1

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FOODCOMM INTERNATIONAL, )

)

Plaintiff, )

)

v. ) No. 02 C 7268

) 

PATRICK JAMES BARRY, )

CHRISTOPHER PAUL LEACY, and )

OUTBACK IMPORTS, INC., and )

EMPIRE BEEF COMPANY, INC., )

)

Defendants. )

MEMORANDUM OPINION

SAMUEL DER-YEGHIAYAN, District Judge

This matter is before the court on Plaintiff Foodcomm International’s

(“Foodcomm”) partial motion for summary judgment and on Defendants’ partial

motion for summary judgment. For the reasons stated below, we deny both motions

for summary judgment in their entirety.

BACKGROUND

Foodcomm alleges that in 1999 it hired Defendant Christopher Paul Leacy

(“Leacy”) to become its sales manager for the purchase and sale of Australian chilled

beef in the United States. Foodcomm also contends that it hired Defendant Patrick
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James Barry (“Barry”) as a salesperson to assist Leacy. According to Foodcomm, as

the work of Leacy and Barry progressed, they became more intricately involved in

the dealings of Foodcomm and the level of their responsibilities expanded. In April

2001, Defendant Empire Beef Company, Inc. (“Empire”) allegedly sent

representatives to meet with Foodcomm representatives to discuss a redistribution

agreement between Foodcomm and Empire (“Redistribution Agreement”). 

Foodcomm and Empire allegedly engaged in a series of negotiations concerning the

Redistribution Agreement and Leacy and Barry were allegedly intimately involved in

the negotiations. According to Foodcomm, in March of 2002, representatives of

Empire became upset by a Foodcomm proposal and Leacy was sent to smooth over

the problems with Empire. Foodcomm contends that while Leacy and Barry were

still employed for Foodcomm they were secretly discussing doing business with

Empire in Leacy’s and Barry’s own business, Defendant Outback Imports, Inc.

(“Outback”), that Leacy and Barry were secretly putting in place. Specifically,

Foodcomm claims that Leacy and Barry conspired to present Empire “with a

business plan to create, Outback Imports, Inc., an Empire Beef-owned entity that

would provide the same services as were already being provided by Foodcomm, and

directly compete with Foodcomm.” (Mem. FSJ 3-4). Foodcomm alleges that in July

and August 2002, Barry began taking absences from work at Foodcomm and he

resigned on August 29, 2002. Leacy allegedly then resigned on August 30, 2002. 

Foodcomm claims that Leacy and Barry were disloyal to Foodcomm by planning

their new business and interfering with the relationship between Foodcomm and
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Empire while Leacy and Barry continued to receive a salary from Foodcomm. 

Foodcomm’s amended complaint includes a breach of fiduciary duty claim brought

against Barry (Count I), a breach of fiduciary duty claim brought against Leacy

(Count II), a breach of contract claim brought against Leacy (Count III), a

constructive trust and unjust enrichment claim brought against Outback (Count IV), a

civil conspiracy claim brought against all Defendants (Count V), and a constructive

trust and unjust enrichment claim brought against Empire (Count VI).

Foodcomm now moves for summary judgment on the breach of fiduciary duty

claims (Counts I and II) and on the civil conspiracy claim (Count V). Defendants

have moved for summary judgment on the constructive trust and unjust enrichment

claim brought against Outback (Count IV), the civil conspiracy claim to the extent

that it is brought against Empire and Outback (Count V), and the constructive trust

and unjust enrichment claim brought against Empire (Count VI). Defendants also

move for summary judgment on the issue of damages resulting from lost profits.

LEGAL STANDARD

Summary judgment is appropriate when the record, viewed in the light most 

favorable to the non-moving party, reveals that there is no genuine issue as to any

material fact and the moving party is entitled to judgment as a matter of law. Fed. R.

Civ. P. 56(c). In seeking a grant of summary judgment the moving party must

identify “those portions of ‘the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any,’ which it believes demonstrate
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the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986)(quoting Fed. R. Civ. P. 56(c)). This initial burden may be satisfied

by presenting specific evidence on a particular issue or by pointing out “an absence

of evidence to support the non-moving party’s case.” Id. at 325. Once the movant

has met this burden, the non-moving party cannot simply rest on the allegations in

the pleadings, but, “by affidavits or as otherwise provided for in [Rule 56], must set

forth specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P.

56(e). A “genuine issue” in the context of a motion for summary judgment is not

simply a “metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co.,

Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of

material fact exists when "the evidence is such that a reasonable jury could return a

verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). The

court must consider the record as a whole, in a light most favorable to the nonmoving party, and draw all reasonable inferences that favor the non-moving party. 

Anderson, 477 U.S. at 255; Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th

Cir. 2000). When there are cross motions for summary judgment, the court should

“construe the evidence and all reasonable inferences in favor of the party against

whom the motion under consideration is made.” Premcor USA, Inc. v. American

Home Assurance Co., 400 F.3d 523, 526-27 (7th Cir.2005).

DISCUSSION
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I. Breach of Fiduciary Duty Claims (Counts I and II)

Foodcomm moves for summary judgment on the breach of fiduciary duty

claims (Counts I and II). 

A. Choice of Law for Breach of Fiduciary Duty Claims

Although Defendants make certain references to California state law in their

answer to Foodcomm’s motion for summary judgment, Illinois law clearly applies to

the breach of fiduciary duty claims in this action. Such a determination has already

been made in this action by the Seventh Circuit in Foodcomm Int’l. v. Barry, 328

F.3d 300 (7th Cir. 2003). Id. at 304. After this court entered a preliminary

injunction in this case, Defendants appealed the ruling and the Seventh Circuit

affirmed this court’s ruling in Foodcomm. Id. at 303. The Court in Foodcomm noted

that “[t]he parties implicitly agree that Illinois law applies to Foodcomm’s claims.” 

Id. The Court also applied Illinois law when determining whether Barry and Leacy

were fiduciaries and whether they violated their fiduciary duties. Id. at 304. Thus,

Illinois law applies to the breach of fiduciary duty claims in this action.

B. Whether Barry and Leacy were Fiduciaries

Foodcomm argues that there is conclusive evidence that shows that Barry and

Leacy were fiduciaries of Foodcomm. 
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1. Whether Prior Ruling Resolved Issue

Foodcomm argues that the Court in Foodcomm, has already found that Leacy

and Barry were fiduciaries of Foodcomm. In Foodcomm the Court addressed

Defendants’ argument that Barry and Leacy were not fiduciaries and the Court

stated: “We disagree.” Id. In support of its conclusion, the Court pointed to pieces

of evidence that indicate that Barry and Leacy were fiduciaries of Foodcomm and the

Court concluded by stating: “These are the hallmarks of a fiduciary, and employees,

as agents of their employer, do not fall outside the purview of a breach of fiduciary

duties.” Id. Defendants contend that the statements made by the Court in

Foodcomm were merely based upon the record before the Court at that juncture, and

were not intended to bind the parties or this court at the summary judgment stage. 

The Seventh Circuit has indicated that “[a] court must be cautious in adopting

findings and conclusions from the preliminary injunction stage in ruling on a motion

for summary judgment . . . .’” Thomas & Betts Corp. v. Panduit Corp., 138 F.3d

277, 291-92 (7th Cir. 1998)(noting that “findings of fact and conclusions of law

made at the preliminary injunction stage are often based on incomplete evidence and

a hurried consideration of the issues; and second, different standards apply in the two

contexts (reasonable likelihood of success on an injunction, and the existence of any

genuine issues of material fact on summary judgment)”). In the instant action, the

Court in Foodcomm did not specifically state that its conclusion that Barry and Leacy

were fiduciaries was a preliminary finding, but the context of the statements by the

Court indicates that its conclusion was only a preliminary finding. For example, in
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Foodcomm, the Court made clear that it was not ruling on the merits of Foodcomm’s

claims by stating that it was applying the legal standard for a preliminary injunction

determination. 328 F.3d at 303. Also, immediately after the Court discussed

whether Barry and Leacy were fiduciaries, the Court made several references to the

fact that the Court was ruling based upon “evidence adduced at the [preliminary

injunction] hearing” and that certain facts appeared to support Foodcomm’s positions

“if proved at trial.” Id. There is no clear statement by the Court in Foodcomm

indicating that it intended to depart from the general principal regarding preliminary

injunction findings and to bind the court and parties at the summary judgment stage

in regards to whether Leacy and Barry were fiduciaries of Foodcomm. Thus, we

conclude that the Seventh Circuit did not bar the parties from addressing this issue at

the summary judgment stage.

2. Evidence of a Fiduciary Relationship

Foodcomm argues that the evidence overwhelmingly shows that Barry and

Leacy were fiduciaries of Foodcomm. Under Illinois law, a plaintiff bringing a

breach of fiduciary duty claim bears “[t]he burden of proving the existence of a

fiduciary relationship . . . .” In re Rothenberg, 530 N.E.2d 1148, 1150 (Ill. App. Ct.

1988). A fiduciary relationship may: 1) “be presumed from the relationship of the

parties, such as in an attorney-client relationship,” or 2) “arise from the facts of

particular situation, for example, where there is trust reposed on one side and

resulting superiority and influence on the other.” Id. If a fiduciary relationship is not
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presumed as a matter of law “the facts from which such a relationship arises must be

proved by clear and convincing evidence.” Id. 

In Foodcomm the court noted that, based upon the record before it at that

juncture, Barry and Leacy appeared to have “had exclusive charge over all of

Foodcomm’s purchasing of Australian chilled beef, and their job descriptions at

Foodcomm involved significant autonomy and discretion.” 328 F.3d at 304. The

Court in Foodcomm also noted that “Barry and Leacy were two of Foodcomm's

highest paid employees . . . .” Id. 

a. Salaries

Foodcomm argues that, apart from the owners of Foodcomm, Leacy and Barry

were Foodcomm’s highest paid employees. Defendants deny in part Foodcomm’s

assertion. Defendants cite a chart of Foodcomm employees’ salaries that indicates

that, besides Leacy, in 2002 four other non-owner employees made more money than

Barry. (R FSF Par. 38)(R FSF Tab 12). Defendants concede that Leacy was the

highest paid employee other than the owners. Thus, whether Barry was one of

Foodcomm’s highest paid employees is a genuinely disputed fact. Also, the mere

fact that Leacy received a high salary is not sufficient to warrant a finding as a matter

of law that he was a fiduciary. Foodcomm will have an opportunity to present

evidence concerning the salaries of Leacy and Barry at trial before the trier of fact.

b. Responsibilities of Leacy and Barry
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Foodcomm also claims that Leacy and Barry had significant responsibilities in

their jobs and had exclusive control over the purchasing of Australian chilled beef. 

Foodcomm asserts that it hired Leacy as its exclusive Sales Manager for importing

Australian chilled beef. (FSF Par. 23). Defendants dispute Foodcomm’s

characterization of Leacy’s position as a Sales Manager and contend that Leacy was

merely hired as a salesman. (R FSF Par. 23). Defendants contend that Leacy did

not have exclusive control over the purchasing of beef and point to Leacy’s

deposition testimony during which Leacy testified that he only handled about 70

percent of the purchasing and that Greg Bourke (“Bourke”), the Vice President of

Foodcomm, handled 30 percent of the purchasing. (Leacy Dep. 27-28). Foodcomm

in response points to Bourke’s declaration which indicates that the responsibilities of

Barry and Leacy expanded until they dealt with all purchasing and that they handled

100 percent of the purchasing when their employment with Foodcomm ended. 

(Bourke Decl. Par 8). Defendants acknowledge that the responsibilities of Leacy and

Barry expanded somewhat during their employment, but disagree with Bourke’s

contention that they handled 100 percent of purchasing when they left Foodcomm. 

Foodcomm, has not pointed to any conclusive evidence that shows that Bourke’s

contentions regarding purchasing are accurate and Leacy’s deposition testimony on

the subject is inaccurate. Thus, whether Leacy and Barry had exclusive control over

the purchasing of Australian chilled beef is a determination that must be made by the

trier of fact. See Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003)(stating that at

the summary judgment stage “a court may not make credibility determinations,
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weigh the evidence, or decide which inferences to draw from the facts; these are jobs

for a factfinder’”). 

In addition, we note that Defendants point to a variety of other evidence that

creates genuinely disputed facts concerning the scope of the other responsibilities of

Leacy and Barry when they terminated their employment with Foodcomm. (R FSF

Par. 23, 32, 44). A determination of what those responsibilities entailed would be

pertinent in order to assess whether Leacy and Barry had formed a fiduciary

relationship with Foodcomm. Thus, because there are genuinely disputed facts, we

cannot determine what were the responsibilities of Leacy and Barry at the time of

their departure from Foodcomm. Such a determination can only be made by the trier

of fact.

c. Discretion and Autonomy

Foodcomm argues that Leacy and Barry had significant discretion and

autonomy in performing their work for Foodcomm. As is indicated above, there are

genuinely disputed facts concerning the scope of the responsibilities of Leacy and

Barry. Such a determination concerning their responsibilities would be relevant for a

determination in regards to the amount of discretion or autonomy they had in

performing those responsibilities. Foodcomm characterizes Leacy and Barry as its

representatives, acting as the sole arm of Foodcomm in dealing with Empire, while

being vested with autonomy to carry out their duties. Defendants, however, point to

evidence that indicates contrary facts. Defendants point for example, to evidence
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that indicates that Bourke took an active role in maintaining Foodcomm’s

relationship with Empire. (R FSF Par. 44). If Bourke was actively involved in

ensuring that Foodcomm maintained a cordial relationship with Empire then the

work of Leacy and Barry dealing with Empire would likely have been monitored and

controlled by Bourke. Although there is no conclusive evidence that proves such a

fact to be true or untrue, we are required to make all reasonable inferences in favor of

Defendants, the non-movants on this issue. Anderson, 477 U.S. at 255. 

Defendants also point to the deposition testimony of Bourke during which he

indicated that Frank Tarantino“had the responsibility for overseeing what Mr. Barry

and Leacy . . . did” in “some instances.” (Bourke Dep.40, 61). Bourke indicated

that Barry and Leacy worked more independently than with Tarantino, but did not

assert that Barry and Leacy had unfettered autonomy in their work. (Bourke Dep. 

61). In response to the evidence cited by Defendants showing that Leacy and Barry

did not have autonomy and broad discretion in performing their jobs, Foodcomm

fails to point to any evidence that would conclusively show otherwise. Foodcomm

merely relies upon the Court’s statements in Foodcomm which were based on the

limited record before the court at that juncture. Thus, a determination concerning the

discretion and autonomy that Leacy and Barry had in their jobs can only be made by

the trier of fact. Based on the above, and a consideration of all the evidence as to

whether Leacy and Barry were fiduciaries of Foodcomm, we conclude that such a 

determination cannot be resolved as a matter of law at this juncture.
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C. Whether Leacy and Barry Breach their Fiduciary Duties

 Foodcomm argues that Leacy and Barry breached their fiduciary duties. 

Under Illinois law, in order to prevail on a breach of fiduciary duty claim a plaintiff

must establish: 1) “the existence of a fiduciary duty on the part of” the plaintiff, 2)

that the defendant breached that duty, and 3) “damages proximately resulting

therefrom.” Romanek v. Connelly, 753 N.E.2d 1062, 1072 (Ill. App. Ct. 2001).

Since, as is explained above, we cannot determine as a matter of law whether Leacy

and Barry were fiduciaries of Foodcomm, we need not proceed further with our

analysis of the breach of fiduciary claims. Foodcomm cannot prevail on their motion

for summary judgment on the breach of fiduciary claims without a finding that Leacy

and Barry were fiduciaries of Foodcomm. 

We also note that even if Foodcomm had pointed to sufficient evidence that

indicates Leacy and Barry were fiduciaries, there are a variety of genuinely disputed

facts that bear upon the determination of whether Leacy and Barry breached their

alleged fiduciary duties. For example, Foodcomm contends that Leacy and Barry

conspired to present Empire “with a business plan to create, Outback Imports, Inc.,

an Empire Beef-owned entity that would provide the same services as were already

being provided by Foodcomm, and directly compete with Foodcomm.” (Mem. FSJ

3-4). However, Foodcomm fails to specifically point to any evidence that would

support such a conclusion. Foodcomm as the movant bears the burden of pointing to

such evidence that shows that it is entitled to prevail as a matter of law. See Celotex

Corp., 477 U.S. at 323 (stating that in seeking a grant of summary judgment the
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moving party must identify “those portions of ‘the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any,’ which it

believes demonstrate the absence of a genuine issue of material fact”)(quoting Fed.

R. Civ. P. 56(c)). In support of Foodcomm’s allegations of conspiratorial conduct

by Leacy and Barry, Foodcomm points vaguely to broad ranges of its statement of

facts. One such citation covers a range of over forty paragraphs and other citations

cover twenty paragraphs of the statement of material facts. (Mem. FSJ 4). Such a

broad reference to the statement of facts would include countless pieces of evidence

that are cited in support of the many paragraphs. Local Rule 56.1 was designed to

assist the courts by making the record clearer and less burdensome for a court to

identify genuinely disputed material facts. Such a purpose would be entirely

defeated if a party could, as Foodcomm has done, simply point abstractly to broad

portions of a statement of material facts and argue that somewhere in that morass of

facts and evidence there is some evidence that supports its position. See Waldridge

v. American Hoechst Corp., 24 F.3d 918, 920, 922 (7th Cir. 1994)(stating that a court

is not “obliged in our adversary system to scour the record looking for factual

disputes and may adopt local rules reasonably designed to streamline the resolution

of summary judgment motions”). Thus, Foodcomm has failed to meet its burden to

identify sufficient evidence that shows that it is entitled to a judgment as a matter of

law on the issue of whether Leacy and Barry breached their alleged fiduciary duties.

Defendants on the other hand have pointed to evidence that indicates that there

are genuinely disputed facts concerning whether Leacy and Barry breached their
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alleged fiduciary duties. For example, Foodcomm contends that Leacy was

attempting to hide from Foodcomm his secret business discussions with Empire. To

support its point, Foodcomm states that in March 2002 Leacy told Bourke that only

Leacy would have further contact with Empire and that Leacy told Bourke that he

should not have contact with Empire. (FSF Par. 75). However, the only support that

Foodcomm cites for such a proposition is the testimony of Bourke at the preliminary

injunction hearing. (FSF Par. 75). Defendants point out that a close examination of

Bourke’s testimony shows that Foodcomm’s characterization of his testimony is

inaccurate. Bourke testified that Leacy told him that Leacy would contact Empire to

“smooth things over.” (Prelim. Hearing 174). Bourke then was asked whether he

and Leacy “agreed” that Leacy should contact Empire instead of Bourke and Bourke

did not deny that characterization of the decision. (Prelim. Hearing 174-75). It is not

clear from such testimony whether it was Leacy who came up with the idea that only

he should have contact with Empire or whether Bourke and Leacy who reached an

agreement together. Although either inference is possible, we are required to make

such inferences in favor of Defendants, the non-movants on this issue. Anderson,

477 U.S. at 255. Foodcomm improperly presents facts that are based upon

inferences in its favor.

In addition, Foodcomm tries to show that Leacy was secretive and breached

his fiduciary duties by arguing that Leacy never told Bourke or anyone else at

Foodcomm that Empire decided to stop doing business with Foodcomm. (FSF Par.

78). Defendants admit the truth of that fact, but point to evidence that shows that
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there was no need for Leacy to inform Foodcomm of that fact because the relations

between Empire and Foodcomm had already broken down and Bourke had

recognized that the decision by Empire to cease its relations with Foodcomm was a

foregone conclusion. (R FSF Par. 78). Whether or not Foodcomm is correct or

Defendants are correct, and which inferences should be made from the evidence is a

matter that can only be determined by the trier of fact. Therefore, whether Leacy and

Barry breached their alleged fiduciary duties is a matter that must be addressed by

the trier of fact. Based on the above, we deny Foodcomm’s motion for summary

judgment on the breach of fiduciary claims (Counts I and II).

II. Civil Conspiracy Claims (Count V)

Foodcomm moves for summary judgment on Foodcomm’s claim against

Defendants for civil conspiracy. Empire and Outback also seek summary judgment

on Foodcomm’s civil conspiracy claim.

A. Civil Conspiracy Choice of Law

When a federal court has diversity subject matter jurisdiction in a case and

does not have federal question subject matter jurisdiction, the court must apply “the

choice-of-law rules of the forum state . . . .” Smurfit Newsprint Corp. v. Southeast

Paper Mfg., 368 F.3d 944, 949 (7th Cir. 2004). The parties do not disagree that this

court solely has diversity subject matter jurisdiction and that the instant action was

brought in federal court in Illinois. Therefore, we must look to Illinois state law for
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choice of law principles.

Empire and Outback argue that California law should be applied in

determining Foodcomm’s civil conspiracy claims. The Seventh Circuit noted that

“[t]he parties implicitly agree[d] that Illinois law applies to Foodcomm’s claims.” 

Foodcomm, 328 F.3d at 303. However, following the Seventh Circuit’s direction,

we must apply Illinois law. Even if the Seventh Circuit’s ruling in its earlier decision

does not apply in the instant action, in Illinois, the “most significant relationship test”

is used to decide between conflicting laws. Palmer v. Beverly Enterprises, 823 F.2d

1105, 1112 (7th Cir. 1987); Ingersoll v. Klein, 262 N.E.2d 593, 595-96 (Ill. 1970). 

Under the most significant relationship test, “the local law of the State where the

injury occurred should determine the rights and liabilities of the parties, unless

Illinois has a more significant relationship with the occurrence and with the parties,

in which case the law of Illinois should apply.” Ingersoll, 262 N.E.2d at 595. When

determining which state has a more significant relationship, the court considers: (1)

where the injury occurred; (2) where the injury causing conduct occurred; (3) the

domicile of the parties; and (4) where the relationship of the parties is centered. 

Additionally, the court should look at the contacts of each jurisdiction under the

factors and evaluate those contacts in light of the policies underlying the laws of

those jurisdictions.

In the instant action, the alleged civil conspiracy between the Defendants has a

more significant relationship to Illinois. First, Barry and Leacy solicited each other

in Illinois. Second, Barry and Leacy at times solicited Empire while in Illinois. 
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Third, Barry and Leacy prepared their business plan on Foodcomm’s computers in

Illinois. Fourth, the Defendants intended to form Outback in Illinois. Fifth,

Outback’s headquarters and sole office was located in Chicago, Illinois. Sixth, on or

about September 18, 2002, Foodcomm learned that Barry and Leacy were “trading

for or from a New firm in Chicago called Outback Imports,” (FSAF Par. 104), and

on October 2, 2002, Barry solicited business by sending an email announcing that he

had “launched a company . . . in partnership with Chris Leacy . . . based in Chicago[,

Illinois] . . . called Outback Imports . . . .” (FSAF Par. 105). Seventh, Barry and

Leacy were domiciled in Illinois at the time the complaint was filed. Finally, even

when Barry and Leacy worked solely for the Outback Imports division of Empire,

Barry and Leacy worked in Illinois. Therefore, since the alleged breach of fiduciary

duties by Barry and Leacy occurred in Illinois, the alleged civil conspiracy occurred

in Illinois, Barry, Leacy, and Outback were domiciled in Illinois, and the relationship

between Foodcomm and the Defendants is centered in Illinois, Illinois law applies to

the civil conspiracy claim. See, e.g., Spinozzi v. ITT Sheraton Corp., 174 F.3d 842,

844 (7th Cir. 1999)(stating that “[the location that the tort occurred] is the place that

has the greatest interest in striking reasonable balance among safety, cost, and other

factors pertinent to the design and administration of a system of tort law”).

Empire and Outback argue that Illinois applies the “internal affairs doctrine”

in determining the appropriate choice of law, which would then require this court to

apply California law to the civil conspiracy claim. (D. Mot. 4). Under Illinois law,

the “internal affairs doctrine” is only applicable “[w]hen the subject is liability of
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officers and directors for their stewardship of the corporation, the law presumptively

applicable is the law of the place of incorporation.” Resolution Trust Corp. v.

Chapman, 29 F.3d 1120, 1122 (7th Cir.1994)(emphasis added). Empire and Outback

contend that “Foodcomm attempts to hold Empire and Outback liable for alleged

breaches of fiduciary duty by Barry and Leacy under a civil conspiracy theory” and

that the “internal affairs doctrine” should be applied. (Mem. DSJ 3, 4). However,

Foodcomm’s claim in Count V is not a breach of fiduciary duties claim, but rather a

tort claim where alleged breaches of fiduciary duties by Barry and Leacy are an

element of the cause of action. See McClure v. Owens Corning Fiberglas Corp., 720

N.E.2d 242, 258 (Ill. 1999)(stating that “[c]ivil conspiracy is an intentional tort . . .

.”). Therefore, as a matter of law, Illinois law applies to Foodcomm’s civil

conspiracy claim.

B. Summary Judgment on Civil Conspiracy Claims

Foodcomm and Defendants contend that they are entitled to judgment as a

matter of law as to the civil conspiracy claims.

Foodcomm contends that each of the elements for civil conspiracy “are readily

satisfied here on the undisputed evidence. (Mem. PSJ 5). Under Illinois law, a civil

conspiracy is defined as: “(1) a combination of two or more persons, (2) for the

purpose of accomplishing by some concerted action either an unlawful purpose or a

lawful purpose by unlawful means, (3) in the furtherance of which one of the

conspirators committed an overt tortious or unlawful act.” Fritz v. Johnston, 807
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N.E.2d 461, 470 ( Ill. 2004). In order to be liable of civil conspiracy, the conspiracy

must be “in furtherance of . . . an overt tortious or unlawful act.” Id. at 470

(emphasis added). In order for Barry and Leacy to further their breaches of fiduciary

duties, Barry and Leacy must first owe fiduciary duties to Foodcomm. As noted

earlier in this opinion, based on the facts and a review of the evidence, the issue of

whether Barry and Leacy owed fiduciary duties to Foodcomm cannot be resolved as

a matter of law. Therefore, because the issue of the existence of fiduciary duties by

Barry and Leacy must be decided by a trier of fact, liability as to Foodcomm’s civil

conspiracy claim cannot be decided as a matter of law.

Additionally, Empire and Outback argue that Foodcomm cannot meet the legal

requirements for civil conspiracy because Foodcomm cannot demonstrate that

Empire and Outback had actual knowledge that Barry’s or Leacy’s conduct

constituted breaches of their fiduciary duties. Civil conspiracy is an intentional tort

that requires proof that a defendant “knowingly and voluntarily participates in a

common scheme to commit an unlawful act or a lawful act in an unlawful manner.”

Adcock, 645 N.E.2d at 894. However, accidental, inadvertent, or negligent

participation in a common scheme does not amount to a civil conspiracy. Id. Simply

knowing of the fraudulent or illegal actions of another is also not enough to show a

conspiracy, Tribune Co. v. Thompson, 174 N.E. 561 (1930), and “[a] defendant who

innocently performs an act which happens to fortuitously further the tortious purpose

of another is not liable under the theory of civil conspiracy.” Adcock, 645 N.E.2d at

894. Empire and Outback contend that Foodcomm cannot satisfy its burden to show
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that Empire and Outback had actual knowledge of “fiduciary duties owed by Barry

and Leacy to Foodcomm” and “any conduct in violation of those duties.” (Mem.

DSJ 6).

Empire and Outback contend that to have such actual knowledge, Empire and

Outback must understand the nature of Barry’s or Leacy’s alleged duties and the

breaches of those duties. Under Illinois law, “[a] defendant who understands the

general objectives of the conspiratorial scheme, accepts them, and agrees, either

explicitly or implicitly to do its part to further those objectives, . . . is liable as a

conspirator.” Adcock, 645 N.E.2d at 894. Foodcomm notes that conspiracy claims

“do no rise or fall based upon a co-conspirator’s legal acumen.” (Resp. DSJ 6)(citing

United States v. Snook, 366 F.3d 439, 445 (7th Cir. 2004), for the proposition that

“on the conspiracy count the government need not prove Snook knew the practice

was illegal”). Empire and Outback must have simply understood “the general

objectives” of the civil conspiracy scheme to breach the alleged fiduciary duties,

accept those objectives, and agree with the objectives, either explicitly or implicitly,

to further the objectives of breaching the alleged fiduciary duties. Simply because

Empire and Outback did not understand the legal terminology or the details of the

law, they are not shielded from liability.

Empire and Outback also argue that the individuals responsible for hiring

Barry and Leacy “had no idea that Barry and Leacy allegedly owed fiduciary duties

to Foodcomm.” (Mem. DSJ 6). Additionally, Empire and Outback contend that the

individuals responsible for hiring Barry and Leacy “did not have any occasion to
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explore the duties of Barry and Leacy to Foodcomm because, as Levine testified, he

was ‘hiring two good salesmen to sell meat to [Empire’s] existing account base.’” 

(Mem. DSJ 6). However, knowledge by Empire that: Barry and Leacy were

Foodcomm’s employees; Leacy was in charge of the Empire account; and Leacy was

involved in business negotiations between Foodcomm and Empire could lead a trier

of fact to conclude that the actions of Empire and Outback were an implicit

agreement to further Barry’s and Leacy’s breach of their alleged fiduciary duties. 

Additionally, a trier of fact could conclude that receiving the business plan from

Barry and Leacy, seeking legal advice from Empire’s attorney about Leacy’s

confidentiality agreement with Foodcomm, financing Outback, and distributing

shareholder agreements to Barry and Leacy could constitute agreement to further the

alleged breaches of fiduciary duties by Barry and Leacy. Further, a trier of fact could

conclude that an agreement, either explicit or implicit, in furtherance of a breach of

the alleged fiduciary duties by Barry and Leacy did not exist. See Adcock, 645

N.E.2d at 894 (noting that the agreement is “a necessary and important” element the

civil conspiracy cause of action). Thus, the question of whether Outback knew of

Leacy’s and Barry’s alleged fiduciary duties is for the trier of fact to answer.

Additionally, Empire and Outback contend that “Outback never functioned as

a corporate entity” and therefore summary judgment must be decided in their favor. 

(Mem. DSJ 6). However, Empire and Outback note that “Quinn (Empire’s

controller) signed the lease [for Outback’s offices] and Empire paid the rent [for

Outback’s offices].” (Reply DSJ 10 n. 9). Additionally, a shareholder agreement
22

and stock option agreement for Barry and Leacy to become shareholders in Outback

was created. (FSAF Par. 84). Further, a Certificate of Incorporation for “Outback

Imports, Inc.” was filed with the New York Secretary of State on July 31, 2002. 

(FSAF Par. 85). In addition to the certificate of incorporation, on or about

September 18, 2002, Foodcomm learned that Barry and Leacy were “trading for or

from a New firm in Chicago called Outback Imports,” (FSAF Par. 104), and on

October 2, 2002, Barry sent an email announcing that he had “launched a company . .

. in partnership with Chris Leacy . . . based in Chicago . . . called Outback Imports . .

.” (FSAF Par. 105). Although Empire and Outback contend that “Outback never

commenced business,” (Mem. DSJ 7-8), and that Outback was merely a shell

corporation, questions of fact remain as to whether there were any profits, and if so,

whether any went directly to Outback or to the Outback Imports division of Empire. 

Thus, even if the trier of fact concludes that Barry and Leacy breached their alleged

fiduciary duties, and that Empire and Outback expressly or implicitly participated in

the alleged conspiracy, material facts still remain as to whether Outback operated as

a business, or was merely a shell for Empire. Therefore, based on the above, we

deny the motions for summary judgment by Foodcomm and the Defendants on the

civil conspiracy claims (Count V).

III. Causation

Foodcomm argues that Defendants “caused injury to Foodcomm in the form of

loss of employee loyalty and loss of the ability to pursue the Empire Beef
23

redistribution deal unencumbered by its own disloyal employees.” (Mem. FSF 6). 

In regards to the alleged harm to Foodcomm resulting from a “loss of employee

loyalty,” Foodcomm has not pointed to sufficient evidence that conclusively

establishes causation for any such damages and which would warrant granting

judgment as a matter of law in favor of Foodcomm on that issue. In regards to the

alleged harm to Foodcomm caused by the loss of its relationship with Empire,

Defendants have pointed to a variety of evidence that indicates that Defendants’

alleged misconduct, even if true, did not cause such harm to Foodcomm. 

For example, there is evidence that indicates that Empire was contemplating

severing its relationship with Foodcomm even before Leacy and Barry engaged in

their alleged secretive communications with Empire. Such evidence makes it

possible to infer that the ultimate decision by Empire to sever relations was based

upon the dealings that occurred prior to Leacy’s and Barry’s alleged misconduct. 

The parties agree that in March 2002 a conflict arose in the negotiations between

Foodcomm and Empire and that Leacy was sent in to try and smooth out the

problems. (FSF 72-73). Foodcomm contends that Empire’s representative became

upset during the negotiations over the Redistribution Agreement. (FSF Par. 71). 

However, Foodcomm does not indicate that the conflict was caused by Leacy or

Barry attempting to interfere with Foodcomm’s relationship with Empire. Rather,

Foodcomm admits that the Empire representative was “upset with Bourke due to

Bourke’s suggestions at the March 12 meeting that Foodcomm broker Empire Beef’s

purchases from ConAgra/AMH as part of the redistribution deal.” (FSF Par. 71). 
24

Bourke, Foodcomm’s General Manager, testified at his deposition that the Empire

representative “was pretty upset” and described the situation as a “hornet’s nest.” 

(Bourke Dep. 192, 197-98). Thus, only the trier of fact can determine whether

Empire decided to sever its relationship with Foodcomm based upon the animosity

caused by Bourke rather than based upon any alleged secretive contacts by Leacy

and Barry.

Defendants also point to other evidence that indicates that their contacts with

Empire were not the cause of Empire’s decision to terminate its relationship with

Foodcomm. Defendants argue that Leacy and Barry did not approach Empire to

discuss doing business with Empire until May 2002 and that Empire had already

indicated its decision to terminate its relations with Foodcomm by that juncture. 

Scott Brubaker (“Brubaker”), a representative of Empire, testified at his deposition

that he spoke with Bourke in September 2002 and that during that conversation 

Brubaker told Bourke that Empire was “no longer going to do business” with

Foodcomm. (Brubaker Dep. 336). Bourke himself testified that when he spoke with

Brubaker in September 2002 about reviving the Redistribution Agreement 

negotiations, Brubaker told him “that door was - - is now closed . . . .” (Bourke Dep.

365). Defendants also point to evidence that shows that Leacy and Barry did not

approach Empire to discuss doing business with Empire until May 2002. (DSF Par.

81-83). Although Foodcomm contends that Leacy and Barry secretly engaged in

improper contacts with Empire sooner than May 2002, such a determination cannot

be made as a matter of law. Only the trier of fact can assess the evidence concerning
25

Leacy’s and Barry’s alleged misconduct and determine whether they acted

improperly, and if they did so, when such conduct took place. Finally, Defendants

point out that even if there is sufficient evidence that shows that there was a remote

possibility after September 2002 that Empire might rekindle its relationship with

Foodcomm, Foodcomm cannot automatically place the blame on Leacy and Barry

for the final breakdown in its relations with Empire. Foodcomm itself put a damper

on such a possible rekindling by suing Empire in the instant action in October of

2002. Thus, there are genuinely disputed facts concerning causation in the instant

action that can only be addressed by the trier of fact.

IV. Damages

Foodcomm argues that it is entitled to partial summary judgment on the issue

of damages. Defendants argue that Foodcomm is barred from seeking any 

compensatory damages for lost profits and that regardless, such damages are

speculative and cannot be calculated. 

A. Whether Foodcomm is Barred from Recovering Lost Profits

Defendants argue that Foodcomm is barred from recovering any damages for

lost profits. 

1. Omission of Request in Amended Complaint

Defendants argue that since Foodcomm did not specifically request
26

compensatory damages in the amended complaint, “Foodcomm has no legal right to

claim any compensatory damages for the loss of Empire business.” (Mem. DSJ 9). 

However, in support of such a statement, Defendants fail to cite to any legal

authority whatsoever. (Mem. DSJ 9). Federal Rule of Civil Procedure 54(c) states

in pertinent part, “[e]xcept as to a party against whom a judgment is entered by

default, every final judgment shall grant relief to which the party in whose favor it is

rendered is entitled, even if the party has not demanded such relief in the party’s

pleadings.” Fed. R. Civ. P. 54(c)(emphasis added). Federal Rule of Civil Procedure

8 (“Rule 8”) requires a plaintiff to include in its complaint a clear and concise

statement of its claims, jurisdictional allegations, and a demand for relief. Fed. R.

Civ. P. 8. Rule 8 does not specify that the demand for relief included in the

complaint is the only relief available to a plaintiff. Fed. R. Civ. P. 8. 

In the amended complaint, Foodcomm seeks: 1) preliminary and permanent

injunctions barring Barry and Leacy from working for Empire and Outback, 2) a

forfeiture of Barry’s and Leacy’s compensation during the last months of their

employment at Foodcomm, and 3) punitive damages. (R DSF Par. 70). Foodcomm

does not specifically ask for compensatory damages in the amended complaint. (R

DSF Par. 10). However, for each count in the amended complaint, Foodcomm

requested that the court “award such further relief as [the] Court deems appropriate

under the circumstances.” (A. Compl. Par. 57, 63, 71, 76, 81, 85). Compensatory

damages would thus be included within the request for “further relief” included in

the amended complaint, and the trier of fact must determine the amount of such
27

damages, if any. 

To the extent that Defendants are contending that they were surprised by the

allegedly untimely request for compensatory damages, Defendants have not shown

that they were prejudiced by the request. Defendants admit that Foodcomm

disclosed its intent to seek such damages in January of 2004 and Defendants did not

subsequently file any motion with this court seeking additional discovery concerning

compensatory damages. Two years later, in September 2006, after this case returned

from an appeal, Defendants appeared before this court and still made no mention of

any complaint on Foodcomm’s intent to seek compensatory damages. Instead,

Defendants and Foodcomm agreed that the court proceed and rule based upon the

summary judgment briefs that were previously filed with the court. Thus, based on

the above, Defendants have failed to show that Foodcomm is barred from pursuing

compensatory damages in the instant action merely because there is not a specific

request for such damages in the amended complaint.

2. Whether the Request for Damages is Speculative and Incalculable

Defendants further argue that even if compensatory damages for lost profits

are available to Foodcomm, this court should find as a matter of law that no

compensatory damages for lost profits can be awarded because Foodcomm’s request

for compensatory damages is speculative and cannot be calculated. Lost profits can

be recovered when a party can prove the calculated amount “with sufficient certainty

to avoid speculation or conjecture by the jury.” Shepard v. State Auto. Mut. Ins. Co.,
28

463 F.3d 742, 748 (7th Cir. 2006). 

3. Expert Calculations

Defendants argue that Foodcomm’s expert’s calculations regarding lost profits

are speculative. Drawing all inferences in favor of Foodcomm, the non-movant on

this issue, we conclude that Foodcomm has presented sufficient evidence such that a

reasonable jury could possibly, without speculation or conjecture, award Foodcomm

lost profits as compensatory damages. It is up to the trier of fact to assess accuracy

of the calculations of Foodcomm’s experts, and to determine how much damages, if

any, should be awarded. Foodcomm should be allowed to present its evidence at

trial concerning compensatory damages for lost profits and it is premature to

conclude prior to trial that such evidence would be insufficient as a matter of law. 

4. Legal Findings in Foodcomm

Defendants argue that in Foodcomm the Court determined as a matter of law

that the lost profits resulting from Foodcomm’s separation from Empire cannot be

calculated. Defendants point to the elements for a preliminary injunction that require

a finding of irreparable harm and no adequate remedy at law. Defendants contend

that the Court’s statements in Foodcomm in regard to those elements show that

damages resulting from Foodcomm’s separation from Empire and lost profits cannot

be calculated. However, the court in Foodcomm was solely reviewing the district

court’s ruling granting Foodcomm’s motion for a preliminary injunction. 328 F.3d at
29

302. The type of harm that the preliminary injunction was meant to address was the

harm that Barry and Leacy could cause Foodcomm by continuing to work with

Empire and Outback. The preliminary injunction preserved the status quo in regard

to Leacy’s and Barry’s further conduct. Thus, in regards to the irreparable harm and

inadequate remedy at law elements, the issue was whether injunctive relief was

necessary to stop Leacy and Barry from causing further harm to Foodcomm or

whether Foodcomm could later calculate damages caused by Leacy’s and Barry’s

further contact with Empire. 

The preliminary injunction order did not order Empire to retain its relationship

with Foodcomm in order to preserve the status quo in that regard. The court was not

presented with a determination of whether Foodcomm would suffer irreparable harm

and lack a remedy at law if an injunction was not issued to order Empire to retain its

relationship with Foodcomm. Thus, Defendants are incorrect when they assert that

the Court in Foodcomm ruled as a matter of law that the lost profits that resulted

from the separation between Foodcomm and Empire cannot be calculated. That

issue was never before the Court. Based upon the above, Defendants have failed to

show that Foodcomm is barred from recovering compensatory damages for lost

profits.

We are not finding that Foodcomm is entitled to recover damages. We are

merely ruling that Foodcomm is entitled to present its evidence concerning damages

at trial. If at the close of Foodcomm’s case in chief Foodcomm has failed to present

sufficient evidence concerning damages, Defendants are entitled to move for a
30

judgment as a mater of law pursuant to Federal Rule of Civil Procedure 50(a). Fed.

R. Civ. P. 50(a).

B. Partial Judgment on Issue of Damages

Foodcomm argues that it is entitled to summary judgment “as to damages

reflecting the compensation paid to Barry and Leacy during their period of

disloyalty.” (Mem. FSJ 12). Foodcomm contends that during the time it has

determined that Leacy and Barry were disloyal to Foodcomm Leacy was paid

$92,500 and Barry was paid $53,837. Foodcomm contends that it is entitled to a

judgment as a matter of law as to such damages. However, as is indicated above,

whether Leacy and Barry were in fact disloyal to Foodcomm and whether

Foodcomm is entitled to prevail on any of its claims is a matter yet to be determined

by the trier of fact. Also, even if the trier of fact concluded that Leacy and Barry

were disloyal to Foodcomm, there are genuinely disputed facts concerning the

precise period that Leacy and Barry were disloyal. Finally, Foodcomm has failed to

point to sufficient evidence that shows that Leacy and Barry failed to offer

Foodcomm any benefit at all during the alleged period of disloyalty. If Leacy and

Barry offered some benefits to Foodcomm, then Foodcomm should not be entitled

out of hand to recover their entire salaries and unjustly benefit from the services

provided by Leacy and Barry. Thus, even if the trier of fact determines that Leacy

and Barry were disloyal and further determines the period of such disloyalty, the trier

of fact needs to assess further evidence to determine whether Foodcomm is entitled
31

to recover all or part of their salaries during that period. Therefore, we deny

Foodcomm’s partial motion for summary judgment on damages.

V. Constructive Trust and Unjust Enrichment Claims (Counts IV and IV)

Empire and Outback move for summary judgment on the Constructive trust

and unjust enrichment claims (Counts IV and VI). Under Illinois law, a constructive

trust is an equitable remedy that may be imposed to redress unjust enrichment where

there is either actual fraud or implied fraud resulting from a fiduciary relationship. 

Steinberg v. Chicago Medical School, 371 N.E.2d 634, 638 (Ill. 1977); see also Ray

v. Winter, 367 N.E.2d 678, 682 (Ill. 1977)(noting that “[c]onstructive trusts are

divided into two general classes: one in which actual fraud is considered as equitable

grounds for raising the trust, and the other, where there exists a fiduciary relationship

and a subsequent abuse of such relationship”). Empire and Outback contend that

they are entitled to summary judgment on Foodcomm’s unjust enrichment claims

since Empire and Outback did not actively participate in or knowingly receive the

benefits of Barry’s or Leacy’s breach of fiduciary duty.

Empire and Outback contend that they are entitled to summary judgment

because “Outback never commenced business.” (Mem. DSJ 7-8). However, Empire

and Outback note that “Michael Quinn (Empire’s controller) signed the lease [for

Outback’s offices] and Empire paid the rent [for Outback’s offices].” (Reply DSJ 10

n. 9). Additionally, a shareholder agreement and stock option agreement for Barry

and Leacy to become shareholders in Outback was created. (FSAF Par. 84). 
32

Further, a Certificate of Incorporation for “Outback Imports, Inc.” was filed with the

New York Secretary of State on July 31, 2002. (FSAF Par. 85). In addition to the

certificate of incorporation, on or about September 18, 2002, Foodcomm learned that

Barry and Leacy were “trading for or from a New firm in Chicago called Outback

Imports,” (FSAF Par. 104), and on October 2, 2002, Barry sent an email announcing

that he had “launched a company . . . in partnership with Chris Leacy . . . based in

Chicago . . . called Outback Imports . . . [that was] importing meats from Australia

and trying to sell [the meats] nationally throughout the States.” (FSAF Par. 105). 

Although Empire and Outback contend that “Outback never commenced business,”

(Mem. DSJ 7-8), and that Outback was merely a shell corporation, questions of fact

remain as to whether there were any profits, and if so, whether such went directly to

Outback or to the Outback Imports division of Empire.

Empire and Outback also argue that “Empire’s representatives . . . had no

knowledge that Barry and Leacy allegedly owed fiduciary duties to Foodcomm.” 

(Mem. DSJ 7-8). However, Empire and Outback have not pointed to sufficient facts

to warrant summary judgment. Whether Empire was aware that Barry and Leacy

owed fiduciary duties to Foodcomm cannot be decided on summary judgment. First,

Levine sought legal counsel from Empire’s attorney about whether Empire “would

run into problems employing” Barry and Leacy. (FSAF Par. 19). Second, Levine

gave Empire’s attorneys a copy of Leacy’s confidentiality agreement with

Foodcomm. Third, Levine had a basic understanding that “[e]mployees are supposed

to come in, do their job to the best of their ability, and represent the company as
33

fairly as possible.” (R FSAF Par. 21). Based on these facts, it is not clear that a

reasonable jury could conclude that Empire did not have knowledge that Barry and

Leacy owed fiduciary duties to Foodcomm. Therefore, based on the above, and a

review of all the evidence, the issue of unjust enrichment and whether Outback

commenced business and whether Empire knew of the fiduciary duties that Barry

and Leacy owed to Foodcomm cannot be resolved as a matter of law. Therefore, we

deny Defendants’ motion for summary judgment on the constructive trust and unjust

enrichment claims (Counts IV and VI).

CONCLUSION

Based on the foregoing analysis, we deny Foodcomm’s partial motion for

summary judgment and Defendants’ partial motion for summary judgment in their

entirety.

___________________________________

Samuel Der-Yeghiayan

United States District Court Judge

Dated: November 14, 2006