American Roller Co., LLC v. Foster-Adams Leasing, LLP
United States District Court for the Northern District of Illinois
2006 WL 1371441 (N.D. Ill. May 16, 2006)
American Roller Co., LLC (American) (plaintiff), contracted to buy Champion Roller, LLC (Champion) from Russell M. Foster, Larry H. Adams, Foster-Adams Leasing, LLP, and Foster-Adams LLP (defendants). CM Acquisitions (CM), an investor in American’s parent company, acted as guarantor. CM negotiated the purchase of Pillar Industries by Pillar Induction, in which it is also an investor. American sued the defendants for misrepresentation and breach of warranty. The defendants counterclaimed for payments already due. During discovery the defendants sought information related to the settlement of a dispute between CM and Pillar Industries, even though neither was a party. The defendants argued American habitually bought companies and then sued in bad faith to get better terms. Specifically, the defendants hoped to depose the former president of Pillar Industries, Mark Skiba, in order to find evidence of American’s business practices and motivations for suing. The defendants thought such discovery could provide grounds for further claims against American. American sought to block the discovery on the ground that the Pillar transaction was not relevant, because Skiba had no involvement with American or Champion, nor did Pillar Industries. American asked the court for a protective order prohibiting discovery related to the Pillar deal.
Rule of Law
Holding and Reasoning (Nolan, J.)
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