2017 IL App (3d) 160348
Opinion filed August 8, 2017 _____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
PERFORMANCE FOOD GROUP ) Appeal from the Circuit Court COMPANY, LLC, a Delaware Limited ) of the 14th Judicial Circuit, Liability Company, d/b/a Performance ) Rock Island County, Illinois. Foodservice—Thoms Proestler, ) ) Plaintiff-Appellee, ) ) v. ) ) ARBA CARE CENTER OF ) BLOOMINGTON, LLC, an Illinois ) Limited Liability Company; ARBA ) CARE CENTER OF COLFAX, LLC, an ) Illinois Limited Liability Company; ) Appeal No. 3-16-0348 ARBA CARE CENTER OF ELGIN, ) Circuit No. 15-L-136 LLC, an Illinois Limited Liability ) Company; ARBA CARE CENTER OF ) TOLUCA, LLC, an Illinois Limited ) Liability Company; ASTA CARE ) CENTER OF FORD COUNTY, LLC, an ) Illinois Limited Liability Company; ) ASTA CARE CENTER OF PONTIAC, ) LLC, an Illinois Limited Liability ) Company; ASTA CARE CENTER OF ) ROCKFORD, LLC, an Illinois Limited ) Liability Company, ) The Honorable ) Joseph F. Fackel, Defendants-Appellants. ) Judge presiding. ____________________________________________________________________________
JUSTICE CARTER delivered the judgment of the court, with opinion. Presiding Justice Holdridge and Justice McDade concurred in the judgment and opinion. _____________________________________________________________________________ OPINION
¶1 Plaintiff, Performance Food Group, brought suit against the ARBA and ASTA
defendants listed in the caption above for breach of contract, seeking to collect money that
plaintiff was allegedly owed for food products that it had sold and delivered to defendants to be
used in defendants’ nursing home facilities. 1 During pretrial proceedings, plaintiff filed a motion
for summary judgment, which the trial court granted after a hearing. Defendants appeal. We
affirm the trial court’s judgment.
¶2 FACTS
¶3 ASTA Healthcare Company (ASTA Healthcare) operated seven skilled nursing home
facilities in Illinois. The facilities were located in Bloomington, Colfax, Elgin, Toluca, Ford
County, Pontiac, and Rockford. Each facility/business was set up as a separate limited liability
company. ASTA Healthcare owned the real property that three of the facilities were located
upon, the ones in Rockford, Pontiac, and Ford County, and had options to purchase the real
property that the other four facilities were located upon. The facilities purchased their food
products from plaintiff on credit (an open account) pursuant to the terms of oral or written
contracts that the facilities had entered into with plaintiff. Michael Gillman was the president of
ASTA Healthcare. Gillman was also the majority owner of four of the limited liability
companies—ASTA Bloomington, ASTA Colfax, ASTA Elgin, and ASTA Toluca.
¶4 In about the middle of 2014, the ASTA entities ran into some financial problems. A
hospice company that ASTA Healthcare was at least part owner of was being indicted by the
Justice Department, and banks were not willing to extend lines of credit to the ASTA entities
under the existing ownership. As a result, the ASTA entities could no longer function and had to
1 Throughout this opinion, for the convenience of the reader, we have used shortened versions of the names of the entities involved rather than the full legal name of the entities. 2 change ownership. ARBA Healthcare Company (ARBA Healthcare) was formed (or had been
formed) with Michael Gillman as the president of the company, and the operation of the nursing
home facilities in Bloomington, Colfax, Elgin, and Toluca was transferred from ASTA
Healthcare to ARBA Healthcare. Each facility was again set up as a separate limited liability
company, this time under the ARBA name. The remaining three ASTA facilities were foreclosed
upon and sold.
¶5 In February 2015, the four ARBA entities/facilities submitted customer account
applications to plaintiff. When plaintiff learned of the change in ownership, it transferred the
account numbers and balances from the old ASTA entities to the new ARBA entities. The
ARBA entities were put on a “short leash” with plaintiff and were required, at least during the
last few months, to pay upon delivery for the food products they received from plaintiff. A
dispute arose because plaintiff was applying those payments to the outstanding amounts that it
was owed from the corresponding ASTA entities, in the order of the oldest amounts due first.
That was contrary to the requirements of ARBA Healthcare’s current lender, who required that
all ARBA payments be applied to ARBA accounts. Eventually the ARBA entities could not meet
their payment obligations, and the businesses folded.
¶6 In November 2015, plaintiff filed the instant breach of contract case against the ARBA
and ASTA entities listed in the caption above (collectively referred to as defendants). In January
2016, plaintiff filed a suggestion of bankruptcy with the trial court indicating that ASTA Ford
County, ASTA Pontiac, and ASTA Rockford had filed for bankruptcy protection in federal
bankruptcy court. Copies of the bankruptcy notices were attached to the suggestion of
bankruptcy.
3 ¶7 In February 2016, defendants filed their answer in this case. In their answer, defendants
admitted that they had contracts with plaintiff, that they had ordered products from plaintiff, and
that plaintiff had delivered those products to them. Defendants made a general denial as to the
remaining allegations. Defendants also raised three affirmative defenses, which were pled as
follows:
“FIRST AFFIRMATIVE DEFENSE: Bankruptcy
1. [ASTA Ford County], [ASTA Pontiac], and [ASTA Rockford] have
filed for Bankruptcy Protection[.]
SECOND AFFIRMATIVE DEFENSE: Payment
1. Amounts in the complaint are incorrect and ARBAs [sic] paid amounts
that Plaintiffs [sic] did not include in their complaint.
THIRD AFFIRMATIVE DEFENSE: Unjust Enrichment
1. Plaintiff may not recover the damages sought in this action because,
under the circumstances presented, it would constitute unjust enrichment.”
(Emphases in original.)
¶8 In April 2016, plaintiff filed its motion for summary judgment on its complaint for breach
of contract against the four ARBA entities. Plaintiff alleged in the motion that (1) each ARBA
entity was a party to a customer account application (the contract) with included terms and
conditions; (2) among other things, the customer account applications provided for recovery by
plaintiff of interest at a rate of 18% per year, together with attorney fees and costs; (3) each
ARBA entity was a successor in interest to the business interest of a prior corresponding ASTA
entity; (4) each ARBA entity and its corresponding ASTA entity were parties to an operations
transfer agreement in which the ASTA entity transferred its operating assets to the ARBA entity
4 for no consideration; (5) the operations transfer agreements and the amendments to those
agreements were signed by Michael Gillman as president of both ASTA Healthcare and ARBA
Healthcare; (6) in accordance with plaintiff’s “understanding,” the ARBA entities or their
principal owners would be responsible for the account balances of the corresponding ASTA
entities, so plaintiff transferred each ASTA entity’s account balance to the account of its
respective ARBA entity successor; (7) in accordance with established practice, plaintiff applied
the payments for the ASTA/ARBA accounts to the oldest invoices first; (8) plaintiff was owed a
principal balance of over $99,000 by ARBA Bloomington, over $26,000 by ARBA Colfax, over
$62,000 by ARBA Elgin, and over $39,000 by ARBA Toluca; 2 (9) the ARBA entities had
breached their contracts with plaintiff and were liable for money damages; (10) the ARBA
entities could not legitimately dispute the balances owed to plaintiff and had no legitimate
defense for nonpayment; (11) the ARBA entities were the mere continuations and alter egos of
the ASTA entities and were, therefore, liable for the account balances of the ASTA entities; and
(12) in addition to the principal balances owed by the ARBA entities, plaintiff was also entitled
to interest, costs, and attorney fees from the ARBA entities pursuant to the terms of the contract
between the parties.
¶9 Attached to plaintiff’s motion for summary judgment were various supporting
documents, including the customer account applications, the deposition of Michael Gillman
(from which many of the background facts listed above were derived), the operations transfer
agreements and the first amendment to those agreements, an affidavit of attorney fees and costs,
and the affidavit of Mike Spear, the plaintiff’s credit manager. In his affidavit, Spear stated,
among other things, that (1) beginning in about April 1996, plaintiff sold product to the ASTA
2 The specific amounts were listed in the complaint and in the motion for summary judgment. 5 entities on an open account pursuant to credit applications; (2) in about January 2015, plaintiff
learned that the operations of the ASTA/ARBA facilities had changed from the ASTA entities to
the ARBA entities but the principal owners of the ASTA entities and the ARBA entities had
remained the same; (3) plaintiff was not informed in advance of the ARBA entities becoming the
operating entities for the ASTA/ARBA facilities, which were previously operated by
corresponding ASTA entities; (4) when plaintiff learned of the transfer of operations from the
ASTA entities to the ARBA entities, plaintiff agreed to continue extending credit to the ARBA
entities upon the credit terms previously provided to the ASTA entities, and the ASTA entities’
account numbers, as established by plaintiff, were used for the ARBA entities; (5) the accounts
for the ARBA entities were established months after plaintiff learned of the transfer of operations
from the ASTA entities to the ARBA entities because plaintiff was informed that the account
balances of the ASTA entities would be paid in full; (6) in agreeing to extend credit to the ARBA
entities, plaintiff understood that the ARBA entities or their principal owners would be
responsible for the account balances of the corresponding ASTA entities; (7) in accordance with
established practice, plaintiff applied the payments for the ASTA/ARBA accounts to the oldest
invoices first; and (8) statements of account, which would be attached to the affidavit as exhibits,
were prepared and kept in the regular course of plaintiff’s business and were accurate and
complete to the best of Spear’s knowledge and belief. Despite the statement in Spear’s affidavit,
however, it does not appear from the record that the statements of account were attached to the
affidavit or made part of the record in this case.
¶ 10 Defendants filed a response to the motion for summary judgment and asserted, among
other things, that (1) summary judgment was not appropriate because issues of material fact
remained as to whether the ARBA entities were the successors or alter egos of the ASTA
6 entities; (2) even if plaintiff’s allegations were true, any matter involving an ASTA debt was a
matter for the federal bankruptcy court to decide; and (3) if plaintiff applied ARBA payments to
ASTA debts, such action would violate bankruptcy laws. In support of those assertions,
defendants referred to various statements made by Michael Gillman in his deposition that (1)
ASTA Healthcare did not own the real estate or buildings involved in some of the nursing home
operations, (2) three of the nursing home operations (Ford County, Pontiac, and Rockford) were
foreclosed upon and sold and were not operated by any persons related to ARBA Healthcare, (3)
the ARBA facilities were taken over by a new landlord who owned the land and the buildings,
and (4) the new landlord chose Michael Gillman and other former ASTA personnel to operate
the facilities. Defendants also attached to the response ownership information for the Ford
County, Pontiac, and Rockford facilities, presumably to show that the new owners were not
connected to ARBA Healthcare.
¶ 11 A hearing was held on the motion for summary judgment in June 2016. After listening to
the arguments of the attorneys, the trial court took the motion under advisement. The trial court
later issued a written ruling granting plaintiff’s motion for summary judgment against the four
ARBA defendants and entering judgment against the four ARBA defendants for the principal
balances owed, plus interest, costs, and attorney fees. In the order, the trial court did not explain
its reasoning for the grant of summary judgment. Defendants appealed.
¶ 12 ANALYSIS
¶ 13 On appeal, defendants argue that the trial court erred in granting summary judgment for
plaintiff on plaintiff’s complaint for breach of contract against the four ARBA defendants.
Defendants assert that summary judgment should not have been granted in this case because (1)
plaintiff failed to satisfy its initial burden of production in the summary judgment proceedings,
7 (2) the automatic bankruptcy stay applied to plaintiff’s claims against the ARBA defendants, and
(3) granting summary judgment for plaintiff would allow plaintiff to be unjustly enriched at the
expense of the bankruptcy estate. Defendants ask, therefore, that we reverse the trial court’s
grant of summary judgment and that we remand this case for further proceedings. Plaintiff
disagrees with all of defendants’ assertions and argues that the trial court’s grant of summary
judgment was proper and should be upheld.
¶ 14 The purpose of summary judgment is not to try a question of fact but to determine if one
exists. Adams v. Northern Illinois Gas Co., 211 Ill. 2d 32, 42-43 (2004). Summary judgment
should be granted only where the pleadings, depositions, admissions, and affidavits on file, when
viewed in the light most favorable to the nonmoving party, show that there is no genuine issue as
to any material fact and that the moving party is clearly entitled to a judgment as a matter of law.
735 ILCS 5/2-1005(c) (West 2014); Adams, 211 Ill. 2d at 43. Summary judgment should not be
granted if the material facts are in dispute or if the material facts are not in dispute but reasonable
persons might draw different inferences from the undisputed facts. Adams, 211 Ill. 2d at 43.
Although summary judgment is to be encouraged as an expeditious manner of disposing of a
lawsuit, it is a drastic measure and should be allowed only where the right of the moving party is
clear and free from doubt. Id. In appeals from summary judgment rulings, the standard of review
is de novo. Id. When de novo review applies, the appellate court performs the same analysis that
the trial court would perform. Direct Auto Insurance Co. v. Beltran, 2013 IL App (1st) 121128,
¶ 43.
¶ 15 I. Whether Plaintiff Satisfied Its Initial Burden of Production
¶ 16 As noted above, in support of its argument on appeal, defendants assert first that
summary judgment should not have been granted for plaintiff because plaintiff failed to satisfy
8 its initial burden of production. More specifically, defendants contend that plaintiff failed to
present sufficient evidence to establish that it was entitled to a grant of summary judgment in that
(1) several genuine issues of material fact remained as to such matters as whether the ARBA
entities were the successors or alter egos of the ASTA entities, whether the ARBA entities were
responsible (by agreement or otherwise) for the amounts owed to plaintiff by the corresponding
ASTA entities, and as to the amount of the principal balances owed, if any, by the ARBA entities
to plaintiff and (2) plaintiff failed to present any documentary evidence to establish the alleged
balances owed by the ARBA entities or to show how the payments that the ARBA entities made
to plaintiff were applied.
¶ 17 Plaintiff disagrees with defendants’ assertion and claims, instead, that it satisfied its
burden of production in the summary judgment proceeding because it introduced undisputed
evidence, including the deposition of Michael Gillman (defendants’ president) and the affidavit
of Mike Spear (plaintiff’s credit manager), that showed that the ARBA defendants breached their
respective contracts with plaintiff; that the ARBA entities were the alter egos or successors of the
ASTA entities; that as successor entities, the ARBA entities were legally liable for the amounts
that the ASTA entities owed plaintiff; and that plaintiff was, therefore, entitled to judgment as a
matter of law. Plaintiff claims further that once it met its initial burden of production and the
burden shifted to defendants, defendants failed to introduce any evidence or factual basis to raise
a genuine issue of material fact that would preclude a grant of summary judgment for plaintiff. In
making that claim, plaintiff contends that any objections that defendants had to the sufficiency of
the Mike Spear affidavit have been forfeited on appeal because defendants failed to raise those
objections in the trial court. Plaintiff contends further that defendants have also forfeited their
9 affirmative defenses because they failed to plead any facts in the trial court to support those
affirmative defenses.
¶ 18 In a summary judgment proceeding, the burden of persuasion is always on the moving
party to establish that there are no genuine issues of material fact and that moving party is
entitled to judgment as a matter of law. See Triple R Development, LLC v. Golfview Apartments
I, L.P., 2012 IL App (4th) 100956, ¶ 12. The burden of production, however, may shift during
the course of the proceedings. See id. Initially, the burden of production is on the moving party.
See id. In a very general sense, to satisfy the initial burden of production, the moving party must
present evidence that, if uncontradicted, would entitle the moving party to a directed verdict at
trial. See id. ¶ 16. More specifically, if the defendant is the moving party, to satisfy the initial
burden of production, the defendant must affirmatively establish through its pleadings and
supporting documents that some element of the case must be resolved in its favor or that there is
an absence of evidence to support the plaintiff’s case. See Beltran, 2013 IL App (1st) 121128,
¶ 43. However, if the plaintiff is the moving party, to satisfy the initial burden of production, the
plaintiff must establish through its pleadings and supporting documents the validity of its factual
position on all of the contested elements of the cause of action (all of the essential elements of
the plaintiff’s claim that are not admitted in the pleadings). Triple R, 2012 IL App (4th) 100956,
¶ 16; 4 Richard A. Michael, Illinois Practice §§ 38.5, 40.3 (2d ed. 2011) (Civil Procedure Before
Trial). Once the moving party satisfies its initial burden of production in the summary judgment
proceeding, the burden of production shifts to the nonmoving party (the party opposing summary
judgment) to present evidence to establish that there are genuine issues of material fact and/or
that the moving party is not entitled to judgment as a matter of law. See Triple R, 2012 IL App
(4th) 100956, ¶¶ 12, 16; Michael, supra § 40.3. At that point, the nonmoving party may not rely
10 solely upon its pleadings to raise an issue of material fact. Triple R, 2012 IL App (4th) 100956,
¶¶ 12, 16. Nor is mere argument alone sufficient to raise such an issue. Id. ¶ 16.
¶ 19 In this particular case, plaintiff was the party who had moved for summary judgment. To
satisfy the initial burden of production, plaintiff had to establish through its pleadings and
supporting documents all of the essential elements of its claim or cause of action that were not
admitted by defendant. See Triple R, 2012 IL App (4th) 100956, ¶¶ 7, 12; Michael, supra,
§ 38.5. Plaintiff’s claim in this case was a breach of contract. The essential elements that plaintiff
had to establish, therefore, were that (1) there was a valid and enforceable contract between
plaintiff and defendants, (2) plaintiff performed the contract, (3) defendants breached the
contract, and (4) plaintiff suffered injury as a result of that breach. See Burkhart v. Wolf Motors
of Naperville, Inc., 2016 IL App (2d) 151053, ¶ 14.
¶ 20 After having reviewed the record in the present case, we find that plaintiff’s pleadings
and supporting documents were sufficient to establish all of the essential elements of the cause of
action. As to the first element, a valid and enforceable contract between the parties, plaintiff
attached the written contracts (the customer account applications) to both the complaint and the
motion for summary judgment, and defendants admitted in their answer that a contract existed
between the parties. In addition, Michael Gillman, the president of ASTA Healthcare and ARBA
Healthcare, confirmed in his deposition that there was an agreement between the parties for the
purchase/sale of food products. Regarding the second element, that plaintiff performed the
contract, Gillman testified in his deposition that plaintiff had provided food products to
defendants, and Mike Spear, plaintiff’s credit manager, attested in his affidavit that plaintiff had
sold food products to defendant on an open account pursuant to credit applications since about
1996. Although defendants have sought on appeal to challenge the sufficiency of Spear’s
11 affidavit, they have forfeited the ability to do so because they failed to raise those challenges in
the trial court. See Cordeck Sales, Inc. v. Construction Systems, Inc., 382 Ill. App. 3d 334, 383-
84 (2008) (a party may not challenge the sufficiency of a summary judgment affidavit for the
first time on appeal—failure to raise objections to such an affidavit in the trial court results in
forfeiture of those objections). As for the third essential element that defendants breached the
contract, plaintiff again presented the deposition testimony of Gillman and the affidavit of Spear.
Those two documents established that the ARBA entities were the alter egos or successors in
interest of the ASTA entities (the ARBA entities took over for the ASTA entities because the
ASTA entities had financial problems and could no longer obtain credit, no consideration was
paid for the transfer of the assets/businesses from the ASTA entities to the ARBA entities, and
Gillman was president of both ASTA Healthcare and ARBA Healthcare) and that the
outstanding balances that were due and owing for the combined accounts had not been paid off
by the ARBA entities after they took over for the ASTA entities. Finally, with regard to the
fourth element that plaintiff suffered damages from the breach, the Spear affidavit attested to the
specific amounts that were due and owing from each of the ARBA defendants, and the contract
documents established that plaintiff was also entitled to interest, costs, and attorney fees pursuant
to the terms of the contract. Again, although defendant seeks on appeal to challenge the
sufficiency of the Spear affidavit as to the amounts that were due and owing because the actual
invoices were not attached to the affidavit, defendants have forfeited that challenge by failing to
raise it in the trial court. See id. In addition, since defendants failed to contradict Spear’s
affidavit with a counteraffidavit or other admissible evidence, Spear’s statement regarding the
amounts that the ARBA defendants failed to pay must be taken as true for the purposes of the
motion. See Purtill v. Hess, 111 Ill. 2d 229, 241 (1986); Cordeck Sales, Inc., 382 Ill. App. 3d at
12 384. Contrary to defendants’ assertion on appeal, Gillman’s deposition testimony cannot be
construed as contradicting the Spear affidavit as to the amounts due and owing, even though
Gillman testified that the ARBA entities paid cash on delivery for the last two months, because
Gillman ultimately testified that he had no idea as to the amounts due and owing or as to whether
plaintiff’s invoices were correct.
¶ 21 Since plaintiff presented sufficient evidence in its pleadings and supporting documents to
satisfy its initial burden of production in the summary judgment proceeding, the burden then
shifted to defendants, as the nonmoving party, to establish that there were genuine issues of
material fact and/or that plaintiff was not entitled to judgment as a matter of law. Upon our
review of the record, we must conclude that defendants failed in that burden. As noted in the
discussion above, defendants failed to present any evidence to establish that there was a genuine
issue of material fact as to plaintiff’s claim of breach of contract.
¶ 22 The only remaining matters regarding the sufficiency of the proof that plaintiff was
entitled to summary judgment were defendants’ three affirmative defenses. Defendants,
however, failed to plead any facts to support those defenses and, instead, presented nothing more
than bare conclusory statements. The affirmative defenses were forfeited, therefore, and plaintiff
had no duty to respond to or negate those defenses. See 735 ILCS 5/2-613(d) (West 2014) (the
facts constituting any affirmative defense must be plainly set forth in the answer or reply); In re
Estate of Wrage, 194 Ill. App. 3d 117, 122 (1990) (respondent’s affirmative defenses failed to
provide any factual basis for her position and were, therefore, inadequately pled); Kaufman &
Broad Homes, Inc. v. Allied Homes, Inc., 86 Ill. App. 3d 498, 501 (1980) (the facts constituting
any affirmative defense must be plainly set forth in the answer or reply so as to ensure that the
reviewing courts are not asked to rule upon questions which were not raised and argued below);
13 Culligan Rock River Water Conditioning Co. v. Gearhart, 111 Ill. App. 3d 254, 259 (1982) (a
defense that is not properly pled is considered to be forfeited).
¶ 23 II. Whether the Automatic Bankruptcy Stay Applied to the ARBA Defendants in This Case
¶ 24 Defendants assert second in support of their argument on appeal that summary judgment
should not have been granted for plaintiff in this case because it was precluded by the automatic
bankruptcy stay that arose when the ASTA entities filed for bankruptcy protection in federal
court. Defendants maintain that the automatic bankruptcy stay applied to plaintiff’s claim against
the ARBA defendants because plaintiff was asserting in this case that the ASTA and ARBA
entities were one and the same and was seeking to collect ASTA debt through the ARBA
entities. According to defendants, plaintiff’s attempt in this case to collect from the ARBA
defendants debt that was owed by the ASTA entities, which were in bankruptcy, was nothing
more than an attempt to make an end run around the bankruptcy protection and the automatic
stay.
¶ 25 Plaintiff disagrees with defendants’ assertion and contends that the bankruptcy stay has
no effect on plaintiff’s claim against the ARBA entities because the ARBA entities did not file
for bankruptcy protection and are not, therefore, debtors to which the automatic stay applies.
Plaintiff maintains, therefore, that summary judgment was properly granted in its favor.
¶ 26 Under section 362 of the federal Bankruptcy Code, the filing of a bankruptcy petition
operates as an automatic stay as to certain actions that were brought, or could have been brought,
against the debtor. See 11 U.S.C. § 362 (2012). The automatic stay, however, protects only the
debtor and does not protect nondebtor entities. Pavers & Road Builders District Council Welfare
Fund v. Core Contracting of N.Y., LLC, 536 B.R. 48, 51 (Bankr. E.D.N.Y. 2015). “Just because
two entities are alter egos does not make them both debtors under the Bankruptcy Code. It
14 simply means they are liable for each other’s debts.” (Emphasis in original.) Id. If a nondebtor
entity wants the protection of the automatic stay, all it has to do is file its own bankruptcy
petition. Id. In the alternative, under certain circumstances, the debtor or another party in interest
may go to the bankruptcy court and obtain an injunction to prevent outside litigation from
proceeding against nondebtor entities. See id. at 51-52. “[N]on-bankruptcy courts have
concurrent jurisdiction with the bankruptcy court to determine the scope of the automatic stay.”
Id. at 51. Therefore, absent an injunction from the federal bankruptcy court, a state trial court is
free to determine whether an automatic bankruptcy stay applies to certain nondebtor entities in
the case before it and whether the trial court shall proceed to judgment in that case. See id.
¶ 27 Applying the above legal principles to facts of the present case, we find that the ARBA
entities were not the debtor for bankruptcy purposes and were not automatically protected by the
bankruptcy stay, even though plaintiff alleged that the ARBA entities were the alter egos of the
ASTA entities. See id. at 51, 53. The trial court in the instant case had concurrent jurisdiction
with the bankruptcy court to determine whether the stay applied to the ARBA entities, who had
not filed for bankruptcy protection. See id. at 51. Having determined that the bankruptcy stay did
not apply to the ARBA entities, the trial court correctly rejected defendants’ argument that the
stay precluded a grant of summary judgment for plaintiff. Had the ARBA entities sought to
ensure a different result, they could have filed their own petition for bankruptcy protection in
federal court or they (or the ASTA entities) could have sought to obtain an injunction from the
federal bankruptcy court to prevent the instant case from moving forward. See id. at 51-53.
¶ 28 In rejecting this particular assertion of defendants, we must take a moment to comment
upon the case of Ng v. Adler, 518 B.R. 228 (Bankr. E.D.N.Y. 2014), a case that is heavily relied
upon by defendants in support of their assertion that the automatic bankruptcy stay applies to the
15 ARBA entities in this case. Although we do not agree with defendants that Adler directly
supports their assertion in this case, to the extent that the Adler case can be read as doing so, we
disagree with the decision reached by the court in the Adler case. We believe that the decision in
the Pavers case, cited above, a later decision by the same district court, correctly shows how the
above legal principles should be applied in the instant factual context. See Pavers, 536 B.R. at
51-53. We note that both of the courts in Pavers and in Adler followed the same general rule—
that under normal circumstances, the automatic bankruptcy stay does not apply to nondebtor
entities. See id.; Adler, 518 B.R. at 246-47. The difference in the outcome of the two cases can
be attributed to the manner in which the two courts applied the general rule under the unique
factual and procedural circumstances of each case. See Pavers, 536 B.R. at 51-53; Adler, 518
B.R. at 246-50.
¶ 29 III. Whether Summary Judgment for Plaintiff Should Have Been Denied Based on Unjust Enrichment
¶ 30 As its final assertion in support of its argument on appeal, defendants claim that summary
judgment should not have been granted for plaintiff because doing so—after plaintiff wrongly
applied payments from the ARBA entities to the balances owed by the ASTA entities, who had
filed for bankruptcy protection—would allow plaintiff to be unjustly enriched at the expense of
the bankruptcy estate.
¶ 31 We do not agree with defendants’ claim for two reasons. First, as noted above,
defendants pled no specific facts to support or establish their affirmative defense of unjust
enrichment. That defense, therefore, was forfeited, and plaintiff was not required to respond to or
negate that defense. See Estate of Wrage, 194 Ill. App. 3d at 122; Kaufman, 86 Ill. App. 3d at
501; Culligan, 111 Ill. App. 3d at 259. Second, the circumstances of this case were not the type
to which a claim of unjust enrichment would apply. See Restatement (Third) of Restitution and
16 Unjust Enrichment § 1 (2011) (discussing unjust enrichment in general); Nesby v. Country
Mutual Insurance Co., 346 Ill. App. 3d 564, 566-67 (2004) (the theory of unjust enrichment is an
equitable remedy based upon a contract implied in law and is based on the concept that a person
should not be allowed to enrich himself unjustly at the expense of another); People ex rel.
Hartigan v. E&E Hauling, Inc., 153 Ill. 2d 473, 497 (1992) (to recover under a theory of unjust
enrichment, a plaintiff must show that the defendant voluntarily accepted a benefit that would be
inequitable for the defendant to retain without payment). As set forth previously, plaintiff in this
case sold and delivered food products to defendants. Defendants used those products but then
failed to pay what was due and owing. Although some of the ASTA entities later declared
bankruptcy, the ARBA entities did not do so, and defendants as a group did not seek to have the
bankruptcy court issue an injunction to prevent plaintiff from pursuing its breach of contract
claim against the ARBA entities in this case. When presented with the matter, the trial judge
apparently decided that the bankruptcy stay did not apply to the ARBA entities. Under the
factual circumstances before us, we find no basis upon which to apply a claim of unjust
enrichment. See Restatement (Third) of Restitution and Unjust Enrichment § 1 (2011); Nesby,
346 Ill. App. 3d at 566-67; E&E Hauling, 153 Ill. 2d at 497.
¶ 32 CONCLUSION
¶ 33 For the foregoing reasons, we affirm the judgment of the circuit court of Rock Island
County.
¶ 34 Affirmed.