Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 1 of 9 PageID #:1
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`KOCH MEAT CO., INC., d/b/a KOCH
`FOODS OF CHICAGO, KOCH FOODS
`OF CINCINNATI, LLC, and KOCH FOODS
`OF MISSISSIPPI, LLC,
`
`Plaintiffs,
`
`
`
`
`v.
`
`
`
`
`MAINES PAPER & FOOD SERVICE INC.,
`
`
`
`
`
`Defendant.
`
`
`)
`)
`)
`)
`)
`)
`)
`) No.
`)
`)
`)
`)
`
`
`
`COMPLAINT
`
`Plaintiffs Koch Meat Co., Inc., d/b/a Koch Foods of Chicago, Koch Foods of Cincinnati,
`
`LLC, and Koch Foods of Mississippi, LLC (collectively, “Koch”), by and through their
`
`undersigned counsel, as and for their Complaint against Defendant Maines Paper & Food Service
`
`Inc. (“Maines”), allege as follows.
`
`INTRODUCTION
`
`1.
`
`This action arises out of Maines’ failure and refusal to pay to Koch $2,571,941,
`
`plus interest, for specialty chicken products that Koch sold and delivered to Maines in March and
`
`April 2020.
`
`2.
`
`Koch is one of the largest privately held poultry producers and processors in the
`
`United States. It provides large volumes of specialty chicken products to restaurant chains and
`
`other end-users nationwide. Maines is in the food distribution business, essentially acting as the
`
`“middleman” between food producers, such as Koch, and end-users, such as the restaurant chains
`
`and other customers that Koch serves.
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 2 of 9 PageID #:2
`
`
`
`3.
`
`For over five years, Koch has had contractual arrangements with the owners of
`
`several major restaurant chains to provide them with specialty chicken products on a regular basis.
`
`During that time, Maines served as the designated distributor of Koch’s products to several of
`
`these restaurant chains. Koch’s customers would place an order for Koch’s products with Maines,
`
`which would then request those products from Koch. Upon Maines’ delivery of the products to
`
`Koch’s customers, those customers would pay Maines an amount sufficient for Maines to pay
`
`Koch in full and to pay Maines for its distribution services.
`
`4.
`
`Pursuant to this long-standing arrangement, in March and April 2020 Koch
`
`received a series of purchase orders for specialty chicken products to be delivered to Maines. Koch
`
`delivered the products, which Maines accepted, and Koch invoiced Maines for those products.
`
`Maines then delivered those products to Koch’s customers. Maines collected millions of dollars
`
`from Koch’s customers for those products. But Maines did not use those proceeds to pay Koch.
`
`Rather, it stiffed Koch, hoarding the cash it collected from Koch’s customers for its own improper
`
`use.
`
`5.
`
`As a result of Maines’ conduct, Koch has incurred over $2.5 million in damages,
`
`plus applicable contractual and/or statutory interest, which continues to accrue.
`
`PARTIES
`
`6.
`
`Koch Meat Co., Inc. (“Koch Meat”) is an Illinois corporation with its principal
`
`place of business in Park Ridge, Illinois. Koch Meat does business as Koch Foods of Chicago
`
`(“Koch Chicago”).
`
`7.
`
`Koch Foods of Cincinnati, LLC (“Koch Cincinnati”) is an Ohio limited liability
`
`corporation with its principal place of business in Fairfield, Ohio.
`
`8.
`
`Koch Foods of Mississippi, LLC (“Koch Mississippi”) is a Mississippi limited
`
`liability corporation with its principal place of business in Flowood, Mississippi.
`
`2
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 3 of 9 PageID #:3
`
`
`
`9.
`
`Non-party Koch Foods Incorporated, a Delaware corporation with its principal
`
`place of business in Park Ridge, Illinois, is the sole stockholder of Koch Meat, and the sole member
`
`of Koch Cincinnati and Koch Mississippi.
`
`10. Maines is a New York corporation with its principal place of business in Conklin,
`
`New York.
`
`JURISDICTION AND VENUE
`
`11.
`
`This Court has jurisdiction over this action under 28 U.S.C. § 1332 because the
`
`amount in controversy exceeds $75,000, exclusive of interests and costs, and diversity of
`
`citizenship exists between Koch and Maines.
`
`12.
`
`Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b)(2) because a
`
`substantial part of the events giving rise to this action occurred in the Northern District of Illinois.
`
`Alternatively, venue is proper in this Court pursuant to 28 U.S.C. § 1391(b)(3) because Maines is
`
`subject to personal jurisdiction in Illinois.
`
`FACTUAL BACKGROUND
`
`13.
`
`Koch maintains business relationships with the owners of restaurant chains to 3hich
`
`it sells large volumes of chicken products on a regular basis. Relevant here, Koch’s customers
`
`include Dine Brands Global, Inc., Brinker International, Inc., and Restaurant Brands International,
`
`Inc., among others (the “Koch Customers” and “Koch’s Customers”).
`
`14.
`
`Until recently, the Koch Customers designated Maines as their chosen food
`
`distributor with respect to Koch’s products. For years, the arrangement between Koch, Maines
`
`and the Koch Customers operated in the ordinary course as follows. Koch’s Customers ordered
`
`Koch’s products from Maines, which then requested those products from Koch via purchase order.
`
`Koch delivered the requested products to Maines at the designated Maines location, and then
`
`3
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 4 of 9 PageID #:4
`
`
`
`invoiced Maines for the delivered products. Maines then delivered Koch’s products to the Koch
`
`Customers, and the Koch Customers would pay Maines an amount equal to: (a) Koch’s invoices
`
`to Maines; plus (b) Maines’ shipping fee. Maines then used those funds to pay Koch’s invoices,
`
`retaining its fee.
`
`15.
`
`Koch’s invoices to Maines stated, among other things: (a) the amount that Maines
`
`owed to Koch for the products; (b) that payment was due in “net 7 days”; and (c) that any amounts
`
`not timely paid would accrue interest at 1.5% per month until paid. By ordering and accepting
`
`Koch’s products, Maines agreed to all terms contained in Koch’s invoices, thereby creating a valid
`
`and enforceable contractual relationship with Koch with respect to each order and corresponding
`
`invoice.
`
`16.
`
`By early 2020, Maines had ordered millions of dollars in chicken from Koch. On
`
`information and belief, Maines made substantial profits each year by selling and delivering Koch’s
`
`specialized chicken products to the Koch Customers.
`
`17.
`
`Between March 2 and March 17, 2020, Koch Chicago delivered chicken products
`
`to Maines pursuant to ten (10) purchase orders. Koch Chicago issued invoices for the delivered
`
`product to Maines (the “Koch Chicago Invoices”). (The Koch Chicago Invoices are attached
`
`hereto as Group Exhibit A.) Together, the Koch Chicago Invoices total $563,440. Maines
`
`accepted all such products without complaint. Each of the Koch Chicago Invoices required Maines
`
`to make full payment to Koch Chicago within seven (7) days. The latest of the invoices was due
`
`to be paid on March 24, 2020. Maines has not made any payment to Koch, despite repeated
`
`demands.
`
`18.
`
`Between March 4 and April 7, 2020, Koch Cincinnati delivered chicken products
`
`to Maines pursuant to twenty-six (26) purchase orders, and Koch Cincinnati issued invoices for
`
`4
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 5 of 9 PageID #:5
`
`
`
`the delivered product to Maines (the “Koch Cincinnati Invoices”). Together, the Koch Cincinnati
`
`Invoices total $1,391,434. (The Koch Cincinnati Invoices are attached hereto as Group Exhibit
`
`B.) Maines accepted all such products without complaint. Each of the above-referenced invoices
`
`required Maines to make full payment within seven (7) days. The latest of the invoices was due
`
`to be paid on April 14, 2020. Maines has not made any payment to Koch, despite repeated
`
`demands.
`
`19.
`
`Between March 4 and March 19, 2020, Koch Mississippi delivered chicken
`
`products to Maines pursuant to fourteen (14) purchase orders, and Koch Mississippi issued
`
`invoices for the delivered product to Maines (the “Koch Mississippi Invoices”). (The Koch
`
`Mississippi Invoices are attached hereto as Group Exhibit C; the Koch Chicago, Koch Cincinnati,
`
`and Koch Mississippi Invoices are referred to herein, collectively, as the “Koch Invoices”.)
`
`Together, the Koch Mississippi Invoices total $598,879. This total is net of credits Koch
`
`Mississippi received for the return of products that certain of the Koch Customers could not use
`
`because of the COVID-19 pandemic and others reasons unrelated to the quality of the products.
`
`20. Maines accepted all of Koch Mississippi’s goods without complaint. Each of the
`
`above-referenced invoices required Maines to make full payment within seven (7) days. The latest
`
`of the invoices was due to be paid on March 31, 2020. Maines has not made any payment to Koch,
`
`despite repeated demands.
`
`21.
`
`Not only has Maines wrongfully failed and refused to pay Koch, but it has reaped
`
`an undeserved windfall from its misconduct. On information and belief, Maines has delivered
`
`over 90% of Koch’s products to the Koch Customers, who then paid Maines in an amount
`
`sufficient to cover both the Koch Invoices and Maines’ shipping fee. Because Maines received
`
`payment for Koch’s products, Maines indisputably had the cash available to pay Koch in full, but
`
`5
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 6 of 9 PageID #:6
`
`
`
`deliberately and wrongfully chose not to do so. Maines simply kept the cash that the Koch
`
`Customers intended for Koch.
`
`22.
`
`As a result of Maines’ refusal to honor its obligations, Koch has suffered, and
`
`continues to suffer, substantial damages. The total amount owed to Koch, collectively, is at least
`
`$2,571,941, plus all applicable contractual and statutory rates of interest that apply and continue
`
`to accrue.
`
`23.
`
`herein.
`
`COUNT I
`BREACH OF CONTRACT
`
`Koch incorporates by reference and re-alleges paragraphs 1-22 as if fully set forth
`
`24.
`
`As alleged herein, Koch and Maines entered into valid and enforceable agreements
`
`for the delivery of Koch’s products, and Maines’ payment for those products.
`
`25.
`
`As alleged herein, Koch has performed all of its obligations under the parties’
`
`agreements.
`
`26.
`
`As alleged herein, Maines’ failure and refusal to pay the Koch Invoices constitutes
`
`a breach of the parties’ agreements.
`
`27.
`
`As a result of Maines’ breach, as alleged herein, Koch has suffered at least
`
`$2,571,941 in damages, and is entitled to recover damages from Maines in an amount to be proven
`
`at trial.
`
`WHEREFORE, Koch prays that this Court award it the following relief: (A) compensatory
`
`damages in an amount to be proven at trial; (B) pre-judgment and post-judgment interest; (C)
`
`Koch’s costs and expenses of suit; and (D) such other and further relief as is appropriate.
`
`6
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 7 of 9 PageID #:7
`
`
`
`COUNT II
`UNJUST ENRICHMENT
` (In the alternative to Count I)
`
`28.
`
`Koch incorporates by reference and re-alleges paragraphs 1-14, 16-22 as if fully set
`
`forth herein.
`
`29.
`
`In the event, and to the extent, that it is found that there are no enforceable
`
`agreements between Koch and Maines, Koch alleges this Count II in the alternative.
`
`30.
`
`As alleged herein, Maines accepted the delivery of specialized chicken products
`
`from Koch (the “Koch Products”) with the understanding that Maines would compensate Koch for
`
`those products.
`
`31.
`
`Upon acceptance of the Koch Products, Maines: (a) delivered the vast majority of
`
`those products to the Koch Customers and, on information and belief, received cash payments
`
`from the Koch Customers for those products; and (b) retained some of the Koch Products for resale
`
`to its own customers.
`
`32.
`
`Because Maines has not paid Koch for the Koch Products it accepted, Maines has
`
`unjustly retained the benefit of those products, to Koch’s detriment. Such benefits include, without
`
`limitation, any and all payments Maines received from its customers and/or Koch’s Customers for
`
`those products.
`
`33. Maines’ retention of such benefits violates the fundamental principles of justice,
`
`equity, and good conscience.
`
`WHEREFORE, Koch prays that this Court award it the following relief: (A) restitution in
`
`an amount to be proven at trial; (B) the imposition of a constructive trust on, and ordering that
`
`Maines convey to Koch, an amount equal to any and all benefits Maines received from the Koch
`
`Products including, without limitation, any and all compensation that Maines received from
`
`Koch’s Customers, or Maines’ own customers, for the Koch Products; (C) pre-judgment and post-
`
`7
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 8 of 9 PageID #:8
`
`
`
`judgment interest; (D) Koch’s costs and expenses of suit; and (E) such other and further relief as
`
`is appropriate.
`
`COUNT III
`ACCOUNT STATED
`
`34.
`
`Koch incorporates by reference and re-alleges paragraphs 1-22 as if fully set forth
`
`
`
`herein.
`
`35.
`
`Koch regularly presented the Koch Invoices to Maines, which Maines retained
`
`without objection.
`
`36.
`
`As a result of Maines’ retention of the Koch Invoices without ever objecting to the
`
`same, an account stated exists between Koch and Maines.
`
`37.
`
`Despite Koch’s demands, Maines has failed and refused to pay any part of the
`
`account stated.
`
`38.
`
`As a result of Maines’ failure to pay the account stated, Koch has been damaged in
`
`an amount not less than $2,571,941, plus all applicable contractual and statutory rates of interest
`
`that apply and continue to accrue.
`
`WHEREFORE, Koch prays that this Court award it the following relief: (A) compensatory
`
`damages in an amount to be proven at trial; (B) pre-judgment and post-judgment interest; (C)
`
`Koch’s costs and expenses of suit; and (D) such other and further relief as is appropriate.
`
`
`
`
`
`Respectfully submitted,
`
`KOCH MEAT CO., INC., d/b/a KOCH FOODS OF
`CHICAGO, KOCH FOODS OF CINCINNATI LLC,
`and KOCH FOODS OF MISSISSIPPI, LLC
`
`By: /s/ Brian E. Cohen
`
`
`
`One of Their Attorneys
`
`
`
`8
`
`

`

`Case: 1:20-cv-03067 Document #: 1 Filed: 05/22/20 Page 9 of 9 PageID #:9
`
`
`
`Courtney D. Tedrowe (#6278584)
`cdt@novackmacey.com
`Brian E. Cohen (#6303076)
`bcohen@novackmacey.com
`NOVACK AND MACEY LLP
`100 North Riverside Plaza
`Chicago, Illinois 60606
`(312) 419-6900
`Doc. No. 1217856
`
`9
`
`