Opinion ID: 3000918
Heading Depth: 2
Heading Rank: 2

Heading: Fairness of the Leases

Text: The remaining question on the validity of the leases is whether Hicks carried his burden of demonstrating a genuine issue of material fact as to their fairness. Hicks’s summary judgment motion attached two leases for comparison, as well as an affidavit from another leasing agent regarding the fair market value of postal trailers. Hicks did not develop an argument based on these documents, however; instead, he repeatedly asserted before the district court that the only issue it needed to consider was his argument about the receiver. But Hicks had “the burden to point to . . . information to show that a genuine issue of fact exist[s]; the district court ‘need not scour the record’ to find such evidence.” Ruffin-Thompkins, 422 F.3d at 610 (quoting L.S. Heath & Son, Inc. v. AT&T Info. Sys., Inc., 9 F.3d 561, 567 (7th Cir. 1993)). We are No. 05-4523 13 tempted to conclude that Hicks abandoned that task by not developing an argument about how the documents he submitted related to his burden of proving fairness. In an abundance of caution, however, we will evaluate the limited evidence Hicks submitted. “Illinois defines ‘fair’ as market value. A transaction is ‘fair’ to a corporation when it receives at least what it would have obtained following arms’ length bargaining in competitive markets.” Olsen v. Floit, 219 F.3d 655, 657 (7th Cir. 2000) (citing Shlensky v. S. Parkway Bldg. Corp., 166 N.E.2d 793 (Ill. 1960)). Hicks submitted three documents potentially relevant to fairness: an affidavit stating that the fair market value for a postal trailer ranges from $360 to $600 per month and two leases Midwest entered into with other companies after Hoagland was appointed receiver. The affidavit is too generalized to raise an issue of fact regarding the fairness of the particular leases in question in this case. The first of the two comparison leases, a three-year lease with Rightway Trucking Co., provided Midwest with trailers at a rate of $250 per trailer per month, substantially lower than the Hicks leases.5 The lease also included an option to purchase, which was not available in the Hicks leases. Without additional information regarding the comparative quality or age of the Rightway trailers, which Hicks did not provide, there is nothing in this lease that would support a conclusion that Hicks’s $450-per-trailer rate was fair. The second lease was between Midwest and XTRA Lease. It is a short-term lease of an entirely different nature in which trailers were provided for daily and weekly rates. 5 Rightway Trucking was owned by the Witters. Accordingly, before entering into this insider transaction, Hoagland obtained the permission of the state court. 14 No. 05-4523 The district court noted during the contempt proceedings that short-term trailer rental rates are often higher than long-term rates; this explains why Hicks was compensated at a rate of $450 per trailer in the contempt proceedings for the short-term continued possession of his trailers, but received only $400 per trailer in the quantum meruit settlement for the long-term use that occurred prior to the July 2002 order mandating the trailers’ return. Hicks has not provided any information regarding how the market value for short-term leases such as those entered into with XTRA compares with that of the long-term leases entered into with him. He also has not provided any information regarding the comparative age and quality of the trailers XTRA offered. By contrast, Midwest submitted three long-term leases it has entered into since returning Hicks’s trailers. Each lease contains an option to purchase and carries a significantly lower rate ($285, $185, and $225 per trailer per month) than the Hicks leases. Midwest also submitted an affidavit from its operations manager stating that the XTRA lease rate was higher than all of Midwest’s other leases because it was a short-term rate. Finally, Midwest included a document from the state court containing its bench trial finding that Hicks had failed to prove that any trailer leases he entered into with Midwest since 1993 were fair under section 5/8.60. As we have discussed, Hicks has the burden of proving that a reasonable jury could find in his favor on the issue of fairness; his evidence is insufficient to create a genuine factual dispute regarding the fairness of the leases.