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September 18, 1996

TIBOR MACHINE PRODUCTS, INC., an Illinois Corporation, Plaintiff and Counter-Defendant,

The opinion of the court was delivered by: GRADY


 Counter-plaintiff Freudenberg-Nok General Partnership ("FNGP") alleges claims for breach of contract, promissory estoppel, and fraudulent misrepresentation in its first amended counterclaim. Counter-defendant Tibor Machine Products, Inc. ("Tibor") moves to dismiss the counterclaim for failure to state a claim pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure and to strike certain claims for damages. For the reasons stated in this opinion, the motion is denied.


 Counter-plaintiff FNGP manufactures, assembles and supplies parts and components to automobile manufacturers. Counter-defendant Tibor machines component parts.

 On June 22, 1992, Tibor submitted a quotation to FNGP for the machining of hubs and rings. The quotation listed a quantity of 120,000 to 150,000 hubs and rings per year at $ 2.48 and $ 1.82 per part respectively. Based on this quotation FNGP selected Tibor to machine and supply those parts. FNGP would then assemble those parts into torsional vibration dampers which it would supply to Nissan Motor Manufacturing Corporation U.S.A. ("Nissan"). On June 22, 1992, FNGP issued purchase orders to Tibor for the tooling and fixtures necessary to machine the parts. On July 23, 1992, FNGP issued a purchase order for the machining of sample parts to be produced in the normal environment and set-up.

 Tibor acquired the tooling and fixtures necessary to machine the rings and hubs. Tibor also machined and supplied the sample parts. FNGP then issued blanket purchase orders on April 20, 1993, for the machining of production volumes of the rings and hubs. The purchase orders reflected the volumes and prices set forth in Tibor's June 22, 1992, quotation.

 On June 4, 1993, before it was scheduled to commence machining production of the parts, Tibor informed FNGP that it lacked the capacity to produce enough rings and hubs to supply the volume requested in FNGP's purchase order. Tibor also told FNGP that it intended to acquire new production equipment that would allow it to machine that volume of parts, but the equipment would not be installed until after FNGP was required to begin supplying dampers to Nissan. FNGP asked Tibor to begin to produce a bank of parts in advance so that FNGP could meet its obligations to Nissan. Tibor responded that it could only produce the parts necessary to create the bank if FNGP agreed to pay increased prices.

 To satisfy its contractual obligations to Nissan and because it had no other source for the machining of the parts, FNGP paid the increased prices until November 1993 when Tibor lowered the prices to the amounts quoted in the purchase order. Tibor failed to machine the required quantities of hubs and rings and supply them on time throughout the end of 1993 and 1994. As a result, FNGP had to acquire the equipment necessary to machine the parts in house. FNGP also had to incur expedited shipping charges for the shipment of parts from Tibor to FNGP and from FNGP to Nissan.

 FNGP alleges that Tibor is liable for breach of contract (Count I), promissory estoppel (Count II), and fraudulent misrepresentation (Count III). FNGP asks for damages for the price increases paid, the expedited freight and shipping charges, and costs incurred to make up for production short falls as well as attorney fees. Tibor moves to dismiss all three counts of the counterclaim and to strike FNGP's request for damages for the price increase and attorney fees.


 Dismissal is properly granted only if "'it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Cushing v. City of Chicago, 3 F.3d 1156, 1159 (7th Cir. 1993) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984)). The court will accept all facts alleged in the complaint as true, drawing all reasonable inferences therefrom in favor of the plaintiff. Jones v. General Electric Co., 87 F.3d 209, 211 (7th Cir. 1996); Wilson v. Formigoni, 42 F.3d 1060, 1062 (7th Cir. 1994).

 I. Breach of Contract

 Under Illinois law, "[a] complaint based upon breach of contract must allege the existence of the contract purportedly breached by the defendant; the plaintiff's performance of all contractual conditions required of him; the fact of the defendant's alleged breach; and the existence of damages as a consequence." McClellan v. Banc Midwest, McLean County, 164 Ill. App. 3d 304, 517 N.E.2d 762, 764, 115 Ill. Dec. 351 (Ill. App. Ct. 1987). Terms of a contract must be sufficiently definite and certain that any terms that are not directly stated are implied. Commercial Bank of Korea, Ltd. v. Charone, Inc., 1990 U.S. Dist. LEXIS 10175, 1990 WL 115790, at *7 (N.D. Ill. Aug. 3, 1990). FNGP adequately alleges the existence of a contract. *fn2" It states that the April 1993 purchase orders it submitted to Tibor for the production of hubs and rings constituted a contract which Tibor accepted and then breached. *fn3" Tibor argues that the counterclaim does not contain enough details of the alleged contract to support a breach of contract claim. We disagree. First, it is enough that FNGP has alleged the existence of the two purchase orders covering hubs and rings, only submitting a copy of the purchase order for rings. FNGP is not required to attach the writing itself in order to sufficiently allege that an agreement existed. Second, the counterclaim alleges specific terms of the purchase orders: "The purchase orders stated annual plan volumes of 120,000 to 150,000 units of rings and hubs at the prices quoted by Tibor in its June 22, 1992 Quotation No. 09907." *fn4"

 Tibor also argues that the purchase orders cannot constitute a valid contract because there was no mutuality of obligation. The purchase orders stated on their face that they were "valid through the 1996 model year at FNGP's discretion." Lack of mutuality is an affirmative defense. Gordon v. Bauer, 177 Ill. App. 3d 1073, 532 N.E.2d 855, 864, 127 Ill. Dec. 26 (Ill. App. Ct. 1988). Although a contract which contains language making it expressly terminable at the will of one party can fail for lack of mutuality of obligation, "it is a well settled rule of law that want of mutuality of obligation is no defense where the contract is executed or where . . . a party who was not bound to perform does perform." Id. The purchase orders required FNGP to pay Tibor at specified prices for the rings and hubs. FNGP states that it did pay Tibor for the rings and hubs. *fn5" Thus, if FNGP did perform in accordance with the contract, the affirmative defense of lack of mutuality may not even be available to Tibor. Regardless, the possible existence of an affirmative defense is not a basis for dismissing a claim.

 Tibor contends that even if we find that the purchase orders constituted a valid offer, the counterclaim fails to allege sufficiently that Tibor accepted that offer. We disagree. FNGP's counterclaim states: "Tibor accepted and acknowledged the Purchase Orders and began performing work necessary to machine the parts to be supplied under the orders." *fn6" Thus, we find that FNGP sufficiently alleges that Tibor accepted the terms of the purchase orders when it began production of the hubs and rings pursuant to those orders.

 Finally, Tibor argues that the counterclaim does not allege that the contract was breached or how it was breached. to the contrary, we believe that FNGP has alleged the details of the breach with sufficient specificity to give Tibor notice. The counterclaim alleges that Tibor breached the volume and price terms of the purchase orders: "On June 4, 1993, immediately before Tibor was scheduled to commence machining production volumes of hubs and rings pursuant to the FNGP purchase orders . . . Tibor finally informed FNGP that it lacked capacity to produce enough rings and hubs and that it intended to acquire new production equipment . . . Tibor demanded increased prices of $ 3.24/ring and $ 5.38/hub, approximately twice the quoted prices for these parts." FNGP's claim for breach of contract is sufficient. Accordingly, we deny Tibor's motion to dismiss Count I.

 II. Promissory Estoppel

 To state a claim for promissory estoppel in Illinois a plaintiff must establish that he reasonably and justifiably relied to his detriment on an unambiguous promise and that such reliance was foreseeable by the promisor. See M.T. Bonk Co. v. Milton Bradley Co., 945 F.2d 1404, 1408 (7th Cir. 1991). "Promissory estoppel is a method to enforce promises that do not meet the requirements of consideration." Prentice v. UDC Advisory Services, Inc., 271 Ill. App. 3d 505, 648 N.E.2d 146, 151, 207 Ill. Dec. 690 (Ill. App. Ct. 1995). "Once consideration is found to exist, a party to the contract can no longer maintain an action for promissory estoppel where the performance which is said to satisfy the requirement of detrimental reliance is the same performance which supplies the consideration for the contract." Id. A party may plead claims for breach of contract and promissory estoppel in the alternative. 648 N.E.2d at 150. "'To the extent that (plaintiff) ultimately will not be able to prevail under both theories of recovery, it need not embrace one over the other at this earlier stage of the proceedings.'" Id. (quoting Jackson National Life Ins. Co. v. Gofen & Glossberg, Inc., 1993 U.S. Dist. LEXIS 9569, 1993 WL 266548, at *3 (N.D. Ill. July 15, 1993)).

 FNGP has brought a claim for breach of contract in addition to its claim for promissory estoppel. Tibor argues that since FNGP has not pleaded these claims in the alternative, the claim for promissory estoppel should be dismissed. FNGP maintains that it did not plead the claims in the alternative explicitly only because it believed it was obvious that the claims were in the alternative. We will regard these claims as having been pleaded in the alternative and treat them accordingly.

 It appears from FNGP's allegations that the same performance constituting the detrimental reliance for the promissory estoppel claim also supplies the consideration for the contract which Tibor allegedly breached. Under these circumstances, Illinois law would preclude the party from maintaining the action for promissory estoppel. However, although we have held that FNGP has alleged contractual terms sufficiently specific to support a claim for breach of contract, we have not made a definitive ruling as to what the specifics of the alleged contract were.

 We have declined to dismiss a promissory estoppel claim where the terms of the alleged contract between the parties are not yet clear. In Trans American Airlines, Inc. v. British Aerospace Holdings, Inc., 1996 U.S. Dist. LEXIS 11572, 1996 WL 465391 (N.D. Ill. Aug. 8, 1996), the defendant argued that plaintiff's claim for breach of contract rendered its claim for promissory estoppel superfluous. Rejecting that argument, we stated: "The terms of the contract at issue here are yet to be determined. The only thing that has been established so far in this case is that both parties agree there is a contract between them. Since it is not true here that 'each and every term was [unambiguously] spelled out in black and white in the contract,' we need not be concerned . . . that in bringing its alternative estoppel claims plaintiff is simply trying to get a second or third 'bite at the apple in the event it fails to prove breach of contract.'" Id. at *4 (quoting Wagner Excello Foods v. Fearn International, Inc., 235 Ill. App. 3d 224, 601 N.E.2d 956, 965, 176 Ill. Dec. 258 (Ill. App. Ct. 1992)). Thus, in accordance with our decision in Trans American Airlines, we deny Tibor's motion to dismiss Count II.

 III. Fraudulent Misrepresentation

 A. Rule 12(b)(6)

 The elements of fraudulent misrepresentation are as follows: (1) the representation must be a statement of a material fact, rather than a mere promise or opinion; (2) the representation must be false; (3) the person making the statement must know or believe that the representation is false; (4) the person to whom the representation is made must reasonably rely on the truth of the statement; (5) the statement must have been made for the purpose of causing the other party to affirmatively act; and (6) the reliance by the person to whom the statement was made led to his injury. LaScola v. U.S. Sprint Communications, 946 F.2d 559, 568 (7th Cir. 1991).

 It is well established under Illinois law that a plaintiff does not state a cause of action for fraud merely by alleging that the defendant had no intention to perform when the contract was made. Ronco, Inc. v. Plastics, Inc., 539 F. Supp. 391, 395 n.5 (N.D. Ill. 1982). A misrepresentation about an intention to act in the future, however, may be actionable if it is part of a "scheme employed to accomplish the fraud." Ault v. C.C. Services, Inc., 232 Ill. App. 3d 269, 597 N.E.2d 720, 723, 173 Ill. Dec. 746 (Ill. App. Ct. 1992).

 As this court has stated: "Even though Illinois courts have described the scheme-to-defraud exception as swallowing the general rule against 'promissory fraud,' mere assertions that, at the time it made the representations, the defendant had no intention to later follow them, cannot be sufficient to state a cause of action for fraud; otherwise, every breach of contract claim could also be a fraud claim." Orix Credit Alliance v. Taylor Mach. Works, Inc., 844 F. Supp. 1271, 1274 (N.D. Ill. 1994).

 Tibor argues that FNGP has failed to meet the pleading requirements for a claim for fraudulent misrepresentation. In our previous opinion dismissing FNGP's initial counterclaim for fraudulent misrepresentation with leave to amend, we stated that we were not satisfied that FNGP had alleged that Tibor "intentionally misled FNGP for the purpose of cheating FNGP." Tibor Machine Products, Inc. v. Freudenberg-Nok General Partnership, 1996 U.S. Dist. LEXIS 2360, 1996 WL 99896, at *5 (N.D. Ill. Feb. 29, 1996). Tibor argues that FNGP has failed to cure this deficiency. We disagree. *fn7" In its first amended counterclaim, FNGP alleges:


Upon receipt and acceptance of the April 20, 1993, purchase orders, Tibor failed to disclose to FNGP that it did not have and would not have the available capacity to machine production volumes and that it already had decided that it could not profitably machine the parts using the equipment that had produced the sample parts and was instead going to purchase new machines with robotic part-loading and handling systems. Tibor further failed to disclose to FNGP that it had already begun discussions with equipment suppliers for the acquisition of the new equipment. Tibor failed to disclose these facts even though it knew that new robotically-fed machines could not be acquired, installed and debugged, and that new sample parts could not be qualified before production was scheduled to begin. Tibor concealed this information from FNGP to prevent FNGP from terminating Tibor and seeking alternate machining sources.

 FNGP alleges that Tibor intended to defraud FNGP when it failed to inform FNGP that it was purchasing additional equipment to produce enough parts to meet the requirements of the purchase orders. *fn8" At that time, Tibor knew that it lacked the capacity to produce the parts on its existing equipment and failed to disclose this fact as well. FNGP alleges that Tibor purposely concealed the fact that it was seeking additional equipment to fill the orders so that FNGP would not terminate the relationship. This satisfies the requirements of fraudulent intent.

 Tibor also argues that for concealment to amount to a misrepresentation, there must have been an opportunity and a duty to speak and that it owed no such duty to FNGP. "Besides misrepresentation, 'fraud may also consist of the intentional omission or concealment of a material fact under circumstances creating an opportunity and duty to speak.'" Athey Products Corp. v. Harris Bank Roselle, 89 F.3d 430, 435 (7th Cir. 1996) (quoting Warner v. Lucas, 185 Ill. App. 3d 351, 541 N.E.2d 705, 706, 133 Ill. Dec. 494 (Ill. App. Ct. 1989)). "There is no duty to speak absent a fiduciary or other legal relationship between the parties." Magna Bank v. Jameson, 237 Ill. App. 3d 614, 604 N.E.2d 541, 545, 178 Ill. Dec. 285 (Ill. App. Ct. 1992). FNGP alleges that the April 1993 purchase order constituted a contract. At this stage of the proceedings, we have not ruled out the possibility that there was a contractual relationship between the parties. Thus, if there was a "legal relationship" between the parties, then Tibor may have had a "duty to speak" and inform Tibor that it was planning to purchase additional equipment in order to meet the requirements of the purchase order because it lacked the capacity on its existing equipment.

 Tibor further contends that the fraudulent misrepresentation claim should fail because FNGP fails to allege that it reasonably relied on Tibor's concealment to its detriment. We disagree. FNGP alleges that Tibor concealed the purchase of the new equipment so that FNGP would not terminate Tibor and seek alternate machining sources. The purchase of the new equipment would have disclosed Tibor's lack of capacity to manufacture the parts on its existing equipment. Had FNGP known of the lack of capacity at an earlier date, it alleges it would have found another source for the parts. Because Tibor waited until just before production was set to begin to disclose its lack of capacity and intent to purchase new equipment, FNGP could not begin to look for an alternate source.

 FNGP reasonably relied on Tibor's silence to mean that it had the capacity to produce parts on its existing equipment. We think that FNGP has sufficiently alleged reasonable detrimental reliance. Accordingly, we will not dismiss Count III for failure to comply with Rule 12(b)(6).

 B. Rule 9(b)

 While Federal Rule of Civil Procedure 9(b) requires "all averments of fraud [and] the circumstances constituting fraud" to be "stated with particularity," we have previously noted that Rule 9(b) does not require an exhaustively detailed explanation of the circumstances of the fraud; the plaintiff should set forth the time, place and substance of the allegedly false representations, as well as the identity of the individual making representations. The allegations are sufficient if the defendant is in a position to understand the nature of the conduct from which the plaintiff has drawn the inference of fraud and can defend against the allegations. Schaps v. R.A. Transportation Services, Inc., 1987 U.S. Dist. LEXIS 4756, 1987 WL 12178, at *3 (N.D. Ill. June 9, 1987).

 Tibor argues that FNGP's fraudulent misrepresentation claim should be dismissed for failure to comport with Rule 9(b)'s requirements of specificity. In particular, Tibor points out that FNGP has failed to allege who at Tibor committed the alleged acts of concealment and who had a duty to disclose these facts. Citing HPI Health Care Services Inc. v. Mt. Vernon Hospital, 131 Ill. 2d 145, 545 N.E.2d 672, 683, 137 Ill. Dec. 19 (Ill. 1989), FNGP argues that where a plaintiff alleges that a corporation has committed a tort like fraudulent misrepresentation, the plaintiff is not required to identify which of the defendant's agents made the allegedly fraudulent misrepresentations.

 We believe that FNGP has satisfied the requirements of Rule 9(b). FNGP has stated that, after it received the April 1993 purchase orders, Tibor failed to disclose its plans to purchase new production equipment. This allegation sufficiently states when the misrepresentation took place and what the substance of the misrepresentation was. Rule 9(b) does not require FNGP to allege specifically which Tibor agent should have been responsible for informing FNGP of the purchase plans. Accordingly, we will not dismiss Count III for failure to comply with Rule 9(b).

 IV. Damages

 Tibor moves to strike certain damages claims. FNGP asks for damages of $ 1,140,000.00, covering the following: the price increase demanded by Tibor for parts supplied between June and November 1993; expedited freight and shipping charges incurred by FNGP to meet its contractual obligations to Nissan; and costs incurred by FNGP to make up for Tibor's productions short falls. FNGP also asks for attorney fees.

 Tibor contends that FNGP has waived its claim for the amounts of the price increase because it voluntarily and knowingly paid the price increase. In its counterclaim, FNGP alleges:


Tibor responded by letter . . . that it would only produce parts to create a bank necessary to enable it to satisfy its contractual obligations to FNGP, if FNGP agreed to pay higher prices for both parts. In the letter, Tibor demanded increased prices of $ 3.24/ring and $ 5.38/hub, approximately twice the quoted prices for these parts. Tibor threatened that if FNGP would not pay the increased prices, it would not machine any parts, placing FNGP in the position of not being able to satisfy its contractual obligations to Nissan. Because FNGP has no other source for the machining of these parts and because Tibor's threatened refusal to machine parts if the higher price was not paid would cause FNGP to be unable to supply Nissan, it paid the higher prices.

 "The issue of duress and compulsory payment generally is one of fact to be judged in light of all the circumstances surrounding a given transaction." Smith v. Prime Cable of Chicago, 276 Ill. App. 3d 843, 658 N.E.2d 1325, 1331, 213 Ill. Dec. 304 (Ill. App. Ct. 1995) (citations omitted). "However, where the facts are not in dispute and only one valid inference concerning the existence of duress can be drawn from the facts, the issue can be decided as a matter of law including on a motion to dismiss." Id. "To render a payment compulsory, there must have been some necessity and 'such pressure must have been brought to bear upon the person paying as to interfere with free enjoyment of his rights of person or property.'" 658 N.E.2d at 1332 (quoting Illinois Glass Co. v. Chicago Telephone Co., 234 Ill. 535, 85 N.E. 200, 201 (Ill. 1908)). "That pressure is established by allegation of some actual or threatened power wielded over the payor from which no immediate relief and from which no adequate opportunity is afforded to effectively resist the demand for payment." Id.9

 We believe the facts alleged demonstrate that FNGP's payment may have been compulsory. This is not a situation where the threat alleged by FNGP is wholly speculative. In Prime Cable, the court found that the plaintiffs' payment was not compulsory because the allegation of threatened loss was purely anticipatory and implied, based upon past dealings with the defendant. Id. at 1333. The court also noted that the plaintiffs did not allege that they had exhausted all options available before they made payment. Id. In our case, FNGP alleges that Tibor actually threatened to refuse to produce the parts unless it paid the higher prices. Furthermore, it alleges that it could not have obtained another vendor because of the lengthy pre-production process. FNGP's claim for damages arising from the increased prices it paid is proper. Accordingly, we deny Tibor's motion to strike those damages.

 Tibor also argues that FNGP may not recover attorney fees on its fraudulent misrepresentation or promissory estoppel claims. Under the American Rule, a successful party may not recover attorney fees or the costs of litigation in the absence of a statute or an agreement of the parties. In re Matter of Estate of Dyniewicz, 271 Ill. App. 3d 616, 648 N.E.2d 1076, 1085, 208 Ill. Dec. 154 (Ill. App. Ct. 1995).

 FNGP contends that attorney fees are proper because the April 1993 purchase order provided that Tibor would indemnify FNGP for attorney fees "arising out of or in connection with the performance of or failure to perform by [Tibor] of its order." FNGP contends that the purchase order is central to both claims and therefore properly provides the basis for a claim for attorneys' fees. We are unable to say at this point that there is no merit to this position, *fn10" and we therefore deny Tibor's motion to strike FNGP's claim for attorneys' fees.


 For the forgoing reasons, plaintiff and counter-defendant's motion to dismiss the first amended counterclaim and to strike certain claims for damages is denied.

 DATED: September 18, 1996


 John F. Grady, United States District Judge

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