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DAMES & MOORE v. BAXTER & WOODMAN

August 6, 1998

DAMES & MOORE, a Delaware corporation, Plaintiff,
v.
BAXTER & WOODMAN, INC., an Illinois corporation, and SIMON B. GOLDEN, an Illinois resident, Defendants.



The opinion of the court was delivered by: GETTLEMAN

MEMORANDUM OPINION AND ORDER

 Plaintiff, Dames & Moore, has filed a five-count complaint against defendants Baxter & Woodman, Inc. ("Baxter") and Simon B. Golden ("Golden") (collectively "defendants"). Plaintiff has alleged that: (1) Golden breached fiduciary and contractual obligations he owed to plaintiff (Count I); (2) defendants conspired to have Golden commit these breaches (Count II); (3) defendants tortiously interfered with the business relationships that plaintiff had with several of its employees and clients (Counts III and IV); and (4) that Baxter was unjustly enriched at the expense of plaintiff due to defendants' alleged wrongdoing (Count V). Defendants have filed separate motions to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). For the following reasons, their motions are granted in part and denied in part.

 BACKGROUND

 For the purposes of a motion to dismiss, the court accepts all well-pleaded allegations as true and draws all reasonable inferences in favor of the plaintiff. Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1428 (7th Cir. 1996). This case involves the claims of an engineering consulting firm, Dames & Moore, against one of its competitors, Baxter & Woodman, and one of its former employees, Simon Golden, for activities that resulted in plaintiff's loss of several clients and employees. Federal jurisdiction is based on the parties' diverse citizenship. Plaintiff is a Delaware corporation with its principal place of business in Los Angeles, California. Baxter is an Illinois corporation with its principal place of business in Illinois. Golden is a resident of Illinois.

 On June 27, 1992, plaintiff acquired the assets of the engineering firm, Midwest Consulting ("Midwest"). Golden began working for Midwest on August 1, 1990, and was hired by plaintiff when it acquired Midwest. During the course of his employment with plaintiff, Golden became the senior project manager for two of plaintiff's municipal clients: the Villages of Grayslake and Round Lake. Plaintiff provided municipal engineering services to Grayslake beginning in June, 1992, when it acquired Midwest, which had previously provided such services to Grayslake pursuant to a series of work orders which plaintiff claims collectively constituted a contract. Plaintiff provided similar services to Round Lake starting in July, 1997, pursuant to a written, at-will contract and related work orders.

 As senior project manager, Golden had numerous responsibilities. He was plaintiff's primary contact with Grayslake and Round Lake. He was also in charge of the administration and supervision of the services provided to these clients, and managed the offices that were dedicated to these clients. Golden also supervised employees who worked in these offices, including Al Beaber ("Beaber") and Michael DeBennette ("DeBennette").

 Golden's position also gave him access to allegedly confidential and proprietary information about Grayslake and Round Lake, and plaintiff's employees. To protect this information, plaintiff required Golden to sign a Confidentiality Agreement, which he did on March 26, 1996. On the same day, Golden signed an Acknowledgment of the terms of plaintiff's Employee Handbook. The Handbook contained the following statement:

 FIDUCIARY RESPONSIBILITY

 
Each employee of DAMES & MOORE is charged with recognizing his or her fiduciary responsibility to the firm and its clients and the obligation to promote the firm's best interests while on the payroll and after leaving the employ of DAMES & MOORE. This interest extends to client lists, designs, reports, patents owned by firm, or by clients per contractual commitment. The employee shares no rights in these proprietary materials even though he/she may have been directly involved in the creation and reporting of the ideas, designs, recommendations or other intellectual endeavors and other proprietary materials.

 At some unspecified date, Golden began negotiating with plaintiff's competitors regarding the diversion of plaintiff's clients, Grayslake and Round Lake, and plaintiff's employees who worked on behalf of these clients. Plaintiff has attached to its complaint, as evidence of Golden's conduct, a letter from John Smith of Smith Engineering, a competitor of plaintiff who is not a party to this lawsuit. The letter is dated October 30, 1997, and is addressed to Golden and four of plaintiff's other employees. In the letter, Smith states, "For the past month I have been communicating with Si Golden regarding the potential for your 'team' to join the Smith Engineering 'family'." He further notes, "All five employees mentioned above would remain in their existing capacity in providing full time service to the municipalities of Grayslake and Round Lake."

 Shortly after this letter was written, three of the employees to whom the letter was addressed, Golden, Beaber, and DeBennette, resigned their positions with plaintiff to join Baxter. Golden tendered his resignation on November 3, 1997 effective November 18, 1997. Beaber and DeBennette tendered their resignations on November 5, 1997, effective November 19, 1997. On November 17, 1997, Round Lake wrote to plaintiff and terminated its at-will contract, indicating that it was doing so primarily because of the transfer of the three employees mentioned above. On November 21, 1997, Grayslake wrote to plaintiff and informed it that it was transferring most of its business to Baxter, but that it would honor several outstanding projects which plaintiff was then performing.

 Plaintiff alleges that Baxter and Golden conspired to bring about the resignations of plaintiffs' employees and the loss of business suffered by plaintiff. Plaintiff alleges that pursuant to the defendants' agreement, Golden solicited Beaber, DeBennette, and other employees of plaintiff to leave plaintiff and work for Baxter. Plaintiff also alleges that Golden solicited Grayslake and Round Lake to change their affiliations from plaintiff to Baxter pursuant to their agreement. Finally, plaintiff alleges that defendants were aided by the use of plaintiff's confidential and proprietary information.

 DISCUSSION

 I. Standard for a Motion to Dismiss

 In ruling on a motion to dismiss, the court considers "whether relief is possible under any set of facts that could be established consistent with the allegations." Bartholet v. Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir. 1992). A claim may be dismissed under Fed. R. Civ. P. 12 (b)(6) for failure to state a claim only if it is beyond doubt that under no set of facts would a plaintiff's allegations entitle him to relief. Travel All Over the World, Inc., 73 F.3d at 1429 (7th Cir. 1996); Venture Assoc. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 432 (7th Cir. 1993). The purpose of a ...


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