The opinion of the court was delivered by: WAYNE ANDERSEN, District Judge
MEMORANDUM OPINION AND ORDER
This case is before the Court on the Defendant Southwestern
Bell Mobile Systems, LLC, d/b/a Cingular Wireless' Motion to
Dismiss Counts II, III, and V of the Plaintiff's First Amended
Complaint pursuant to FED. R. CIV. P. 9(b) and 12(b)(6). The
jurisdiction of this Court is based upon 28 U.S.C. § 1332 because
the parties are citizens of different states and the amount in
controversy exceeds the statutory minimum of $75,000, exclusive
of interest and costs. For the following reasons, the Court
grants the Defendant's motion in part and denies it in part.
On or about October 1, 1997, Areawide Cellular, Inc. and the
Defendant's predecessor, Southwestern Bell Mobile Systems, Inc.
d/b/a Cellular One (hereinafter the named Defendant, Southwestern
Bell Mobile Systems, LLC d/b/a Cingular Wireless, and
Southwestern Bell Mobile Systems, Inc. d/b/a Cellular One are
collectively referred to as "Cingular"), entered into an "Authorized Sale and Service
Agreement" ("Agreement") whereby Areawide Cellular, Inc. became a
licensed sales and service dealer of Cingular wireless services.
The parties subsequently amended the Agreement on or around
October 20, 1997, which altered the original payment structure.
The parties operated under the Agreement until April 7, 2003,
when Areawide Cellular, Inc. filed for bankruptcy protection.
Thereafter, AW Acquisition Corp. purchased the assets of Areawide
Cellular, Inc. (hereinafter Areawide Cellular, Inc. and AW
Acquisition Corp. are collectively referred to as "Areawide").
Pursuant to the Agreement, Areawide became a nonexclusive,
authorized agent of Cingular to sell Cingular services. In
particular, Section 3 of the Agreement, which lays out the
parameters of the parties' relationship, states in relevant part:
[Cingular] hereby appoints [Areawide] as a
nonexclusive, authorized agent in the Area to solicit
and contract, on behalf of [Cingular], with
Subscribers for the Authorized Services, subject to
all of the terms and conditions hereof.
During the term of this Agreement or thereafter,
[Cingular] reserves the right without obligation or
liability to [Areawide] to market the Authorized
Services and CPE in the same geographical areas
served by [Areawide], whether through [Cingular's]
own representatives or through others, including, but
not limited to other authorized agents, retailers,
resellers and distributors.
Upon enrollment of a particular Subscriber, that
Subscriber shall become a customer of [Cingular] and
[Cingular] shall offer and furnish such customer
billing services as [Cingular] deems appropriate.
[Cingular] shall be responsible to collect any
charges for Authorized Services from Subscribers.
Furthermore, Section 1 of the Agreement sets forth the following
Authorized Services. Those Services provided by
[Cingular] that [Areawide] is authorized hereunder to
sell on behalf of [Cingular], including CRS and any
other Services set forth on Exhibit A hereto. Cellular Radio Services (CRS). Any and all service
(including resale of said service) authorized by the
Federal Communications Commissions . . .
CPE. The customer premise equipment, including
cellular terminal equipment, that a Subscriber needs
for using CRS and other Authorized Services.
Subscriber. A customer of an Authorized Service
provided by [Cingular]. The CRS telephone number or
other service access number assigned to a customer of
[Cingular's] Authorized Services is deemed to be a
separate Subscriber, regardless of how many CRS
telephone numbers or service access numbers may be
used by one customer.
Accordingly, Areawide agreed to act as Cingular's agent with
respect to the sale of Authorized Services to Subscribers (this
opinion hereinafter refers to the customers to whom Areawide sold
the Cingular Authorized Services as "Areawide-originated
In consideration of Areawide's sales efforts, Cingular agreed
to compensate Areawide under a series of tiered commissions. The
amendment to the Agreement explicitly sets forth the structure of
payment, but it shall suffice for the purposes of this opinion to
note that Areawide was to receive set commissions based upon each
activated Areawide-originated Subscriber and the type of
Authorized Services provided to that subscriber. Furthermore,
Areawide was to receive monthly residual commissions that were,
generally speaking, equal to five percent of the total recurring
base charges and local airtime charges billed by Cingular to
II. Allegations Regarding Cingular's Conduct
Areawide avers that on numerous occasions, Cingular directly
contacted Areawide-originated Subscribers and encouraged those
subscribers to end their relationship with Areawide. Furthermore,
Areawide alleges that Cingular offered to ship cellular telephones directly to Areawide-originated Subscribers
in an effort to induce them to leave Areawide. According to the
complaint, Cingular also attempted to establish a new
relationship with the Areawide-originated Subscribers through its
own internal channels of distribution.
In addition, the complaint claims that beginning in 1998, and
continuing throughout the duration of the Agreement, four
specific Cingular employees falsely represented that Cingular was
selling equipment to Areawide "at cost" and Areawide had access
to the same level of pricing and equipment discounts as
Cingular's internal channels of distribution. Moreover, Areawide
alleges these Cingular personnel falsely represented that
residual commissions paid to Areawide would not be affected when
Cingular sold a replacement phone directly to an
Areawide-originated customer. As set forth in the complaint, the
above-mentioned Cingular employees made these representations to
Areawide either in person or over the telephone.
Areawide further asserts that the Cingular employees knew at
the time that the representations were false and were intended to
prevent Areawide from purchasing cellular equipment from other
providers at a lower cost and to conceal the fact that Cingular
was withholding residual commissions due to Areawide. Based upon
the purportedly false representations, Areawide claims that it
continued to purchase equipment from Cingular and refrained from
purchasing equipment from other sources at lower rates. Moreover,
Areawide asserts that Cingular's allegedly false representations
induced it to refrain from pursuing potential claims for residual
commissions. This reliance was reasonable and justified,
according to Areawide, because Cingular was in a superior
position of knowledge with respect to its own pricing and
residual policies. III. The Counts
Cingular now asks this Court to dismiss Counts II, III, and V.
The disputed counts are summarized as follows: Count II alleges
that Cingular, by contacting Areawide-originated Subscribers,
breached the duty of good faith and fair dealing that is implied
in the parties' Agreement; Count III raises allegations of common
law fraud; and Count V alleges tortious interference with a
prospective economic advantage. At this point in the litigation,
Cingular does not seek the dismissal of Count I (breach of
contract for failure to pay commissions purportedly owed to
Areawide); Count IV (violation of the Illinois Franchise
Disclosure Act); or Count VI (defamation).
When deciding a motion to dismiss, this Court accepts as true
all "well-pleaded factual allegations and view[s] them, along
with the reasonable inferences to be drawn from them, in the
light most favorable to [the plaintiff]." Cornfield v.
Consolidated High School Dist. No. 230, 991 F.2d 1316, 1324 (7th
Cir. 1993). Moreover, under the federal notice pleading
standards, a complaint does not fail to state a claim simply
because it does not set forth a complete and convincing picture
of the purported wrongdoing. American Nurses' Association v.
State of Illinois, 783 F.2d 716, 727 (7th Cir. 1986). At the
same time, this Court is not bound by the legal characterizations
that the plaintiff assigns to the alleged facts. Republic Steel
Corp. v. Pennsylvania Engineering Corp., 785 F.2d 174, 183 (7th
Cir. 1986); Prudential Insurance Co. of America v. Sipula,
776 F.2d 157, 159 (7th Cir. 1985). Furthermore, ...