A state appeals panel says a Cook County judge wrongly cut short a produce distributor's bid to keep some wholesalers on the hook for potential liability for an E. coli outbreak linked to cilantro served at two Carbon fast-casual Mexican restaurants in Chicago.
The root issue dates to the summer of 2016 when an E. coli breakout sickened patrons at two Carbon fast-casual Mexican restaurants in Chicago. More than 50 personal injury lawsuits stemming from the incidents ended via settlements before going to trial in March 2020. But a breach of implied warranty claim from distributor Martin Produce against wholesalers La Galera Produce and Jack Tuchten Wholesale Produce continued.
According to court records, while Martin continues to assert the cilantro in question was clean, it also maintains any finding it breached implied warranty of merchantability should also apply to the wholesalers. Cook County Circuit Court Judge Daniel Kubasiak disagreed, granting summary judgment to La Galera and Tuchten by explaining Martin failed to provide pre-suit notice under Uniform Commercial Code requirements.
Martin challenged that decision before the Illinois First District Appellate Court, which ruled June 7. Justice Mary Mikva wrote the opinion; Justices Freddrenna Lyle and David Navarro concurred.
According to Mikva, Martin’s chief argument on appeal is the notice requirement doesn’t apply if the breach allegation involves perishable goods with latent defects. Martin also said even if the notice requirement does apply, Illinois Supreme Court precedent contains exceptions for “actual knowledge of the defect or notification through the filing of the buyer’s complaint.”
The panel rejected Martin’s position the wholesalers forfeited their failure to notify argument by not raising it before seeking summary judgment. It agreed with Tuchten’s suggestion Martin lost the right to make that contention by itself failing to raise it earlier. Mikva also said Martin’s forfeiture argument lacks merit because lack of pre-suit notice is not an affirmative defense that must be raised at a certain point.
Regarding the notice requirement itself, Mikva wrote the panel wasn’t convinced “a broad, court-recognized exception for goods that are perishable, have latent defects, or are intended for human consumption is appropriate here.” She explained there is no Illinois precedent endorsing Martin’s position, Uniform Commercial Code language bolsters the wholesalers’ defense and a 2021 Illinois First District Appellate Court opinion, Baja Foods v. Spartan Surfaces, rejected an argument “the inability to cure a defect, on its own, should relieve the buyer of its notice obligation.”
While acknowledging that notice of the alleged contamination wouldn’t have changed anything for the people who consumed the cilantro, the panel said, it would’ve allowed companies to gather evidence, investigate potential breaches and take other useful actions, such as pursuing settlements.
“We are not free to ignore the UCC’s notice requirement on a case-by-case basis or to carve out our own broad exceptions for whole categories of goods,” Mikva wrote.
However, the panel did agree with Martin regarding exceptions under the 1996 Illinois Supreme Court opinion, Connick v. Suzuki Motor. Mikva said the wholesalers knew of the purported contamination of a particular product “years before Martin” filed its breach claim and also that the breach complaint itself — filed under the UCC — supplants the need for direct notice.
“The wholesalers here had actual knowledge that the specific shipments of cilantro they supplied to Martin Produce, and which were in turn supplied to Carbon, were alleged to have been contaminated by at least June 2018, when the personal injury plaintiffs first brought claims against them,” Mikva wrote. “Counsel for Martin Produce suggested at oral argument in this appeal that they had actual knowledge even sooner because Martin Produce issued the wholesalers subpoenas shortly after Martin Produce was brought into the suit, in January 2017. In either case, the wholesalers had the opportunity to investigate and gather evidence regarding those specific transactions long before Martin Produce sued them for breach of warranty.”
Where Judge Kubasiak seemingly struggled, Mikva wrote, was a Connick limitation holding a lawsuit itself can provide notice only if the underlying claim was for breach of warranty as well as personal injury. Although Martin’s claim did not incorporate personal injury, Mikva said, dozens of such suits from restaurant patrons provided actual knowledge a claim like Martin’s might eventually surface.
In determining summary judgment was improper, and remanding the complaint for further consideration, the panel said there are other questions appropriate for the circuit court, such as the timeliness of notice, the relevance of Martin’s insistence the cilantro it sold didn’t breach any warranties and when exactly the wholesalers learned of the potential contamination.
The wholesalers are represented by Nicholas Parolisi, of Litchfield Cavo, of Chicago and Highland, Ind., and Timothy Young, of Lewis Brisbois, of Chicago. Young declined to comment.
Martin Produce is represented by Arnett Law Group, of Chicago. Arnett did not respond to a request for comment.