the Fifth Amendment in a civil context invites an inference that the witness’ testimony would be
adverse to his interest.” Wintz Properties, Inc., 155 F.3d at 872 (citing Baxter v. Palmigiano, 425
U.S. 308, 318 (1976)). Here, Bell invoked the Fifth Amendment during his deposition. Thus, this
Court is entitled to draw an inference that his testimony would have been adverse to his interest, i.e.,
that he knew the statement to be false or made the statement in culpable ignorance as to its truth of
falsity. In addition, Bell’s position as CFO of Provident with the attendant duties and responsibilities
further supports this inference.

Moreover, Capital City was not relying on whether Bell had the authority to bind Cook
County to a contract in excess of $10,000 but rather on Bell’s authority to represent that such an
obligation had been approved by the County Board.

Therefore, Cook County’s reliance on the statutes and ordinances limiting Bell’s authority
to contract on behalf of the County Board is misplaced.

There exists, however, a genuine issue of material fact as to whether Capital City’s reliance
on Bell’s misrepresentations was justified. “[I]n order to avoid summary judgment, [Capital City]
must set forth enough facts from which a jury could find by clear and convincing evidence that it was
justified in relying on [Cook County’s] alleged misrepresentation.” Teamsters Local 282 Pension
Trust Fund y. Angelos, 839 F.2d 366, 369 (7th Cir. 1988). Regarding Bell’s assertion of the County
Board’s approval, the Court must view “the representation in light of all the facts of which [Capital
City] had actual knowledge as well as those of which [it] ‘might have availed [it]self by the exercise
of ordinary prudence.” Soules, 79 Ill. 2d at 286 (quoting Schmidt v. Landfield, 20 Ill. 2d 89, 94
(1960)). While the Cook County Purchasing Ordinance and sections 5-36001 and 5-36008 limit

Bell’s authority to bind Cook County, neither the ordinance nor sections 5-36001 and 5-36008 regard

-13-


administration of the organization’s policies on finance, accounting, budget, data processing, patient
accounting, medical records, internal controls and auditing. (Pl.’s 56.1 7.) Bell was also
responsible for maintaining records and procedures that were required to adequately safeguard
Provident’s assets and planning, organizing, coordinating and controlling its financial policies,
receipt of revenue and expenditure of funds. (Pl.’s 56.1 | 7.) Bell also reviewed, interpreted,
analyzed and communicated financial reports and data to management and the board of trustees.
(P1.’s 56.1 97.) Bell also ensured that all contracts that directly affected Provident’s interests were
properly reviewed. (PI.’s 56.1 7.) Finally, Bell was one of a few people who was an authorized
signer of voucher forms and requisition and change orders on Provident’s behalf. (PI.’s 56.1 4/7.)
However, at no time did Bell have the authority to commit Cook County financially for services or
goods that exceed $10,000 without prior approval of the County Board. (Def.’s 56.1 [ 28.) Bell
resigned from his position at Provident effective April 1, 2001. (Def.’s 56.1 429.)

The Cook County Purchasing Ordinance provides, in pertinent part, that:

The Board of Commissioners of Cook County shall have no power or authority to

delegate to any committee or other person or persons the “power to act”, when such

“power to act” shall involve the letting of any contract or the expenditure of public

money exceeding the sum of $10,000.00; and any action of said board, or of any

committee thereof, or of any other person or persons in violation of this section shall

be null and void. No money shall be appropriated or ordered paid by said County

Commissioners beyond the sum of $10,000.00, unless such appropriation shall have

been authorized by a vote of at least two-thirds of the members elected to the said

county board. And no officer of Cook County, or other person shall incur any

indebtedness on behalf of the county, unless first authorized by said Board of

Commissioners.
(Def.’s 56.1 14.) The Cook County Purchasing Ordinance circumscribes the authority of the Board
of Commissioners (“County Board”) to spend Cook County’s money. (Def.’s 56.1 § 14.) For

obligations that exceed $10,000, a department of Cook County must first seek authorization from

-4-


never physically present on the dates listed, and could not have been physically accommodated at
Provident given the physical plant, its size and maintenance requirements. (Def.’s 56.1 { 60.)

The County Board did not approve payment on Invoices 32-018 and/or 32-019 either to JTD
or Capital City. (Def.’s 56.1 455.)

DISCUSSION

Cook County moves for summary judgment on Count I, which states a claim for breach of
contract, arguing that JTD had no contract with Cook County for the amounts it assigned to Capital
City. Capital City does not contest Cook County’s motion for summary judgment as to Count I.

Under Illinois law:

[a]ll contracts for supplies, material and work for the County of Cook shall be let as

herein provided. All contracts for supplies, material or work for Cook County shall

be approved by the board of commissioners and signed by the president of the board,

the county purchasing agent and the comptroller. Supplies shall be issued only on

the requisition of the responsible officers of the county institutions now or hereafter

established by law, approved by the county purchasing agent.
55 Ill. Comp. Stat. 5/5-36001 (2002). Illinois law also provides that:

[i]fany Office, department, institution, or agency of the county government or officer

or employee thereof shal! purchase or contract for any supplies, materials, equipment

or contractual services contrary to the provisions of this Division, or contrary to the

rules and regulations made thereunder, such order or contract shall be void and of no

effect, and if county funds shall have been paid out upon such order or contract, the

amount thereof may be recovered in the name of the county in an appropriate action

instituted therefor.
55 Ill. Comp. Stat. 5/5-36008 (2002). As was noted earlier, the Cook County Purchasing Ordinance
provides that no person shall have the power to act when such power involves the expenditure of

public money in a sum exceeding $10,000.00 and that such actions are null and void unless such

expenditure was first authorized by the County Board.


Provident. (Pl.’s 56.1 § 8.) Bell signed a voucher form dated May 20, 1998, that approved payment
to “Swerbeh, Ltd. c/o Capital City Financial Group”. (Pl.’s 56.1 49.)

JTD, Inc. (“JTD”), Third-Party Defendant, was a corporation providing temporary clerical
services at all relevant times. (Def.’s 56.1 13.) Payne was also the president of JTD at all relevant
times. (Def.’s 56.1 14.) On August 4, 1999, the County Board awarded Contract No. 99-54-647
(“the 1999 contract”) to JTD for temporary clerical support services for Provident. (Def.’s 56.1
30.) The 1999 contract authorized temporary clerical services by JTD from June 22, 1999 until
June 20, 2000, in the amount of $37,450.00 based on 3,500 hours of services at a rate of $10.70 per
hour. (Def.’s 56.1 31.) The County Board approved no other contract with JTD. (Def.’s 56.1 932.)

On August 15, 2000, Payne, on behalf of JTD, applied to Capital City for funding. (Def.’s
56.1 935.) Capital City instructed Payne to contact Bell to verify the factored invoices because it
deemed Bell to be the person to expedite payments. (Def.’s 56.1 ] 36.) Payne sent a letter dated
August 28, 2000, via facsimile, to Bell at Provident informing Bell that JTD had entered into an
arrangement for financing with Capital City whereby JTD’s accounts receivable were to be assigned
to and processed through Capital City. (Def.’s 56.1 437.) Bell’s signature on the letter indicates that
the letter was faxed from Provident on September 1, 2000. (Def.’s 56.1 4 38.)

On September 6, 2000, Capital City faxed Bell Invoice 32-018, a document prepared by
Capital City dated August 30, 2000, that purports to represent services provided by JTD during the
weeks ending August 6, 2002 to August 27, 2000, for a total amount of $173,256.20. (Def.’s 56.1
139.) Capital City advanced to JTD $121,279.34 based on a 70% factor rate applied to the invoice
amount. (Pl.’s Add. 56.1 93.) Of this advance amount, $34,651.24 was deducted by Capital City

at Payne’s direction and applied to preexisting debt from Swerbeh on behalf of JTD. (P1.’s Add. 56.1

-6-


the County Board. (Def.’s 56.1 4 15.) Regardless of the payment increment amount, if the whole
subject of the obligation exceeds the $10,000 threshold, County Board authorization is required.
(Def.’s 56.1 4 15.)

After the County Board has authorized an obligation exceeding $10,000, the Cook County
Purchasing Agent (“Purchasing Agent”) either advertises for bids or enters into a sole source
contract. (Def.’s 56.1 4 16.) Ifthere is an advertised bid, the department recommends the acceptance
ofa particular bid to the County Board. (Def.’s 56.1 16.) The County Board then decides whether
to approve the bid for contract. (Def.’s 56.1 16.)

All Cook County contracts must have a purchase order number in order to be paid. (Def.’s
56.1 § 19.) Vendors must fill out a Cook County voucher form referencing the purchase order
number and may attach their own invoice form to the voucher form. (Def.’s 56.1 20.)

Ifa contract relates to Provident as the department, Provident then checks the voucher form
and certifies on that form that the request for payment complies with the contract terms, including
but not limited to the amount, the contract time frame, and whether the service or good has been
provided. (Def.’s 56.1 21.) Provident then sends the voucher to the Cook County Comptroller’s
Office (“Comptroller’s Office”) for payment. (Def.’s 56.1 21.) The Comptroller’s Office checks
the purchase order number on the voucher form, whether the payment is for over or under $10,000,
to determine if there are sufficient funds assigned to that purchase order number. (Def.’s 56.1 22.)

In October 1997, Capital City entered into an Accounts Receivable Purchase and Security
Agreement with a company called Swerbeh, Ltd (“Swerbeh”). (Pl.’s 56.1 § 8.) Mary Payne
(“Payne”) signed the agreement on behalf of Swerbeh as its president.(Def.’s 56.1 4 34; Pl.’s 56.1

48.) Ina factoring transaction involving Swerbeh in May 1998, Bell was the “contact” person at

5.


sent the check to Payne at JTD on October 13, 2000. (P1.’s Add. 56.1 9.)

The total amount of accounts receivable purchased by Capital City represented in Invoice 32-
019 was $260,287.50. (Pl.’s Add. 56.1 410.) Capital City advanced to JTD $181,201.25 based on
a 70% factor rate applied to the invoice amount. (PI.’s Add. 56.1 § 10.) At Payne’s direction,
$52,057.50 was deducted by Capital City and applied to a preexisting debt owed by Swerbeh to
Capital City. (Pl.’s 56.1 { 10.)

On October 27, 2000, Payne wrote Bell, stating that a mistake had been made and that the
total amount of the invoices for the period of August and September 2000 should have been
$43,250.00. (Def.’s 56.1 7 48.)

The representations in Invoices 32-018 and 32-019 made by JTD were false. (P1.’s 56.1 22.)
The services purported to have been provided as reflected by those Invoices would have required the
County Board’s approval and a purchase order number. (Def.’s 56.1 § 50.) It is not within the
authority of the Purchasing Agent to obligate Cook County to the expenditures reflected in Invoices
32-018 and 32-019 absent specific County Board authorization or in payment increments of less than
$10,000, since the whole obligation exceeds $10,000. (Def.’s 56.1 451.)

There is no contract between Cook County and JTD or Capital City and no purchase order
assigned for the services represented in Invoices 32-018 and 32-019. (Def.’s 56.1 4 53.) There are
no contracts between Cook County and JTD or Capital City and no purchase order number assigned
other than Contract No. 99-54-647 with JTD. (Def.’s 56.1 54.)

JTD provided no services at Provident between July 31, 2000 and October 6, 2000. (Def.’s
56.1 4 59.) The individuals whose names appear on the “Schedule A” backup materials dated

September 6, 2000 and October 12, 2000, did not work at Provident during the relevant period, were

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Minute Order Form (06/97)

United States District Court, Northern District of Illinois

courtroom
deputy’s
initials

LG

Name of Assigned Judge Sitting Judge if Other
or Magistrate Judge John W. Darrah than Assigned Judge
CASE NUMBER 01 C 564 DATE 10/16/2002
CASE CAPITAL CITY FINANCIAL GROUP vs. COUNTY OF COOK
TITLE
[Inthe following box. (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]

DOCKET ENTRY:

qd) a Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) Oo Answer brief to motion due . Reply to answer brief due.

4 oO Ruling/Hearing on set for at

(5) ia Status hearing[held/continued to] [set for/re-set for] on set for at

(6) oO Pretrial conference[held/continued to] [set for/re-set for] on set for at ‘

(7) Oo Trial[set for/re-set for] on at

(8) (a) (Bench/Jury trial] [Hearing] held/continued to at

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

COFRCP4(m) CLocal Rule 41.1 COFRCP41(a\(1) Cl FRCP41(a)(2).

(io) «xf {Other docket entry) Enter Memorandum Opinion And Order. Capital City Financial Group’s
motion for partial summary judgment is denied; and Cook County’s motion for summary judgment is
granted as to counts I and II and denied as to count III.

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

No notices required, advised in open court.
No notices required, number of notices
Notices mailed by judge's staff. OCT 9 1 2002
Notified counsel by telephone, date docketed

ov | Docketing to mail notices.
Mail AO 450 form. oe
Copy to judge/magistrate judge.

Date/time received in
central Clerk’s Office

uiling deputy initials



undisputed that the County Board did not authorize payment of the invoices that Capital City sent
to Bell. Therefore, Cook County’s motion for summary judgment is granted as to Count I.

Cook County moves for summary judgment on Count II, a claim for account stated, arguing
that there is no genuine issue of material fact as to this claim. Capital City does not contest Cook
County’s motion for summary judgment as to Count II.

An account stated is an agreement between parties who previously engaged in

transactions that the account representing those transactions is true and the balance

Stated is correct, together with a promise for the payment of the balance, .. . ““An

account stated only determines the amount of the debt where a liability exists, and

cannot be made to create a liability per se where none before existed,’””

Dreyer Med. Clinic v, Corral, 227 Ill. App. 3d 221, 226 (1992) (quoting Sexton v. Brach, 124 Il.
App. 3d 202, 205 (1984)). As was noted above, Capital City has not presented any evidence of an
enforceable contract between JTD and Cook County for the sum of $433,543.70 that was assigned
to Capital City. Thus, there is no genuine issue of material fact as to whether there is an account
stated; and, therefore, Cook County’s motion for summary judgment is granted as to Count II.

Cook County moves for summary judgment on Count III, a misrepresentation claim.

In order to prove a “claim for fraudulent misrepresentation under Illinois law, [Capital City]
must establish 1) that [Cook County] made a statement; 2) ofa material nature; 3) which was untrue;
4) known by the person making it to be untrue, or made in culpable ignorance of its truth or falsity;
5) relied upon by [Capital City] to [its] detriment; 6) made for the purpose of inducing reliance; and
7) [Capital City’s] reliance led to [its] injury.” Bensdorf & Johnson, Inc. v. Northern Telecom Ltd.,
58 F. Supp. 2d 874, 881 (N.D. Ill. 1999) (citing Doherty v. Kahn, 682 N.E.2d 163, 167 (Ill. App. Ct.
1997)). “[T]he reliance by [Capital City] must be justified, i.e., [it] must have had a right to rely.”

Soules v. Gen. Motors Corp., 79 Ill. 2d 282, 286 (1980). Capital City’s motion for summary

-ll-


“{A] municipality cannot be bound by a contract that does not comply with the prescribed
conditions for the exercise of its power.” Ad-Ex, Inc. v. City of Chicago, 207 Ill. App. 3d 163, 169
(1990). It is undisputed that the County Board approved a contract between Cook County and JTD
in the amount of $37,450.00 for services to be rendered during the period beginning June 22, 1999
and ending June 20, 2000. Count I seeks payment for breach of a $433,543.70 contract between JTD
and Cook County that was assigned to Capital City. However, it is undisputed that the County Board
approved no other contract between JTD and Cook County; and Capital City has not presented any
evidence that would establish the existence of such a contract between JTD and Cook County. In
fact, the undisputed facts establish that JTD had no $433,543.70 obligation from Cook County to
assign to Capital City. Payne wrote to Bell on October 27, 2000, and informed him that a mistake
had been made and that the invoices for the claimed period only totaled $43,250.00. Furthermore,
even if such a contract did exist, it would be null and void under sections 5-36001 and 5-36008 as
well as under the Cook County Purchasing Ordinance because the amount of the contract exceeded
$10,000.00.

Moreover, Bell had no authority to enter into a contract for such an amount on Cook
County’s behalf. “The general rule is that when an employee of a municipal corporation purports to
bind the corporation by contract without prior approval, in violation of an applicable statute, such
contract is utterly void.” City of Belleville y. Ill. Fraternal Order of Police Labor Council (“IFOP
Labor Council”), 231 Ill. App. 3d 56t, 563 (2000). Here, the Cook County Purchasing Ordinance
prohibits the delegation of the power to act “involv{ing] the letting of any contract or the expenditure
of public money exceeding the sum of $10,000.00 ” and Cook County officers from incurring

indebtedness on behalf of Cook County without authorization from the County Board. It is

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13)

On September 6, 2000, JTD and Payne sent Capital City a completed “Schedule A” that
included backup materials for Invoice 32-018, indicating that JTD supplied Provident with
approximately 66 workers per week who worked an aggregate of 2,190 to 2,298 hours per week.
(Def.’s 56.1 ] 41.) Bell’s signature appears on Invoice 32-018 with the date September 5, 2000.
(Def.’s 56.1 40.) For the receivables represented by Invoice 32-018, based on Bell’s signature as
the verifying officer of Provident, Capital City wire-transferred to Swerbeh, on behalf of JTD,
$86,608.10 on September 7, 2000. (Def.’s 56.1 42; Pl.’s Add. 56.1 2.)

On October 12, 2000, JTD and Payne sent Capital City a completed “Schedule A” that
included backup materials for Invoice 32-019, indicating that JTD supplied Provident with
approximately 74 workers per week who worked an aggregate of 2,791 to 2,874 hours per week
during the weeks ending September 3 to October 1, 2000. (Def.’s 56.1 4] 43.) Invoice 32-019
contained a return mailing address for Capital City in Indianapolis, Indiana. (P1.’s 56.15.) Capital
City issued Swerbeh a check for $130,143.75 on October 12, 2000, for these receivables. (Def.’s
56.19 44.)

On October 17, 2000, Capital City faxed Bell Invoice 32-019, a document prepared by
Capital City dated October 6, 2000, that purports to represent services provided during the weeks
ending September 3 to October 1, 2000, for a total amount of $260,287.50. (Def.’s 56.1 45.) Bell
signed and faxed Invoice 32-019 to Capital City on October 17, 2000. (Def.’s 56.1 4 46.)
Denise Brooks of Capital City forwarded the October 12, 2000 verification for Invoice 32-019 to
Capital City’s general manager, William F. Brooks. (P1.’s Add. 56.18.) Based on Bell’s signature

as the verifying officer for Provident, Capital City issued its check no. 4914 to “Swerbeh/JTD” and

-7-


56.1] 1; Pl.’s 56.1 91.) William Brooks (“Brooks”) is the general manager of Capital City. (P1.’s
56.192.)

Capital City is a financing/funding company that provides financing to various entities,
including the factoring of such entities’ accounts receivable. (Pl.’s 56.1 § 3.) Factoring is the
purchase of receivables from companies at a discounted value. (Def.’s 56.1 § 9;Pl.’s 56.1 § 3.)
Factoring is an unregulated business. (Def.’s 56.1 ] 8.) Prior to purchasing an account receivable,
Capital City sends out an invoice verification to a person that it assumes to be authorized to verify
that the work has been performed and that the invoice is due and payable. (Def.’s 56.1 | 12.) When
Capital City purchases an account receivable, it sends the client a “Schedule A”, which contains a
concurrence that the matters attached thereto represent what Capital City is buying, for the client’s
signature. (Def.’s 56.1 { 10.) The “Schedule A” constitutes a separate contract each time Capital
City purchases a particular invoice. (Def.’s 56.1 § 10.) Capital City considers its protection to be the
signature of the person who verifies that the invoice will be paid. (Def.’s 56.1 13.)

Cook County is a body politic and corporate. (Def.’s 56.1 § 2.) Cook County owns and
operates Provident Hospital (“Provident”), which provides medical facilities, personnel and services
to the general public for the care and treatment of physical and mental diseases. (Def.’s 56.1 ]] 23;
Pl.’s 56.1 95.) Provident is located at 500 East 51" Street in Chicago, Illinois. (Def.’s 56.1 § 24.)

Atall relevant times, Earl Bell (“Bell”) was Provident’s Associate Administrator of Finance,
a position that is the functional equivalent of a Chief Financial Officer (“CFO”), and reported to
Provident’s Chief Operating Officer. (Def.’s 56.1 [ 26; Pl.’s 56.1 97.) Bell’s responsibilities at
Provident included the day-to-day supervision of Provident’s financial operations. (Def.’s 56.1 §27.)

Additionally, Bell was responsible for the development, interpretation, coordination and

-3-


verification as to whether an expenditure had been approved by the County Board. Moreover, prior
to the invoices at issue in this case, Capital City had factored accounts receivable from Swerbeh,
JTD’s predecessor, in May 1998, which were verified by Bell on behalf of Provident and apparently
paid by Cook County. Thus, there is a genuine issue of material fact as to whether Capital City’s
reliance was reasonable. Therefore, Capital City’s motion for summary judgment on Count III is
denied, and Cook County’s motion for summary judgment on Count III is denied.
CONCLUSION

For the reasons stated herein, Capital City Financial Group’s Motion for Partial Summary
Judgment is denied; and Cook County’s Motion for Summary Judgment is granted as to Counts I
and II and denied as to Count II.

IT IS SO ORDERED.

Coin Darrah, Judge
ited States District Court

Date: Cum. 200 2_

-14-


motion for summary judgment is responsible for demonstrating to the court why there is no genuine
issue of material fact, the non-moving party must go beyond the face of the pleadings, affidavits,
depositions, answers to interrogatories, and admissions on file to demonstrate, through specific
evidence, that there remains a genuine issue of material fact and show that a rational jury could
return a verdict in the non-moving party’s favor. Celotex, 477 U.S. at 322-27; Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 254-56 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586-87 (1986); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).

Disputed facts are material when they might affect the outcome of the suit. First Ind. Bank
vy. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion for summary judgment,
a court must view all inferences to be drawn from the facts in the light most favorable to the
opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726,
731 (7th Cir, 1999). However, a metaphysical doubt will not suffice. Matsushita, 475 U.S. at 586.
If the evidence is merely colorable or is not significantly probative or is no more than a scintilla,
summary judgment may be granted. Anderson, 477 U.S. at 249-250.

BACKGROUND

The undisputed facts taken from the parties’ Local Rule 56.1(a) & (b) statements of material

facts (referred to herein as “PI.’s 56.1” and “Def.’s 56.1”") and exhibits are as follows.

Capital City is an Indiana corporation with its principal place of business in Indiana. (Def.’s

'The Court will not consider unsupported statements of fact or general “denials” that do
not contain references to the factual record, as required by Local Rule 56.1(3). See Bordelon v.
Chicago Sch, Reform Bad. of Trustees, 233 F.3d 524, 527 (7th Cir. 2000) (strict compliance with
the local rules governing summary judgment is upheld given the importance of local rules that
structure the summary judgment process). It is deemed as admitted all 56.1 responses which fall
into this category.

-2-


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

CAPITAL CITY FINANCIAL GROUP,
INC., an Indiana corporation,
Case No. 01 C 564

Plaintiff, OCT 2 4 2eHa

Honorable John W. Darrah

COUNTY OF COOK, an Illinois
corporation,

)
)
)
)
)
Y. )
)
)
)
)
Defendant. y
MEMORANDUM OPINION AND ORDER

Plaintiff, Capital City Financial Group, Inc. (“Capital City”), filed a three-count complaint
against Defendant, County of Cook (“Cook County”), alleging breach of contract, account stated,
and fraudulent or negligent misrepresentation. Cook County moves for summary judgment pursuant
to Federal Rule of Civil Procedure 56. Capital City moves for summary judgment on Count III,
fraudulent misrepresentation. For the reasons that follow, Cook County’s Motion for Summary
Judgment is granted in part and denied in part; and Capital City’s Motion for Partial Summary
Judgment is denied.

LEGAL STANDARD

Summary judgment is appropriate when there remains no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins. Co.
v. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir. 1994). “One of the principal purposes

of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses

....” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Thus, although the moving party on a

1 5


judgment on Count III must be denied if it fails to meet this burden. Angelos, 839 F.2d at 369.

Capital City moves for summary judgment on Count III, arguing that (1) it reasonably relied
on Bell’s misrepresentations and (2) Bell had actual authority to verify financial matters regarding
Cook County. Capital City maintains that Bell made a material statement, i.e., that the contract had
been approved by the County Board which he knew to be untrue or made with culpable ignorance
as to its truth and that it relied on the statement to its detriment.

The County argues that: (1) Capital City cannot establish that the representations were made
by Cook County and (2) Capital City’s reliance was unreasonable due to the ordinance and statutes
cited above which limit Cook County employees’ authority.

It is undisputed that: (1) Bell made a statement verifying that the debt existed and that Cook
County would pay the debt, (2) this statement was untrue, and (3) Capital City relied to its detriment
on this statement by advancing funds to JTD.

Cook County asserts that there is a material issue of fact as to whether Bell knew his
statement was untrue. However, the Court may draw the inference that Bell knew his statement to
be untrue or was made with culpable ignorance from his refusal to speak under Central States,
Southeast & Southwest Areas Pension Fund v, Wintz Properties, Inc., 155 F.3d 868 (7th Cir. 1998).
In Wintz Properties, the Fund sued Wintz and the company of which he was the president for failing
to pay withdrawal liability required under ERISA. 155 F.3d at 870. The district court ordered Wintz
to pay the withdrawal liability, but he did not. Wintz Properties, Inc., 155 F.3d at 871. Ina hearing
before the district court, Wintz asserted his Fifth Amendment right rather than testify regarding the
issue of whether his company was financially able to make the court-ordered payment. Wintz

Properties, Inc., 155 F.3d at 872. The Court of Appeals for the Seventh Circuit held that “invoking

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