United States District Court, N.D. Illinois
February 23, 2004.
CHAD PFEIFER, Plaintiff,
METROPOLITAN SIDING & WINDOWS, INC., Defendant
The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Defendant Metropolitan Siding
& Window, Inc.'s ("MSW") motion to dismiss for lack of subject matter
jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), or in
the alternative to dismiss for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below we
deny the motion to dismiss in its entirety.
Plaintiff Chad Pfeifer ("Pfeifer") was employed by MSW in 2000 as a
Marketing Manager. Pfeifer claims that in 2000 the president of MSW
promised to pay Pfeifer $50,000 a year, plus sales and commissions of 1%
of MSW's gross sales for each calendar year. Pfeifer was terminated in
2003 and he claims that MSW has failed to pay $29,260 in commissions
still owed to him.
A party may move to dismiss claims over which a district court lacks
subject matter jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(1). In deciding whether to grant a 12(b)(1) motion for lack of
subject matter jurisdiction a court "must accept the complaint's
well-pleaded factual allegations in as true and draw all reasonable
inferences from those allegations in the plaintiffs favor." United
Transp, Union v. Gateway Western Ry. Co., 78 F.3d 1208, 1210 (7th
In ruling on a 12(b)(6) motion to dismiss, the court must draw all
reasonable inferences that favor the plaintiff, construe the allegations
of the complaint in the light most favorable to the plaintiff, and accept
as true all well-pleaded facts and allegations in the complaint, Thompson
v. Illinois Dep't of Prof I Regulation, 300 F.3d 750, 753 (7th Cir.
2002); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). The
allegations of a complaint should not be dismissed for a failure to state
a claim "unless it appears beyond 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 (1957). Nonetheless, in order to
withstand a motion to dismiss, a complaint must allege the "operative
facts" upon which each claim is based. Kyle v. Morton High School,
144 F.3d 448, 444-45 (7th Cir. 1998); Lucien v. Preiner, 967 F.2d 1166,
1168 (7th Cir. 1992). The plaintiff need not allege all of the facts
involved in the claim and can plead conclusions, Higgs v. Carter,
286 F.3d 437, 439 (7th Cir. 2002); Kyle, 144 F.3d at 455. However, any
conclusions pled must "provide the defendant with at least minimal notice
of the claim," Id., and the plaintiff cannot satisfy federal pleading
requirements merely "by attaching bare legal conclusions to narrated
facts which fail to outline the bases of [his] claim." Perkins, 939 F.2d
MSW contends that this court lacks subject matter jurisdiction because
the amount in controversy does not exceed $75,000. A district court has
subject matter jurisdiction over "all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest
and costs and is between . . . citizens of different states."
28 U.S.C. § 1332(a). MSW argues that the amount in controversy in this
action is merely the $29,260 in commissions allegedly owed. MSW contends
that Pfeifer filed this action under the false impression that he can
bring a claim under the Illinois Sales Representative Act ("ISRA"), 820
ILCS 120/1 et seq. which provides for treble damages and attorneys'
fees, thereby making the amount in controversy greater than $75,000.
MSW argues that ISRA is not applicable in this action because Pfeifer
admits that he was an employee of MSW. The ISRA provides:
All commissions due at the time of termination of a
contract between a sales representative and principal
shall be paid within 13 days of termination, and
commissions that become due after termination shall be
paid within 13 days of the date on which such
commissions become due. Any provision in any contract
between a sales representative and principal
purporting to waive any of the provisions of this Act
shall be void.
820 ILCS 120/2. The ISRA also states that:
A principal who fails to comply with the provisions of
Section 2 concerning timely payment or with any
contractual provision concerning timely payment of
commissions due upon the termination of the contract
with the sales representative, shall be liable in a
civil action for exemplary damages in an amount which
does not exceed 3 times the amount of the commissions
owed to the sales representative. Additionally, such
principal shall pay the sales representative's
reasonable attorney's fees and court costs.
820 ILCS 120/3. As indicated in the statutory text above, the ISRA
applies to sales representatives. The ISRA provides that:
"Sales representative" means a person who contracts
with a principal to solicit orders and who is
compensated, in whole or in part, by commission, but
shall not include one who places orders or purchases
for his own account for resale or one who qualifies as
an employee of the principal pursuant to the Illinois
Wage Payment and Collection Act *fn1.
820 ILCS 120/1(4)(emphasis added). The Illinois Wage Payment and
Collection Act ("IWPCA"), 820 ILCS 115/1 et seq., states:
As used in this Act, the term "employee" shall
include any individual permitted to work by an
employer in an occupation, but shall not include
(1) who has been and will continue to be free from
control and direction over the performance of his
work, both under his contract of service with his
employer and in fact; and
(2) who performs work which is either outside the
usual course of business or is performed outside all
of the places of business of the employer unless the
employer is in the business of contracting with third
parties for the placement of employees; and
(3) who is in an independently established trade,
occupation, profession or business.
820 ILCS 115/2. MSW argues that Pfeifer admits that he was an employee of
MSW because Pfeifer states in his complaint that "[a]t all times referred
to in this Complaint, up to and including May 10, 2003, Plaintiff was
employed by Metropolitan as Metropolitan's Marketing Manager." We agree
with Pfeifer that simply because he used the verb "employed" does not
necessarily mean that he should be deemed an "employee" as defined by the
IWPCA. The word "employee" is a term of art in the act and usage of the
verb "employed" in the complaint did not necessarily mean anything more
than that Pfeifer worked for MSW. We acknowledge that the fact that
Pfeifer was MS W's Marketing Manager and was paid a salary would suggest
that he was an employee of MSW. However, for the purposes of these
motions to dismiss we are required to accept as true all well-pled facts
and make all reasonable inferences in favor of Pfeifer, the non-movant.
MSW's arguments fail to consider the proper legal standard. This is
clearly indicated in MSW's reply when it argues that "[c]ommon usage of
the terms used by Plaintiff in the complaint would lead any reasonable
reader to the conclusion that plaintiff was an employee of Metropolitan."
This argument is premature and is better suited for a summary judgment
motion. We are not convinced that Pfeifer "can prove no set of facts in
support of his claim which would entitle him to relief." Conley, 355
U.S. at 45-46. It is possible based on the facts provided in the
complaint that Pfeifer qualifies for one of the exceptions to the
definition of "employee" in the IWPCA. Pfeifer is not required to plead
each and every fact in support of his claim. Higgs v. Carter, 286 F.3d 437
439 (7th Cir. 2002). He has pled the operative facts necessary to give
MSW notice of his claim as required. Kyle, 144 F.3d at 444-45.
Since Pfeifer is seeking to invoke this court's jurisdiction he has the
burden of establishing that jurisdiction exists. Adams Street Joint
Venture v. Harte, 231 F. Supp.2d 759, 761 (N.D. Ill. 2002). However,
absent "evidence raising a fact question as to subject matter
jurisdiction, the court's inquiry is limited [to] . . . whether the
complaint's allegations, construed in a light most favorable to the
[plaintiff,] are sufficient to support subject matter jurisdiction." Id.
We note that MSW also has filed a concise motion to dismiss and it
fails to offer any reasoning or facts why Pfeifer does not qualify for
one of the exceptions to the definition of "employee." Although, we are
allowed to consider extraneous evidence and look beyond the complaint in
determining whether or not we have subject matter jurisdiction, United
Transp. Union, 78 F.3d at 1210, neither MSW nor Pfeifer has submitted any
additional information or evidence in regards to the motion to dismiss.
MSW simply maintains that Pfeifer admits to being an employee under the
IWPCA because he used the verb "employed" in his complaint and therefore
we should dismiss the claims against MSW. Not only is such a suggestion
an overly rigid and inequitable application of the law, it is
inconsistent with the legal standard for a motion to dismiss and the
IWPCA itself. In the first two exceptions to the definition of "employee"
the IWPCA makes specific reference to the non-employee's "work" for his
"employer." Thus it is consistent with the IWPCA to state that a
non-employee may be "employed" by his employer without being deemed an
"employee" under the IWPCA. We are not ruling that Pfeifer is an employee
or is not an employee under the IWPCA. We are merely ruling that, at this
juncture, and based on the facts before us, we cannot say that Pfeifer
was an "employee" under the IWPCA and cannot be deemed a sales
representative under ISRA and recover treble damages. Therefore, the
motion to dismiss is denied.
Based on the foregoing analysis we deny the motion to dismiss in its
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