United States District Court, N.D. Illinois
March 26, 2004.
CACIQUE, INC. and CACIQUE DISTRIBUTORS, U.S., Plaintiffs
MARIA GONZALEZ and, MARTHA SALAZAR, Defendants, and JOSPEH CANNAROZZI, Defendant-Counterclaimant
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs, Cacique, Inc. and Cacique Distributors, U.S., filed suit
against Defendant-Counterclaimant, Joseph Cannarozzi and Defendants,
Maria Gonzalez and Martha Salazar, alleging misappropriation of trade
secrets. Cannarozzi subsequently filed an Amended Counterclaim, alleging
interference with contractual relations and interference with prospective
economic advantage. The Amended Counterclaim seeks preliminary and
permanent injunctions against the Plaintiffs to enjoin and restrain them
from improperly persuading, inducing or causing any of Cannarozzi &
Company's current and prospective customers to cease doing business with
Cannarozzi and/or Cannarozzi & Company, as well as from disseminating
any damaging or prejudicial information concerning or relating to
Cannarozzi and/or Cannarozzi & Company into the cheese and dairy
products business community/industry, absent a proper factual foundation
for such information.
Presently before the Court is Plaintiffs' Motion to Dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(6). Cacique, Inc. and Cacique
Distributors, U.S. (collectively "Cacique") seek dismissal of
Cannarozzi's Amended Counterclaim.
In reviewing a motion to dismiss, the court reviews all facts alleged
in the complaint and any reasonable inferences drawn therefrom in the
light most favorable to the plaintiff. See Marshall-Mosby v. Corporate
Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). A plaintiff is not
required to plead the facts or the elements of a claim, with the
exceptions found in Federal Rule of Civil Procedure 9. See Swierkiewicz
v. Sorema, 534 U.S. 506, 511 (2002); Walker v. Thompson, 288 F.3d 1005,
1007 (7th Cir. 2002) (Walker). Dismissal is warranted only if "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 (1957). The "suit should not be dismissed if it is
possible to hypothesize facts, consistent with the complaint, that would
make out a claim." Graehling v. Vill. of Lombard, III., 58 F.3d 295, 297
(7th Cir. 1995).
A reading of the Complaint and Amended Counterclaim support the
following summary of the alleged operative conduct of the parties.
Cannarozzi worked for Cacique as a Regional Sales Manager in the
Chicago Area until December 19, 2002, when he voluntarily resigned from
the position. Maria Gonzalez worked as a District Manager for Cacique
until May 2003, when she voluntarily resigned. Martha Salazar was
employed by Cacique as a Product Demonstrator until she was laid off.
Cannarozzi commenced operation of Cannarozzi & Company, a food
brokerage business, in January 2003. Gonzalez and Salazar were employed
by Cannarozzi & Company as lower-level employees. Cannarozzi, via
Cannarozzi & Company, brings suppliers, distributors and customers
together to facilitate sales of dairy/food products. Cannarozzi is
the broker for Tropical Cheese Industries, Inc., ("Tropical") one of
Plaintiff's Complaint alleges that Cannarozzi misappropriated
Plaintiff's trade secrets and will inevitably disclose such alleged trade
secrets to Tropical. In addition, the Complaint alleges that Cannarozzi
misappropriated trade secrets with an intent to utilize the claimed
confidential Cacique trade secret information to promote and sell
Tropical's Hispanic-style dairy products.
In his Amended Counterclaim, Cannarozzi alleges that the Plaintiffs,
through Ernesto Ramirez (Regional Sales Manager for Cacique, Inc.) and
others, have knowingly and maliciously sought to interfere with
Cannarozzi's and Cannarozzi & Company's current contractual relations
and prospective business relations (prospective economic advantage) by
suing Cannarozzi "without merit"; by suing Gonzalez and Salazar and
forcing them to resign from Cannarozzi & Company; and by informing
current customers and prospective customers of the following: (1) that
Cannarozzi was "the enemy"; and (2) that what Cannarozzi had done in the
marketplace was worse than sleeping with Ernesto Ramirez's wife.
Plaintiffs contend that Cannarozzi's Amended Counterclaim should be
dismissed because: (1) tortious interference with contractual relations
and/or prospective economic advantage cannot be alleged based on the
action of filing a lawsuit; (2) identifying Cannarozzi as "the enemy"
states a protected opinion and does not harm Cannarozzi's reputation; and
(3) Ramirez's characterization of Cannarozzi's actions is a protected
A party has no cause of action against a bona fide competitor unless
the circumstances indicate unfair competition, that is, an unprivileged
interference with prospective economic advantage. A-Abart Elec. Supply,
Inc. v. Emerson Elec. Co., 956 F.2d 1399, 1404-05 (7th Cir. 1992).
Illinois courts have adopted the formulation of the Restatement (Second)
of Torts § 768 (1979) in defining unlawful competition. A-Abart Elec.
Supply, Inc., 956 F.2d at 1405. Under the Restatement, if the tort of
interference with prospective economic advantage is alleged, the
defendant may raise and is entitled to the protection of the "privilege"
of competition. A-Abart Elec. Supply, Inc., 956 F.2d at 1404-05. It is a
conditional privilege and is as follows:
"(1) One who intentionally causes a third person not
to enter into a prospective contractual relation with
another . . . does not interfere improperly with the
other's relation if:
(a) the relation concerns a matter involved in the
competition between the actor and the other; and
(b) the actor does not employ wrongful means; and
(c) his action does not create or continue in an
unlawful restraint of trade; and
(d) his purpose is at least in part to advance his
interest in competing with the other." Restatement
(Second) of Torts § 768(1979). (Emphasis added.)
Comment (e) relating to element (c) of this section provides that,
"physical violence, fraud, civil suits and criminal prosecutions, are all
wrongful means in the situation covered by this section." Restatement
(Second) of Torts § 768. (Emphasis added.)
When conduct is privileged, the plaintiff (counter-plaintiff here) must
demonstrate actual malice on the defendant's part to overcome the
conditional privilege and to prevail on the tortious interference claim.
Malice, in interference with contractual relations cases, means that the
interference must have been intentional and unjustified. Stafford v.
Puro, 63 F.3d 1436, 1442 (7th Cir. 1995). The evidence must show that the
defendant acted with a desire to harm unrelated to the interest that the
defendant was presumably seeking to protect Prince v. Zozove,
959 F.2d 1395, 1400 (7th Cir. 1992). Wrongful means adopted to interfere
with the competitive privilege set forth in the Restatement will result
in liability if it involves the threat or institution of groundless
suits in bad faith. Great Escape, Inc. v. Union City Body Co., Inc.,
791 F.2d 532, 542 (7th Cir. 1986); Zenith Electronics Corp. v. Exzec,
Inc., 1997 WL 223067 1, 6 (N.D. Ill. 1997). Bringing a civil suit in bad
faith or with malicious intent is recognized as a "wrongful means" upon
which the competitor's privilege is destroyed and upon which a claim for
tortious interference may be based. Lynchval Sys., Inc. v. Chicago
Consulting Actuaries, Inc., 1998 WL 151814 1, 8-9 (N.D. III. 1998);
Stafford, 63 F.3d at 1442.
Under the Federal Rules of Civil Procedure, claims for relief only
necessitate a pleading setting forth a short and plain statement of the
grounds upon which the court's jurisdiction depends, a short and plain
statement of the claim showing that the pleader is entitled to relief,
and a demand for judgment for relief. Fed.R.Civ.P. 8. "In all averments
of fraud or mistake, the circumstances constituting fraud or mistake
shall be stated with particularity. Malice, intent, knowledge, and other
condition of mind of a person may be averred generally." Fed. R. Civ. P.
Cannarozzi has provided a short and plain statement of his claim,
including a general averment that the Plaintiff's action was brought with
malice. Paragraph 20 of Defendant's counterclaim states, "Plaintiffs,
through, among others, Ernesto Ramirez, have knowingly and ymaliciously
sought to interfere with Cannarozzi's and Cannarozzi & Company's current
contractual relations and prospective business relations by suing
Cannarozzi without merit, by suing Gonzalez and Salazar and forcing them
to resign from Cannarozzi & Company . . ." (Emphasis added.) Paragraph
26 of Defendant's counterclaim states, "Plaintiffs brought their action
with the specific intention to damage Cannarozzi's business, reasonably
believing that Salazar and Gonzalez would likely be forced to resign
their positions with Cannarozzi & Company, and that Cannarozzi,
therefore, would not be able to adequately service his customers."
added.) Cannarozzi has sufficiently pled malicious intent in its
counterclaim to support a claim of tortious interference.
Plaintiffs cite Havoco. of Amer., Ltd. v. Hollobow, stating, "Under
Illinois law, the only cause of action recognized for the wrongful filing
of a lawsuit is one for malicious prosecution or abuse of process."
Havoco. of Amer., Ltd. v. Hollobow, 702 F.2d 643, 647 (7th Cir. 1983).
Havoco. asserted that the defendants filed a groundless lawsuit that was
wholly baseless. Unlike Cannarozzi, Havoco. never alleged malice or
malicious intent in connection with the defendant's filing of the
Plaintiffs also cite Wilton v. Gallagher, which reiterates the
principle that the only cause of action recognized for the wrongful
filing of a lawsuit is one for malicious prosecution or abuse of process.
Unlike Cannarozzi, but similar to Havoco, Wilton never alleged malice or
malicious intent in connection with the defendant's filing of the
Cannarozzi has sufficiently pled a claim for tortious interference with
contractual relations and prospective economic advantage without regard
to the alleged statements by Plaintiffs. Accordingly, it is, therefore,
unnecessary to discuss Plaintiffs' other contentions in support of
dismissing Cannarozzi's Counterclaim.
For the foregoing reasons, Plaintiffs' Motion to Dismiss is denied.
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