The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
Plaintiff William A. McIntosh, a citizen of North Carolina,
brought this twelve-count complaint against Illinois
defendants, Magna Systems, Inc. ("Magna"), Wilbur S. Edwards
("Edwards"), James F. Griffin ("Griffin"), and Zed R. Daniels,
Sr. ("Daniels"), alleging breach of contract, quantum meruit,
fraudulent misrepresentation, intentional interference with
prospective business opportunities and intentional
interference with a contractual relationship. Diversity
jurisdiction is alleged pursuant to 28 U.S.C. § 1332 (1976).
Presently before the Court are the defendants' various motions
to dismiss all twelve counts of this complaint for failure to
state a claim upon which relief can be granted. Fed.R.Civ.P.
12(b)(6). For the following reasons, defendants' motions are
granted in part and denied in part.
The plaintiff and Magna entered into an agreement on or
about May 4, 1978, which is the subject matter of this
litigation. The agreement purportedly provided that in return
for plaintiff's assistance in the development, acquisition,
marketing, production and distribution of Magna educational
to colleges and universities, Magna would reserve an annual
fee of $35,000 for three years on plaintiff's behalf. Magna
also promised to provide plaintiff the option of purchasing 25
percent of Magna's authorized stock in lieu of payment of the
accumulated annual fee at the end of the three-year period.
Although plaintiff has allegedly performed his obligations
under the terms and conditions of the agreement, Magna,
through its defendant directors, Edwards, Griffin and Daniels,
has refused to pay plaintiff his accumulated annual fee and
has amended its articles of incorporation so as to defeat
plaintiff's right to purchase 25 percent of Magna's authorized
stock. The specific factual and legal arguments arising from
these incidents will be discussed seriatim. However, the Court
initially must determine, however, whether Illinois or North
Carolina law applies in this case.
In a diversity action, the choice of law rules of the state
in which the district court is located apply. Klaxon Co. v.
Stenton Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020,
1021, 85 L.Ed. 1477 (1941); Pittway Corp. v. Lockheed Aircraft
Corp., 641 F.2d 524, 526 (7th Cir. 1981). In the present case,
therefore, plaintiff's allegations require the Court to look to
Illinois contract and tort choice of law principles. In
contract cases, the general Illinois rule is that if the
contract was to be performed in more than one state, as
here,*fn1 the law of the place of execution governs. P.S. &
E., Inc. v. Selastomer Detroit, Inc., 470 F.2d 125, 127 (7th
Cir. 1972). When the place of contract execution implicates
more than one jurisdiction, as here,*fn2 Illinois courts will
adhere to the "most significant contacts" test to determine
which law applies. Adams Laboratories, Inc. v. Jacobs
Engineering Co., 486 F. Supp. 383, 389 (N.D.Ill. 1980); Ehrman
v. Cook Electric Co., 468 F. Supp. 98, 100 (N.D.Ill. 1979).
Similarly, in tort cases, Illinois will adhere to the "most
significant relationship" test to determine which law applies.
Evra Corp. v. Swiss Bank Corp., 522 F. Supp. 820, 827 (N.D.Ill.
1981); Ingersoll v. Klein, 46 Ill.2d 42, 45, 262 N.E.2d 593
The "most significant contacts" test applicable to actions
sounding in contract requires examination of the following
five factors: (1) the place of "contracting" (i.e. the place
where the last act necessary to make the contract binding
occurred); (2) the place of negotiation; (3) the place of
performance; (4) the situs of the subject matter of the
contract; and (5) the domicile, residence, place of
incorporation, and place of business of the parties.
Restatement (Second) of Conflicts § 188 (1969). Although
Illinois and North Carolina both have substantial contact with
plaintiff's contract claims, on balance the Court finds that
Illinois law should govern resolution of those claims.
The "most significant relationship" test applicable to
actions sounding in tort requires examination of the following
four factors: (1) the place of the injury; (2) the place where
the conduct causing the injury occurred; (3) the domicile,
place of incorporation and place of business of the parties;
and (4) the center of gravity of the parties' relationship.
Restatement (Second) of Conflicts § 145 (1969). In the present
case, although the place of plaintiff's injury would appear to
be North Carolina, the conduct which caused the injury occurred
in Illinois and the center of gravity of the parties'
relationship was also in Illinois. Therefore, Illinois law
should govern resolution of the tort claims raised in this
Within the framework of Illinois substantive law, the Court
will not dismiss a complaint unless it appears beyond doubt
that the plaintiff can prove no set of facts in support of his
claim that would entitle him to the relief requested. Cruz v.
Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 1081, 31 L.Ed.2d 263
(1972); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99,
101-102, 2 L.Ed.2d 80 (1957). As the Seventh Circuit has noted:
Under the Federal Rules of Civil Procedure, it is
well established that, on a motion to dismiss, a
complaint must be construed in the light most
favorable to the plaintiff, the allegations
thereof being taken as true; and if it appears
reasonably conceivable that at trial the
plaintiff can establish a set of facts entitling
him to some relief, the complaint should not be
Mathers Fund, Inc. v. Colwell Co., 564 F.2d 780, 783 (7th Cir.
1977). Applying this standard to the present case, defendants'
motions to dismiss will be granted as to Counts IV, V, VII, X
and XI, and denied as to Counts I, II, III, VI, VIII, IX and
Count I of the complaint seeks damages resulting from
Magna's alleged breach of contract in failing to reserve
plaintiff's $35,000 annual fee and its attempt to defeat his
option to purchase Magna stock despite his full and complete
performance of his obligations under the agreement. Count V of
the complaint seeks punitive damages from Magna on the theory
that this breach was wilful, unlawful, knowing and malicious.
Magna moves to dismiss these counts on the theory that the
complaint does not adequately allege whether the agreement in
question was oral or written. If the contract was written,
Magna contends that the documents attached to the complaint
purportedly evidencing the contract lack sufficient
specificity and mutuality of obligation. If the contract was
oral, Magna contends that the terms as alleged violate the
Statute of Frauds. Ill.Rev.Stat. 1979, ch. 59, § 1.
Plaintiff's complaint as well as his responsive brief make
clear that the parties never entered into a formal written
contract of employment. The letters exchanged between the
parties in May and June, 1978, do not themselves rise to the
level of an offer and acceptance.*fn3 The fundamental
issue, therefore, is whether the ...