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PYRAMID CONTROLS, INC. v. SIEMENS INDUS. AUTOMATIO

September 23, 1997

PYRAMID CONTROLS, INC., Plaintiff,
v.
SIEMENS INDUSTRIAL AUTOMATIONS, INC., et al., Defendants.



The opinion of the court was delivered by: ALESIA

 Before the court is defendants Siemens Industrial Automations, Inc. and Siemens Energy & Automation, Inc.'s (collectively "Siemens") motion to dismiss plaintiff Pyramid Controls, Inc.'s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the court grants Siemens' motion to dismiss.

 I. BACKGROUND

 Pyramid alleges the following facts which, for the purposes of this motion, are taken as true. Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984). Siemens manufactures and sells industrial automation products and devices. In 1991, Pyramid entered into two distributor agreements with Siemens. The agreements gave Pyramid the right to offer, sell, and distribute Siemens' products. The agreements provided that Pyramid was to sell the products under a marketing plan. In addition, the agreements required Pyramid to build a high-tech training center and to purchase from Siemens training and demonstration equipment which cost thousands of dollars. On June 14, 1995, Siemens advised Pyramid that Siemens was terminating the distributor agreements and was turning over the entire product line covered by the agreements to a competing distributor.

 In January of 1997, during a conversation with its attorney, Pyramid learned for the first time that the distributor agreements created a franchise relationship between Pyramid and Siemens that was protected under the Illinois Franchise Disclosure Act of 1987 (the "IFDA") and that Siemens had violated the IFDA. On May 15, 1997, Pyramid filed this lawsuit against Siemens. Pyramid alleges that Siemens terminated the franchise without good cause in violation of section 705/19 of the IFDA which caused Pyramid to suffer in excess of $ 75,000 in damages. This court has subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1332, as there exists complete diversity between the parties and the amount in controversy exceeds $ 75,000.

 Siemens argues that Pyramid's suit should be dismissed for two reasons. First, Siemens contends that Pyramid's suit is time barred by the applicable statute of limitations. Second, Siemens contends that Pyramid's complaint is insufficient to state a cause of action because Pyramid alleges no facts which support the allegation that Siemens terminated the franchise without good cause.

 II. DISCUSSION

 A. Legal standard

 When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Cromley v. Board of Educ. of Lockport, 699 F. Supp. 1283, 1285 (N.D. Ill. 1988). If, when viewed in the light most favorable to the plaintiff, the complaint fails to state a claim upon which relief can be granted, the court must dismiss the case. See FED. R. CIV. P. 12(b)(6); Gomez v. Illinois State Bd. of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987). However, the court may dismiss the complaint only if it appears beyond a doubt that the plaintiff can prove no set of facts in support of its claim that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).

 B. Whether the complaint is time barred

 Siemens argues that Pyramid's complaint is time barred by section 705/27 of the IFDA which provides the statute of limitations for IFDA claims. 815 ILCS § 705/27. Section 705/27 provides that a private plaintiff may not bring a cause of action under the IFDA

 815 ILCS § 705/27.

 Pyramid filed its complaint on May 15, 1997. Siemens contends that the one-year limitation period bars Pyramid's complaint because Pyramid had knowledge of facts or circumstances reasonably indicating a statutory claim for relief as of June 14, 1995, the date on which Siemens notified Pyramid of the termination. Pyramid responds that it did not have knowledge of a claim for relief until January of 1997 when it learned for the first time, during the course of a conversation ...


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