United States District Court, N.D. Illinois
January 29, 2004.
INDECK POWER EQUIPMENT CO. Plaintiff,
RING POWER CO. Defendant
The opinion of the court was delivered by: DAVID COAR, District Judge
MEMORANDUM OPINION AND ORDER
This case comes before the Court on Plaintiffs Motion to Dismiss
Count II of Defendant's Counterclaim for failure to state a claim,
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For
the reasons stated in this opinion, Plaintiffs Motion is granted.
Factual and Procedural Background
Plaintiff Indeck Power Equipment Company is an Illinois corporation in
the business of buying and leasing permanent and temporary power plant
equipment. Defendant Ring Power Corporation is in the business of, among
other things, selling and leasing such power plant equipment. In March
2001, Indeck contracted to purchase from Ring twenty-four Caterpillar
XQ2000 Trailer Generators. Indeck and Ring entered into twenty-four
written Purchase Orders, each five-pages in length, to effectuate the
sales.*fn1 The purchase price of the twenty-four generators exceeded
On September 26, 2003, Plaintiff Indeck Power Equipment Company
"Indeck") filed a two-count complaint in state court alleging that
Defendant Ring Power Corporation ("Defendant" or "Ring") breached the
express and implied warranties in the Purchase Orders between the
parties. On October 23, 2003, Defendant Ring removed this case to federal
court. Jurisdiction of the federal court in this case is based on the
diverse citizenship of the parties: Indeck is an Illinois corporation and
Ring is a Florida corporation.
In its Complaint, Indeck alleges that Ring delivered generators that
are not in compliance with the purchase order. Specifically, Indeck
asserts that the generators Ring shipped were "Utility Convertible
[generators], not Utility Grade [generators]". (Pl. Comp. ¶ 12.)
Ring, in its Answer, denied that it shipped the wrong generators to
Ring also asserted a two-count Counterclaim against Indeck. In the
first Count of the Counterclaim, Ring seeks reformation of the contract
to reflect the understanding of the parties at the time of the contract.
In Count II of the Counterclaim, Ring states a claim for unjust
enrichment against Indeck. Indeck seeks dismissal of Count II for failure
to state a claim upon which relief may be granted.
The purpose of a motion to dismiss is to test the legal sufficiency of
the claim, not to decide the merits of the case. In evaluating the
motion, the Court accepts as true all facts and allegations in the claim
and makes all reasonable inferences in the non-movant's favor. See
Holman v. Indiana, 211 F.3d 399, 402 (7th Cir. 2000). Claims should
only be dismissed if it is clear that no set of facts in support of the
claim would entitle the party to relief. See Ledford v.
Sullivan, 105 F.3d 354, 356 (7th Cir. 1997) (quoting Hishon v.
King & Spalding, 467 U.S. 69. 73 (1984)).
Plaintiff Indeck seeks to dismiss Count II of the counterclaim because
it asserts that, under Illinois law, unjust enrichment claims cannot be
brought against parties to a contract. Both parties agree that Illinois
law governs the dispute in this case. The legal question underlying this
motion is whether under Illinois law a party to a contract can sustain a
claim for unjust enrichment as a matter of law.
Illinois law is fairly clear on the subject. The Illinois Supreme Court
clearly enunciated the principle in 1977'. "[W]here there is a specific
contract which governs the relationship of the parties, the doctrine of
unjust enrichment has no application." LaThrop v. Bell Federal Sav.
& Loan Ass'n, 370 N.E.2d 188, 195 (Ill. 1977). There can be no
doubt that this principle remains in force in Illinois law today.
See Adams v. American Intern. Group, Inc. 791 N.E.2d 26, 31
(Ill.App. Ct. 2003) ("an action for unjust enrichment that seeks
imposition of an implied contract . . . cannot be maintained where an
express contract governs the parties"); B & B Land Acquisition,
Inc. v. Mandell, 714 N.E.2d 58, 63 (Ill.App. Ct. 1999) ("Because
the theory [of unjust enrichment] is based on an implied contract, it has
no application when an express contract governs the relationship between
The Defendant seeks to sustain its counterclaim under its permissive
capacity to plead in the alternative. Defendant Ring makes clear its
belief that it is "entitled to prevail on the Purchase Orders as written"
in Count I of its counterclaim. (Def. Counterclaim, Count I, ¶ 4.) In
federal court, parties are entitled to plead alternative theories of
relief, "even if the pleadings are inconsistent." See Alper v.
Altheimer & Gray, 257 F.3d 680, 681 (7th Cir. 2000). While
parties are entitled to plead in the alternative, they can also plead
themselves out of court by admitting
facts that would be inconsistent with relief. As discussed above,
Illinois law clearly holds that the existence of a contract governing the
relationship between two parties precludes relief on an unjust enrichment
theory. In its answer, Defendant admits that the parties "entered into
twenty-four written Purchase Orders pursuant to which Plaintiff
contracted to purchase from Defendant twenty-four Caterpillar XQ2000,
trailer generators. . . ." (Def. Ans., ¶ 5) Consequently, the
Defendant has pled itself out of court on its unjust enrichment claim.
In the briefing on the motion, Defendant asserts that its
"precautionary, alternative unjust enrichment claim" (Def. Mem. L. at 2)
is offered as a hedge "against the theoretical rescission" (Def. Mem. L.
at 2) that Plaintiff seeks in its Complaint, (Pl. Comp. ¶ 14). Should
the Court order rescission to remedy Plaintiffs alleged damages,
Defendant would be entitled to appropriate restitution to restore the
parties to the position before the contract. As Defendant points out, the
Illinois Supreme Court has announced that "rescission means to restore
the parties to their former position; a termination of a contract with
restitution." Chicago Limousine Service, Inc. v. Hartigan Cadillac,
Inc., 564 N.E.2d 797, 802 (Ill. 1990). Consequently, any moneys that
the Defendant would be entitled to under its improperly pled unjust
enrichment theory are already accounted for as a necessary concomitant of
the rescission remedy.
For the reasons set forth in this opinion, the Court grants Plaintiffs
Motion to Dismiss Count II of Defendant's Counterclaim for failure to
state a claim upon which relief can be granted.