United States District Court, N.D. Illinois
April 14, 2004.
ANTHONY CONSTANTINO, Plaintiff,
MORNINGSTAR, INC., LIZ KIRSCHER, DAN WARYCK, and JOSEPH MANSUETO, Defendants
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Anthony Constantino, filed suit against Defendants,
Morningstar, Inc., Liz Kirscher, Dan Waryek, and Joseph Mansueto,
alleging violations of the Illinois Wage Payment and Collection Act, 820
ILCS 115/1 et seq., and common law causes of action, including breach of
contract, tortious interference with contract, fraud, wrongful
termination of employment, and promissory estoppel, Presently pending
before the Court is Defendants' Motion to Dismiss Counts III (fraud) and
V (tortious interference) of Plaintiff's Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6).
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) (Marshall-Mosby). 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). A filing under Federal Rules of
Civil Procedure need not contain all the facts that will be necessary to
prevail. It should be "short and plain," and it suffices if it notifies the defendant of the principal
events. Hopkins v. Poelstra, 320 F.3d 761, 764 (7th Cir. 2003). Dismissal
is warranted only if "it appears beyond a doubt that the plaintiff can
prove no set offsets in support of his claim which would entitle him to
relief." Conley v, Gibson, 355 U.S. 41, 45-46 (L957). The simplified
notice pleading relics upon liberal discovery and summary judgment
motions to define disputed issues and facts and to dispose of
unmeritorious claims. Swierkiewicz, 534 U.S. at 513.
A reading of the Plaintiffs Complaint supports the following summary of
the alleged operative conduct of the parties.
Morningstar is an Illinois corporation; Joseph Mansueto is the
president. In January 2000, Morningstar offered Plaintiff a position as
Reprints Coordinator, with a straight hourly wage. In late 2000,
Morningstar assigned Plaintiff all selling responsibilities for the
Reprints unit, as well as his duties as Reprints Coordinator.
Morningstar, through Plaintiff's supervisor, offered Plaintiff a base
salary and commissions. The supervisor explained that the commissions
would be paid quarterly and would be based on sales ordered by
Morningstar customers versus completed sales. In 2001, Plaintiffs
supervisor advised Plaintiff that he would only receive a commission on a
sale when the customer paid Morningstar. In late 2001, Plaintiff's new
supervisor, Dan Waryek, told Plaintiff his compensation package would be
the same as it had been in 2001, with commissions being paid quarterly;
but. now commissions would again be based on the sales ordered.
Morningstar provided Plaintiff with a copy of the 2002 Incentive Plan,
which included a commission structure providing for a 1% commission on
sales between 0 and $150,000 and 4% for sales over $150,000. Plaintiff
agreed to and accepted the modifications to his pay plan and commission
structure. Later in 2002, Waryek told Plaintiff that he would receive 75% of his commissions
earned for the first quarter, 90% for the second quarter, 110% for the
third quarter, and 125% for the fourth quarter. Plaintiff relied on
Waryck's assurances that Morningstar would pay his commissions in
accordance with this schedule and accepted the modifications. After
receiving 75% of his earned first quarter commissions, Morningstar failed
to pay him 90% of his earned second quarter commissions. In late August
2002, Waryek told Plaintiff that the compensation and commission
structure would not be honored; and Morningstar would pay Plaintiff his
commission if the entire unit met its production goal, Morningstar paid
Plaintiff $2,000, which was below the amount Plaintiff agreed to and
expected he would receive. Plaintiff wrote to Morningstar demanding that
Morningstar abide by its representations, promises and agreement. On or
about November 6, 2002, Morningstar terminated Plaintiff's employment.
Morningstar failed to pay commissions that were earned and owed to the
Plaintiff at the time of the termination.
Plaintiff asserts that the conduct of Morningstar, through its agents
Kirscher and Waryek, constitutes fraud because it made material
representations to Plaintiff which it was aware were false at the time or
were made recklessly without knowledge of the truth and which were
intended to induce Plaintiff to rely thereon, which he did to his
detriment. Further, Plaintiff asserts that Mansueto tortiously interfered
with his contract without justification by directing Morningstar to
withhold payments to Plaintiff.
Defendants argue that Plaintiff's fraud and tortious interference
claims must be dismissed because Plaintiff failed to plead material
allegations sufficient to withstand a motion to dismiss.
Defendants first argue that the tortious interference claim must be
dismissed because it fails to allege that Mansueto interfered with a contractual relationship with a
third party. To establish a claim for tortious interference with
contractual relationship, a plaintiff must prove: (1) the existence of a
valid contract with some other party; (2) the defendant's knowledge of
the contract; (3) an intentional arid unjustified interference by the
defendant that induced or caused a breach of the contract; and (4) damage
to the plaintiff resulting from the interference. Cook v, Winfrey,
141 F.3d 322, 327 (7th Cir. 1998). However there is an exception to the
third-party requirement where a corporate officer, supervisor or
co-worker maliciously misuses his or her powers to cause a discharge, the
officer, supervisor or co-worker may be held liable for tortious
interference. Otterbacher v. Northwestern University, 838 F. Supp. 1256,
1260 (N.D. Ill. 1993); Mustafa v. Illinois Dept. of Public Aid, 1997 WL
194980 (N.D. ILL. 1997),
In Mustafa, the plaintiff alleged that her supervisor and a fellow
employee tortiously interfered with her reasonable expectation of being
promoted and caused the termination of her employment. Mustafa, 1997 WL
194980, at *2. The defendants moved to dismiss the tortious interference
count for failure to state a claim because the supervisor and employee
were agents of the employer and could not have interfered with the
employer's relationship with Mustafa. Mustafa, 1997 WL 194980, at *5, The
court found that "an individual who knowingly and intentionally
communicates false information to another employee in an effort to
terminate a co-worker can be held liable for tortious interference with
contractual relations and/or prospective economic advantage." Mustafa,
1997 WL 194980, at *5,
Here, Plaintiff has asserted that Mansueto, as a corporate officer,
tortiously, maliciously, and with conscious indifference interfered with
the Plaintiff's contract with Morningstar, his employer. Plaintiff has
properly alleged a claim for tortious interference by a corporate officer
with his employment contract. Plaintiffs Complaint satisfies the liberal pleading
requirements of the Federal Rules of Civil Procedure; and, therefore,
Defendants' Motion to Dismiss Count V of Plaintiff's Complaint is
Regarding the Count III fraud claim, Defendants first assert that the
fraud claim should be dismissed because it alleges the same operative
conduct for its contract claim as it does for the fraud claim. However, a
Plaintiff is allowed to plead both breach of contract and fraud when the
fraud was perpetrated to induce a Plaintiff to enter a contract that was
subsequently breached. Byczek v. The Boelter Companies, Inc.,
264 F. Supp.2d 720, 723 (N.D. Ill. 2003). In Byczek, the court denied a
motion to dismiss when claims of fraud and breach of contract were
asserted against the same party in the same complaint. Byczek, 264 F.
Supp.2d at 723. The defendant in Byezek misrepresented his company's
financial condition to the plaintiff; and based on this
misrepresentation, plaintiff entered into a contractual relationship with
the defendant. Byczek, 264 F. Supp.2d at 722. The court allowed the
plaintiff's fraud claim because the plaintiff alleged that the defendant
made fraudulent misrepresentations about the financial status of his
company in order to induce plaintiff to enter into the contract in the
first place, Byczek, 264 F. Supp.2d at 723.
In the instant case, Plaintiff sufficiently pleads that the Defendants'
misrepresentations induced him to enter into an employment agreement and
to continue employment with Morningstar. Therefore, Plaintiff can bring
both a claim for fraud and for breach of contract.
Next, the Defendants argue that the fraud claim does not meet the
pleading requirements of Rule 9(b) of the Federal Rules of Civil
Procedure. To survive a motion to dismiss a fraud claim, Plaintiff must
plead the following elements: (1) that Defendant made a false statement of
material fact, (2) known or believed to be false by the party making it,
(3) with intent to induce the other party to act, (4) action by the other party in reliance on the truth of the
statement, and (5) damage to the Other party resulting from such
reliance, Blair v, Supportkids, Inc., 222 F. Supp.2d 1038, 1042 (N.D.
Ill. 2002). Federal Rule of Civil Procedure 9(b) requires that in any
averment of fraud, the plaintiff must allege the circumstances of fraud
with particularity, although the malice, intent, knowledge, and other
mental condition may be averred generally. Fed.R.Civ. P, 9(b). A
complaint satisfies Rule 9(b) when it asserts the "who, what, where, and
when of the alleged fraud," Circle Group Internet, Inc, v.
Fleishman-Hillard, Inc., 231 F. Supp. 801, 803 (N.D. Ill. 2002),
The Plaintiff sufficiently alleged each element of the fraud and
supplied the "who, what, where, and when" of the alleged fraud.
Plaintiff, therefore, satisfies Rule 9(b) and has pled fraud with
Therefore, the Defendants' Motion to Dismiss Count III of Plaintiff s
Complaint is denied.
For the foregoing reasons, Defendants' Rule 12(b)(6) Motion to Dismiss
Counts HI and V of the Complaint is denied.
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