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TIBOR MACH. PRODS. v. FREUDENBERG-NOK GEN. PSHP.

September 18, 1996

TIBOR MACHINE PRODUCTS, INC., an Illinois Corporation, Plaintiff and Counter-Defendant,
v.
FREUDENBERG-NOK GENERAL PARTNERSHIP, Defendant and Counter-Plaintiff.



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.

 BACKGROUND1

 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.

 DISCUSSION

 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, ...


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