the Joint Venture did not obtain the contract when it was initially awarded. (Amended Complaint, P 6.) The Joint Venture did prepare and submit a written proposal to the City, and the co-venturers shared in the expenses and work in preparing that proposal as well as in conducting a formal presentation. (Amended Complaint, PP 7,8.)
In July 1992, approximately one year later, the City announced that the contract would be awarded to another applicant. That decision was subsequently rescinded, however, and another request for proposals was issued in December 1992. According to SAS, McDonald's failed to inform SAS that the City was again requesting proposals, instead electing to form a new joint venture (CAP) with Duty-Free International Inc. for the purpose of submitting a proposal. That proposal was accepted and CAP was subsequently awarded the contract.
In Count I SAS alleges that McDonald's breached the oral joint venture agreement by failing to notify SAS of the City's second request for proposals. In Counts II and III, SAS claims that McDonald's, by obtaining the contract through CAP, appropriated a business opportunity of the Joint Venture, and breached its fiduciary duty to SAS.
McDonald's and CAP have moved to dismiss the amended complaint for failure to state a claim, arguing that: (1) the allegations of the complaint establish as a matter of law that the parties intended that a written agreement govern their relationship; (2) even if an oral agreement existed, the Joint Venture terminated upon the submission of the proposal to the City, or when the City awarded the contract to another applicant, and; (3) if an oral agreement existed, the complaint fails to allege that SAS complied with all conditions precedent. Because all three counts are predicated on the existence of an oral joint venture agreement, defendants' argument, although directed toward count I, is equally applicable to counts II and III.
In addition, defendants assert that the amended complaint must be dismissed for SAS's failure to join a necessary party (Carson) pursuant to Fed. R. Civ. P. 19.
Failure to State A Claim
A motion to dismiss for failure to state a claim should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). When deciding a motion to dismiss, the court shall accept as true all of the plaintiff's well pleaded factual allegations and otherwise liberally construe the complaint. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1979). In addition, the court must give the plaintiff the benefit of every reasonable inference that may be drawn from the facts. Powe v. City of Chicago, 664 F.2d 639, 642 (7th Cir. 1981).
Defendants contend that Count I fails to state a claim for breach of contract ( and, therefore, counts II and III also fail to state claims), arguing that the allegations of the amended complaint demonstrate that the parties to the alleged Joint Venture did not intend to be bound until the execution and delivery of the detailed written documents. Defendants do not argue that a joint venture cannot be established by oral agreement, see Ditis v. Ahlvin Construction Co., 408 Ill. 416, 97 N.E. 2d 244 (1951), but rather that the allegations of paragraph 6 of the amended complaint demonstrate as a matter of law that the parties never intended to be bound by any oral agreement. In support of this argument, defendants rely on Thacker v. Chicago Housing Authority, No. 87 C 0365, 1989 U.S. Dist. LEXIS 8540 at 14 (N.D. Ill. July 20, 1989, and Ceres Illinois Inc. v. Illinois Scrap Processing. Inc., 114 Ill. 2d 133, 143-44, 102 Ill. Dec. 379, 500 N.E.2d 1 (1986), in which the court stated:
However, even where the essential terms have been agreed upon, "if the clear intent of the parties is that neither will be legally bound until the execution and delivery of a formal agreement, then no contract comes into existence until such execution and delivery [Citations]."