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ALLIED VISION GROUP v. RLI PROFESSIONAL TECHS.

February 13, 1996

ALLIED VISION GROUP, INC., Plaintiff,
v.
RLI PROFESSIONAL TECHNOLOGIES, INC., Defendant.



The opinion of the court was delivered by: WILLIAMS

 Defendant RLI Professional Technologies, Inc. ("RLI") moves the court to dismiss Count II of the Amended Complaint filed by Plaintiff Allied Vision Group, Inc. ("Allied") pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For reasons set forth below, the court grants RLI's motion to dismiss.

 Background

 In ruling on this motion to dismiss the court "accept[s] as true the factual allegations of the complaint." Lashbrook v. Oerkfitz, 65 F.3d 1339, 1343 (7th Cir. 1995) (citation omitted). According to Allied's Amended Complaint, both Allied and RLI deal in eyeglasses and other ophthalmic goods. (Am. Complaint P 4.) In 1992 RLI told Allied that RLI wanted to acquire a company that manufactured and distributed ophthalmic goods, which until then RLI had purchased regularly from Allied. (Am. Complaint PP 5-6.) In October, 1992, Allied and RLI entered into an agreement under which Allied would introduce RLI to such a company, and RLI would pay Allied a "finder's fee" in the event that RLI purchased that company. (Am. Complaint P 8.) Under the terms of the agreement,

 
The [finder's] fee shall be payable at the closing of the sale, if RLI purchases or obtains an option to purchase the business presented by [Allied] within one year of presentation by [Allied]. If the business opportunity presented by [Allied] is pending at the end of one year, this agreement shall automatically be extended for the necessary time duration until a final determination regarding the purchase has been made by RLI.

 (Am. Complaint, Ex. A, P 3.)

 At the time the agreement was executed, in October, 1992, Allied introduced RLI to Target Industries ("Target"), a wholesaler of optical supplies. (Am. Complaint PP 7, 10.) Between October, 1992, and June, 1994, RLI conducted extensive discussions and negotiations with Target. Among other things, RLI had Target's stock appraised, toured Target's facilities, and reviewed Target's financial performance. (Am. Complaint PP 11-14.) In June, 1994, RLI and Target signed a "Letter of Intent" to merge, and in May, 1995, RLI purchased Target. (Am. Complaint PP 15, 20.) At all times between October, 1992, and May, 1995, Allied believed that negotiations continued between RLI and Target; and Allied communicated this belief to RLI. Relying on this belief, Allied refrained from investigating other potential acquirors of Target. (Am. Complaint PP 16-18.)

 Count I of Allied's Amended Complaint alleges that RLI breached its agreement with Allied by refusing to pay Allied a finder's fee. (Am. Complaint P 26.) In particular, Allied alleges that negotiations between RLI and Target were continuously "pending" from the time Allied introduced RLI to Target in October, 1992, to the time RLI and Target merged in May, 1995. (Am. Complaint P 25.)

 Count II of Allied's Amended Complaint, entitled "Unjust Enrichment," alleges that Allied conferred valuable benefits on RLI by refraining from introducing Target to any other entities that may have been interested in purchasing Target. Allied's forbearance in this regard enhanced RLI's bargaining position with Target because Allied was no longer seeking purchasers who might compete with RLI for the opportunity to acquire Target. (Am. Complaint P 29.) Allied's forbearance stemmed from its belief that RLI was engaged in continuous negotiations with Target from the time of their initial meeting to the time of their merger, and that Allied ultimately would be compensated for its forbearance with a finder's fee under the terms of the agreement. If, contrary to Allied's belief, negotiations between RLI and Target ceased at some point, then Allied and RLI were no longer bound by the agreement. In that case, Allied's forbearance conferred valuable benefits upon RLI in reliance upon RLI without payment or compensation to Allied. (Am. Complaint P 30.) Count II alleges that RLI knowingly, wilfully, intentionally and unfairly accepted and enjoyed the benefit of Allied's continued forbearance, and that it would be inequitable for RLI to retain such benefits without adequately and fully compensating Allied. (Am. Complaint PP 31-33.)

 Analysis

 RLI moves the court to dismiss Count II of Allied's Amended Complaint for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. "A motion to dismiss tests the sufficiency of the complaint, not the merits of the suit." United States v. Brickman, 906 F. Supp. 1164, 1167 (N.D. Ill. 1995) (citing Triad Assocs., Inc. v. Chicago Housing Auth., 892 F.2d 583, 586 (7th Cir. 1989), cert. denied, 498 U.S. 845, 112 L. Ed. 2d 97, 111 S. Ct. 129 (1990)). The court will dismiss a claim only where "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Chaney v. Suburban Bus Div., 52 F.3d 623, 627 (7th Cir. 1995) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)). When ruling on a motion to dismiss, the court "accept[s] as true the factual allegations of the complaint and draw[s] all reasonable inferences in favor of the plaintiff[]." Lashbrook v. Oerkfitz, 65 F.3d 1339, 1343 (7th Cir. 1995) (citing Zinermon v. Burch, 494 U.S. 113, 118, 108 L. Ed. 2d 100, 110 S. Ct. 975 (1990)).

 RLI argues -- and the court agrees -- that Allied cannot state a claim for unjust enrichment in Count II, because Allied admits that a contract governed the relationship between Allied and RLI with respect to the acquisition of Target. (See Am. Complaint P 8 (alleging agreement); id. P 28 (incorporating P 8 into Count II).) The Supreme Court of Illinois has held unequivocally that "where there is a specific contract which governs the relationship of the parties, the doctrine of unjust enrichment has no application." La Throp v. Bell Fed. Sav. & Loan Ass'n, 68 Ill. 2d 375, 370 N.E.2d 188, 195, 12 Ill. Dec. 565 (Ill. 1977), cert denied., 436 U.S. 925, 56 L. Ed. 2d 768, 98 S. Ct. 2818 (1978). Citing La Throp, the Seventh Circuit has stated with equal force that "under Illinois law, a plaintiff may not state a claim for unjust enrichment when a contract governs the relationship between the parties." First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007 (7th Cir. 1985).


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