The opinion of the court was delivered by: DAVID COAR, District Judge
MEMORANDUM OPINION AND ORDER
Before this court are two motions to dismiss the first amended
complaint of Plaintiff P.H. International Trading Company d/b/a
Hana K. Fashions ("Plaintiff" or "Hana K."). Defendant Christia
Confezioni S.p.A. ("Christia") filed the first motion to dismiss.
Defendants FBLG, Inc. and FBLGINC, Corp. (collectively "FBLG")
filed the second motion to dismiss. For the reasons set forth
below, Defendant Christia's motion to dismiss is GRANTED with
respect to Count VII of the Complaint (violation of the Illinois
Consumer Fraud and Deceptive Business Practices Act), and DENIED
with respect to all other Counts. Additionally, for the reasons
set forth below, Defendant FBLG's motion to dismiss is DENIED. I. FACTUAL BACKGROUND
For the purposes of this motion, the following facts alleged in
Plaintiff's first amended complaint are taken as true.
Plaintiff Hana K. is a New York corporation that conducts
business at its facilities in Glencoe, Illinois. (Am. Compl. ¶
1). Hana K. is in the business of promoting, marketing and
selling high quality outerwear, including shearling lamb fur
coats at the wholesale and retail level. Hana K. is owned by
Pierre and Hana Lang. Defendant Christia is an Italian
corporation with its principal place of business in Italy.
Christia is in the business of manufacturing high-end shearling
coats. (Am. Compl. ¶ 2). Defendant FBLGINC, Corp., a Canadian
corporation located in Canada, is in the business of marketing
and selling outerwear. Leonard Gorski ("Gorski") owns FBLGINC,
Corp., which stands for Furs by Leonard Gorski, Inc. (Am. Compl.
¶ 3). Defendant FBLG, Inc. is a Delaware corporation with its
principal place of business in Wilmington, Delaware. FBLG, Inc.,
however, has held itself out as a Canadian corporation and the
distributor for Christia in North America.*fn1 (Am. Compl. ¶
A. The Contractual Relationship between Hana K. and Christia
On April 21, 1989, Hana K. and Christia entered into a contract
under which Hana K. agreed to become the exclusive North American
distributor of Christia shearling products. (Am. Compl. ¶ 10). In
exchange, Christia became Hana K.'s exclusive supplier of
shearling products. (Am. Compl. ¶ 11). In furtherance of this
exclusive relationship, Hana K. used only Christia's name in conjunction with Hana K's name in every advertisement for
shearling products. Christia encouraged this practice in order to
promote Christia's name and promote Hana K. and Christia as a
team that manufactured and sold only high-quality products
throughout North America. (Am. Compl. ¶ 12). In addition, with
the encouragement of Christia, Hana K.'s business card
incorporated Christia's name and logo. (Am. Compl. ¶ 14).
On May 1, 1995, Hana K. and Christia renewed their contractual
relationship and commitment to exclusivity. Their Distribution
Agreement ("Agreement") expressly provided that Hana K. was the
exclusive distributor of Christia garments in the United States
and Canada (the "Territory") and that Christia would neither
directly nor indirectly sell, transfer, or deliver garments in
the Territory. The Agreement also provided that Hana K. neither
produce nor directly market through intermediaries any products
that are the same, similar to, or in competition with those of
Christia; that Hana K. purchase products from Christia with the
purpose of reselling it in the Territory; and that Hana. K. do
its best to promote the sale of Christia products and display
those products at all the trade-fairs and expositions it
attended. (Am. Compl. ¶ 15).
Under its terms, the Agreement expired after five years.
However, at the time of expiration, the Agreement automatically
renewed for an additional five-year term unless one of the
parties expressly notified the other of its intent not to the
continue the contract for the additional term. (Am. Compl. ¶ 16).
The notice of intent to terminate had to be communicated in
writing to the other party at least six months prior to the
expiration of the initial five-year term. Furthermore, the notice
had to be sent by registered or insured mail, with a return
receipt. (Am. Compl. ¶ 17). The initial term of the 1995 Agreement between Christia and
Hana K. would have expired on April 30, 2000. As such, the
Agreement would automatically renew for an five years unless one
of the parties receive notice to the contrary by October 31,
1999. (Am. Compl. ¶ 18).
In a letter dated and allegedly mailed on October 29, 1999 and
sent from Italy, Christia stated that the contract with Hana K.
was not intended to automatically renew for an additional five
years after the initial five-year term expired. The letter was
dated October 29, 1999, but Hana K. did not receive the letter
until after October 31, 1999. (Am. Compl. ¶ 19).
Subsequent to the letter's receipt, both Christia and Hana K.
continued to perform pursuant to the terms of the 1995 Agreement
for two and one-half years. In fact, in subsequent catalogues,
Christia continued to represent to Hana K. and to the world that
Hana K. was the distributor for Christia in North America.
Furthermore, annual sales of Christia products by Hana K.
increased during this period. (Am. Compl. ¶ 20).
Subsequent to October 29, 1999, Christia pushed Hana K. to
advertise a new line of shearling products, again using
Christia's name in conjunction with Hana K.'s name. In addition,
Christia specifically represented to Hana K. that it would
continue to use Hana K. as Christia's exclusive North American
distributor. Based upon Christia's specific and knowing
representations, Hana K. continued as Christia's exclusive
distributor and Christia continued to perform its obligations
pursuant to the contract. (Am. Compl. ¶ 21).
Subsequent to October 29, 1999, Christia also pushed Hana K. to
advertise, promote, and exhibit Christia products at various
trade shows. For example, in a letter dated January 2002, the
owner of Christia, Francesco Sorio, expressly requested that the
owner of Hana K. market and advertise for Christia: "Dear Pierre
[Lang], [w]ould you please inform us if you're going to do the Fashion Coterie and in which days the fair is. There is an
interesting issue in WWD magazine to put advertising for a good
price." (Am. Compl. ¶ 22).
Subsequent to October 29, 1999, Christia also pushed Hana K. to
purchase more products than Hana K. had purchased in the past.
Hana K. continued to order shearling products from Christia, and
Christia continued to supply shearling products to Hana K. on an
exclusive basis. (Am. Compl. ¶ 23).
B. The Alleged Wrongdoing by Christia and FBLG
On behalf of FBLG, Leonard Gorski contacted Christia on
numerous occasions during the initial five-year term of the 1995
Agreement. He did so in an effort to obtain an exclusive supply
and distribution contract for Christia shearling products. (Am.
Compl. ¶ 24). Gorski also solicited the Hana K. customers who
owned Christia products. (Am. Compl. ¶ 27). At all relevant
times, Gorski and FBLG were aware of the existence of the
exclusive distribution and supply contract between Christia and
Hana K. (Am. Compl. ¶ 26).
Gorski contacted Christia despite his knowledge of the
exclusive contract, and in order to induce Christia to breach its
contractual obligations to Hana K. (Am. Compl. ¶ 24). Despite
Gorski's efforts, Christia refused to contract with Gorski or
FBLG because of Christia's exclusive contract with Hana K. (Am.
Compl. ¶ 25).
The Montreal Fur Fair took place between April 28, 2002 and May
1, 2002. Two weeks before the Fair, Christia informed Hana K.
that Christia would now supply shearling products to Hana K. and
to FBLG. (Am. Compl. ¶ 28). During the Fair, FBLG began acting
as a North American distributor of Christia products by inviting his clients
to buy Christia products. (Am. Compl. ¶ 29).
In May 2002, Lang traveled to Italy to meet with Christia.
Lang's goal was to ensure that the season's orders for Hana K.
were manufactured and shipped in a timely fashion pursuant to
custom, practice, and prior agreement. At that time, Christia
accepted Hana K.'s order. (Am. Compl. ¶ 30). On June 4, 2002,
however, Lang received a facsimile transmission from Christia
stating that the order had been cancelled and the coats would not
be delivered. The facsimile stated that Christia would no longer
honor its exclusive contract with Hana K., and that any future
orders could be filled only by FBLG. (Am. Compl. ¶ 31).
Plaintiff alleges that FBLG approached Christia in an effort to
cause Christia to terminate its contract with Hana K., or
alternatively, interfere with Hana K's business expectancy with
Christia by suggesting that additional benefits would accrue to
Christia if FBLG became the exclusive distributor of Christia
products. (Am. Compl. ¶ 27). Plaintiff also alleges that FBLG and
Christia have signed an exclusive supply and distribution
agreement, despite and in violation of Hana K. and Christia's
exclusive supply and distribution agreement. (Am. Compl. ¶ 33).
Plaintiff maintains that, since FBLG and Christia entered into
an exclusive contract, Plaintiff has been unable to maintain its
previously well-established wholesale business. (Am. Compl. ¶
34). After thirteen consecutive years of representing to its
accounts and customers that Christia products were the finest and
most unique in the world, Plaintiff can no longer supply them.
(Am. Compl. ¶ 35). Plaintiff further maintains that, because it has lost its
wholesale business, it has incurred great costs to secure
substitute supplies of shearling. Plaintiff has been forced to
expend considerable time, effort, and expense in developing its
retail business, and is unable to sell its large inventory of
Christia coats at the retail level at the same margin that it
could have at the wholesale level. (Am. Compl. ¶ 36). Plaintiff
built this large inventory expending a large amount of capital
in so doing in order to maintain its relationship with
Christia. Further, Plaintiff has lost money because FBLG has
drastically underpriced its shearling products. (Am. Compl. ¶
Plaintiff also alleges that it has been forced to enter the
manufacturing business to complete orders for goods that were
placed prior to Christia's termination of its relationship with
Plaintiff. (Am. Compl. ¶ 38).
Plaintiff further alleges that, as the exclusive distributor of
Christia products in the United States, it imparted its
experience and expertise about the American market to Christia.
Christia and FBLG are benefitting from Plaintiff's knowledge to
the detriment of Plaintiff. (Am. Compl. ¶ 39).
Plaintiff also maintains that, after having promoted Christia
as the best manufacturer of shearling in the world, it has lost a
great volume of customers who do not desire to buy alternative
products from Hana K. (Am. Compl. ¶ 40). In addition, much of the
fur coat industry considers Hana K. out of business. This has had
a negative impact of Plaintiff's ability to sell its products.
(Am. Compl. ¶ 41). Finally, Plaintiff maintains that without Christia's name
attached to Hana K's name, Plaintiff has lost both a ...