motion, the agreement between Cramer and Oberthur shall be
governed by Illinois contract law.

In Illinois, it is well-established that once a statement of
fact has been admitted in the pleadings, it constitutes a

judicial admission. Farwell Const. Co. v. Ticktin, 376 N.E.2d

621, 625 (Ill. App. 1978). Cramer and Oberthur both state in
their pleadings that there was a settlement agreement between the
two parties. Therefore, there was a settlement agreement between
Cramer and Oberthur.

Oberthur admits in its Motion for Summary Judgment that it
did in fact breach the contract formed between it and Cramer. In
Illinois, “[tjhe doctrine of conditions, which - sometimes -
allows a party to terminate a contract because the other party
has failed to keep his part of the bargain, is designed to create
a self-help remedy proportionate to the need. ‘But it is not in
society’s interest to permit a party to abuse this protection by
using an insignificant breach as a pretext for avoiding his

contractual obligations.’” Casio, Inc. v. S.M. & R. Co., 755

F.2d 528, 532 (7th Cir. 1985) (quoting Farnsworth, Contracts §
8.15, at p. 607 (1982)).

In order for Cramer to have been able to breach his
performance of the contract, the non-performance by Oberthur must
have been material. The determination of whether a breach of

contract is material is a complicated question of fact, involving



‘and if that breach gave reason for Cramer to withhold his
performance and revoke the contract. Wright, at 262.
Conclusion
For the reasons set forth above, Oberthur’s motion for

summary judgment is denied.

DATED:



‘depositions, answers to interrogatories, and admissions on file,
together with affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” Fed. R. Civ. P. S6(c).
When making such a determination, the Court must construe the
evidence and make all reasonable inferences in favor of the non-
moving party. See Anderson v. Liberty Lobb Inc., 477 U.S. 242,
247 (1986). Summary judgment is appropriate, however, when the
non-moving party “fails to make a showing sufficient to establish
the existence of an element essential to the party’s case, and on
which that party will bear the burden of proof at trial.”

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also

Courtney v. Biosound, 42 F.3d 414, 418 (7th Cir. 1994).

II. Breach of Contract

Cramer brings Count I of the complaint alleging breach of
contract and Count II alleging commissions owed to him based on

that breach. The Seventh Circuit has determined a settlement
agreement is merely a contract between two parties where,
generally, the defendants promise a partial remedy and in
exchange the plaintiffs promise to dismiss the defendants from
any future liability. Carr _v. Runyan, 89 F.3d 327, 331 (7th Cir.
1996). “As such, the formation, construction, and enforceability
of a settlement agreement is governed by local contract law.”

Laserage Technology Corp. v. Laserage Lab, 972 F.2d 799, 802 (7th

Cir. 1992). Therefore, for purposes of this



‘careful consideration of several factors. Wright v. Douglas
Furniture Corp., 240 N.E.2d 259,262 (Ill. App. 1968). Specific
factors such as “whether the breach worked to defeat the
bargained for objectives of the parties or caused
disproportionate prejudice to the non-breaching party, whether
custom and usage considers such a breach to be material, and
whether the allowance of reciprocal non-performance by the non-
breaching party will result in his accrual of an unreasonable or
unfair advantage need to be considered.” Id.

The agreement between Oberthur and Cramer specified that
Oberthur shall pay Cramer $16,250 for lost wages and $24,220 for
unpaid commissions and/or bonuses, totaling $40,472.00. After
the agreement was signed and faxed to Oberthur, Oberthur then
breached its obligation by refusing to pay. Oberthur offered
$16,250 for lost wages and $14,706 for commissions and/or
bonuses, totaling $30,956 instead of $40,472 - the total in the
agreement.

Since Cramer and Oberthur have stipulated there was in fact
a contract between the two parties, the only unresolved issue is
whether the breach by Oberthur was material enough to allow
Cramer to avoid his contractual obligations as a self-help remedy
under the “doctrine of conditions”. Cramer’s motion explains
that he was entitled to withhold his performance of the contract

because Oberthur agreed to the contract and then withheld 23% of



Minute Order Form (06/97)

United States District Court, Northern District of Illinois

5
wr Magitrateduage | __ Ce0te M. Marovich “than Asiged Judge

CASE NUMBER 02 C 8536 DATE 71712003

CASE Cramer vs. Oberthur Card Systems, et al.

TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]
DOCKET ENTRY:
() im Filed motion of [ use listing in “Motion” box above.]
(2) oO Brief in support ofmotiondue__.
(3) oO Answer brief to motion due____. Reply to answer brief due.
(4) oO Ruling/Hearingon_ssetfor_— at.
(5) a Status hearing set for 8/13/03 at 11:00AM.
(6) a Pretrial conference[heid/continued to] [set for/re-set for]on__——ssetfor_——sat_—
(7) oO Trial[set for/re-set for}on____at
(8) Oo {Bench/Jury trial] [Hearing] held/continuedto__at
(9) im} This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}

OOFRCP4(m) OLocal Rule 41.1 OFRCP41(a)(1) CO FRCP41(a)(2).

(10) Ml [Other docket entry) ENTER MEMORANDUM OPINION AND ORDER. Oberthur’s motion
for summary judgment is denied.

(11) ff [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required. umber of notices:

JUL 18.208

date docketed

Notices mailed by judge’s staff.

Notified counset by telephone.

oY | Docketing to mail notices.

Mail AO 450 form, UNO LOWISIA sin ockating Wy nis
Copy to judge/magistrate judge. :
no Ynys
courtroom : AI a sy date msied notice
m
ID deputy’s a
initials ey es
* Date/time received in
central Clerk's Office ‘mailing deputy initials



‘their performance without any assurance of future performance,
thus breaching the contract first. Under Illinois law, these
actions by Cramer would be a sound legal response to a material
breach of contract by another party. However, the determination
of the materiality of a breach of contract is not a determination
for the court to make on a summary judgment motion, but rather a
decision for a jury to hear and make a conclusion. Wright, at
262.

Next, Oberthur contends that Cramer should have given them
notice that they were in breach and an opportunity to cure the
breach, which they eventually did cure--almost five months later.
In support of this argument Oberthur cites the Seventh Circuit’s

decision in Stanley Gudyka Sales Co., Inc. v. Lacy Forest Prods,

915 F.2d 273, 277 (7 Cir. 1990). In Stanley, the Court held
that although no Illinois case was found to require a non-
breaching party to provide notice and an opportunity to cure in
similar circumstances, that requirement did comport with general
contract theory. Id. However, the Court first looked to the
trial court’s determination, during trial, of how proportionate
the revocation of the contract was by the performing party after
the non-performing party breached. Id. Before a determination
of whether Cramer should have given Oberthur notice of the breach
with an opportunity to cure can be made, there needs to be a

factual determination of how material the breach was by Oberthur



. UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

JUL 2 8 2003

BRIAN D. CRAMER
Plaintiff, 02 C 8536
v.

Judge George M. Marovich
OBERTHUR CARD SYSTEMS AND
SERVICES, INC.

Defendant.

MEMORANDUM OPINION AND ORDER

On August 22, 2002, Plaintiff Brian D. Cramer (“Cramer”)
filed a Complaint (“Complaint”) in the Circuit Court of DuPage
County against his former employer, Oberthur Card Systems and
Services, Inc. (“Oberthur”) for breach of a contract and damages
based upon the breach. Oberthur later removed the action to this
Court based on diversity jurisdiction. Oberthur now moves for
summary judgment pursuant to Rule 56 of the Federal Rules of
Civil Procedure. For the reasons set forth below, the Motion is
denied.

BACKGROUND

Cramer was employed by Oberthur to sell credit card designs,
credit card systems and related goods and services, and to
receive a commission from these sales. The undisputed facts show
that on May 13, 2002, Cramer was terminated by Oberthur. At the
time of Cramer’s termination, there was an amount. of unpaid

commissions due to Cramer by Oberthur. To remedy this dispute,

|



Cramer and Oberthur agreed to a Settlement Agreement
(“Agreement”) on June 27, 2002. The Agreement stipulated
Oberthur would pay Cramer $16,250 for lost wages and $24,220 for
unpaid commissions and/or bonuses, totaling $40,472.00, and
Cramer would extinguish all of his claims against Oberthur.
Cramer faxed a signed copy of the agreement to Oberthur, which
Oberthur acknowledged, but disputed the calculations of unpaid
commissions and/or bonuses. Oberthur refused to pay $24,220 for
unpaid commissions and/or bonuses, and on July 12, 2002 offered
Cramer $14,706 instead of $24,220 plus $16,250 for lost wages.

On July 31, 2002, as a result of Oberthur’s breach, Cramer
demanded Oberthur pay him $122,445.84 for all unpaid commissions
and/or bonuses for 2001 and 2002 before August 9, 2002. On the
same date, Oberthur tendered a check to Cramer in the amount of
$11,676.37, which Cramer negotiated under the condition that he
would not be accepting Oberthur’s new bonus figures.

After receiving Cramer’s demand for $122,445.84, Oberthur
asked for an extension of 6 days to verify these figures, which
Cramer rejected. Cramer thereby filed a lawsuit in the Circuit
Court of DuPage County, which Oberthur removed to the Northern
District of Illinois and filed this motion for summary judgment.

DISCUSSION

I. Summary Judgment Standards

Summary judgment should be granted when “the pleadings,