the termination notice was sent, oral statements were made
disclaiming an actual intent to terminate, though not clearly
modifying or withdrawing the notice as in Stauffer, 2003 WL
553622 at *S. Such statements were made both immediately before
and shortly after the notice was received by MSMC. However, the
pertinent facts do not stop there. Between the giving of the
notice in October 1999 and the end of 2000, Western Union made
repeated oral and written statements indicating that it intended
to continue the parties' relationship beyond the initial term.
This included Fields' July 19, 2000 letter that is ambiguous as
to whether Western Union considered a notice of termination to be
outstanding.” There is sufficient evidence on which a jury could
find that a clear and unequivocal invocation of the termination
clause did not exist as of the second half of 2000, if not other
times as well. On defendant's summary judgment motion, it must
be assumed that an effective termination notice was not in place.

Since, on the facts assumed to be true, there was no
effective notice of termination as of December 2000, MSMC had the
ryight to invoke the § 17 extension option as it did on

December 15, 2000. That clause provides that MSMC “shall have

7MSMC also relies on the continued payment of full
Allowances even though the contract purportedly would terminate
in less than 36 months. However, under the contract, Western
Union was required to make full payment and seek reimbursement at
the time the Acquired Location ceased providing Western Union
services. Compliance with the terms of the contract is not
conduct inconsistent with an intent to terminate. Cf.
International Hobby, 1998 WL 376053 at *6,


Div. 1966). But see Blue Sky MLS, Inc. v. RSG Systems, LLC, 2002
WL 1065873 *3 & n.5 (O.N.J. March 28, 2002).

The two identical clauses relied upon by Western Union
must be read in context. Each is contained within a particular
section of the Agreement each of which concerns specific types of
liability. Neither clause contains express language making it
generally applicable to the entire Agreement. Each refers to
"[Te]xcept as otherwise provided herein." The more reasonable
reading of "herein" would be as a reference to the particular
section within which the clause is contained, not as a reference
to provisions in other parts of the contract.*® Thus, each
limitation of liability should be understood as only applying to
the particular section within which it is contained. Moreover,
construing either clause as being generally applicable to the
Agreement would render the other meaningless because, if one of

the clauses applies to the entire Agreement, there would be no

Blue Sky indicates that the strict construction rule
applies to exculpatory clauses that protect a party from all
liability and not to actual limitation of liability provisions.
Abel, however, involved a limitation of liability.

20Although not fully consistent, the Agreement generally
uses the term “hereunder” to refer to provisions contained in
another section of the Agreement. See Agreement §§ 8(A) (iii),
13(C), 13(F), 13(I), 20. Section 17 uses "herein" to refer to a
provision in that section itself. Subsection 13(I) uses "herein"
to refer to a provision in another subsection of § 13, that is,
subsection 13(G). Section 14 uses "hereunder" both ways and § 21
uses "herein" both ways.



Thus, the third paragraph refers to assignees and/or transferees
permitted by the second paragraph and/or permitted (written
consent) by Western Union in accordance with § 19,

The Agreement itself did not require that MSMC obtain
Western Union's approval of the entity to which it sold or
transferred an Acquired Location. Except to the extent provided
in the Agreement or consented to by Western Union, delegating its
obligations did not discharge MSMC's duty. Fusco v. City of
Union City, 261 N.J. Super, 332, 618 A.2d 914, 916-17 (App. Div.
1993); Restatement (38 nd) of Contracts § 318(3) (1981). MSMC
does not dispute that it had to provide a transferee that was
“ready, willing, and able to continue providing Western Union
Services." MSMC Memo. in Opposition [65} at 36. Ace had
provided Western Union Services at a number of locations until
March 2000. As of October 2000, Ace was the largest agent for
MoneyGram, Western Union's largest competitor. The relationship
between Ace and Western Union was terminated because Albin had
had a bad experience with Ace when Albin was at MoneyGram and
because Western Union did not want to do business with an entity
that was MoneyGram's largest agent. Western Union continued to
permit Ace franchisees to be Western Union agents, At the time
it consummated the sale to Ace, MSMC was aware of Western Union's
policy against providing Western Union services at Ace-owned
locations.

Western Union does not contend that Ace was unable to

perform the duties it was willing to assume. Instead, Western



2001, MSMC used the customer list to send a mailing notifying
customers about MSMC's change of wire transfer providers. The
mailing also included information about MSMC services that had
not been the ones offered through Western Union.

All of Western Union's agents have agreements with
confidentiality provisions similar to those contained in the
Agreement. Western Union also provides manuals to its agents
that address the issue of the confidentiality of customer
information. Any customer information that is obtained directly
from the customer is obtained by the agents, not Western Union.
Western Union does not provide customer lists to its agents. As
to all agents whose agreements are terminated, Western Union
requests the return of all Western Union customer records as is
provided in the agency agreements. MSMC represented to Western
(nion that it returned all customer records upon termination of
the Agreement. It is undisputed that MSMC retained the customer
list that was created and included data about customers who had
purchased Western Union services. Jt is also undisputed that
MSMC returned all original Western Union transaction forms. MSMC
did not inform Western Union that it had provided copies of the
forms to the marketing agency. The copies of the forms were
destroyed by the marketing agency, not retained.

Tt is undisputed that MoneyGram was aware that a customer
list was being developed and that a mailing would be made. It is
also undisputed that, on April 4, 2001, MSMC provided MoneyGram

with the amount of gross commissions and bonuses it earned from



Under New Jersey law, every contract contains an implied

covenant of good faith and fair dealing. Wilson v. Amerada Hess

Corp., 168 N.J. 236, 773 A.2d 1121, 1126 (2001); Sons of Thunder
Inc. v. Borden, Inc., 148 N.J. 396, 690 A.2d 575, 587 (1997).
Thus, “in every contract there is an implied covenant that
‘neither party shall do anything which will have the effect of
destroying or injuring the right of the other party to receive

the fruits of the contract.'" Id. (quoting Palisades Properties,

Inc. v. Brunetti, 44 N.d. 117, 207 A.2d 522, 531 (1965) (quoting
Williston on Contracts § 670 at 159-60 (3d ed. 1961)))- Accord

Wilson, 773 A.2d at 1126-27. Where, as in the present case, the
contract contains an unfettered right to terminate, the motive
for terminating is irrelevant. Thunder, 690 A,2d at 589-90;

Karl's Sales & Service, Inc. v. Gimbel Brothers, Inc., 249 N.J.

Super. 487, 592 A,2a 647, 651 (App. Div.), Gert. denied, 127 N.J.
548, 606 A.2d 362 (1991). However, the party still must act in
geod faith under the contract. Thunder, 690 A.2d at 588. For
example, the terminating party must continue to faithfully
perform under the contract until the actual termination date.

See id. at 587-88 (citing United Roasters, Inc. v. Colgate-

Palmolive Co., 649 F.2d 985 (4th Cir.), cert. denied, 454 U.S.
1054 (1981)). Also, the terminating party must act with good
faith and fair dealing in keeping the other party adequately
aware of its plans to terminate. It cannot encourage the other
party to expand or incur additional expenses where, unlike the

other party, the terminating party knows information that leads


(1) is sufficiently secret to derive
economic value, actual or potential, from
not being generally known to other persons
who can obtain economic value from its
disclosure or use; and

(2) is the subject of efforts that are
reasonable under the circumstances to
Maintain its secrecy or confidentiality.

765 ILCS 1065/2(d). See also Delta Medical Systems v. Mid-

America Medical Systems, Inc., 331 Ill. App. 3d 777, 772 N.E.2d

768, 780 (1st Dist.), appeal denied, 201 I111.2d 564, 786 N.E.2d
182 (2002).

It need not be decided whether the customer list, which
was created by MSMC not Western Union and which contained
information MSMC could have gathered directly from its customers
without using the Western Union transaction forms, constitutes a

trade secret under ITSA. See id. at 781; Unisource Worldwide,

Inc. v. Carrara, 244 F. Supp. 2d 977, 986 (C.D. Ill. 2003). Even
if the customer list or transaction forms could constitute a
trade secret, it must also be shown that misappropriation
occurred. Delta, 772 N.E.2d at 780; Unisource, 244 F. Supp. 2d

at 990 n.7; Nilssen v. Motorola, Inc., 963 F. Supp. 664, 679

(N.D. Ill. 1997). In the present situation, misappropriation

would have to be based on disclosure of confidential information
that, because of its relationship with Western Union, MSMC had a
duty not to disclose. 765 ILCS 1065/2(b) (2) (B) (II); Nilssen, 963

F, Supp. at 679 (quoting American Antenna Corp. v. Amperex

Electronic Corp., 190 Ill. App. 3d 535, 546 N.E.2d 41, 44 (2d

- §5 -



certain states to publicly disclose its revenues, fees, and
commissions, including the fees and commissions it receives from
Western Union." In support of this factual contention, MSMC
cites one conclusory paragraph from Silverman's affidavit. [t is
doubtful that Silverman's affidavit meets the summary judgment
requirement of providing specific facts and he cannot testify as
to the legal requirements of state law. Additionally, the
affidavit does not identify which states require disclosures nor
what the disclosures are. However, MSMC's statement is to be
taken as true unless adequately controverted by Western Union.

See N.D, Ill. Loc. R. 56.1(b) (3) (B). Merely expressing

disagreement with an asserted fact without providing any citation
to materials supporting a dispute or stating why the moving
party's statement is deficient will leave the asserted fact

admitted. See Traum v. Equitable Life Assurance Society of

United States, 240 F. Supp. 2d 776, 780 (N.D. Ill. 2002). In
response to 7 33, Western Union purports to dispute the
allegations by incorporating its responses to four other
paragraphs and by quoting language from § 8(A) (iii). None of the
incorporated responses, however, address the issue of required
disclosures to lenders, investors, buyers, or government
agencies. Therefore, the second two sentences of { 33 must be
deemed admitted. However, which states actually require

disclosures and the specific disclosures required are left in

dispute.



enw

part and denied in part. Second Amended Counterclaim Counts I,
II, and III, and Count IV(B) (except for the claim based on
§ 8(A) (iii) of the parties' agreement) are dismissed. Status

hearing set for July 23, 2003 at 11:00 a.m.

ENTER:

Wipe, 7 boct-

UNIZED STATES DISTRICT JUDGE

DATED: JUNE /[ 7 , 2003



Also, it must be considered that this is a retail business that
relies on volume to be successful. While there may be a number
of repeat customers, this is not the type of situation where the
restricted entity has fewer customers and more well-developed
relationships with individual clients. Neither was any special
skill or equipment or contribution from Western Union needed to
collect the customer information. Additionally, to a substantial
extent, the customer base at a particular location may be largely
determined by convenience of location to the customer's home,
employment, or other place frequently visited. This is not the
type of situation where it is appropriate to restrict MSMC from
using information with respect to customers who used Western
Union services, even if that information was collected on Western
Union forms that the contract identifies as property of Western
Union. Section 18(B) of the Agreement will not be enforced based
on use “of information with respect to Western Union's customers"
nor will MSMC be prohibited from continued patronage of customers
who had previously used Western Union services.

Still to be considered is the claimed violation of
§ 8(A) (iii), which prohibits MSMC from making use of or
disclosing the "volumes, revenues, earnings, commission rates or
payments hereunder." Expressly excepted from this prohibition
are uses or disclosures for purposes of performance under the

Agreement or as may be required by law. There is no evidence



Western Union would thereafter go through the mechanics to set up
the Western Union services. From 1995 through 2001, Western
Union itself also substantially expanded the number of agents it
had in North America, increasing the number cf agents by
approximately 1000 per year from 1995 through 1998, 3000 in 1999,
3500 in 2000, and 6800 in 2001.

In November 1998, Albin became the Chief Operating
Officer of Western Union North America. He soon became concerned
about the Allowances paid under the Agreement and that the
Agreement contained no limit on MSMC's expansion. He decided
that Western Union should limit MSMC's expansion during the
remaining initial term and negotiate new terms for when the
initial term expired. On September 24, 1999, Western Union
informed MSMC that it would need 30 days' notice of new locations
and that locations would not be considered part of the Agreement
until actually approved by Western Union. In December 1999,
Western Union informed MSMC that, if it provided advance notice
of an acquisition, Western Union would try to have approval in
place by the time the acquisition closed. MSMC thereafter
complied with this request.

In November 1999, for the first time under the Agreement,
Western Union declined to approve certain new locations. By
September 2000, Western Union had declined to approve 40 of 71
proposed new locations. There is more than sufficient evidence
for a jury to find that Western Union was motivated by a desire

to avoid paying further Allowances and that the Allowances were


néed to have the other.** The limitation of liability clauses
relied upon by Western Union must be understood as applying only
to liability under the sections in which they are contained.
Since MSMC's claims are not based on breaches of these sections,
the limitation of liability clauses do not apply to MS5MC's
claims.

Western Union also contends that it is entitled to
summary judgment on any claim for lost profits because MSMC does
not have sufficient evidence to support such a claim. It
contends that it cannot be shown that MSMC would have actually
purchased certain Nationwide, National Check Cashers, and Pratts
locations if Western Union had approved them for the provision of
Western Union sérvices. However, there is evidence that the
Allowances and income from providing Western Union services were
considerations for the purchases. A genuine factual dispute
exists as to causation.

IV. WESTERN UNION'S COUNTERCLAIM
A. ALLOWANCE REFUNDS
In Count IV(A) of its Second Amended Counterclaim,

Western Union contends it is entitled to Allowance Refunds for

21Tt would also be contradictory to read the clauses as
stating that there are no consequential damages, etc. anywhere in
the contract except as set forth in ("herein") the sections in
which the clause is contained. If read in that manner, the
limitation of liability in § 10 would eliminate any consequential
damages, etc. in § 11 and the limitation of liability in § 1]
would eliminate any consequential damages, etc, in § 10 leaving
no such damages even though the clauses state exceptions.



whether Western Union was entitled to the Allowance Refund for
locations that were open less than 36 months at the time the
Agreement terminated. There is also a dispute concerning whether
Western Union was entitled to the Allowance Refund when MSMC sold
some Acquired Locations to Ace Cash Express, Inc. ("Ace") and
Western Union would not allow Ace to continue to offer Western
Union services at those locations. As to Acquired Locations sold
to Ace, MSMC seeks the return of the Allowance Refunds it has
already paid. MSMC also complains that Western Union wrongfully
denied approval of a number of locations as Acquired Locations.

Western Union brings a five-count Second Amended
Counterclaim. Most of the counts center on MSMC's alleged
misappropriation of customer and transaction information related
to MSMC's provision of Western Union services ("customer
information"). Count I is labeled as a conversion claim based on
MSMC's retention and use of the customer information. Count II
is labeled as a fraud claim and is based on the allegation that
MSMC falsely represented that it returned all customer
information around the time the Agreement terminated. Count III
is labeled as a trade secret misappropriation claim based on MSMC
using the customer information to create a database used in

soliciting customers to continue to use MSMC locations after the


reference is made to the assignment or transfer of a location.
The principal business referenced in § 21 is MSMC located in
Northbrook, Illinois. The locations do not operate under that
name and the address in Northbrook, Illinois is not one of the
locations where Western Union services are offered. Section 4,
which concerns locations, does not have a provision expressly
referring to the assignment, transfer, or sale of locations, It
does refer to the "Change" of a location as requiring 30 days'
notice and Western Union's written consent. A sale that ends
Western Union services at that location could be considered a
change of location.*® Thus the reference to assignment or
transfer of the principal business should be understood to be a
reference to an assignment, transfer, or sale of MSMC, not an
assignment, transfer, or sale of a specific location. Such a
reading is consistent with the plain language of § 19 referring
to the assignment or transfer of the "Agreement" and no reference
to assignment or transfer of a location, Additionally, to the
extent § 19 is ambiguous and thus could possibly be read as
applying to assignments or transfers of locations, it must be
strictly construed against Western Union, which drafted this
language. Section 19 will not be read as applying to the sale of

locations.

’The written consent provision of § 4 would not have
applied to the sale of the 15 locations to Ace since Western
Union services were to continue at those locations after the
sale, thus, no change of location offering services.



the option to extend this Agreement for an additional term of six
years on terms to be mutually agreed between Western Union and
Agent no less than six months before the end of the initial term
hereof." As Western Union stresses, this option is to be on
terms mutually agreed by the parties. Generally, every word ina
contract, however, is to be accorded some effect. Cumberland
County Improvement Authority v. GSP Recycling Co., 358 N.J.
Super. 484, 818 A.2d 431, 438 (App. Div. 2003); AXA Assurance,

Inc. v. The Chase Manhattan Bank, 339 N.J. Super. 22, 770 A.2d

1211, 1214 (App. Div. 2001); Mastrobuono v. Shearson Lehman

Hutton, Inc., 514 U.S. 52, 63 (1995); Restatement (Second) of
Contracts § 203(a) (1981). It must be recognized, that the
extension is an "option" on the part of MSMC. While Western
Union certainly could not be required to accept any terms
demanded by MSMC, the fact that it is MSMC's option implies some
duty of conciliation on Western Union's part. It should also be
recognized that MSMC offered to extend on the existing terms of
the Agreement, terms upon which the parties had previously been
able to mutually agree.* In any event, it is certainly clear
that, at a minimum following MSMC's exercise of the option,
Western Union had to engage in a good faith effort to reach a

mutual agreement as to terms. Cf. Union Electric Co. v.

"It is recognized that the clause is written in the
future tense: "to be mutually agreed." Therefore, it cannot be
read as absolutely requiring Western Union to accept an extension
based on the existing terms of the Agreement.


considerations, but the evidence shows that Western Union never
began its due diligence process. Western Union contends that
MSMC's possible acquisition of the National Check Cashers
locations never reached a sufficient stage of negotiations for
Western Union to begin consideration. That, however, remains an
issue of fact. As to the Pratts locations, Western Union
responded that it would not approve two Western Union providers
within the same location even though MSMC's intention was to
replace the Western Union services being previded by Pratts
employees.

MSMC contends that violation of the duty of good faith
and fair dealing can be found based on (a) Western Union being
motivated by a desire to avoid paying Allowances; (b) special
instructions to more thoroughly examine the requests and look for
locations to deny; and (c) explanations for denials that are
inconsistent with the actual facts. Western Union contends
(a) it was entitled to act in its financial interest in
considering the costs of the Allowance as part of its financial
analysis; (b) emphasizing documentation was reasonable in light
of the possibility of litigation between the parties; and
(c) MSMC ignores that factors other than proximity were
considered so that two locations with the same proximity to other
Western Union locations might be treated differently because of
the other factors.

Under § 4 of the Agreement, Western Union had unilateral

authority to approve new locations. In such a situation, "“{a]



good faith and fair dealing in negotiating to extend, renew, or

replace the Agreement.

B,. FAILURE TO_ APPROVE NEW LOCATIONS

Section 4 of the Agreement provides in part:

Agent and Western Union agree that all additional

locations of Agent, whether newly opened ar

acquired, will be included as locations under

this Agreement as soon as reasonably possible

after opening or acquisition as the case may be,

subject to Western Union's prior approval.

After October 1999, MSMC proposed 71 new locations of
which Western Union rejected 40. At to all 40 rejections, MSMC
contends Western Union did not act with good faith and fair
dealing. MSMC places the rejections in four categories: 16
Nationwide locations, 15 National Check Cashers locations, 6
Advance America locations, and 3 Pratts locations.

The facts assumed to be true for purposes of Western
Union's summary judgment motion on this claim are as follows. As
of June 28, 1995, MSMC had 109 locations. From then until
October 1999, MSMC opened or acquired 117 new locations at which
it offered Western Union services. Western Union did not reject
any of the new locations. During this approximate time period,
Western Union did not go through any approval process for a new

location. MSMC would inform Western Union of a new location and

4prior to October 1999, there were a few disputes as to
whether relocations qualified for the Allowance, but no instances
of Western Union rejecting a proposed location as a place to
offer Western Union services.


Of course, the references to § 19 that are contained in
§ 13(I) must be considered. Omitting, for the moment,
consideration of the last sentence of the second paragraph of
§ 13(I), that paragraph provides that MSMC may sell or transfer
an Acquired Location and delegate to the transferee its
obligations to provide Western Union services at the location.
There is no requirement that MSMC obtain Western Union's approval
of the transferee. In light of this provision and the previously
set forth construction of § 19, the last sentence of this
paragraph should be understood as distinguishing § 19 from the
other provisions of the paragraph. The last sentence makes clear
that the language allowing MSMC to transfer locations and
obligations without prior approval does not in any way limit the
requirement that an assignment of the overall Agreement requires
Western Union's written consent as set forth in § 19.

Still to be considered is language in the third paragraph
of § 13(I). That paragraph refers to “Agent (and/or any
permitted assignee or transferee of Agent in accordance with the
immediately preceding paragraph and Section 19 hereof)." Western
Union contends that the reference to a "permitted assignee or
transferee" makes clear that its permission is required for an
assignment or transfer. However, the use of the word "permitted"
is not limited to referencing permission by a party. It also is
understood as meaning permitted by the Agreement, that is, an
assignee or transferee as permitted by ("in accordance with")

paragraph two of § 13(I) ("the immediately preceding paragraph") .



However, because it also included an offer of compromise with a
stated response time, it was held that the purported termination
notice failed to satisfy the clear and unequivocal requirement.
Id. at 1379-81.

In Accu-Weather, the parties’ contract automatically
renewed for two-year terms, but could be terminated by written
notice 120 days prior to the end of any term. The then existing
term expired August 15, 1992. On February 20, 1991, however, the
defendant gave the following written notice:

This is to serve you notice to cancel our
contract with you, effective 90 days from
February 1, 1991 (our ist conversation).

Due to the reorganization of the station and

market condition, we are forced to take this

step, but at a later date, we may continue your

services.

The plaintiff rejected the purported cancellation, citing the
termination provision of the contract and stating proper
notification would be required at the end of the existing term.
The defendant did not thereafter repudiate the contract as of

May 1, 1991 and instead continued to comply with the terms of the
contract. On June 1, 1992, less than 120 days before the end of
the term, the defendant sent written notice of termination
effective at the end of the term, referencing the February 20,
1991 notice. Id., 644 A.2d at 1252-53. The court held that the
February 1991 notice was ineffective to terminate the contract as

of May 1991, Id. at 1254-55, As to a termination effective

August 1, 1992, the February 1991 notice was held to be


of the Allowance under the Agreement and certain guaranteed fees,
As early as 1997, the parties discussed extending the Agreement.
In a September 8, 1997 memorandum regarding "Contract
Negotiations," a Western Union official stated “We are open to
discussions regarding an extension of the agreement under revised
economic terms and predicated on the inclusion of other Western
Union products, namely Money Orders." In a March 1998 internal
memorandum, the same official stated, "Extension through 2004
sounds good."

In a letter dated October 22, 1999, Western Union Chief
Operating Officer Robert Albin sent MSMC President Jeffrey
Silverman formal notice of termination under § 17. The text of
the letter states in its entirety:

Pursuant to Section 17 of the Agency

Agreement, this letter will serve as Western

Union's notice of the intent to terminate this

Agreement upon the expiration of the initial term

thereof.

This termination notice does not preclude

the possibility that a new Agency Agreement will

be executed during the interim period before the

expiration of the existing Agency Agreement. In

fact, we look forward to beginning negotiations

on a new, mutually beneficial agreement in the

near future.

Prior to Silverman receiving the notice, Albin called him and
told him that it was being sent because of a legal perspective,
but he did not want it to interfere with discussions of a
continuing relationship or renewal of the Agreement. Ina

conversation after Silverman received the notice, Albin told him

he sent the notice for a technical reason.


that this provision applies regardless of whether Western Union
approves the assignee. To the extent Western Union's approval is
required for the assignment provision to be effective, MSMC
contends Western Union wrongfully rejected Ace.

MSMC contends § 19's assignment provision applies to the
assignment or transfer of the Agreement, not to the assignment or
sale of a particular Acquired Location, Section 13(I) was
jointly negotiated, whereas § 19 is essentially unchanged form
language drafted by Western Union. See Cole Dep. at 162.'® The
last sentence of § 21 apparently was also form language of

Western Union. See id. at 152, 162-63.77 Thus, any ambiguity in

§ 19 or the last sentence of § 21 should be strictly construed
against Western Union as the author of the language. Kotkin v.
Aronson, 175 N.J. 453, 815 A.2d 962, 963 (2003) (quoting in re
Miller's Estate, 90 N.J. 210, 447 A,2d 549, 555 (1982)).

As a general rule, in the absence of an express
contractual prohibition, the rights and obligations under a
contract may be assigned or delegated. Aronsohn v. Mandara, 98

N.J. 92, 484 A,2d 675, 679 (N.J. 1984); J.H., Renarde, Inc. v.

Sims, 312 N.d. Super. 195, 711 A.2d 410, 412-13 (Ch. Div. 1998);

*%Cole testified that the only change from the form was
the number of days for the notice. That aspect of § 19 is not at
issue.

Mole testified that § 21 on the copy of the Agreement
shown to him was difficult to read due to poor duplication, but
he did not believe there were any changes to the standard
language of the last sentence,



from the terms of the Agreement that it was not anticipated that
MSMC would be discriminated against because its Allowance terms
were more favorable than other agents. Being more stingy in the
approval of MSMC's new locations in order to avoid payment of the
Allowance and guaranteed commissions is an improper motive in the
parties' relationship.*® In addition to actual rejections, this
applies to failing to timely and reasonably respond to requests
for approvals, if also motivated by seeking to avoid paying the
Allowance and guaranteed commissions.

MSMC's claims based on the alleged bad faith or unfair
rejection of new locations will not be dismissed.

C. REJECTION OF THE ASSIGNMENT TO ACE
The second and third paragraphs of § 13(I) of the
Agreement provide:

Further, in the event an Acquired Location
is sold or otherwise transferred by Agent, Agent
agrees that it shall assign, and shall require
the purchaser or transferee of such Acquired
Locations, as a condition precedent to such sale
or transfer, to agree to assume Agent's
obligations hereunder to offer the Services at
such Acquired Location for a period of three
{3) years from the date on which such acquired
location was activated for the provision of the
Services pursuant to this Agreement or until
June 30, 2000, whichever is longer. If Agent
complies with the terms set forth in this section
said location(s) will not be subject to a prorata
pay back provision. Nothing in the foregoing,

Since such facts are not before the court, no opinion
is expressed regarding whether it would be an improper motive if
Western Union had rejected locations because it projected the
locations as unprofitable for it by taking into account MSMC's
Allowances and guaranteed commissions.



IT. SUMMARY JUDGMENT STANDARD

On a motion for summary judgment, the entire record is

considered with all reasonable inferences drawn in favor of the
nonmovant and all factual disputes resolved in favor of the

nonmovant. lLesch v. Crown Cork & Seal Co., 282 F.3d 467, 471

(7th Cir. 2002); Hilt=Dyson v. City Of Chicago, 282 F.3d 456, 462

(7th Cir.), gert. denied, 123 8, Ct. 97 (2002); Schneiker v.
Fortis Insurance Co., 200 F.3d 1055, 1057 (7th Cir. 2000). The

burden of establishing a lack of any genuine issue of material
fact rests on the movant. Qutlaw v. Newkirk, 259 F.3d 833, 837
(7th Cir. 2001); Wollin v. Gondert, 192 F.3d 616, 621-22 (7th
Cir. 1999), The nonmovant, however, must make a showing
sufficient to establish any essential element for which it will

bear the burden of proof at trial. Celotex Corp. v. Catrett,

477 U.S. 317, 322 (1986); Billings v. Madison Metropolitan School

District, 259 F.3d 807, 812 (7th Cir. 2001). The movant need not
provide affidavits or deposition testimony showing the
nonexistence of such essential elements. Celotex, 477 U.S.

at 324. Also, it is not sufficient to show evidence of
purportedly disputed facts if those facts are not plausible in

light of the entire record. See NLFC, Inc, v. Devcom

Mid-America, Inc., 45 F.3d 231, 236 (7th Cir.), cert. denied,

$15 U.S. 1104 (1995); Covalt v. Carey Canada, Inc., 950 F,2d 481,

485 (7th Cir. 1991); Collins v. Associated Pathologists, Ltd.,


Agreement terminated. After the Agreement terminated, MSMC
locations offered money transfer services provided by MoneyGram
Payments Systems, Inc. ("MoneyGram"), a competitor of Western
Union. Count IV is labeled as a breach of contract claim and is
broken into subclaims. Count IV(A) seeks the Allowance Refunds
regarding the Acquired Locations that had not offered Western
Union Services for 36 months at the time the Agreement
terminated. Count IV(B) alleges the copying and use of customer
information and certain financial information breached a
provision of the Agreement. Count IV(C) seeks indemnity under
the Agreement for $1800 in losses that Western Union allegedly
incurred due to MSMC's failure to remit money transfers to the
proper person. Count V is labeled as a set-off claim, seeking to
set off the Allowance Refunds allegedly due against any damages
MSMC may obtain on its claims.

Western Union moves for summary judgment dismissing
MSMC's Second Amended Complaint in its entirety. Western Union
also moves for summary judgment in its favor on the Count I
conversion and Count IV(B) contract claims related to the
customer information, as well as the Count IV(A) claim for the
Allowance Refunds. MSMC moves for summary judgment dismissing
all the counts of the Second Amended Counterclaim that concern

customer information, that is, Counts I, II, III, and IV(B).



ineffectively ambiguous in that it did not refer to that date and
also made reference to possibly continuing at a later date,
Additionally, the defendant's continued performance was found to
be inconsistent with a clear intent to terminate the contract.
Id. at 1255. The court, however, held that a factual dispute
precluded summary judgment for the plaintiff because a factual
dispute existed regarding whether the defendant had provided
adequate oral notice that the February 1991 notice would be
effective at the end of the term. Id. at 1255-56,.§

The situation in the present case is not on all fours
with Dresser, Stovall, or Accu-Weather. The first sentence of
Western Union's October 22, 1999 letter clearly invokes the
termination provision of the contract and expressly states
Western Union's "intent" to terminate, which is a clear statement
of termination. Cf. Dresser, 936 F.2d at 930; Stovall, 584 P.2d

at 1378, 1379; Maloney v. Madrid Motor Corp., 385 Pa. 224, 122

A.2d 694, 696 (1956). Consistent with Dresser, indicating in the
letter that further discussions would continue and reaching an
agreement was a “possibility” did not prevent the letter from
being a clear and unequivocal invocation of the termination
provision effective at the end of the initial term. But compare

Accu-Weather, 644 A.2d at 1255. Similar to Dresser, at the time

*The court held oral modifications or waivers of the
writing requirement or time requirements were possible. Accu-
Weather, 644 A.2d at 1255. Courts are split as to whether oral
notice of termination can suffice when the contract requires
written notice. See C.J.S. Contracts § 446 & nn. 52-53.


Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587, 106 S, Ct. 1348, 89 L. Ed. 2d 538
(1986)).

Outlaw, 259 F.3d at 837.

III, MSMC'S CLAIMS
Whether Western Union is entitled to summary judgment
dismissing the Second Amended Complaint will be considered first.
In ruling on those issues, all genuine factual disputes are
resolved and all reasonable inferences are drawn in MSMC's favor.

A. TERMINATION AND NEGOTIATION
Section 17 of the Agreement provides:?

This Agreement shall continue in force for an
initial term of six years unless otherwise
terminated as provided herein. Thereafter, this
Agreement shall continue in effect subject to the
right of either party to terminate it at the end
of the six-year term or at any time thereafter
upon the giving of at least twelve months' notice
to the other party. . . . Agent [MSMC] shall
have the option to extend this Agreement for an
additional term of six years on terms to be
mutually agreed between Western Union and Agent
no less than six months before the end of the
initial term hereof.

Early during the term of the Agreement, management
employees at Western Union were dissatisfied with the financial

terms of the Agreement. They were dissatisfied with the amount

*Section headings are omitted from all quoted Agreement
language because § 21 provides in part: “The headings are solely
for convenience and are not to be used in interpreting this
Agreement."


considered in deciding whether to approve new locations. The
employees evaluating the new locations were instructed to conduct
very thorough reviews and document their decisions. As to 15
Nationwide locations, the local Market Development Manager was
instructed to: "Please review very thoroughly and get back to me
by Monday as to which stores we do not want in the St, Louis
market." Employees had not previously been instructed to conduct
very thorough analysis or specifically to identify locations that
were not wanted.

In the letter initially rejecting 20 of 35 proposed
Nationwide locations, Western Union stated its decision as to the
20 "locations is based largely on the fact there are existing
Western Union agent locations in close proximity to [those]
locations which offer excellent service, such as extended hours
and high levels of encashment, to our customers in those areas."
Proximity to other cash checkers was given for rejecting certain
Advance America locations. As to placing kiosks in three Pratts
grocery store locations, Western Union denied approval on the
ground that Pratts already offered Western Union services in the
store and two locations in the same store were unnecessary.” As
to the National Cash Checkers locations, MSMC never made an
actual bid while it awaited possible approval by Western Union,

which never provided a response. There is evidence that other

VApparently, MSMC's intention would have been for Pratts
to stop offering Western Union services at its customer service
counter.


‘Minute Order Porm (06/7)

. United States District Court, Northern District of Minois
Senseotmaings | WILLUAMT. tart | Sree
ASSIGNED JUDGE
CASE NUMBER 01 C 1688 DATE sung / 9 ,2003
CASE MORRIS SILVERMAN MANAGEMENT CORPORATION v.
TITLE WESTERN UNION FINANCIAL SERVICES, INC,
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) stale brictly the nature
MOTION: ‘of the motion being presented, ]
DOCKET ENTRY:
qd) im} Filed motion of [ use listing in “Motion” box above.]
(2) Qo Brief in support of motion due.
(3) oO Answer brief to motion due_ __. Reply to answer brief due__
(4) im Ruling/Hearing on__— set for at
(5) o Status hearing(held/continued to] [set for/re-set for]on set for at.
(6) o Pretrial conference[held/continued to] [set for/re-set for]on set for_ at
(7) qo Trial[sct for/re-set for}on at.
(8) Oo [Bench/Jury trial] [Hearing] held/continuedto__—_sat__
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OCOFRCP4(m) Cl Local Rule 41.1 OFRCP41(a)(1) C1 FRCP41(a)(2).

ao [Other docket entry) Defondant-counterplaintiff's motion for summary judgment [54] is
denied. Plaintiff-counterdefendant's motion for summary judgment [66] is granted in part and
denied in part. Second Amended Counterclaim Counts J, Tl, and Il, and Count I'V(R) (except
for the claim based on § 8(A)(iii) of the partics' agreement) are dismissed, Status hearing sct
for July 23, 2003 at 11:00 a.m.

(il) @ [For further detail see order attached to the original minute order,]

No notices required, advised in open court

No notices required. number of notices

v | Notices mailed by judge's staff, JUN 2.0 2003

Notified counsel by telephone.

date dackered

ns
Docketing to mail notices: 1uAca y Ww
Mail AO 450 form. seas WO,
Cony to judge/magistrate judge Leh Wd Gy ae eu
6/19/2003
courtroom OT g3- fa] 31g date miiied notice
cow deputy’s wn
initials
Date/time received in
central Clerk's Office | naling niin



return the copies of transaction forms made for the marketing
agency breached § 18(E).

The undisputed facts do not show any breach of § 18(E).
By its own language, that section applies only to records that

"exist."

Even without such language, the provision would not be
read as requiring the return of records that do not exist.
Since the copies used by the marketing agency were destroyed,
there was nothing further to return. MSMC did not breach § 18(B)
and that aspect of Count IV(B) will be dismissed.

New Jersey law has recognized that a business entity may
have a legitimate interest in its proprietary and confidential
information and its customer relationships. Ingersoll-Rand
Co. v. Ciavatta, 110 N.J. 609, 542 A.2d 879, 894 (1988); Platinum
Management, Inc. v. Dahms, 285 N.J. Super. 274, 666 A.2d 1028,
1038 (Law Div. 1995), "[T]o be judicially protected,
misappropriated information need not rise to the level of the
usual trade secret, and indeed, may otherwise be publicly
available. The key to determining the misuse of the information
is the relationship of the parties at the time of disclosure, and

its intended use." Id, Accord Meadox Medicals, Inc. v. Life

Systems, Inc., 3 F. Supp. 2d 549, 552 (D.N.J. 1998). However,

New Jersey law does not automatically enforce every restriction

This is not a situation where Western Union may have
lost the value of having the records for its own use. Only
copies were destroyed; MSMC provided the originals to Western
Union.



must be taken as true. In late 2000, the parties reached an
agreement in principle, but were unable to agree upon and execute
final written terms. MSMC also points to evidence that, after
October 1999, Western Union continued to pay out the entire
Allowance for Acquired Locations even though it was less than 36
months before the expiration of the Agreement under the
termination notice.

On December 15, 2000, while negotiations were ongoing,
MSMC sent a letter purportedly invoking the extension option of
§ 17. MSMC stated it was extending the term an additional six
years and that the existing terms of the Agreement were
acceptable to MSMC,

In 1999, unbeknownst to MSMC, Western Union began
negotiations with a major competitor of MSMC (the "Competitor").
In January 2001, MSMC first heard of the negotiations with the
Competitor and raised the issue with Western Union. Western
Union would not confirm whether it was negotiating with the
Competitor. MSMC had previously engaged in some negotiations
with MoneyGram and thereafter, on February 21, 2001, reached an
agreement in principle with MoneyGram and ended negotiations with
Western Union. Western Union thereafter reached an agreement
with the Competitor, which now provides Western Union services in
Southern California, an area where MSMC formally provided
substantial Western Union services. MSMC now uses MoneyGram's

services.


Following a December 1999 meeting at which an extension
of the relationship was discussed, Mary Ann Fields of Western
Union sent Silverman a letter in which she stated: "Thank you
and Mark for taking time to meet with us to discuss your concerns
and the desire to continue our business relationship. We value
the relationship and would like it to continue as well."

Discussions as to continuing or renewing the Agreement
continued until February 2001. This included a July 19, 2000
letter from Western Union National Account Manager Fran Meyer to
Silverman in which she made reference to a Western Union offer
that MSMC had until August 31 to accept. She specifically
referenced confidentiality provisions of the Agreement as
applying to the ongoing negotiations. Additionally, she stated:
“If you elect not to accept our generous offer and execute a new
agreement by 8/31/00 extending your Western Union relationship,
we will consider notice as being given and proceed accordingly.
Our standard requirement for notice is 12 months and by 8/31/00
we will be well within that period."

Throughout the negotiations, Western Union made it clear
that it was unwilling to include an Allowance provision or
guaranteed commission levels or payments in any extension.
Western Union characterizes the negotiations as concerning a new
contract, not an extension, of the Agreement. To the extent it
is a material fact, on defendant's summary judgment motion,

evidence supporting that the negotiations were for an extension


services resulting from the breach of its duty to act with good
faith and fair dealing in negotiating a contract extension would
constitute a "default" as that term in used in § 13(I). As is
discussed in § III(A), supra, disputed factual issues exist
regarding whether Western Union committed such a breach.
Therefore, Western Union is not entitled to summary judgment as
to Count IV(A) of its Second Amended Counterclaim.
B._ CUSTOMER INFORMATION

MSMC moves for summary judgment dismissing all the
counterclaims based on customer information. Western Union seeks
summary judgment in its favor on two of those claims,
Counterclaims I and IV(B). Unless otherwise noted, the facts set
forth below are undisputed facts applicable to each party's
motion for summary judgment. Where there are genuine factual
disputes, the different facts that must be assumed to be true for
each party's motion will be expressly noted.

Sections 7 and 8 of the Agreement provide in part:

7. Records with respect to Western Union's

customers, including customer lists and other

customer information, and records relating to

transactions of the Services are the property of

Western Union. Such records are subject to audit

and review by Western Union at any time during

normal business hours. to

8. (A) Agent shall make no use or

disclosure, other than for purposes of its

performance under this Agreement or as

May be required by law, of (i) security

identifications . . .; (ii) Western Union's

customer information including, without

limitation, names and credit card numbers;

(iii) volumes, revenues, earnings, commission

rates or payments hereunder; or (iv) other
confidential information with respect to Western



liability on behalf of the other, nor be

liable for any acts or omissions of the

other, except as otherwise specifically

provided herein.

In October 2000, MSMC sold 107 of its locations to Ace.

Most of those centers had offered Western Union Services.
Approximately 44 of the locations were Acquired Locations and
approximately 40 of them had offered Western Union Services for
less than 36 months. As to 15 of the locations, Ace agreed to
assume MSMC's obligations to Western Union and offer Western
Union services through December 31, 2001. Western Union refused
to permit Ace to offer Western Union services at the 15
locations. Western Union then demanded that MSMC pay $756,863 in
Allowance Refunds for the 40 locations. Under pressure, MSMC
paid the full amount. MSMC contends it should not have been
required to pay $237,495 of the Allowance Refunds, which
represents a portion of the Allowance Refunds related to the 15
locations where Ace had agreed to continue to offer Western Union
services.4§ MSMC contends it did not owe $237,495 of the

Allowance Refunds because, as to the 15 locations, it fully

complied with the assignment requirement of § 13({I). It contends

The Second Amended Complaint alleges that $237,495 is
the damages related to this claim. 2d Am. Compl. qd 59-60,
76(e). In its answer to the summary judgment motion, MSMC refers
to seeking return of the entire $756,863 of Allowance Refunds.
MSMC Memo. in Opposition [65] at 35. That apparently is a
mistake. MSMC makes no argument as to why it would not have been
required to pay the Allowance Refunds for the other 25 locations.



on competition that parties have agreed upon and included in a
written contract. "Noncompetition agreements are looked upon
unfavorably by the courts, as potential restraints on trade."
Maw _v. Advanced Clinical Communications, Inc., 359 N.J. Super.
420, 820 A.2d 105, 113 (App. Div. 2003). To be enforceable, the
restrictive covenant must be reasonable under the circumstances.
Id.; Ingersoll-Rand, 542 A.2d at 887; Platinum Management,

666 A.2d at 1037; Meadox, 3 F. Supp. 2d at 552.

In an employment contract, post-employment restrictions
on competition must satisfy a three-prong test to be enforceable:
the restrictions "must be reasonably necessary to protect the
employer's legitimate interests, must not cause undue hardship on
the employee and must not impair the public interest." Platinum
Management, 666 A.2d at 1037. Accord Maw, 820 A.2d at 113. The
same general rule has been applied to a nonemployee contractual
relationship in which the restricted party was a sophisticated
entity that acted as an independent distributor for a
manufacturer. See Meadox, 3 F. Supp. 2d at 552 & n.2.

A business may not use a restrictive covenant to protect
customer information that it did not, either directly or

indirectly, assist in developing. Id. at 553; Coskey's

Television & Radio Sales & Service, Inc. v. Foti, 253 N.J. Super.

626, 602 A.2d 789, 794-95 (App. Div. 1992). Here, Western Union
had no direct contact with the customers at MSMC locations.
Under § 2{A) of the Agreement, MSMC was responsible for

advertising and promoting Western Union services so as to develop



however, shall be deemed to limit Western Union's
rights to approve any assignment of this
Agreement pursuant to Section 19 hereof.
Notwithstanding anything contained in the
foregoing to the contrary, in the event that
Agent (and/or any permitted assignee or
transferee of Agent in accordance with the
immediately preceding paragraph and Section 19
hereof) for whatever reason (other than a default
by Western Union hereunder) does not offer the
Services at any Acquired Location for a minimum
of thirty-six (36) consecutive months in
accordance with the terms of this Agreement,
Western Union shall be immediately entitled, upon
the termination of any one or more of the
Services at such Acquired Location, to demand
repayment of a prorata portion of the Acquired
Location Allowance not earned for such Acquired
Location pursuant to the following formula: The
Acquired Location Allowance shall be multiplied
by a fraction, the numerator of which shall be
the number of months the Acquired Location
offered Money Transfer Services, and the
denominator of which shall be thirty-six (36).

Section 19 provides in its entirety:

This Agreement may not be assigned or transferred
by Agent without the prior written consent of
Western Union. Agent agrees to give Western
Union no less than 60 days' notice of any
proposed assignment, transfer or change of name
of Agent's principal business with which the
Western Union Agency business is associated. For
purposes of this Section, any change in control
of Agent shall be deemed to be an assignment.
This Agreement will inure to the benefit of
Western Union, its successors and assigns.

The last sentence of § 21 of the Agreement provides:TM

Neither party shall have the authority to make
any agreement or commitment, or incur any

MNone of the copies provided of this page of the
Agreement are very easy to read and the first few characters of
two lines appear to have been cut out by a hole punch, but the
language stated in the text appears to be accurate.



844 F.2d 473, 476-77 (7th Cir.), cert. denied, 488 U.S, 852
(1988). As the Seventh Circuit has summarized:

The party moving for summary judgment
carries the initial burden of production to
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." Logan v.
Commercial Union Ins. Co., 96 F.3d 971, 978 (7th
Cir. 1996) (citing Celotex Corp. v. Catrett,

477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d
265 (1986) (citation and internal quotation
omitted)). The moving party may discharge this
burden by "'showing'--that is, pointing out to
the district court--that there is an absence of
evidence to support the nonmoving party's case."
Celotex, 477 U.S. at 325, 106 S. Ct. 2548. Once
the moving party satisfies this burden, the
nonmovant must "set forth specific facts showing
that there is a genuine issue for trial." Fed.
R. Civ. P. 56(e). “The nonmovant must do

more, however, than demonstrate some factual
disagreement between the parties; the issue

must be 'material.'" Logan, 96 F.3d at 978.
"Irrelevant or unnecessary facts do not preclude
summary judgment even when they are in dispute."
Id. (citation omitted). In determining whether
the nonmovant has identified a "material” issue
of fact for trial, we are guided by the
applicable substantive law; "[o]nly disputes that
could affect the outcome of the suit under
governing law will properly preclude the entry of
summary judgment." MeGinn v. Burlington Northern
R.R. Co., 102 F.3d 295, 298 (7th Cir. 1996)
(citation omitted). Furthermore, a factual
dispute is "genuine" for summary judgment
purposes only when there is "sufficient evidence
favoring the nonmoving party for a jury to return
a verdict for that party." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249, 106 8S. Ct. 2505,
91 L. Ed, 2d 202 (1986). Hence, a "metaphysical
deubt" regarding the existence of a genuine fact
issue is not enough to stave off summary
judgment, and "the nonmovant fails to demonstrate
a genuine issue for trial 'where the record taken
as a whole could not lead a rational trier of
fact to find for the non-moving party... .'"
Logan, 96 F.3d at 978 (quoting Matsushita Flec.



Consolidation Coal Co., 188 F.3d 998, 1001 (8th Cir. 1999).
Additionally, although MSMC gave notice of the option just less
than two weeks before the six-month deadline for reaching a
mutual agreement,® the parties had already been engaged in
substantial negotiations.

There is evidence to support that Western Union did not
act in good faith in seeking to reach a mutual agreement. First,
it took more than two months to respond in writing to MSMC's
invocation of the option. Western Union's absolute refusal to
consider including an acquired location allowance or guaranteed
commissions in the extended agreement could be found to be a
failure to act in good faith. Also, Western Union's negotiations
with the Competitor while MSMC retained and invoked the extension
option, as well as Western Union's refusal to answer questions
about negotiations with the Competitor could be found to be a
failure to act with good faith and fair dealing. Cf. Bak-A-Lum,
351 A.2d 349.19

For the foregoing reasons, genuine factual disputes

remain as to whether Western Union violated its duty to act with

°*The clause is not clearly written as to the deadline,
but the better reading would be that the mutual agreement is to
be reached before the six-month deadline, not merely that MSMC
invoke the option before the deadline.

Fven if the termination notice had been effective and
therefore MSMC no longer had the right to exercise the option,
some or all of this conduct could still be found to be a
violation of Western Union's continuing duty to act with good
faith until the Agreement expired.


III of the Second Amended Counterclaim will be dismissed in their
entirety. Count IV(B) of the Second Amended Counterclaim will be
dismissed except to the extent it is based on a violation of

§ @(A) (iii) of the parties' Agreement.

In today's opinion the parties' Agreement has been
construed and a number of rulings have been made, both of which
result in a narrowing of the issues remaining between the
parties. A very complicated set of facts would have to be
presented to a jury for the resolution of disputed factual
issues. The contractual relationship between the parties
terminated approximately two years ago. All that remains is a
question of monetary damages; no issues of injunctive relief or a
continuing relationship exist. In light of today's ruling, the
two sophisticated entities that are involved in this litigation
should be able to examine their possibilities of success or
failure and the possible ranges of damages that could be awarded.
The parties should reasonably reach a financial settlement of
their claims against each other.

By no later than July 1, 2003, MSMC shall serve a written
demand for settlement upon Western Union. Western Union shall
respond within one week after the demand is served. A status
hearing will be held for the parties to report on the possibility
of settlement.

IT IS THEREFORE ORDERED that defendant-counterplaintiff's
motion for summary judgment [54] is denied. Plaintiff-

counterdefendant's motion for summary judgment [66] is granted in



or other crime, destruction, mysterious
disappearance and all other similar or dissimilar
causes of loss with respect thereto (including,
without limitation, the receipt of counterfeit
currency or bank cashiers' checks or deposit to
the wrong bank account); (B) Agent assumes full
responsibility for the consequences of Agent's
failure to adhere to the Service Requirements
(including, without limitation, any payments of
Money Transfers to other than the intended
recipients, in excess of the authorized amount,
or resulting from Agent's failure to mark the
transaction as paid out in the "Will Call File");
(C) Agent agrees to hold the Western Union Funds
in trust as a fiduciary for the sole and
exclusive use and benefit of Western Union and to
account therefor separately and apart from all
other funds of Agent and agrees that, in the
event agent commingles Western Union Funds with
any other funds, such other funds shall be
impressed with a trust to the extent of the
Western Union Funds; and (D) Agent agrees to pay
all Western Union Funds to Western Union upon
demand regardless of the presence or absence of

negligence of Agent. Except as otherwise
provided herein, neither party shal] be liable to
the other for any indirect, incidental, special
or consequential damages. Agent will provide to
Western Union annually, promptly after the close
of Agent's fiscal year, financial statements for
the year just ended, including any income
statement and a year-end balance sheet, certified
by Agent's independent auditors or otherwise as
may be acceptable to Western Union.

il. Each party shall indemnify and hold the
other harmless from and against any claims,
losses, damages, liabilities or expenses
(including reasonable attcrneys' fees) ("Losses")
as follows. Western Union will indemnify Agent
against Losses arising out of claims or actions
concerning mishandling, delays, non-delivery or
other errors or omissions concerning the Services
and caused by Western Union prior to transmission
to Agent or after acceptance from Agent and not
attributable to the acts or omissions of Agent or
its employees or agents, Agent will indemnify
Western Union against Losses arising out of the
acts or omissions of Agent or its employees or
agents, in connection with Agent's performance in
providing the Services under this Agreement,
including without limitation, any losses



attributable to Agent's failure to comply with
the provisions of the Service Requirements.
Except as otherwise provided herein, neither
party shall be liable to the other for any
indirect, incidental, special or consequential
damages.

The language of section 11 is form language drafted by

Western Union. See Cole Dep. at 151. To the extent there is any
ambiguity, the language in this section should be strictly
construed as against Western Union, The underlined language in

§ 10 was added during negotiations and the last sentence of § 10
may have been modified from the form language. See id. at 151,
155-56; MSMC Response App. Exh. 87 (MSMC 006280).

Under New Jersey law, limitation of liability clauses are
enforceable if "they do not adversely affect the public interest,
where the exculpated party is not under a public duty to perform,
as in the case of a public utility or common carrier, and where
the contract does not grow out of unequal bargaining power or is

otherwise unconscionable." Tessler & Son, Inc. v. Sonitrol

Security Systems of Northern N.J., Inc., 203 N.J. Super. 477, 497

A.2d 530, 532 (App. Div. 1985). See also Marbro, Inc. v., Borough
of Tinton Falls, 297 N.J. Super. 411, 688 A.2d 159, 162 (Law Div.
1996) (applying Pennsylvania law, but also discussing New Jersey
law). Unless clear and unambiguous, limitations of liability
clauses are to be strictly construed. Abel Holding Co. v.
American District Telegraph Co., 147 N.J. Super. 263, 371 A.2d
111, 114 (App. Div. 1977); Midland Carpet Corp. v. Franklin

Associated Properties, 90 N.J. Super. 42, 216 A.2d 231, 234 (App.



To the extent any revenue or earnings data is publicly
available because it must be disclosed to a state regulatory
agency, its disclosure to MoneyGram will not be found to be a
breach because MoneyGram could have otherwise obtained the
information through the public sources. MSMC's required
disclosures to lenders, investors, and buyers is not a basis for
disclosing to MoneyGram because MoneyGram was none of the three.
Also, disclosures to buyers, as well as disclosure to a new
service provider such as MoneyGram, are not disclosures for the
purpose of performance under the Agreement. Since the parties do
not provide any details as to what disclosures are required by
law, neither side is entitled to summary judgment based on
whether or not the commission and bonuses disclosures to
MoneyGram breached the Agreement.

MSMC also contends it is entitled to summary judgment
based on Western Union's inability to prove any damages resulting
from the disclosures. Factual disputes exist as to that issue.

Count IV(B) will be dismissed except to the extent it is
based on disclosures of commissions and bonuses earned from
Western Union.

2. COUNT III--TRADE SECRETS MISAPPROPRIATION

Western Union bases its Count III trade secrets
misappropriation claim on the Illinois Trade Secrets Act
("ITSA"), 765 ILCS 1065. Under ITSA,

(d) "Trade secret" means information,

including but not limited to, . . . list of
actual or potential customers or suppliers, that:



good faith performance doctrine may be said to permit the
exercise of discretion for any purpose--including ordinary
business purposes-~reasonably within the contemplation of the
parties. It follows, then, that '[a] contract thus would be
breached by a failure to perform in good faith if a party uses
its discretion for a reason outside the contemplated range--a
reason beyond the risks assumed by the party claiming the
breach.'" Wilson, 773 A.2d at 1127 (quoting Steven J. Burton,

Breach of Contract & the Common Law Duty to Perform in Good

Faith, 94 Harv. L. Rev. 369, 386 (1980)). See alsa Shree Ganesh

inc. v. Days Inns Worldwide, [nc., 192 F. Supp. 2d 774, 784 (N.D.

Ohio 2002). The party's discretion must be exercised reasonably
and with proper motive, not arbitrarily, capriciously, or ina
manner inconsistent with the expectations of the parties.
Wilson, 773 A.2d at 1128. Still, the party's right to exercise
discretion based on its own reasonable beliefs concerning
business strategy must be recognized; there is no breach unless
the party acts with an improper motive. Id. at 1130.

During the first four plus years of the Agreement,
Western Union approved every new location proposed by MSMC. It
approved these locations even though it was not happy with the
Allowance and guarantees it had to pay MSMC. There is no
contention that business dynamics changed in late 1999 such that
expansion was less attractive. To the contrary, Western Union
continued to expand at an even greater rate in 1999, 2000, and

2001. Nevertheless, on the facts that must be assumed to be true



The undisputed facts establish that, as required by the
§ 18(E) of the Agreement, MSMC provided the transaction forms to
Western Union and all copies were destroyed, There can be no
conversion claim based on MSMC's alleged retention of the
transaction forms. Neither can there be any claim based on using
the transaction forms to create the customer list. As is
discussed in § IV(B) (1), supra, MSMC'’s use of the forms did not
breach the parties! Agreement. Therefore, Western Union cannot
show that MSMC wrongfully exercised control or dominion over the
transaction forms. MSMC is entitled to summary judgment
dismissing Count I of the Second Amended Counterclaim. Western
Union's motion for summary judgment as to liability on Count I
will be denied.

4. COUNT II--FRAUD

In Count II of the Second Amended Counterclaim, Western
Union alleges that MSMC committed fraud in that it falsely
represented that all the transaction forms had been returned to
Western Union. The undisputed facts are to the contrary. MSMC
is entitled to summary judgment dismissing Count II of the Second

Amended Counterclaim,

V._ CONCLUSION
Western Union's motion for summary judgment will be
denied. None of the claims contained in the Second Amended

Complaint will be dismissed. MSMC's motion for summary judgment

will be granted in part and denied in part. Counts I, II, and



motions for summary judgment.

The contract between the parties (the "Agreement") is
dated June 28, 1995 and was amended July 15, 1996. The Agreement
provided for an initial term of six years and was to remain in
force thereafter unless either party exercised a right to
terminate by giving at least twelve months' notice to the other
party. There is no dispute that, in October 1999, Western Union
provided written notice to terminate the agreement at the end of
the initial term. MSMC, however, contends that Western Union
violated its duty to act in good faith in negotiating an
extension of the Agreement and that the written notice of
termination was ineffective. The Agreement has provisions
regarding fees and commissions to be paid to MSMC for providing
Western Union services to the public. There is also a provision
that MSMC was to receive an upfront Acquired Location Allowance
(the "Allowance") for each new “Acquired Location" it opened or
acquired and at which it offered Western Union services. If such
an Acquired Location offered Western Union services for less than
36 months, Western Union was entitled to a pro rata refund of the

Allowance ("Allowance Refund"). A dispute exists regarding

Union's briefs total 70 pages. That does not include multiple
and lengthy Local Rule 56.1 statements. The parties are
admonished to henceforth judiciously edit any further briefs or
memoranda and take the term “brief" more to heart.



Western Union in 2000 for each of 42 core locations. The
information provided did not include the volumes for those
locations nor how the commissions or bonuses were calculated.

Genuine factual disputes exist regarding MoneyGram's
participation in the development of the customer list. On MSMC's
motion, it must be assumed that (a) MoneyGram actively
participated in the decision to create a customer list;
{(b) MoneyGram actively participated in the development of the
customer list; and (c) some of the payments made to MSMC under
its agreement with MoneyGram were based on MoneyGram knowing MSMC
had access to the Western Union customer information and
MoneyGram's knowledge of commissions and bonuses MSMC received
from Western Union. On Western Union's motion, it must be
assumed that (a) the decision to create a customer list was an
independent decision of MSMC; (b}) independently of MoneyGram,
MSMC controlled the customer list development process; and
(c) MoneyGram agreed to MSMC's compensation before learning of
MSMC'’s intention to create a customer list.

1. COUNT IV(B)--BREACH OF CONTRACT

The Count IV(B) contract claim will be considered first.
In this count, Western Union alleges three related, but distinct,
breaches. Western Union contends that (1) the customer list,
including the use of the Western Union transaction forms and
their disclosure to the marketing agency, breached sections 7,
8(A) (ii), and 18(B); (2) disclosing the gross commissions and

bonuses to MoneyGram breached § 8{A) (iii); and (3) failure to

- 46 -



Union, the Services, this Agreement, or the
relationship between the parties.

(B) Agent agrees not to divulge to any third
party the existence of terms of the Local
Marketing Support, the Guaranteed Commissions

., the Acquired Location Allowance . . ., or
the Acquired Location Allowance Advance

Section 18 of the Agreement provides in part:

. . . Immediately upon termination of this

Agreement, . . . (B) Agent will no longer be

entitled to enjoy the benefits of the patronage

of Western Union's customers attracted to Agent's

premises and will make no use of Western Union's

customer lists or of information with respect to

Western Union's customers; . . . (E) Agent will

deliver to Western Union. . . all copies of all

information and records with respect to Western

Union's customers, transactions of the Services

or Western Union's security measures and

procedures, regardless of the form or media in

which such records exist;

On February 21, 2001, MSMC reached an agreement in
principle to use MoneyGram services upon the expiration of the
initial term of the Agreement. The written agreement with
MoneyGram was executed on April 13, 2001. In March 2001, MSMC
began accumulating information about its customers, including
customers who both had or had not used Western Union services.
Western Union transaction forms were used in accumulating some
this information. In early April 2001, a marketing agency was

retained to develop a customer list. The marketing agency was

provided copies of Western Union transaction forms to use in

of

completing the customer list. MoneyGram suggested the marketing

agency that was used and, in July 2001, paid the marketing

agency's fee. The day after the Agreement terminated in June



it to believe actual termination is likely. See Thunder, 690
A.2da at 588 (citing Bak-A-Lum Corp. of erica vy. Alcoa Buildin
Products, Inc., 69 N.J, 123, 351 A.2d 349 (1976)). Additionally,
the implied covenant cannot override an express term in the
contract, but, unlike the law in some other states, New Jersey
recognizes a breach of the implied covenant can occur even if the
pertinent express term is not violated. Wilson, 773 A.2d at
1126.

The general rule is that, to be effective, a notice
terminating a contract must be clear and unequivocal. See 17B

C.J,8. Contracts § 446 (2002); Stovall v. Publishers Paper Co.,
284 Or. 53, 584 P.2d 1375, 1377-78 (1978); Todd v. Corporate Life

Insurance Co., 1990 WL 16430 *4 (N,D. Ill. Feb 15, 1990), aff'd

in part, rev'd in part on other grounds, 945 F.2d 204, 208 (7th

Cir. 1991); Accu-Weather, Inc. v. Prospect Communications, Inc.,
435 Pa. Super. 93, 644 A.2d 1251, 1254 (1994); Miller v. Crouse,
19 Ariz. App. 268, 506 P.2d 659, 664 (1973); In re Greater
Southeast Community Hospital Foundation, Inc., 267 B.R. 7, 18
(Bankr. Ct. D, Col. 2001). The focus is on whether the notice is
sufficiently clear to apprise the other party of the action being
taken. LA-Neyada Transit Co. vy. Marathon Oil Co., 985 F.2d 797,
800 (Sth Cir. 1993). The related conduct of the parties,
including conduct between the giving of notice and the actual
date of termination, may be considered in determining whether
there has been a clear and unequivocal termination. See Accu-

Weather, 644 A.2d at 1255; International Hobby Corp. v. Rivarossi



Dist. 1989)); Roton Barrier, Inc. v. Stanley Works, 79 F,3d 1112,

1118 (Fed, Cir. 1996).

Where the parties have a contractual relationship that
defines the duty of nondisclosure, the contract defines that
duty for purposes of misappropriation under ITSA. Nilssen, 963
F. Supp. at 680. As is discussed in § IV(B)(1), supra, MSMC did
not breach the Agreement in creating the customer list or
disclosing the Western Union transaction forms. Since such
conduct did not breach the parties' contract, it cannot

constitute misappropriation under ITSA. See id.; Unisource, 244

F. Supp. 2d at 986, 989-90. MSMC is entitled to summary judgment
dismissing Count III of the Second Amended Counterclaim.
3. COUNT I--CONVERSION

In Count I of the Second Amended Counterclaim, Western
Union alleges that MSMC wrongfully converted Western Union's
customer and transaction information. Under Illinois law,
"conversion is any unauthorized act that deprives a person of his
or her or its property permanently or for an indefinite time. To
establish a conversion claim, a plaintiff must establish that
(1) it has a right to the property; (2) it has an absolute and
unconditional right to the immediate possession of the property;
(3) it made a demand for possession; and (4) the defendant
wrongfully and without authorization assumed control, dominion,

or ownership over its property.” Turner Investors v. Pirkl,

Til. App. 3d , N.E.2d ___, 2003 WL 1900919 *3 (3d Dist.

April 15, 2003).



basis. The Seventh Circuit held:

Pyrrhus fails to cite any case law for its

proposition that a mere oral instruction to

disregard a written termination makes the written

notice of termination ineffective. Moreover, the

notice that Dresser intended to continue

negotiating with Pyrrhus, but that "such

discussions are not intended and do not limit

this termination notice” (January 25, 1988

termination letter) makes any reliance on the

oral instruction objectively unreasonable. Thus,

we hold that Dresser terminated its Contract with

Pyrrhus.

Id. at 930.%

In Stovall, supra, Stovall's attorney sent a letter to
Publishers specifically and clearly invoking the paragraph of a
contract permitting termination based on a breach by Publishers.
The letter goes on to state that Stovall was rejecting a prior
offer of compromise and was prepared to file suit, but would
consider further offers of compromise. The letter continues on
by proposing specific modifications to the compromise and stating
"the foregoing is submitted in the interest of campromise and may
be accepted by written notice actually received" by a stated
date. See Stovall, 584 P.2d at 1378-79. The court stated that,
had the letter ended after rejecting Publishers' offer and

invoking the termination clause, it would have constituted a

clear and unequivocal invocation of the termination provision.

SAt least one case has held that, where a contract
required written notice of termination, a written termination
notice may thereafter be modified or withdrawn orally. See

Stauffer v. Westmoreland Obstetric & Gynecologic Associates,
S.C., 2003 WL 553622 *5 (N.D, Ill. Feb. 26, 2003).



last contract under which MSMC offered Western Union services
expired June 28, 2001. The present case centers on the
termination of the parties' relationship and the last few years
before termination.

Diversity jurisdiction is proper in that MSMC is an
Illinois corporation with it principal place of business in
Illinois and Western Union is a Colorado corporation with its
principal place of business in Colorado. The amount in
controversy is well in excess of $75,000. The parties agree
that, under a choice of law provision of the parties' contract,
New Jersey law applies to the contract claims between the
parties. Because the parties present no choice-of-law arguments
regarding the noncontract claims, generally cite to Illinois law
regarding these claims, and do not contend there is any
applicable law that is different than Illinois law, Illinois law
will be applied in resolving the noncontract claims. See

Massachusetts Bay Insurance Co. v. Vic Koenig Leasing, Inc.,

136 F.3d 1116, 1120 (7th Cir. 1998); Wood _v, Mid-Valley, Inc.,

942 F,2da 425, 426-27 (7th Cir. 1991); In re Iowa Railroad,
840 F.2d 535, 543 (7th Cir. 1988); Eqqert v. Weisz, 839 F.2d

1261, 1263 n.1 (7th Cir. 1988).* Presently pending are cross

*the parties had more than adequate opportunity to
address any issue they may have contested. Perhaps
improvidently, the court granted each party's request to file
oversized briefs. MSMC's briefs total 93 pages and Western


Union contends Ace was not an entity it was willing to approve.
Since the parties do not address the legal issues involved, the
court will not resolve questions of whether Ace's relationship
with MoneyGram makes it an unqualified candidate that does not
satisfy MSMC's obligation to provide an able replacement or
whether selling to an entity that MSMC knows Western Union will
not do business with is violation of MSMC's duty to act with good
faith and fair dealing in meeting the transfer requirements of
§ 13(1). As to MSMC's claim that it is entitled to the return of
Allowance Refunds it has paid, Western Union's summary judgment
motion will be denied.
BD. LOST PROFITS

As to the new locations that were not approved by Western
Union and the alleged breach of not negotiating an extension with
good faith and fair dealing, MSMC's prayer for damages includes
lost profits. Western Union contends any such damages are harred
by provisions contained within sections 10 and 11 of the
Agreement. Those sections provide in their entirety (emphasis
added):

10. Any other provisions of this Agreement

or of law notwithstanding, (A) Agent assumes full

responsibility and liability for all monies,

including, without limitation, Money Transfer

principal and fees, received in connection with

the provision of the Services or under this

Agreement by Agent, its employees or agents (the

"Western Union Funds") and all Western Union

Money Transfer checks received by Agent, its

employees or agents, and agrees to hold Western

Union harmless from any claims, losses, damages,

liabilities, or expenses due to or arising out of
loss, misuse, theft, burglary, forgery, robbery



locations were opened that were as close in proximity to other
Western Union agents as the rejected MSMC locations,

As to the National Cash Checkers and Pratts locations,
Western Union contends it had no obligation to consider approval
of those locations until after MSMC had actually acquired the
locations. Section 4, however, does not specify the timing for
approval, other than that it be prior te the Agreement applying
to the location. Section 13(1) provides in part that MSMC
“agrees to provide Western Union with timely notice of the
acguisition of its new Acquired Locations in order to facilitate
the activation of such locations for the provision of Western
Union services." Approval before closing an acquisition would
constitute "prior approval" and notice prior to closing an
acquisition would also be timely. Contrary to Western Union's
contention, the language of the Agreement does not preclude
approval prior to closing an acquisition, There being no
specification in the contract, reasonable, good faith notice and
reasonable, good faith responses would be required. Moreover,
once Western Union insisted on enforcing the prior approval
requirement, it informed MSMC that it would try to approve
proposed acquisitions prior to the closing of the acquisition,
As long as MSMC provided sufficient advance information, Western
Union had to act reasonably and in good faith in providing its
approval or disapproval.

As to the National Check Cashers locations, Western Union

represented to MSMC that it was engaging in its due diligence


IN THE UNITED STATES DISTRICT COURT QcnETeD
FOR THE NORTHERN DISTRICT OF ILLINOIS anv?
EASTERN DIVISION yun 204

MORRIS SILVERMAN MANAGEMENT

)

CORPORATION, )
)

Plaintiff, )
Counterdefendant, )

)

v. ) No. QO1 C 1688

)

WESTERN UNION FINANCIAL SERVICES, )
INC., )
)

Defendant, )
Counterplaintiff. )

MEMORANDUM OPINION AND ORDER

I. BACKGROUND
This case centers around the dissolution of a

relationship between plaintiff-counterdefendant Morris Silverman
Management Corporation ("MSMC") and defendant-counterplaintiff
Western Union Financial Services, Inc. ("Western Union"). MSMC
owns and operates numerous currency exchanges, check cashing
facilities, and payday loan centers at various locations in the
United States. During the late 1990's, it operated up to 200
locations. For more than 25 years, MSMC offered Western Union
wire transfer and other services at those locations, Other non~

Western-Union services are also offered at each location. The


customer interest and confidence. Based on the 109 MSMC
locations in operation in June 1995, § 2(B) required that Western
Union provide $50,000 to $100,000 per year of local marketing
support, with adjustments to be made for increases in the number
of locations. The Agreement refers to MSMC being required to
participate in national promotions. Western Union, however, has
presented no evidence as to the marketing it may have engaged in
during the time period of the Agreement nor the effect any
Western Union advertising had on attracting customers to MSMC's
locations. On the evidence before the court, it can only be
found that MSMC was primarily responsible for attracting
customers to its locations. It must also be found that Western
Union had at least some indirect effect on attracting customers.
In Meadox, the independent (and exclusive in its
territory) distributor of a manufacturer's medical products was
entirely responsible for attracting and developing customers.
Also, the parties' contract in that case did not expressly state
that either party had a proprietary interest in customer
information. However, the manufacturer could not have access to
the customer information collected by the distributor unless it
promised to keep it confidential. The court found that, if
either party had a proprietary interest in the customer
information, this implied that the distributor did. Primarily
based on these facts, the court held that a covenant that
prohibited the distributor from selling competitive products for

one year after the termination of the relationship was



Restatement (Second) of Contracts §§ 317, 318 (1981). There is
no contention by Western Union that public policy should limit
MSMC's ability to assign its rights and obligations as to
particular locations providing Western Union services nor is
there any contention that MSMC's cbligations could not be
delegated because Western Union had a substantial interest in
performance by MSMC itself. Thus, unless the Agreement provides
otherwise, MSMC was free to delegate to Ace its obligations to
provide Western Union services at the 15 locations at issue.

Notwithstanding a grammatical or punctuation error in the
last sentence of § 21, that sentence apparently provides neither
party shall have the authority to make an agreement or commitment
on behalf the other except as provided for in the Agreement.
Whether this would be clear enough to prohibit MSMC's delegation
of its obligation to provide Western Union services at particular
locations, cf. Owen v. CNA Insurance/Continental Casualty Co.,
167 N.J. 450, 771 A.2d 1208, 1218 (2001), need not be decided
since there is a provision of the Agreement that permits
delegation of that obligation. It is noted, though, that § 21
itself contains no general requirement that approval be obtained
for any assignment or delegation.

Section 19 contains a requirement of prior written
consent before MSMC may assign or transfer the "Agreement." The
notice provision of § 19 refers to the assignment, transfer, or

change of name of the "principal business . . . with which the

Western Union Agency business is associated." No express



those Acquired Locations that had provided Western Union services
less than 36 months at the time the parties' relationship
terminated. The parties do not dispute as to which stores
offered services less than 36 months nor apparently do they
dispute the amount of the Allowance Refunds that would be due.
However, MSMC raises two grounds as to why summary judgment in
Western Union's favor should be denied as to this claim. Since
Western Union is seeking summary judgment on this claim, all
genuine factual disputes are to be resolved in MSMC's favor in
ruling on this claim.

Section 13(I) of the Agreement, as amended, provided
that, upon termination of services at an Acquired Location,
Western Union would be "immediately entitled . . . to demand"
payment of any Allowance Refund that may be due. Without
citation to any authority, MSMC contends Western Union is not
entitled to any Allowance Refunds because it did not satisfy this
"demand" requirement prior to filing suit. Case law, however,
supports that any demand requirement is satisfied by the filing
of a lawsuit. Leary v. Gledhill, 8 N.J. 260, 84 A.2d 725, 727-28
(1951). Failure to make a demand is not a basis for denying
summary judgment.

MSMC's other ground is a sufficient basis for denying
summary judgment. Western Union is entitled to an Allowance
Refund when, in less than 36 months, services are terminated "for
whatever reason (other than a default by Western Union

hereunder)." Western Union does not dispute that termination of



for purposes of Western Union's summary judgment motion, starting
in late 1999, Western Union was less willing to approve new
locations for MSMC, On summary judgment, it must be taken as
true that the locations that were rejected did not have a
reasonable justification for being distinguished from locations
that had previously been approved or locations that were still
being approved for MSMC and other agents. Instead, it is
reasonable to infer that Western Union was making approval more
difficult in order to avoid paying the Allowances and guarantees.
The legal question, though, is whether that is a legitimate and
reasonable business motive or an improper motive under New
Jersey's common law as to the implied covenant of good faith and
fair dealing.

On the evidence before the court, it cannot be assumed to
be true that the proposed locations were expected to be
unprofitable for Western Union, only that they might be less
profitable than if opened by other agents who had agency
agreements with terms less favorable to the agent. Was it
improper for Western Union to be motivated by such
considerations? That question cannot be answered in a vacuum,
but must be considered in light of the expectations of the
parties under the Agreement. The Agreement contained no specific
limit on MSMC's ability to expand; only Western Union's
discretionary approval power. One of the "fruits" of the
contract for MSMC was the ability to expand and receive

Allowances and guaranteed payments. It is reasonable to infer



The parties do not contend there is any extrinsic
evidence that would aid in construing the language of § 17.3 The
court must construe the meaning of this section as it applies to
the facts assumed to be true for purposes of summary judgment.

The contract does not detail how the termination and
option provisions of § 17 are to be applied.‘ Additionally, it
does not expressly set forth how the termination and option
provisions interplay. MSMC, though, implicitly concedes that, if
there existed an effective invocation of termination as of
December 15, 2000, its attempt to exercise the option was without
effect. Instead, MSMC argues that the continuing negotiations
and contemporaneous statements made Western Union's October 22,
1999 invocation of termination rights ineffective, If that
argument has merit, it would also have to be determined what
obligations Western Union had to negotiate "mutually agreed"
extension terms and whether evidence sufficiently supports that

it breached any such obligations.

4aMSMC presents evidence that the initial draft of the
Agreement was boilerplate language provided by Western Union, but
that the parties then negotiated changes to a number of
provisions. As to § 17, the boilerplate term length was changed
from five years to six years and the last sentence of the
section, which is key to the parties' dispute, was a mutually
negotiated addition to the boilerplate language. Cole Dep. at
161-62, As to the § 17 option provision, therefore, the rule
cannot apply that ambiguities should be construed against Western
Union as the drafter of the language.

*Section 20 of the Agreement contains general notice
provisions requiring that the notice be in writing, listing the
possible methods of delivery, and identifying the addresses to
which notice is to be sent.


unenforceable because the manufacturer lacked a protectable
interest in the customer information it sought to protect. See
Meadox, 3 F. Supp. 2d at 553-54.

The facts in the present case are different from those in
Meadox. Here, it must be inferred that Western Union made some
contribution to attracting customers. However, it was primarily
the responsibility of MSMC and customers were primarily obtained
through MSMC's efforts. Also, it was entirely through MSMC's
efforts that any customer information was collected. Unlike
Meadox, here the parties' Agreement expressly states that records
of Western Union customer transactions are the property of
Western Union. Here, it cannot be found that Western Union had
no possible protectable interest in the customer information.
However, Western Union's minimal participation in developing
customers must still be taken into account in balancing the
interests involved.

In addition to taking into account Western Union's
minimal contribution to the development of customers, it must be
considered that the customer list (which is the primary basis for
any harm suffered by Western Union based on customer information)
includes many who were MSMC customers, but did not use Western
Union services. Also, most of the Western Union customers also
purchased non-Western Union services from MSMC. Further, this is
not a situation where the locations are Western Union stores.

The locations have signage showing that they provide Western

Union services, but the business name is something different.



that MSMC disclosed volumes or commission rates.** In its
discussions with MoneyGram, however, it is undisputed that MSMC
disclosed gross commissions and bonuses of $1,250,000 for the
year 2000 for 42 core locations. For those same 42 locations,
MoneyGram agreed to pay MSMC a "guaranteed minimum payment" of
$1,250,000 annually for the first three years of their agreement.
The disclosure of gross commissions and bonuses would be the
disclosure of revenues, earnings, or payments under the
Agreement. MSMC contends that it must share revenue and
commission information with potential lenders, investors, buyers,
and government agencies and therefore the information is not
confidential information that was expected to be undisclosed
under the Agreement.

In 7 33 of its Local Rule 56.1(a) (3) statement,” MSMC
states: "Like the customer information used to develop the
Customer List, information about the commissions earned by MSMC
is also readily available to MSMC. MSMC must share such revenue
information with potential investors and lenders. It must advise
potential MSMC financial service center buyers of the financial

results of its business operations. MSMC is required by law in

The deposition testimony of Eugene Schott that is cited
by Western Union does not establish that any commission rate or
volume data was actually disclosed. Schott refers to the
commission rates of MoneyGram. See Schott Dep. at 52. Although
one question was asked Schott assuming that volumes had been
disclosed, Schott did not actually testify that volumes were
disclosed. See id. at 108.

Docket Entry [67].



S.P.A., 1998 WL 376053 *6 (E.D. Pa, June 30, 1998), aff'd by
unpublished order, 203 F.3d 817 (3d Cir. 1999); Stovall, 584 P.2d
at 1380; Miller, 506 P.2d at 664. The parties have not cited and
this court has not found any case law indicating that New Jersey
does not follow the general rule. Cf. Upper Penns Neck

Township v. Lower Penns Neck Township, 20 N.J. Super. 280, 89
A.2d 727, 732 (Law Div. 1952) (where joint enterprise agreement
is silent as to termination and therefore terminal at will of
either party, "no particular form of notice of withdrawal is
necessary, it being sufficient that unequivocal acts or
circumstances are brought to the knowledge of other partners,
signifying a purpose to terminate the arrangement").

Despite lengthy briefs, neither party has cited any cases
involving the question of whether a notice of termination was
sufficient and/or overridden by other communications or conduct.
In Dresser Industries, Inc. v. Pyrrhus AG, 936 F.2d 921 (7th Cir.
1991), Dresser provided notice of termination similar to that
involved in the present case in which Dresser clearly invoked the
termination clause of the parties' contract, but also stated that
it was willing to discuss a new form of relationship. Unlike the
present case, it was also expressly stated that further
discussions would not limit the effect of the termination notice.
Prior to receipt of the notice, a Dresser employee orally

informed Pyrrhus to disregard the termination notice because

Dresser intended to continue the relationship on an expanded