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INDUSTRIAL SPECIALTY CHEMS. v. CUMMINS ENGINE CO.

June 28, 1995

INDUSTRIAL SPECIALTY CHEMICALS, INC., an Illinois corporation, Plaintiffs,
v.
CUMMINS ENGINE CO., INC., an Indiana Corporation; FLEETGUARD, INC., an Indiana Corporation, DOUG HUDGENS and JERRY JOYNER, Defendants.



The opinion of the court was delivered by: MARVIN E. ASPEN

 MARVIN E. ASPEN, District Judge:

 Plaintiff Industrial Specialty Chemicals, Inc. ("ISC") brings this six-count complaint against defendants Cummins Engine Company, Fleetguard Inc., Doug Hudgens and Jerry Joyner. Defendants have moved to strike the complaint for failure to comply with the requirements of Fed. R. Civ. P. 8. In addition, defendants have also moved to dismiss Counts I, II, IV, V and VI, arguing that plaintiff has failed to state claims in these counts upon which relief can be granted. For the reasons set forth below, defendants' motions are granted in part and denied in part.

 I. Background

 ISC, an Illinois corporation, manufactures and distributes chemicals that are specially produced for large industrial concerns. ISC hoped to gain as two of its customers Cummins, a producer of diesel engines, and Fleetguard, a subsidiary of Cummins that distributed chemicals and maintenance products for diesel engines. Beginning in 1985, *fn1" plaintiff began discussing with Doug Hudgens of Fleetguard about the possibility of improving certain chemicals Fleetguard was currently using, as well as inventing new chemical solutions. In particular, plaintiff alleges that Fleetguard asked it to develop various chemicals for use in Cummins diesel engines. At Hudgens's request, ISC sent several brochures and letters outlining ISC's products and services, as well as test samples of its products, to Cummins and Fleetguard. In addition, the parties spoke several times in person and over the phone about Fleetguard's needs, ISC's progress on developing certain chemicals, and the test results obtained from various samples. ISC alleges that before the parties began exchanging privileged and confidential information, they executed confidentiality agreements covering all the materials sent by ISC to Fleetguard and Cummins. Complaint PP 6(AA), 6(MMM).

 ISC claims that by 1987 it had expended thousands of hours in developing chemical products and adapting them to Fleetguard's specifications. In response to ISC's request for some consideration, Hudgens allegedly responded that if ISC successfully developed a new acid cleanser that met Fleetguard's and Cummins's performance criteria, both companies would aggressively market the product and purchase as much as they needed from ISC for an indefinite period of time. In addition, Hudgens allegedly promised that ISC would be "a major second source supplier" of several other chemicals for both Fleetguard and Cummins if its efforts on the acid cleanser were successful. Complaint P 6(O). These promises are alleged to have been reiterated by Hudgens and other members of Fleetguard at various times between 1987-90, including a representation by Hudgens that Fleetguard would purchase at least $ 200,000 of supplies from ISC annually beginning in 1990. Complaint PP 6(U), 6(DD), 6(FF), 6(NN), 6(SS) 6(DDDD). ISC contends that in reliance on these promises, it continued expending substantial time and effort on developing the desired acid cleaner and various other chemical products sought by Fleetguard and Cummins. In addition, when development of the acid cleanser was complete, ISC developed packaging and brochure materials for the marketing and distribution of the chemical by Cummins and Fleetguard. ISC's efforts began to bear fruit in August 1990, when Fleetguard ordered 2400 gallons of a chemical solution ISC had developed specifically for its use. Complaint P 6(UUU).

 Notwithstanding its efforts on behalf of Cummins and Fleetguard, plaintiff alleges that beginning in June 1991 defendants began a concerted effort to terminate their relationship with ISC and renege on their prior commitments. ISC alleges that during telephone conversations in July and August 1991, Hudgens expressed dissatisfaction with plaintiff's services, stated that he and others at Fleetguard had reservations about the company's abilities, and questioned the ethics and competence of ISC's principals. Although a Fleetguard representative called ISC on December 6, 1991 and requested technical information on ISC's products (purportedly in order to place another order), no furthers orders were placed by either Fleetguard or Cummins, and no further contact with ISC was initiated.

 On September 1, 1994, ISC filed this sixty page complaint against the several defendants, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, breach of the confidentiality agreements, violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Deceptive Trade Practices Act, and common law fraud and equitable estoppel.

 Defendants have moved to dismiss five of the six counts. A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) should not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims 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); Chaney v. Suburban Bus Division of the Regional Transp. Auth., 52 F.3d 623, 627 (7th Cir. 1995). At this stage in the litigation we take as true all factual allegations made in the complaint, and construe all reasonable inferences therefrom in plaintiff's favor. Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995).

 A. Count I (Breach of Contract)

 Defendants first contend that Count I is deficient because the alleged contract between ISC, Fleetguard and Cummins is too indefinite to be enforceable, and it fails to set forth such key elements as price, quantity and duration. Plaintiff responds that defendants made specific oral representations of an intention to purchase their products, and any missing terms can be supplied through the course of dealings between the parties and the voluminous documents attached to the complaint as exhibits.

 Under Illinois law, *fn2" the intention of the parties determines whether a contract has been formed. Bradley Real Estate v. Dolan Assocs., Ltd., 266 Ill. App. 3d 709, 640 N.E.2d 9, 11, 203 Ill. Dec. 582 (Ill. App. Ct. 1994); Bercoon, Weiner, Glick & Brook v. Manufacturers Hanover Trust Co., 818 F. Supp. 1152, 1155 (N.D. Ill. 1993). "Although the intent of the parties to an oral contract is generally a question of fact, it may become a question of law if the facts are undisputed and there can be no difference in the judgment of reasonable men as to the inferences to be drawn from them." David Copperfield's Disappearing, Inc. v. Haddon Advertising Agency, Inc., 897 F.2d 288, 292 (7th Cir. 1990) (quotations and citation omitted). ISC argues that on several occasions Hudgens and other members of Fleetguard represented to ISC that if it produced certain chemical products according to defendants' specifications and needs, then defendants would purchase these chemicals from ISC. These allegations, if believed, could support a finding that defendants intended to be bound by their promise to purchase future orders from ISC.

 However, as defendants correctly point out, many elements of this alleged agreement are not mentioned in the complaint. In particular, there is no allegation that the parties agreed on (1) the prices of the products to be sold, (2) the duration of the agreement, or (3) the amount of each type of chemical to be sold. The first deficiency will not defeat plaintiff's contract claim, as a reasonable price term may be implied to a contract. *fn3" 810 ILCS 5/2-305(1); Ingrassia v. Ingrassia, 156 Ill. App. 3d 483, 509 N.E.2d 729, 737, 109 Ill. Dec. 68 (Ill. App. Ct.), app. denied, 113 Ill. Dec. 299, 515 N.E.2d 108 (Ill. 1987); Ryan v. Wersi Elecs. GmbH and Co., 3 F.3d 174, 180 (7th Cir. 1993). So too with the second objection, since "ordinarily, where no definite term is fixed during which an executory contract shall continue in force, it is terminable at the will of either party." First Nat. Bank of Cicero v. Sylvester, 196 Ill. App. 3d 902, 554 N.E.2d 1063, 1069, 144 Ill. Dec. 24 (Ill. App. Ct.), app. denied, 133 Ill. 2d 555, 149 Ill. Dec. 320, 561 N.E.2d 690 (Ill. 1990); Rush-Presbyterian-St. Luke's Medical Center v. Hellenic Republic, 980 F.2d 449, 452 (7th Cir. 1992). *fn4" The third objection is more substantial. Plaintiff alleges that Fleetguard and Cummins agreed to purchase all of their requirements of the new acid cleanser ISC specially developed for them, as well as all of their "secondary source requirements" for several other chemicals. The alleged quantity term concerning the newly developed acid cleanser--all of defendants' requirements--is sufficiently definite to form a binding agreement. See 810 ILCS 5/2-306(1). However, requirements contracts must be exclusive to be enforceable--that is, the purchaser must agree to buy all of its requirements from the seller. Torres v. City of Chicago, 261 Ill. App. 3d 499, 632 N.E.2d 54, 57-57, 197 Ill. Dec. 985 (Ill. App. Ct.), app. denied, 157 Ill. 2d 523, 205 Ill. Dec. 188, 642 N.E.2d 1305 (Ill. 1994); Canteen Corp. v. Former Foods, Inc., 238 Ill. App. 3d 167, 606 N.E.2d 174, 183, 179 Ill. Dec. 342 (Ill. App. Ct. 1992), app. denied, 148 Ill. 2d 640, 183 Ill. Dec. 16, 610 N.E.2d ...


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