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DAWSON v. W. & H. VOORTMAN

March 28, 1994

RONALD DAWSON, Plaintiff,
v.
W. & H. VOORTMAN, LIMITED, a Canadian Corporation, Defendant.


ALESIA


The opinion of the court was delivered by: JAMES H. ALESIA

Before the court is the motion of defendant W. & H. Voortman, Ltd. ("Voortman"), to dismiss the twelve-count Complaint of plaintiff Ronald Dawson in its entirety. The motion is brought pursuant to both Rule 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim upon which relief can be granted, and Rule 12(b)(1), for lack of subject matter jurisdiction. *fn1" For the following reasons, the motion is granted in part and denied in part.

 I. FACTS

 Plaintiff's Complaint alleges as follows: From November 1984 until July 14, 1989, plaintiff was employed as a sales representative for defendant. Pursuant to his employment, plaintiff received an employment policy manual to assist him in the operation of his business as a cookie distributor. On or about July 14, 1989, defendant, without legal justification or excuse or advance notice, terminated plaintiff as a Voortman representative effective immediately.

 In Counts I and II, Dawson alleges he is entitled to commissions and exemplary damages due him pursuant to the Illinois Sales Representative Act. 820 ILCS 120/0.01 through 120/3. In Count III, Dawson alleges that he is entitled to recover the expenditures that he incurred from operating, expanding and maintaining a sales territory during the period of his employment. In Count IV, plaintiff seeks to recover for the intentional and tortious interference with his business relationships caused by defendant as a result of his employment termination. In Count V, Dawson seeks recovery for Voortman's intentional misrepresentation arising out of its April 1989 concealment of the fact that plaintiff was to be terminated in July 1989. In Count VI, Dawson requests relief for his loss of future profits as a result of his employment termination. In Count VII. plaintiff seeks relief for the breach of an implied-in-fact contract resulting from his employment termination. In Count VIII, plaintiff alternatively alleges that he is entitled to recover for defendant's unjust enrichment. In Count IX, Dawson seeks recovery under the theory of promissory estoppel as a result of his reliance on the employment contract and the defendant's promise of continued employment. In Count X, Dawson seeks to recover for a violation of the Sherman Act, 15 U.S.C. §§ 1 et seq. for Voortman's mandatory price formula for the sale of a distributorship business and for an illegal tying arrangement. *fn2"

 II. DISCUSSION

 A. Standard For Motion To Dismiss

 A Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted will only be granted if it is beyond doubt that the plaintiff is unable to prove any set of facts that would entitle him to recover. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957). The court must take all well-pleaded facts and allegations as true, and must view them in the light most favorable to the plaintiff. Ellsworth v. City of Racine, 774 F.2d 182, 184 (7th Cir. 1985), cert. denied, 475 U.S. 1047, 106 S. Ct. 1265, 89 L. Ed. 2d 574 (1986). Plaintiff is entitled to all reasonable inferences that can be drawn from the complaint. Id.

 B. Dismissal Of All Claims Because Relationship Is Terminable At Will

 In its motion to dismiss, defendant contends that all counts of the Complaint should be dismissed because the relationship between Dawson and W & H Voortman was terminable at will. In support of this contention, defendant relies on the maxim that under Illinois law, a contract which fails to fix a time for its duration is ordinarily terminable at the will of either party. Dempz v. Burns & Assocs., Inc., 1989 U.S. Dist. LEXIS 13330, 1989 WL 153319, at *2 (N.D. Ill. Nov. 3, 1989); Duldulao v. St. Mary of Nazareth Hosp. Ctr., 115 Ill. 2d 482, 489, 505 N.E.2d 314, 317, 106 Ill. Dec. 8 (1987). However, this conclusion does not end the matter.

 The policy manual issued by Voortman to Dawson (attached to the Complaint as Exhibit A), states the following: "The territory assigned shall remain the exclusive sales area of the distributor so long as the distributor is willing and able to conduct his business according to the policies and procedures stipulated by W. & H. Voortman Limited in this handbook . . . ." (Complaint ex. A at 3) Given that the court is to draw all reasonable inferences from the facts as set forth in the Complaint, it appears that the policy manual sets forth what can be analogized to a "for cause" termination clause. Under Illinois law, a contract provision that fails to specify the length of the term of employment, but that does set forth conditions upon which termination may be based, is not terminable at will, but is terminable upon the existence of those conditions. E.g., Scaramuzzo v. Glenmore Distilleries, Co., 501 F. Supp. 727, 732 (N.D. Ill. 1980). The Complaint sufficiently alleges the theory that plaintiff never violated the policy manual's provisions and was therefore not susceptible to termination at will. Accordingly, defendant's Motion to Dismiss in this regard is denied.

 C. Counts III - X -- Release Of Claims

 In defendant's motion to dismiss, it is also asserted that Counts III through X should be dismissed in accordance with a release of claims that was signed by plaintiff Dawson pursuant to a prior decision by a court of this district. (See Full and Final Release and Confidentiality Agreement, attached as Exhibit B to defendant's Motion to Dismiss)

 In Gomez v. Illinois State Board of Education, 811 F.2d 1030, 1039 (7th Cir. 1987), the Seventh Circuit noted that when reviewing a motion to dismiss the court should remember that "the attack is on the sufficiency of the complaint, and the defendant cannot set or alter the terms of the dispute, but must demonstrate that the plaintiff's claim, as set forth by the complaint, is without legal consequence." The release at bar is not within "the language of the complaint"; nor is it a "matter[ ] of which the court may take judicial notice." Id. Therefore, a motion to dismiss on this ground would be premature and improper. Defendant's theory appears more appropriate for a summary judgment motion than a motion to dismiss, and the court would entertain such a summary judgment motion based on the release.

 D. Counts I and II -- The Sales Representative Act

 With respect to Counts I and II, relying on the Sales Representative Act, defendant asserts that plaintiff is collaterally estopped from pursuing relief on these grounds. Defendant relies on a 1988 ruling by Judge Parsons, then a judge of this district, in a case between the parties at bar. See Dawson v. W. & H. Voortman, Ltd., 1988 U.S. Dist. LEXIS 6783, No. 87 C 6651 (N.D. Ill. July 6, 1988) (attached as Exhibit C to defendant's Motion to Dismiss). There, Judge Parsons held that plaintiff Dawson was not a sales representative within the meaning of the Illinois Sales Representative Act. Id. at 6-7; 820 ILCS 120/0.01 through 120/3. Judge Parsons's ruling was based in part on his examination of Dawson's relationship with his employer in general.

 The doctrine of collateral estoppel bars relitigation of issues that were actually and necessarily decided in prior litigation between the parties. White v. Elrod, 816 F.2d 1172, 1174 (7th Cir.), cert. denied, 484 U.S. 924, 108 S. Ct. 286, 98 L. Ed. 2d 246 (1987); In re Vitreous Steel Products Co., 911 F.2d 1223, 1234 (7th Cir. 1990). For collateral estoppel to apply, its four elements must be satisfied: (1) the issue sought to be precluded must be the same as that involved in the prior action; (2) the issue must have been actually litigated; (3) the determination of the issue must have been essential to the final judgment; and (4) the party against whom estoppel is invoked must have been fully represented in the prior action. La Preferida, Inc. v. Cerveceria Modelo, 914 F.2d 900, 905-06 (7th Cir. 1990).

 Needless to say, close scrutiny of Judge Parsons's ruling is critical to the analysis here. That fact makes it all the more shameful that the parties have misrepresented -- a word not chosen lightly -- the nature of Judge Parsons's ruling. In his briefing, plaintiff cuts away Judge Parsons' general comments on the relationship between plaintiff and defendant. Defendant in turn cuts away that portion of Judge Parsons's ruling that was specific to the facts of that earlier case. Defendant's neglect is the one that counts, since it is defendant as movant who now asks this court to act. Defendant's failure to fully and accurately argue the collateral estoppel issue is the first reason for denial of defendant's motion as to Counts I and II. The second reason is that the general comments by Judge Parsons were not essential to his holding. Judge Parsons in the ...


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