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KEN-PIN, INC. v. VANTAGE BOWLING CORP.

January 15, 2004.

KEN-PIN, INC., Plaintiff,
v.
VANTAGE BOWLING CORP., MARK SCHMIDT and COMPUTER SCORE PTY., LTD., Defendant



The opinion of the court was delivered by: HARRY LEINENWEBER, District Judge

MEMORANDUM OPINION AND ORDER

In this diversity action, plaintiff Ken-Pin, Inc. ("Ken-Pin"), an Illinois corporation with its principal place of business in Richmond, Illinois, is maintaining a four-count complaint against Vantage Bowling Corp. ("Vantage"), a Colorado corporation with its principal place of business in Denver, Colorado, against Mark Schmidt ("Schmidt" and, collectively with Vantage, "the Vantage Defendants"), a Colorado resident and Vantage's chief executive officer, and against Computer Score Pty., Ltd. ("Computer Score"), a foreign corporation organized under the laws of Australia with its principal place of business in Tweed Heads South, New South Wales, Australia. Before the Court are the Vantage Defendants' and Computer Score's motions to dismiss Ken-Pin's complaint. For the following reasons, the motions are granted in part and denied in part. Page 2

I. BACKGROUND

  The dispute at hand relates to the sale and servicing of computerized scoring equipment used at bowling centers. The following facts are taken from Ken-Pin's complaint and are construed as true. Ken-Pin is a corporation that markets, sells, installs, and services products and equipment used at bowling centers. In the early 1990s, Computer Score developed an automatic bowling scoring system (the "Scoring system"). The Scoring System was a gift to less mathematically adept bowlers as it allowed them to score their games automatically and to display the results on monitors. In a letter dated June 21, 1993, Computer Score offered Ken-Pin in writing the option of entering into an exclusive or nonexclusive distributorship of the Scoring Systems in the United States. The letter offered Ken-Pin the right to market, install and service, or to manufacture Scoring System equipment. Ken-Pin purchased the non-exclusive rights for $60,000 and paid the amount in full by June 1994.

  From 1993 until 1998, Ken-Pin sold Scoring Systems that had been manufactured and assembled in Australia and then shipped to the United States for delivery and installation. Wishing to avoid the freight costs involved in this process, in late 1997 Ken-Pin began to negotiate a subcontract with Vantage, a corporation also involved in the development, marketing, and sale of products and services for the bowling industry, for the manufacture of Scoring Page 3 System hardware. On May 18, 1998, Ken-Pin also entered into employment agreements with Art and Craig Lackenbach (the "Lackenbachs") to install and service the Scoring Systems. As part of their employment contracts, the Lackenbachs entered into covenants not to compete that restricted them from engaging in certain commercial activities in the bowling industry for two years after their employment with Ken-Pin ended. One of the projects the Lackenbachs completed for Ken-Pin was a manual for the installation, maintenance, and operation of the Scoring Systems. The project cost Ken-Pin $28,000.

  On March 14, 2000, the Lackenbachs resigned from Ken-Pin, effective April 17, 2000 and subsequently went to work for Vantage. According to Ken-Pin, despite its warning that the Lackenbachs had entered into restrictive covenants, Schmidt and Vantage engaged the Lackenbachs in prohibited commercial activities. Ken-Pin learned of the violations on November 6, 2000. Six months later, on May 8, 2001, Ken-Pin received further bad news when it learned from Computer Score that Vantage was to be Computer Score's sole and exclusive distributor for the Scoring Systems in the United States and that Computer Score would no longer be selling the Scoring System's electronic and software components to Ken-Pin.

  On November 5, 2002, Ken-Pin filed a three-count complaint in this Court. In response, the Vantage Defendants and Computer Score filed motions to dismiss. Ken-Pin requested and received several Page 4 enlargements of time in which to respond to the pending motions, but on August 1, 2003, filed an amended complaint instead. In the amended complaint, it asserted claims for breach of contract against Computer Score (Count I), promissory estoppel against Computer Score (Count II), tortious interference with Ken-Pin's contracts against Vantage and Schmidt (Count III), and tortious interference with Ken-Pin's prospective economic advantage against Vantage and Schmidt (Count IV). The Vantage Defendants and Computer Score again responded by filing motions to dismiss the amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(2).

  II. STANDARD OF REVIEW

  A motion to dismiss under Rule 12(b)(6) tests whether the plaintiff has properly stated a claim upon which relief could be granted, not whether the plaintiff will ultimately prevail on the merits. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). In ruling on a motion to dismiss, a court must construe all well-pleaded allegations of the complaint as true, and draw all reasonable inferences in favor of the plaintiff. Id. A motion to dismiss will not be granted unless it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The parties agree that the applicable law is that of Illinois. Page 5

  In assessing the merits of a Rule 12(b)(6) motion, a court is usually confined solely to the pleadings, which consist generally of the complaint and any exhibits attached to it, and supporting briefs. Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). If additional evidence is placed before the court and not excluded, the court must typically convert the motion into a Rule 56(c) motion for summary judgment. Id. Under a narrow exception to this rule, however, a court may consider documents attached by a defendant to the motion to dismiss if those documents are referred to in the plaintiff's complaint and are central to his or her claim. Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998); see also Tierney v. Vahle, 304 F.3d 734, 738-39 (7th Cir. 2002) (collecting cases). The Vantage Defendants attach several documents to their motion to dismiss that Ken-Pin refers to in its amended complaint and that the Court believes are central to Ken-Pin's claims. These are the June 21, 1993 letter from Computer Score to Ken-Pin, in which Computer Score offered Ken-Pin the United States distributorship for the sale of the Scoring System, and the employment agreements between Ken-Pin and the Lackenbachs. As the Seventh Circuit explained in Levenstein, it is particularly appropriate to consider such pertinent documents in contract interpretation cases. Levenstein, 164 F.3d at 327. Accordingly, the Court will consider these documents in addressing the Vantage Page 6 Defendants' motion to dismiss without converting the motion to a motion for summary judgment.

  III. DISCUSSION

  A. Computer Score's Motion to Dismiss

  Computer Score brings its motion pursuant to Rule 12(b)(6) and argues that Ken-Pin has failed to state a claim against Computer Score for either breach of contract or promissory estoppel.

  1. Count I

  In Count I, Ken-Pin alleges that Computer Score breached its distributorship agreement when it decided that it would no longer sell Ken-Pin Scoring Systems or components of Scoring Systems. Under Illinois law, to state a cause of action for breach of contract, a plaintiff must allege sufficient facts to establish four elements: (1) the existence of a valid and enforceable contract containing both definite and certain terms; (2) performance by the plaintiff; (3) breach of the contract by the defendant; and (4) injury to the plaintiff. Bensdorf & Johnson, Inc. v. N. Telecom Ltd., 58 F. Supp.2d 874, 877 (N.D. Ill. 1999). In order to allege the existence of a contract, Ken-Pin must present facts in its complaint indicating an offer, acceptance and consideration. Id. In order for the contract to be binding and enforceable, the terms must be "sufficiently definite and certain so that a court can determine what the agreement was and what conduct constituted a breach." Id. Computer Score contends that Page 7 the claim must be dismissed because: (1) the alleged agreement between the parties lacked essential terms establishing mutuality of obligation and therefore was unenforceable; (2) the alleged agreement lacked a specific term of duration and was terminable at will; and (3) the ...


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