Opinion ID: 750117
Heading Depth: 1
Heading Rank: 2

Heading: Bruner Corporation's Appeals

Text: 15 We review de novo a district court's decision to grant summary judgment, construing the evidence in the light most favorable to the nonmovant and drawing all reasonable inferences in its favor. O'Connor v. DePaul Univ., 123 F.3d 665, 669 (7th Cir.1997). Summary judgment is appropriate if there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law. FED.R.CIV.P. 56(c). A genuine issue of material fact exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Newell v. Westinghouse Elec. Corp., 36 F.3d 576, 578 (7th Cir.1994) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)). 16 Bruner Corporation appeals from the district court's summary judgment decision denying relief on the company's RICO, WOCCA, and civil conspiracy claims. As the district court explained, in order to satisfy the mens rea requirements of RICO, WOCCA, and Wisconsin's civil conspiracy statute, Bruner Corporation must prove that R.A. Bruner knew that the goods it purchased from John Balogh were stolen. See supra note 3. Bruner Corporation argues that a genuine issue of material fact exists as to R.A. Bruner's knowledge that the goods were stolen, for three reasons: (1) R.A. Bruner was aware that its purchases from Balogh deviated from official company procedures; (2) it knew that the prices charged by Balogh were below the factory direct prices paid by official manufacturer's representatives; and (3) it had been told by Bruner Corporation that it could not purchase directly from Balogh. 17 Bruner Corporation's first argument is based on the different payment and invoicing procedures used when R.A. Bruner purchased from John Balogh as opposed to when it purchased from Bruner Corporation's customer service department. When it purchased from the company, R.A. Bruner made its checks payable to Bruner Corporation and received computer-printed invoices from Bruner Corporation that prominently displayed the company name and logo. By contrast, when it purchased through Balogh, R.A. Bruner made its checks payable directly to Balogh, who gave in return hand-written invoices displaying no company name or logo. Bruner Corporation contends that a reasonable fact-finder could rely on this discrepancy in the payment and invoicing procedures as support for a finding that R.A. Bruner either knew that the goods purchased through Balogh were stolen, or at least knew enough that it should have inquired as to whether the sales were authorized. 18 The problem with this argument is that, for several years prior to the start of Balogh's trafficking in stolen goods, Bruner Corporation allowed R.A. Bruner to purchase the Corporation's products both directly and through John Balogh. There is no evidence in the record that the payment and invoicing procedures used prior to the conversion period were any different than those used during the conversion period. We do not agree that the different invoicing procedures, standing alone, can support an inference that R.A. Bruner knew that Balogh was selling stolen property. 19 Bruner Corporation's other evidence, however, does support its contention that a genuine issue of fact exists in this regard. The record shows that R.A. Bruner knew that the prices it was getting from John Balogh on Bruner Corporation products were lower than the factory direct prices that it would have to pay if it made its purchases through Bruner Corporation's normal channels. Initially, John Balogh charged R.A. Bruner 40% less than the list price, which was the same discount offered to the official manufacturer's representatives. At some point along the way, however, Balogh began offering an even greater discount of 46% below list price. R.A. Bruner admits that this discount surpassed any that it (or, to its knowledge, any official manufacturer's representative) had received before, though it claims that it accepted Balogh's explanation of the deeper discount as a means for R.A. Bruner to stay competitive with the official manufacturer's representatives. Since Bruner Corporation never offered R.A. Bruner a discount greater than 40% when R.A. Bruner purchased through the Corporation directly, a reasonable fact-finder could conclude that R.A. Bruner knew or should have known that the additional discount it received from Balogh was not authorized by his supervisors. At the least, a reasonable fact-finder could conclude that this triggered R.A. Bruner's obligation to investigate further the propriety of Balogh's sales. See, e.g., United States v. Crabtree, 979 F.2d 1261, 1269-70 (7th Cir.1992) (approving the use of an ostrich instruction, in a criminal prosecution for interstate transportation of stolen goods, to inform[ ] the jury that guilty knowledge can be inferred from a combination of suspicion and deliberate ignorance), cert. denied, 510 U.S. 878, 114 S.Ct. 216, 217, 126 L.Ed.2d 173 (1993); United States v. Ramsey, 785 F.2d 184, 189 (7th Cir.) (approving the use of an ostrich instruction in a case involving prosecution for mail and wire fraud), cert. denied sub nom. McCreary v. United States, 476 U.S. 1186, 106 S.Ct. 2924, 91 L.Ed.2d 552 (1986). 20 In addition, the management of Bruner Corporation told R.A. Bruner on at least two occasions after 1990 that it could no longer purchase directly from the company. In a letter dated July 8, 1991, Bruner Corporation management told R.A. Bruner that it could not purchase Bruner Corporation products directly and that it had to make purchases through Stickler & Associates, the manufacturer's representative for the area. Later that same year, Joseph Prochot, the President and CEO of Bruner Corporation, had a heated conversation with Robert Bruner, Sr., in which Prochot told Bruner explicitly that under no circumstances would the company sell to him directly. After being told twice--by letter and in person by the President of the company--that it had to purchase through Stickler & Associates, R.A. Bruner nevertheless continued to make purchases through John Balogh. Again, a reasonable fact-finder confronted with this evidence could find that R.A. Bruner knew that the goods Balogh was selling were stolen, or at least that it should check with the company to make sure these transactions were legitimate. 21 This is not to say that Bruner Corporation will necessarily succeed at trial in proving that R.A. Bruner knew that the goods were stolen. There is significant evidence pointing toward the opposite conclusion. Until the current management took over, Bruner Corporation had always allowed R.A. Bruner to purchase through John Balogh, who by all accounts was a veteran and highly respected Corporation employee. Furthermore, Balogh had always given R.A. Bruner a discounted price over the course of their long relationship. When the discount went up 6%, Balogh explained this as a way for R.A. Bruner to remain competitive in the industry. Finally, Bruner Corporation repeatedly reprimanded Balogh for continuing to sell products to dealers who were not official representatives. Its failure to put a stop to these sales could imply that the Corporation tolerated Balogh's maverick behavior to an extent, and could suggest that R.A. Bruner's trust in Balogh may have been well-founded even though it dealt with him outside the normal channels. 22 Our task, of course, is not to determine which view will ultimately win out on the issue of R.A. Bruner's knowledge. The significant evidence pointing in both directions is sufficient to render summary judgment inappropriate at this stage of the proceedings. We simply are unable to agree with the district court that, based on the record, no reasonable jury could find that R.A. Bruner had knowledge sufficient to satisfy the mens rea requirements of RICO, WOCCA, and Wisconsin's civil conspiracy law. We therefore remand the case to the district court for further proceedings on these claims.