In the

United States Court of Appeals

For the Seventh Circuit

No. 12-3557

TABFG, LLC,

Plaintiff-Appellee,

v.

RICHARD PFEIL,

Defendant-Appellant.

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division.

No. 1:08-cv-06979 — Robert W. Gettleman, Judge.

ARGUED APRIL 15, 2013 — DECIDED MARCH 20, 2014

Before RIPPLE, ROVNER, and WILLIAMS, Circuit Judges.

ROVNER, Circuit Judge. TABFG, a limited liability corporation, brought suit against Richard Pfeil alleging, among other

claims, tortious interference with a contract. After a benchtrial,

the district court entered judgment in favor of TABFG, and

awarded a judgment in the amount of $957,659.68, comprised

of a principal amount of $674,121.87 plus prejudgment interest
2 No. 12-3557

of $279,530.36 and costs of $4,007.45. Pfeil now appeals that

determination, and we affirm.

In April 2003, a joint venture was formed between two

limited liability companies, TABFG and NT Prop Trading (“NT

Prop”), for the purpose of trading securities for financial gain.

TABFG was the entity responsible for all of the trading for the

joint venture, and was comprised of three individual members

and managers, Cal Fishkin, Igor Chernomzav, and Kent

Spellman. NT Prop was tasked with funding the venture, and

included two members who were also limited liability

corporations—NT Financial and Pfeil CommodityFund(“Pfeil

Commodities”). The sole member, manager and owner of Pfeil

Commodities was Richard Pfeil (“Pfeil”), who was known as

the “money man” for the joint venture and is the defendant in

this case. NT Prop was managed by two individuals, William

Anthony, who was Pfeil’s attorney, and Larry Nocek.

Under the terms of the Joint Venture Agreement, NT Prop

would provide the money to fund the trading by TABFG. The

agreement called for an initial funding in the amount of $2

million, followed by a subsequent infusion of an additional

$2.5 million. At first, this arrangement appeared to function

well. NT Prop provided the initial $2 million in start-up

money, which came from Pfeil Commodities, and the traders

proved adept at their craft, earning profits of $3.4 million. 

A problem arose, however, which threatened the ability of

the joint venture to continue in its mission. Before forming

TABFG, Fishkin and Chernomzav (hereinafter the “Traders”)

were employees of Susquehanna International Group LLP

(“SIG”), a company that engaged in the trading of equities,
No. 12-3557 3

futures, and other derivative products and securities. In that

employment, the Traders were signatories to an employment

contract that contained restrictive covenants which limited

their ability to compete with their former employer upon

leaving their jobs. The parties to the Joint Venture Agreement

were aware of those limitations, and provided in that agreement for the payment of attorneys’ fees and other costs

necessary to escape the strictures of that employment contract.

Toward that end, the Traders filed a lawsuit against SIG

seeking a declaratory judgment to invalidate the restrictive

covenants. SIG responded by adding TABFG and NT Prop to

their lawsuit as additional counterclaim defendants seeking

disgorgement of all profits, thus creating consternation among

the parties to the joint venture that the money in that venture

could be imperiled. On September 16, 2003, SIG obtained an

injunction in a Pennsylvania district court enjoining the

Traders for nine months after their departure from SIG from

trading any security that they had traded within the last three

months of their employment with SIG, and enjoining them

from associating with each other on a securities trading

business for nine months. That prevented the Traders from

working together to trade on behalf of TABFG, and spelled the

end of the joint venture because their combined trading

prowess was the cornerstone of the venture. The Joint Venture

Agreement provided that “[u]pon termination of the Joint

Venture, a Reconciliation Statement will be prepared by NT

Prop and delivered to the parties within fifteen (15) days after

termination, and all profits and the Hold Back, if any, shall be

concurrently distributed to the respective parties.” The district

court concluded that the venture effectively ended when the
4 No. 12-3557

injunction was entered, and that the terms of the Joint Venture

Agreement required a disbursement of funds as of October 2,

2003. The district courtfound that the Joint Venture Agreement

provided for an even split of the profits between TABFG and

NT Prop less expenses and payments. A letter of October 3,

2003, from counsel for the Traders sought a distribution of

funds under the Joint Venture Agreement, and noted that a

refusal by NT Prop to distribute such finds would constitute a

breach. The Traders in that letter also expressed a willingness

to continue to trade under the Joint Venture Agreement, but

acknowledged that such a course of action might not be in the

best interest of the parties. 

Numerous discussions ensued between the parties as to the

amounts due from NT Prop to TABFG under the agreement,

and NT Prop created spreadsheets in an effort to detail the

amounts owed. The parties failed to agree as to the final

accounting, but Fishkin on behalf of TABFG literally begged

Pfeil to distribute what was owed to TABFG so that it would

have the funds needed to mount a defense in the lawsuit by

SIG. 

On January 6, 2004, Pfeil caused NT Prop to distribute

$360,000 to TABFG, $533,023.69 to NT Financial, and

$2,742,182.02 to Pfeil Commodities, which he solely owned and

which funds he acknowledged went to him personally and for

his own personal use. Pfeil and Nocek signed an agreement

two days later, on January 8, 2004, purporting to authorize that

distribution, and Pfeil signed it as a manager although the only

managers of NT Prop in fact were Nocek and Anthony. After

the distribution, approximately $200,000 was left in the assets

of the joint venture, which was mainly spent for legal fees and
No. 12-3557 5

taxes. In September, 2004, NT Prop was involuntarily dissolved

by the Illinois Secretary of State.

TABFG subsequently filed a lawsuit against Pfeil, alleging

among other claims that Pfeil tortiously interfered with the

contractual obligations of NT Prop in its Joint Venture Agreement under which the distribution of profits was supposed to

be evenly split between TABFG and NT Prop, less expenses

and payments. Under Illinois law, which applies to this claim,

a claim of tortious interference requires proof of a legally

enforceable contract of which the defendant had knowledge,

and the defendant’s intentional interference inducing a breach

by a party to the contract, resulting in damages. Stafford v. Puro,

63 F.3d 1436, 1441 (7th Cir. 1995); Dallis v. Don Cunningham &

Assoc., 11 F.3d 713, 717 (7th Cir. 1993). Essentially, TABFG

asserted that when Pfeil, who was not an officer, director or

manager of NT Prop, engineered a distribution of the bulk of

the joint venture funds to himself, he tortiously caused NT

Prop to breach its contractual obligations under the Joint

Venture Agreement to TABFG on that date. 

After a bench trial, the district court judge agreed with

TABFG, and awarded judgment to TABFG against Pfeil. In so

holding, the district court judge explicitly found Pfeil to be not

credible in his testimony, and found Fishkin and Chernomzav

very credible. In reviewing the decision of the district court, we

review factual findings for clear error, with special deference

to the district court’s determinations of credibility that are not

contradicted by extrinsic evidence. Furry v. United States, 712

F.3d 988, 993 (7th Cir. 2013); United States v. Stadfeld, 689 F.3d

705, 709 (7th Cir. 2012).
6 No. 12-3557

Pfeil raises two challenges to the district court’s decision.

First, he asserts that the claim of tortious interference is barred

by the statute of limitations. Second, he asserts that his distribution of the funds was protected by privilege, and therefore

he cannot be held liable for that distribution. We take these

arguments in turn.

The relevant statute of limitations for a claim of tortious

interference with contract is five years, and Pfeil argues on

appeal that the limitations period began to run on October 2,

2003. According to Pfeil, the Joint Venture Agreement was

effectively terminated when the Pennsylvania district court

entered the injunction against the Traders, thus triggering the

requirement in the Joint Venture Agreement that NT Prop

prepare a Reconciliation Statement and distribute the funds

within 15 days. Pfeil asserts that the failure to distribute the

funds within that time period constituted a breach of contract

on October 2, 2003, and therefore that is the relevant date of

breach for limitations purposes. 

As an initial matter, we note that this argument was first

made to the district court in the Motion to Alter or Amend the

Judgment after the adverse trial verdict was rendered against

Pfeil. A party cannot withhold a statute of limitations claim

like a trump card, to be played in the event that the trial ends

unfavorably. That is essentially what happened here. In his

Answer to the Complaint, Pfeil raised as an affirmative defense

the following statute of limitations claim, though he never

argued it further after that time: 

Plaintiff’s claims are barred by the statute of limitations. Plaintiff knew or had reason to know of the
No. 12-3557 7

distributions allegedly made by NT Prop prior to

January 2004 and failed to file the instant lawsuit

within the applicable statute of limitations period. 

That is a distinct argument from the one made in the postjudgment motion and before this court on appeal. In that

affirmative defense, Pfeil alleges that TABFG had knowledge

of distributions by NT Prop prior to the January 2004 distribution, and that the limitations period began to run as of those

earlier distributions. On appeal and in the post-judgment

motion, however, Pfeil asserts that the Joint Venture Agreement was breached on October 2, 2003, when distributions

were required following the termination of the contract but not

made, and therefore that the distribution in January 2004 could

not trigger the limitations period because that distribution

clause had already been breached on October 2nd. In fact, Pfeil

recognized that its argument could be perceived as distinct

from its affirmative defense in the answer, and in the Motion

to Alter or Amend the Judgment Pfeil sought leave to amend

that affirmative defense to reflect the new approach. The

failure to raise a specific statute of limitations argument may

constitute a waiver even if other statute of limitations arguments are raised. Dexia Credit Local v. Rogan, 629 F.3d 612, 626

(7th Cir. 2010). Here, the failure to raise, or pursue, the statute

oflimitations argument before judgment was enteredafter trial

presents the issue of waiver. TABFG never argued waiver,

however, and the district court also did not consider that

possibility. We have often noted that parties can waive waiver

by failing to assert it, and because the district court and the

parties addressed the issue solely on the merits, and there is in

fact no merit to the argument, we limit our discussion to the
8 No. 12-3557

merits as well. See Cromeens, Holloman, Sibert, Inc. v. AB Volvo,

349 F.3d 376, 389 (7th Cir. 2003).

The failure to disburse the payment within the 15 days was

not treated by any party as an abrogation of the duty to

distribute the payment itself, and it is apparent that the failure

to disburse within the 15 days was not a material breach. In

fact, the parties routinely disregarded the timeliness requirements of the contract. See Arrow Master, Inc. v. Unique Forming

Ltd., 12 F.3d 709, 716 (7th Cir. 1993) (noting Illinois cases

holding that there is no material breach where conduct

indicates acquiescence such as an acceptance of delays and an

absence of demand for performance).The contract required NT

Prop to fund the original $2 million, and although $1 million

was paid, the additional $1 million was delayed beyond the

time provided in the Joint Venture Agreement. Pfeil, who was

known as the “money man” behind those payments, also

delayed and ultimately failed to release the subsequent $2.5

million required by the contract. The failure to disburse within

the 15 days was treated no differently by the parties, who

continued to negotiate the amounts owed in the disbursement

through the ensuing months until Pfeil distributed the money

on January 6. It was only at that point that there was a breach

of the disbursement requirement of the contract, because that

was the point at which it became clear that the money would

not be disbursed in the manner required by the contract. Pfeil

in fact argued in a motion in limine that evidence of any breach

prior to January 2004 should be excluded, a position firmly

counter to the contention now that the claim is outside the

statute of limitations because a breach occurred prior to

January 2004. The court properly determined that the obliga-
No. 12-3557 9

tion to disburse continued until the January 2004 date, and that

the statute of limitations for the tortious interference claim

began to run as of the date of that breach. 

Pfeil next argues that his action in distributing the funds

was privileged, and therefore that he cannot be held liable for

that action. The Illinois Supreme Court has recognized a

privilege intortious interference caseswhere the interest which

the defendant was acting to protect is one which the law deems

to be of equal or greater value than the plaintiff’s contractual

rights. HPI Health Care v. Mt. Vernon Hosp., 545 N.E.2d 672, 677

(Ill. 1989). Illinois has therefore granted a conditional privilege

to managers or corporate officers that protects them from

personal liability for their decisions made on behalf of the

corporation. Id.; Nation v. American Capital, Ltd., 682 F.3d 648,

651–52 (7th Cir. 2012); Stafford, 63 F.3d at 1442. The privilege is

necessary because a corporation acts through its agents, and

the duty that those agents owe to the corporation’s shareholders outweighs their duty to the corporation’s contract creditors.

Stafford, 63 F.3d at 1442; HPI Health Care, 545 N.E.2d at 677. The

business judgment rule is the basis for the privilege. Nation,

682 F.3d at 652. “Because the interests of corporate officers,

directors, and shareholders are sufficiently aligned with those

of the company, they generally cannot be liable in tort when

they interfere with the company’s contract for the benefit of the

company.” Id. The utility of such a rule is clear. For instance, a

company facing a liquidity crisis may need to take measures to

address the cash flow problems such as deferring payments to

vendors and renegotiating terms with suppliers. Such actions

taken to protect the future of the company and the ongoing

viability of those business relationships should not result in
10 No. 12-3557

tort liability to those agents acting in the company’s best

interests. See Nation, 682 F.3d at 653. Those agents are not

protected from any and all decisions, however. The privilege

extends only to acts undertaken on behalf of the corporation,

and corporate officers “are not justified in acting solely for

their own benefit or solely in order to injure the plaintiff

because such conduct is contrary to the best interests of the

corporation.” Stafford, 63 F.3d at 1442, citing HPI Health Care,

545 N.E.2d at 678

Pfeil maintains that the district court misapplied the law.

According to Pfeil, a person subject to privilege cannot be held

liable unless that person was acting only for his own personal

benefit and acted contrary to the interests of the corporation.

See Nation, 682 F.3d at 653; Von Der Ruhr v. Immtech Intl., 570

F.3d 858, 866 (7th Cir. 2009). Pfeil maintains that the district

court considered only the first part of that test, and upon

finding that Pfeil distributed the money for his own personal

interest, ended the inquiry and held that the privilege did not

therefore shield him from liability. Pfeil asserts that his actions

were in the interests of NT Prop, and therefore he cannot be

held liable.

There are several problems with this argument, not the

least of which is that Pfeil was not a manager, director or

officer of NT Prop, and was not authorized to act on NT Prop’s

behalf. Pfeil has presented no argument that he was somehow

the de facto manager of NT Prop, and in fact argued at various

times against any attempt to equate him with NT Prop. He was

merely the sole member of one of two members of NT Prop,

albeit the person who ultimately provided virtually all of the

funds for the enterprise. Absent authority to act on behalf of
No. 12-3557 11

NT Prop, the privilege does not attach. The district court,

however, did not explore whether Pfeil was authorized to act

on behalf of NT Prop, noting merely that he was pulling the

strings all along. Given the lack of fact findings as to his role in

the corporate structure, we will not address whether the

privilege applies as an initial matter, and instead will consider

only the district court’s decision that the conditional privilege

was overcome. 

The district court held that Pfeil’s act in distributing the

money was a personal one, not a corporate one at all, and that

it was done solely for his own personal benefit. The court also

rejected as not credible Pfeil’s contention that he believed the

hold-back provision in the contract reduced the amount owed

to TABFG to less than $360,000. The court noted that under the

plain language of the Joint Venture Agreement the hold-back

provision did not apply, and that it was clear that TABFG was

owed significantly more than $360,000. 

We have repeatedly recognized that actions taken solely for

one’s own personal benefit are not actions taken in the interests

of the corporation. Stafford, 63 F.3d at 1442; Dallis, 11 F.3d at

717; see also HPI Health Care, 545 N.E.2d at 678. Moreover, Pfeil

himself testified that he was unaware of the terms of the

distribution agreement, or the numbers in the spreadsheets

prepared by NT Prop, although he was aware of the existence

of those documents. Therefore, by his own admission, he did

not attempt to determine the legal responsibilities of NT Prop

before distributing the funds, nor did he attempt to allocate

that distribution in a manner consistent with the numbers in

the spreadsheet developed by NT Prop to determine the

proper distribution. Furthermore, as the district court pointed
12 No. 12-3557

out, the bulk of the money was put into Pfeil’s own pocket, not

into a trust or escrow or other account designed to protect the

interests of NT Prop. The district court found Pfeil not credible

in indicating that he was not aware of the numbers, but that

too leads to the conclusion that he was not acting in the interest

of NT Prop, because he did not distribute the funds in the

manner required by that agreement and there was no apparent

corresponding benefit to NT Prop in his failure to do so. The

spreadsheet prepared by NT Prop revealed that significantly

more money was owed TABFG than the $360,000 paid. The

only benefit from Pfeil’s skewed distribution of that money

was to Pfeil personally. The failure to ascertain the legal

obligations of NT Prop and the allocation of the funds for his

own personal benefit support the district court’sdetermination

that Pfeil was acting solely in his own interest and not in the

best interest of NT Prop. Moreover, the district court’s holding

that TABFG did not receive the funds to which it was entitled

under the Joint Venture Agreement further establishes that the

distribution was not in NT Prop’s interest. There is no evidence

that in failing to comply with that legal obligation Pfeil gained

some other benefit to NT Prop, and in fact NT Prop was

involuntarily dissolved within 9 months of that distribution.

The findings by the district court establish that Pfeil acted

solely for his own personal benefit, and that the distribution

was not in the interest of NT Prop, and therefore Pfeil is not

shielded from liability by privilege.

The decision of the district court is AFFIRMED.