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February 25, 2000


The opinion of the court was delivered by: Kocoras, District Judge.


This matter comes before the Court on Defendants' motion to dismiss. For the reasons set forth below, the Court denies Defendants' motion.


Czapla was a futures and options broker who transacted business with Commerz Corp., which is a registered futures commission merchant. Commerz LLC is allegedly the entity which succeeded to the business of Commerz Corp. on or about January 1999. Commerz AG is a German banking corporation, which is the registered principal, parent and/or sole owner of Commerz Corp. and Commerce LLC.

On or about June 15, 1997, Czapla entered into a written employment contract with Commerz Corp. (the "Contract"). The Contract provided several methods for termination, one of which was that the Contract would expire, unless earlier terminated by either party, on June 14, 1998. The Contract also provided that "neither this Agreement nor any provision hereof may be waived, modified, amended or changed except by an agreement in writing executed by both parties hereto." About one week before the June 14, 1998 contract expiration date, Czapla allegedly reached a mutual agreement with Colleen Baer ("Baer"), the Chief Executive Officer of Commerz Corp., to continue Czapla's employment under the terms of the Contract for an unspecified period of time, subject to termination by either party or until such time as the parties might enter into a further written agreement.

Czapla continued to work for Commerz Corp. under the same terms of the Contract until about February 1999. At that time, Commerz LLC, which had by then succeeded Commerz Corp., notified Czapla that it wanted to reduce the parties' agreement into writing to include certain terms that were different from the previous Contract. For example, Commerz LLC wanted to pay Czapla monthly rather than quarterly, to reduce the termination notice period from 90 days to 30 days, and to change the basis upon which interest income would be calculated and paid to Czapla. On or about March 2, 1999, Commerz LLC provided Czapla with a copy of the proposed agreement and indicated that if Czapla did not sign by March 5, 1999, he would be terminated. Because Czapla and Commerz LLC failed to agree on changes to the Contract, Commerz LLC terminated Czapla on or about March 5, 1999.

In his complaint, Czapla seeks certain monies he alleges Commerz Corp. and Commerz LLC owe him, which include commissions and interest income as of the time of the termination notice and for a period of at least 90-days thereafter. Defendants move to dismiss all counts of Czapla's complaint, arguing that Czapla fails to allege the existence of a contract, but rather depends on an invalid oral modification, that Czapla's breach of contract claim violates the statute of frauds, and that Czapla fails to state a claim against Commerz LLC and Commerz AG. Czapla has since voluntarily dismissed Commerz AG as a defendant.


The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the sufficiency of the complaint, not to decide the merits of the case. A defendant must meet a high standard in order to have a complaint dismissed for failure to state a claim upon which relief may be granted. In ruling on a motion to dismiss, the court must construe the complaint's allegations in the light most favorable to the plaintiff and all well-pleaded facts and allegations in the plaintiff's complaint must be taken as true. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993), cert. denied, 510 U.S. 1012, 114 S.Ct. 602, 126 L.Ed.2d 567 (1993). The allegations of a complaint should not be dismissed for failure to state a claim "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Nonetheless, in order to withstand a motion to dismiss, a complaint must allege facts sufficiently setting forth the essential elements of the cause of action. Lucien v. Preiner, 967 F.2d 1166, 1168 (7th Cir. 1992), cert. denied, 506 U.S. 893, 113 S.Ct. 267, 121 L.Ed.2d 196 (1992). With these principles in mind, the Court evaluates Defendants' motion.


I. Modification

Defendants argue that the Court should dismiss Czapla's breach of contract claim because there existed no contract after the Contract's June 14, 1998 expiration date. According to Defendants, the alleged oral agreement between Baer and Czapla to extend the Contract terms was ineffective in the face of the Contract's clause that provides that modifications or amendments must be agreed to in writing by both parties. Czapla counters that the complaint does not allege that the oral agreement was a modification or amendment of the Contract, but was a separate new contract merely using the same terms as the old Contract. In the alternative, Czapla argues that if the oral agreement is viewed as an extension of the Contract, Defendants waived the Contract's requirement that all modifications or amendments had to be in writing.

Because the Court agrees that Czapla alleges an extension of his Contract rather than the creation of a new contract, the Contract provision requiring modifications and amendments to be in writing is applicable. However, because the facts may demonstrate that Defendants waived this provision, the Court declines to ...

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