William Blair & Co., Ltd. Liab. Co. v. FI Liquidation Corp. - 358 Ill. App. 3d 324, 294 Ill. Dec. 348, 830 N.E.2d 760 (2005)

Rule:

When parties file cross-motions for summary judgment, a court is invited to decide the issue on summary judgment as a matter of law; however, summary judgment is nevertheless inappropriate if factual questions regarding a material issue exist.

Facts:

Defendants-appellees FI Liquidation Corporation, formerly known as Forms, Inc., also known as Spectra Graphics, Newton Business Forms Corporation, and Newton Business Forms Corporation (hereinafter collectively Spectra), contacted plaintiff-appellant William Blair & Company, L.L.C. (hereinafter Blair), an investment banking firm, to help arrange for Spectra’s sale to or merger with another company. A contract provided that Blair was entitled to payment after termination of the relationship if Spectra, with a certain time thereafter, consummated any possible transaction with a company with which Blair had a substantive discussion. During the relationship, Blair made several contacts with the potential purchaser but it was unable to broker a deal. After the relationship between Spectra and Blair was terminated, Spectra was acquired by the potential purchaser. Blair sought payment of a fee. Blair then filed suit against Spectra for breach of contract, alleging that it had substantive discussions with the potential purchaser within the 12-month period and was, therefore, entitled to a fee under the tail provision of the contract. The circuit court heard the parties’ cross-motions for summary judgment in which they agreed that the facts were not in dispute. The court ruled for Spectra, finding that under the commonly understood meaning of the word "substantive," no substantive discussions had taken place with the potential purchaser that would entitle Blair to a fee under the tail provision of the contract. Blair contended on appeal that the circuit court erred in granting summary judgment to Spectra because the uncontroverted facts supported the conclusion that Blair, not Spectra, was entitled to judgment as a matter of law.

Issue:

1. Did the trial court err in granting summary judgment to Spectra?
2. Under the circumstances, was Blair entitled to summary judgment?

Answer:

1) Yes. 2) No.

Conclusion:

The court held that the trial court erred in granting summary judgment under 735 Ill. Comp. Stat. Ann. 5/2-1005(c) (2002) in favor of either party as the contractual term, substantive discussion, was ambiguous and the extrinsic evidence did not resolve the issue of material fact. The contract did not define substantive discussion, and the term was susceptible to different interpretations. While the extrinsic evidence may have been relevant to construing substantive discussion at trial, an issue of material fact remained. The parties disputed the inferences drawn from the evidence. Accordingly, the judgment was reversed, and the case was remanded to the trial court for trial of the issues.