimed au *8 fraud it charges is an oral promise—to thority to act on behalf of Case how retain it as a distributor for Case Brasil'—(cid:127) could Extra reasonably have relied on his that Case did not intend to honor. But oral representations about what Case Bra- damages what could it have incurred as a sil would do? If Santa Claus had showed result of the fraud? It is not contending up at the bargaining in place table of that it would be better off had it not been Sharman, his apparent absence of authori induced to sign the complains release. It ty to bind Case Brasil would not render being about terminated as a distributor. Extra’s reliance on promises his oral rea But that is subject the of its Brazilian suit sonable. for breach of the distributorship contract. Notice too that the no-reliance clause It argue does not that the termination was
refers to the “party’s representative” —a costly more to it because of Sharman’s term broader than apparent authority. A promise not to terminate it. person may “represent” another without
giving impression the that he has the au- So the properly suit was dis thority to bind person missed, the represents— he and we move to the issue of costs. of; others roll that fee Case, transcript graphic as awarded The district transcript itself. Since $116,000 in court the fee for the into party, some winning 54(d) transcript make the provid- reporter rules cannot of the civil Rule costs. (when hearing, sepa in this attending awarded the costs were without ed regarded reads “costs—other properly rule now attendance fee is case—the rate allowed to be attorney’s fees—should for the tran component than a of the fee as the committee party,” Held, but prevailing Held v. 137 F.3d script. only “styl- change is that the explains (7th Cir.1998); note v. Ford Motor Finchum istic”) specified 28 U.S.C. the costs Cir.1995); Co., Ar as of course be allowed § 1920 “shall Stores, Inc., 33 Fed. v. Wal-Mart rambide the court other- party unless prevailing curiam). (6th Cir.2002) (per Appx. that the dis- argues directs.” wise di- have “otherwise should
trict court
merit to Extra’s
greater
There is
costs,
rected],”
punish
awarding no
translation
about the award of
complaint
based
its defense
presenting
for not
“compensation
The
refers to
fees.
statute
almost five
clause until
the no-reliance
experts, compensation
appointed
of court
The ar-
filed this suit.
after Extra
years
fees,
salaries,
expenses
interpreters,
process
The
frivolous.
gument
interpretation services
special
and costs of
to be
costs is intended
awarding court
§
28 U.S.C.
1828].”
under
U.S.C.
[28
turn it into an
Extra wants to
summary.
added).
(Section
1920(6)
§
(emphasis
litigation
winning party’s
inquest on
program
provision
a
for the
creates
filed a motion
Case have
strategy. Should
criminal
in federal
interpretation services
clause?
on thе no-reliance
to dismiss based
corpus proceedings.)
and habeas
for sum-
filed its motion
it have
Should
1920(6),
char-
and the
of section
specificity
need dis-
Did it
mary judgment earlier?
whole, makes us
1920 as a
acter of section
the enforce-
to establish
covery
order
“interpreters” loose-
interpret
reluctant
of the no-release
applicability
ability
docu-
translators of written
ly to include
foot-dragging defendant?
it a
clause? Was
ments,
presented
the exhibits
in this case
that a district court
are not issues
These
support
and in
depositions
by Case
in order to decide
have to resolve
should
and also
summary judgment,
motion for
expenses
tiny
fraction of
whether
trial
proposed
list of
on its
the exhibits
almost seven
litigation, now
protracted
normally un-
interpreter
An
exhibits.
losing
old,
be shifted from
years
should
living
translates
person
who
derstood is
winning party.
He
another.
language to
speech from one
translator, see,
Cong
e.g., Yu
type
is a
complains about
Extra also
508-09,
Trinidad,
U.S.
v.
Eng
at
reporter
of the cost items —court
two
(1926);
Gjerazi
areWe mindful that the Sixth in Circuit costs—the concern that underlies our re- Products, Int'l, Inc., BDT Inc. v. Lexmark jection of attempt having avoid Cir.2005), pay held that on the basis of alleged costs Case’s the statute allows the award of costs fоr delay” in interposing “unreasonable its de- (Other translating documents. decisions terminative defense to Extra’s suit. For awards, have allowed such BDT but is the while there is a natural limit to the ex- only reported appellate pense decision that we interpreters amount of time —the have found in which the meaning of the that (including witnesses deponents) un- placed question.) statute was in only The dergo live examination —there is no natu- gave reason the court “the defini ral limit on the number of documents of interpret expressly includes to can be translated in aid of a claim or intelligible ‘translate into or familiar lan defense. A magnitude suit of the Ex- guage.’ Webster’s Third (remember, New Interna tra’s suit it’s almost seven (1981).” Dictionary old) tional But years generate pages can millions of statutory term “interpreters,” is “in not of documents. A large fraction of the terpret.” same dictionary defines “in documents in this case are in Portuguese, (so terpreter” might far as relate to the not to mention the countless pages of Bra- statute) translates; as “one that esp: a zilian statutes and cases that might be person who orally persons translates for relevant to the litigation. It is ominous are conversing who in tongues.” different percent that 65 of the costs awarded qualification Id. The in “especially” leaves translation, this case were and of that open possibility interpretation that an amount percent only was for interpreta- can sometimes be of a document. And tion. Was all that translation of written it can judge indeed be: a interprets stat necessary? documents We do not think a utes, might sometimes (though rarely) district judge required should be to wade be statutory referred to as a interpreter. into such without a issues clearer directive But he is not a (Because translator. If judge Congress. from ruling this cre- translated the French Code of Criminal ates a circuit, conflict with another we Procedure into English, we say would have opinion, circulated the advance he had “interpreted” issuance, the French code to the entire court under 7th Cir. English. into 40(e). R. judge No voted to hear the case banc; en Judge Flaum did not participate There plenty are interpre loose matter.) in the consideration tations; so we do not wish deny summarize, To for the de- possibility stretching section 1920 as far fendant on the merits is affirmed. The urged by Case. But it would be a award of part costs affirmed in stretch, and there should be a good reason reversed part, the matter of costs is for disfiguring statutory language before remanded to the district court for redeter- knife, wielding the and there is not here. mination. We cannot find a “spirit” in section 1920 might guide interpretation un- AFFIRMED IN PART, REVERSED IN PART, AND moored from statutory language. The Remanded. items allowable as costs are a hodgepodge. RIPPLE, Circuit Judge, concurring in *10 purposive There is no explanation why for part dissenting and in part. some items are and others out. To include translation fees would simply com The granted district court summary plicate process of awarding court judgment in favor of respect Case with to to ter- sufficient evidence garner unable to fraud promissory Extra’s fraud both colleagues. corrupt and his affirms minate Hirose majority panel claims. corrupt to both counts. con- respect on Hirose’s court with In based district majority’s determination panel duct, Brasil in Brazilian join I Case Extra sued properly dismissed court the district court. to Ex- respect claim. With fraud Extra’s investigat- was time that it At same however, count, I fraud promissory tra’s executives, also was Brasil Case ing Case of the district would reverse merger ap- proposed to have a seeking trial. the case for and remand CADE, agency with by a Brazilian proved authority approve to busi- regulatory I objections Extra had filed mergers. ness A. aware of these merger. Case was to the action, Equipa- time, diversity indeed, Case exeс- objections; In this at one (“Extra”) as- Ltda. Exportagáo, E mentos and his counsel with Briante utives met promissory fraud and claims of serts Briante’s law- objections. regarding these (“Case”). Case Corporation Case against Cahill, in- Brian a senior yer informed farm and is a manufacturer Case, construction. Briante was at house counsel owned wholly is a equipment; Case improper alleged most about concerned under the organized subsidiary of Case account and to Extra’s charge-backs open Brazil. From until laws get were filed to objections that the CADE of Case as a distributor operated Case’s attention. agreement a distribution under equipment 1999. Briante in October met with Cahill (the “1992 distribution Case Brasil with Case, three issues Cahill had On behalf agreement”). (1) need- additional information to discuss: having serious con- began Case (2) associates; Hirose and his ed to fire illegal improp- allegedly cerns about (3) merger; and pending to the objections at Brasil. Case еr conduct executives parties could issue. The charge-back alleg- Mario Hirose From 1997 until later, however, issues; these not resolve operating “charge-back” edly had been indicate lawyer called Cahill Briante’s prof- Brasil’s both Case scheme1 inflate meeting and in another Briante’s interest man- Brasil’s of Case its and the bonuses safety Briante’s concern for express also to extort- allegedly also agement; Hirose people again with if he meet Case should Briante, owner from Persio ing agreed It was therefore Brazil. R$50,000 as a per month president, States and fly to the United Briante would the 1992 continuing for distribu- condition in an management with Case would meet Although became agreement. airport Wauke- hangar at an airplane the al- of, investigating, and was aware gan, it was Illinois. corruption leged transfer these management would Brasil's as follows: Extra operated The scheme open Brasil's from Case books opеn with loans accounts had other distributors Extra. like kept with distributors amounts owed accounts reflected the Case Brasil that as to the distributor in losses part This As resulted entity the other. one manage- Brasil’s scheme, windfall to Case approve well farm Brasil would management in- enabled they ment because customers equipment whom loans on false based improperly their bonuses flate pay Whenever off the loans. knew could loan, figures. sales on such a a customer defaulted *11 Waukegan. cap met Extra million the total amount of R$2 Briante, represented by had with was who monies Extra that owed to Case Brasil. him Extra’s Brazilian and American attor- In exchange, Extra dropped the suit it that as Extra’s advisor. neys well financial had instituted in 1999 in Brazilian courts. Sharman, represented by was Case James Additionally, Extra released all claims that Dietrick, and Cahill William Case outside Brasil, might against it had have Case attorney. Sharman introduced himself as any including regarding chargе- claims a Case Vice-President and head Case’s scheme, alleged back Hirose’s extortion operations. Latin American It is undis- objections and to Case Brasil’s then-pend- puted that Sharman is not officer of an ing merger. deposi- Case Brasil. Cahill testified in a Extra, in compliance with the terms that repre- tion he did not inform Extra’s Release, provided Case with informa- sentatives that Sharman was officer operations Brasil, about the of Case of Case Brasil. namely Hirose extorting money day After a full negotiations, par- or dealers, other from favors Case which (the “Release”). agreement reached an
ties allowed to Case terminate Hirose’s em- The Release recites that it is between Ex- ployment. Indeed, Sharman and Cahill Brasil; tra and Case James Sharman flew to the following day Brazil to fire signed the Release on behalf of Bra- Case Hirose; other Case officials fired Hirose’s moreover, sil. Throughout litigation, this staff. Case has maintained that “actual par- point At this litigation, in the the record
ty” to the Release was Case Brasil. R.173 permit does not a definitive determination at 1-2. as to the to which extent Case Brasil failed The Release contains a no-reliance comply to with the Release or whether clause: repudiated Brasil the contract. Ac- No Reliance Party: On The Other Both cording Extra, ignored, Case Brasil has parties represent and warrant in almost completely, obligations under making they this Release relying are by failing Release to tender proper judgment, their own belief and knowl- Representative Commercial and Technical edge and the counsel attorneys of their agreements Services to Extra. Case Bra- of choice. The parties are not relying sil officers “stupid” called Release representations or statements made said that it “made no sense at all.” party any the other person repre- 2001, morеover, attempted Case Brasil senting except them for the representa- force Extra signing into a novation that tions and expressed warranties in this would have released Case Brasil from its
Release. obligations under the Release. In that R.157, Ex. 9 at document, 5-6. Under the terms of Case Brasil asked Extra to rec- Release, Case was of Briante’s ognize R$10,365,000, assured a debt of despite the cooperation full support rectifying cap million set R$2 Release. After Case’s problems with its opera- Brazilian novation, Extra sign refused to tions. Case part, for its assured Brasil terminated Extra’s line of credit provide would a “stan- any refused to sell to Extra spare dard” Case “Commercial Representative parts equipment. of Case in- Brasil Agreement and Technical Agree- Services formed Extra’s credit would be Id., ment.” Ex. 9 at 1. With respect to the signed restored if Extra the novation. Ac- issue, charge-back agreed cording to Case Brasil executives
731 we noted that Extra Specifically, Extra desist 362-63. that demanded repeatedly manipulated Case had contending was that the terms of attempting to enforce from Extra into dupe sign- form to corporate and threatened agreement Waukegan the concomitantly pre- the Release while ing of Case as a position distributor ability repudiate serving Case Brasil’s comply with if Extra did equipment remand, the district Release. Id. On the demands. Brasil’s Case motion to dismiss. Af- court denied Case’s contrast, that Case Case, contends discovery, conducted ter the had termi- fully and that performed has Brasil summary judg- Case filed motion agreement the 1992 distribution nation ment. of the under the terms permissible was summary granted The district court and occurred itself agreement distribution all based on Re- judgment claims to extend negotiations after only and on this no-reliance clause tendering lease’s (through Case’s agreement Rissman, v. Tech- in Rissman court’s decision Representative the Cоmmercial Extra) (7th Cir.2000).3 In had agreements nical Services contends, event, case, explained after court that the district any In Case this failed. only the 1992 with “limited value” applied breach of perceived Brasil’s Rissman typically clause “is Extra sued a no-reliance agreement, because distribution termination; oppos- to deflect the wrongful party one uses in Brazil for shield Brasil at 8. Brasil of fraud.” R.174 party’s that Case claims highest ing court Brazil’s held recognized owe court terminate, although might Although it the district could Release, still is which party This issue not a damages. Case is some Extra courts. in Brazilian was between Case being litigated clause [nev- that “the non-reliance believed B. the critical issue” ertheless] bears on oral on Case’s “Extra’s reliance prom whether of fraud asserts claims Id. reasonable[J” representations [was] previous In our against fraud issory Case. ruled Extra’s reliance case, The court in this we reversed disposition reasonable, was not court, representations which had Case’s of the district judgment of this In a matter of law. support ground on the Extra’s suit dismissed determination, explained the district party to indispensable Brasil was negoti- that, with Case when Extra met for fur suit,2 the case and remanded Release, was “under the ate the Equipamen See Extra proceedings. ther represent- that Sharman impression” F.3d Corp., 361 Exportaqáo E v. tos both Sharman and Cir.2004) Brasil because (7th ing Case Extra /]. [hereinafter result, Sharman As a had said so. district Cahill reversing parties, representing” “any person Extra’s was court, repeatedly noted we clause. the no-reliance in under the terms of alleged was based on Case’s suit law, promis- fraud and both 360-61, Illinois Under Release. See id. negotiating any precludes claim Republic anti-reliance clause generally 19. See Fed.R.Civ.P. See 2. -U.S.-, Pimentel, id. See also by prior representations.” Philippines v. deceit 2180, 2184-85, J., (noting (Rovner, concurring) L.Ed.2d 131 at 388-89 S.Ct. (2008) (discussing changes per rule аnd that courts not a se that this is 19). to Rule totality amendments apply continue to should approach). circumstances Rissman, 383- In Rissman Cir.2000), “a written held that we *13 require proof fraud sory alleged misrepresentation reliance. Con- and Extra’s sequently, damages. the district court both at dismissed Id. 13-14. promissory
the fraud and the
fraud claim.
II
here,
moved,
As relevant
also had
alternative,
summary
in
judgment
for
A.
respect
promissory
to Extra’s
fraud
with
Extra contends that Case Brasil’s prom-
ground
had no
claim
(that
ises
as set forth
the Release
evidence of a scheme to defraud. The
provide
Brasil would
a commercial repre-
rejected
district court
this
basis
alternative
agreement
sentative
to renew the 1992
granting summary judgment.
It con- distribution agreement and that
it would
that “Extra has
evidence to
cluded
offered
cap
liability
charge-backs
Extra’s
for the
allegations
its
of a
to
support
scheme
de-
million) were,
as
explained
we
R$2
Specifically,
fraud.” Id. at 12.
the district
рrevious opinion,
our
dangled
the “bait
court noted that
persuade
before
to
provide
it” to
owner,
according to Extra’s
Bri-
Persio
extortion,
evidence of Hirose’s fraud and
ante,
got
as soon as Case
the informa-
suit,
dismissing
then-pending
its
Brazilian
tion it wanted from
reneged
on releasing any
might
future claims that it
agreements.
Specifically,
its various
bring
against Case
dropping
to stop
Case failed
Case Brash from objections
proposed
to Case Brasil’s
merg-
terminating
agreement
the distribution
I,
Indeed,
er. Extra
Finally, the district court
declined promissory
also
theory.
fraud
Illinois
Under
summary
law,
to grant
respect
matter,
general
with
as a
“misrepresenta-
promissory
fraud claim the alter-
tions of intention
perform
future con-
ground
duct,
that Extra
native
not estab-
could
even
present
if made without a
inten-
proximate
lish
causation
Case’s
perform,
generally
between
do not
constitute
law,
fact;
plaintiff may prove
(2)
Under Illinois
statement of material
the defendant
promissory
by establishing
all of the
knew or believed that the statements were
and,
false,
additionally, by
of fraud
elements
estab
or
statements were
made
awith
lishing that the false statement
disregard
concerns fu
they
reckless
of whether
were true
false; (3)
existing
ture conduct
rather
than an
or
the statements were made with
preexisting
action; (4)
material fact and
false
the intent
plaintiff
induce
pat
statement of future conduct
part
reasonably
of a
believed
justi
the statements and
Steinberg
statements;
tern or scheme to
fiably
defraud.
v. Chi.
acted in reliance on those
Sch.,
320,
699,
(5)
Med.
69 Ill.2d
plaintiff
Ill.Dec.
damages
suffered
as a
(Ill.1977).
Johnson,
N.E.2d
The elements
result. Kapelanski v.
(1)
Cir.2004) (Illinois law).
fraud are:
the defendant made a false
upon
Mount
of the fraudulent statements
which
Health Care Servs. v.
fraud.” HPI
Inc.,
predicated
repeated
137 Extra has
this suit are
131 Ill.2d
Hosp.,
Vernon
(Ill.1989).
itself, and,
and reenforced in the Release
Ill.Dec.
545 N.E.2d
terms,
courts, however,
the no-reliance
“recognized
have
its own
clause
Illinois
*14
rule,”
to
apply
“representations
under which does not
and
exception to this
an
in”
expressed
if
false warranties
the Release.
are actionable
‘the
promises
“such
R.157,
con
Ex. 9 at 5-6. For example,
of future
promise
representation
or
employed
specifically
following
the scheme
Release
contains the
alleged
to be
duct
(quoting terms: Before October
Case Brasil
accomplish the fraud.’” Id.
to
Sch.,
320, promises
provide
Ill.2d
to
to Extra standard
v. Chi. Med.
69
Steinberg
(Ill.
Representative
N.E.2d
641
Case Commercial
13 Ill.Dec.
1977));
agreements;
v. Am. Broadcast Technical Services
Case Bra-
see also Desnick
(7th
Cos., Inc.,
promises
any charge-backs
sil
that
made
ing
F.3d
Cir.1995) (“Unlike
nowadays, by
against
open
Case Brasil'
Extra’s
ac-
most states
reversed;
remedy
a
for
count would
provide
does not
be
Illinois
fraud’)—
that it will
(‘promissory
promises
cap Extra’s liabilities
promises
fraudulent
R.157,
at
a ‘scheme’ to de
million.
Ex. 9. Because
they
part
unless
are
R$2
added)). Accordingly,
promissory
predicat-
a Extra’s
fraud claim is
(emphasis
fraud.”
action,
law,
upon
“representations
under Illinois
ed
and warran-
рromissory fraud
(1)
itself,
expressed
ties
in” the
plaintiff prove
that a
that
Release
requires
clause, by
plain language,
its
a false and material state
no-reliance
defendant made
(2)
conduct;
prevent
establishing
future
as
cannot
from
re-
.concerning
ment
(3)
defraud;
as a matter of law on that claim.
knowing
to
liance
scheme
part
false,
R.157,
or the
Ex. 9 at 5-6.
that
the statements were
with a
dis
statements were made
reckless
adhering
plain
In
to
lan-
addition
false;
they were true or
regard of whether
clause,
guage of the no-reliance
this result
(4)
the statements were made with
justifications
policy
is consistent with the
(5)
action;
plaintiff
to induce
intent
By
strictly enforcing
for
such clauses.
reasonably
the statements and
believed
memorializing conclusively
gov-
the terms
justifiably acted in reliance on those state
transaction,
clauses
erning a
no-reliance
(6)
ments;
plaintiff
damages
suffered
skullduggery and
mitigate the risks of
Johnson,
Kapelanski
a result.
as
Rissmаn,
memory.
missing promissory fraud claim on take into clause does not Many no-reliance clause. of the no-reliance the basis of the may fraud claim. tra have had for Hirose’s extortion of promissory account Extra’s Case, of a part Extra and Mr. Briante. Rescission would claims defraud, manipulated has scheme to to Extra if the Brazilian mean little statute is, be- the distinction form—that corporate expired equivalent of limitations has Brasil— subsidiary, Case it and its tween Extra from prevents to our laches doctrine signing Extra into the Release and dupe Similarly, only on these claims. suing needed divulging information can damages recompense Extra for the concomitantly scheming to ensure while opportunity allegedly that it suffered lost not obtain the benefits of Extra would agreed divulge to Case informa- when Having from Extra the Release. obtained regarding Hirose and Brasil’s *15 fire Hirose information to requisite objections to corruption drop and to as a corrupt associates as well and his Rescission, then-pending merger. Case’s claims, all failed to blanket Case release short, “simply is not feasible” this Brasil follow the terms of ensurе Case Corp., case. Jones v. 310 F.3d InfoCure can- the Release. The clause no-reliance Cir.2002) (internal 529, quotation from, reliance, prevent proving not omitted). marks and citation law, respect with to its as a matter promissory fraud claim. B. majority’s further panel opinion ob importance foregoing scures the above, requires As discussed Illinois law analysis by faulting maintaining Extra for Extra, promissory to win its fraud damages rather than seeking it is claim, engaged establish that in a Case at 12. Extra’s com Supra rescission. In discussing scheme to defraud. Illinois itself, however, plaint and the Release elu law, we have noted that “the distinction why cidate Extra did not seek rescission as promissory between a mere fraud and a remedy. recognizes, As Illinois law re elusive, promissory scheme of fraud is place cannot not scission of the Release caused, least, say has considerable Extra in ante quo the status because uncertainty, as even the ac- Illinois cases can consideration that it tendered to Case Desnick, knowledge.” See, e.g., not be recovered. Klucznik v. continued, Despite uncertainty, this we “it Nikitopoulos, Ill.App.3d 105 Ill proper is not our role as a federal court in (Ill.App Dec. 503 N.E.2d a diversity suit to read ‘scheme’ out .Ct.1987)(“[A] grant court will not rescis law; give Illinois we must it some mean- in any sion of a contract event where the ing.” Id. We concluded: “Our best inter- quo parties status ante of the cannot be pretation that promissory fraud is ac- restored.”); see also Sweet Dreams Un only particularly tionable if it either is limited, Int’l, Inc. v. Dial-A-Mattress or, egregious may what amount (7th Cir.1993) (“A Ltd., thing, larger same it is embedded in a successful rescission action annuls the con pattern deceptions or enticements that tract and returns the to the status reasonably against induces reliance and ante.”). quo consideration for As Case’s ought provide remedy.” which the law unfulfilled) (allegedly promises set forth in Id. Releasе, all released claims rejected The district court claim against including Case the suit that Case’s summary judgment it that it was entitled to regarding had instituted scheme; charge-back proffer Brasil’s the Release based on Extra’s failure to evi- might any also that Ex- encompass respect claims dence with to this element of the signing Extra into the Release and dupe claim. The district fraud promissory alleged divulging Extra has sufficient the information that Case need- believed of mate- genuine concomitantly to create a issue scheming evidence ed while to ensure in a engaged rial fact as to whether that Extra would obtain benefits According to to defraud. scheme the Release. provisions of the on various reneged informa- as it received the
Release as soon Conclusion Moreover, from Extra. sought that it reasons, I foregoing For the would re- almost ignore, Brasil to Case allowed Case verse the of the district court obligations under the Rе- completely, its respect promissory with to Extra’s Commer- by failing proper to tender lease jury claim and remand for a trial on that Representative and Technical Services cial issue. Extra. Case Brasil officers agreements to “stupid” and said that called the Release no at all.”
“made sense sign- into attempted to force Extra *16 have excused
ing a novation would under the obligations Brasil from its
Case document, In that Case Brasil
Release. R$10,- recognize Extra to a debt of
asked 365,000, cap million set despite the R$2 America, UNITED STATES sign Release. After Extra refused Plaintiff-Appellee, novation, Ex- Brasil terminated Case of credit and refused to sell tra’s line any spare parts equipment. of Case Extra CAMPOS, Defendant- Gustavo Extra that Extra’s Brasil informed Appellant. signed if Extra credit would be restored No. 07-1561. According to
the novation. repeatedly demanded Brasil executives of Appeals, States Court United attempting from to en- desist Seventh Circuit. Waukegan agree- force the terms Feb. 2008. Argued position as a ment and threatened equipment if Extra did distributor of Case Sept. Decided Brasil’s demands. comply with Case Extra has adduced sufficient Whether in a engaged
evidence that Case scheme issue. that this
defraud is close Given summary judgment is before us on
action that, contrary sugges- to Case’s given
tions, vigorously are disputing Bra- complicit
whether Case (alleged) comply failure to with the
sil’s be al-
Waukegan agreement, should proceed promissory with its
lowed sufficient evi-
claim. Extra has adduced jury to allow a to conclude
dence in a with Case Brasil to
engaged scheme