Breach of Contract – Equalize Capital Contributions

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7^th Circuit Court of Appeals

Case Name: Christos Dimas v. George Stergiadis

Case No.: 20-1196

Officials: EASTERBROOK, WOOD, and KIRSCH, Circuit Judges.

Focus: Breach of Contract – Equalize Capital Contributions

Christos Dimas appeals a judgment ordering him to pay his former business partner, George Stergiadis, for capital contributions Stergiadis made to their failed business, 1600 South, LLC. Stergiadis’s recovery effort began in 2008 when he sued Dimas and their other business partner, Dean Theo, in Illinois state court. But Dimas’s bankruptcy filings—seven petitions in six years—stalled the suit. Stergiadis filed a proof of claim in the most recent bankruptcy for the capital contributions. Dimas objected to the claim, but the bankruptcy court approved it in the amount of $618,974 after an evidentiary hearing. The court reasoned that, under Illinois law, the partners had an implied-in-fact contract to equalize capital contributions to the LLC, and Dimas thus owed Stergiadis the awarded amount to achieve equality. The district court affirmed.

On appeal, Dimas argues that the bankruptcy court misinterpreted 1600 South’s operating agreement. Specifically, he insists that the operating agreement’s plain language precludes an implied-in-fact contract to equalize capital contributions. He also contends that the bankruptcy court erred when it relied on extrinsic evidence to find an implied-in-fact contract existed among 1600 South’s partners. We disagree, and thus affirm.

Affirmed

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Derek A Hawkins is Corporate Counsel, at Salesforce.