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SKINNER v. SHIRLEY OF HOLLYWOOD

October 11, 1989

CRAIG SKINNER and CHARLES SKINNER, d/b/a CHARLES SKINNER & ASSOCIATES, Plaintiffs,
v.
SHIRLEY OF HOLLYWOOD, A Division Of National Corset Supply House, Defendant



The opinion of the court was delivered by: BUA

 NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE

 Defendant seeks to dismiss this diversity action pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons stated herein, defendant's motion to dismiss is granted with respect to Count V of plaintiffs' second amended complaint, and denied with respect to the remainder of plaintiffs' complaint.

 I. FACTS

 Plaintiffs Craig Skinner and Charles Skinner, d/b/a Charles Skinner and Associates ("Skinner"), are in the business of representing manufacturers of women's lingerie and apparel. Defendant Shirley of Hollywood ("Shirley"), a division of National Corset Supply House, is a California corporation which manufactures women's lingerie and apparel. In 1973, Shirley hired Skinner to be its sole sales agent for an exclusive territory in the Midwest. On August 30, 1982, Skinner sent Shirley a letter in confirmation of the territorial agreement. The letter specified that Skinner had territorial rights to all active accounts in Illinois, Indiana, Michigan, Kentucky, Minnesota, North Dakota, South Dakota, and Wisconsin. In return for distributing Shirley's products in that region, Skinner would receive a 10% commission. From 1973 to 1988, Skinner represented Shirley's products in the region.

 Skinner now claims that Shirley breached the contract in April 1984 by maintaining house accounts in Skinner's territory without paying commissions on those accounts, and by unilaterally removing all major store accounts from Illinois, Indiana, Wisconsin, Minnesota, and Kentucky. Skinner also accuses Shirley of overcharging for product samples. In addition to the breach of contract claim, Skinner's six-count complaint asserts claims for wrongful termination, recoupment of expenses, unjust enrichment, and for violation of the Illinois Sales Representatives Act, Ill. Rev. Stat. ch. 48, paras. 2251-2253 (1987). Skinner also seeks an accounting for commissions allegedly owed by Shirley.

 II. DISCUSSION

 For the purpose of ruling on a motion to dismiss pursuant to federal rule 12(b)(6), the allegations in plaintiffs' complaint must be taken as true. Greene v. Finley, 749 F.2d 467, 468 (7th Cir. 1984). This court may dismiss the complaint only if it is clear that plaintiffs are not entitled to relief under any set of the facts. Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984).

 A. Count I -- Breach of Contract

 Shirley claims that the alleged employment agreement is too indefinite to be enforceable. In addition, Shirley raises the statute of frauds and the statute of limitations as a bar to Skinner's claim.

 1. Sufficiency of the Allegations *fn1"

 To state a claim for breach of contract, the plaintiff need only allege the following: 1) the formation of a contract; 2) the terms of that contract; 3) performance by the plaintiff; 4) a breach by the defendant; and 5) damages. Cleland, 670 F. Supp. at 817. In the instant case, Skinner alleges that it entered into an employment agreement in 1973 to be Shirley's sole sales agent for an exclusive territory comprised of all active accounts in Illinois, Indiana, Michigan, Kentucky, Minnesota, North Dakota, South Dakota, and Wisconsin. Skinner negotiated, accepted, and performed the agreement in Illinois. Skinner also alleges that it was entitled to a 10% commission on shipments made into its territory and that Shirley had a duty to report all sales and shipments to Skinner. The contractual relationship could be terminated by either party upon proper notice. Finally, Skinner alleges that it properly performed under the contract for fifteen years, that Shirley breached the contract, and that Skinner suffered damages as a result of the breach.

 Shirley, on the other hand, argues that the parties never reached agreement on the essential terms of the contract. In light of the fact that both parties had been fully performing under the contract for eleven years prior to the alleged breach, Shirley's position that the agreement was vague and unclear is disingenuous. Under basic contract law, an agreement that is too indefinite to be enforceable can be made definite by performance. United States for Argyle Cut Stone Co. v. Paschen Contractors, Inc., 664 F. Supp. 298, 302 (N.D.Ill. 1987). Undeniably, Skinner has alleged that there was an employment agreement between the parties for fifteen years, and that it fulfilled all of its obligations under the agreement. "Where plaintiff has alleged full performance of the contract, indefiniteness will not bar an action." Id.

 Shirley's argument that there was no mutuality of agreement and, therefore, no enforceable contract, is an issue of fact to be resolved at trial and not at this early stage in the pleadings. Cleland, 670 F. Supp. at 817. Rule 8(a) of the Federal Rules of Civil Procedure merely requires "a short and plain statement" indicating that the plaintiff is ...


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