United States District Court, N.D. Illinois, Eastern Division
September 29, 2005.
P.H. INTERNATIONAL TRADING COMPANY d/b/a HANA K. FASHIONS Plaintiff,
CHRISTIA CONFEZIONI S.p.A., an Italian corporation and FBLGINC, Corp., a Canadian corporation, and FBLG, Inc., a Delaware corporation, Defendants.
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).
C. Plaintiff's Injuries
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 significant
component of its reputation for selling unique, high-end
shearling products, and good will in the business. (Am. Compl. ¶
Plaintiff's Complaint lists the following counts against
Defendants Christia and FBLG: Breach of contract or, in the
alternative, promissory estoppel against Christia (Counts I and
III, respectively); equitable estoppel against Christia (Count
IV); tortious interference with contract or, in the alternative,
tortious interference with prospective economic advantage against
FBLG (Counts II and V, respectively); common law fraud, violation
of the Illinois Consumer Fraud and Deceptive Business Practices
Act, and constructive fraud against Christia (Counts VI, VII, and
VIII, respectively); in the alternative, quantum meruit against
Christia (Count IX); in the alternative, unjust enrichment
against Christia (Count X); civil conspiracy against Christia and
FBLG (Count XI); and specific performance against Christia (Count
II. STANDARD OF REVIEW
When a Federal Rule of Civil Procedure 12(b)(3) motion to
dismiss for improper venue is based on a forum selection clause,
the plaintiff has the burden of showing that venue is proper.
See M/S Bremem v. Zapata Off-Shore Co., 407 U.S. 1, 18
(1972); Moore v. AT&T Latin America Corp., 177 F. Supp. 2d 785,
788 (N.D. Ill. 2001). The court must resolve factual conflicts in
the parties' submissions in favor of the plaintiff, and may look
to facts outside the complaint to determine whether venue is
proper. See Moore, 177 F. Supp. 2d at 788; National Hydro
Systems v. Summit, 731 F. Supp. 264, 265 (N.D. Ill. 1989)
(citing Deluxe Ice Cream Co. v. R.C.H. Tool Corp.,
726 F. 2d 1209, 1215 (7th Cir. 1984)). A trial court has discretion to dismiss a suit on the grounds
of forum non conveniens if doing so "best serves the
convenience of the parties and the ends of justice." Kamel v.
Hill-Rom Co., 108 F.3d 799, 802 (7th Cir. 1997). Dismissal on
these grounds "will ordinarily be appropriate where trial in the
plaintiff's chosen forum imposes a heavy burden on the defendant
or the court, and where the plaintiff is unable to offer any
specific reasons of convenience supporting his choice." Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 249 (1981). The analysis
has two steps. First, the court must determine whether an
adequate alternative forum is available. Hyatt International
Corp. v. Coco, 302 F.3d 707, 718 (7th Cir. 2002). Second, the
court must balance all relevant public and private factors
related to the proper forum for the litigation. Id. A "certain
deference" typically must be given to the plaintiff's choice of
The purpose of a motion to dismiss for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6) is to test the
sufficiency of the complaint, not to decide the merits of the
case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir.
1990) (citation omitted). On a 12(b)(6) motion, the Court accepts
all well-pleaded allegations in the plaintiff's complaint as
true, Fed.R.Civ.P. (12)(b)(6), and views the allegations in
the light most favorable to the plaintiff. Bontkowski v. First
National Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993). The
Court should not dismiss a complaint "unless it appears beyond
all 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). III. ANALYSIS OF CHRISTIA'S MOTIONS TO DISMISS
Christia asserts three grounds on which to dismiss Plaintiff's
first amended complaint: (1) Improper venue; (2) Forum non
conveniens; and (3) Failure to state a claim upon which relief
can be granted.
A. Improper Venue
Christia argues that the forum selection clause in the
Agreement specifies Italy as the proper venue for disputes
arising out of the Agreement; therefore, venue in the Northern
District of Illinois is improper under Rule 12(b)(3). According
to Christia, the Agreement states "the competent court shall be
the Court of Bassano del Grappa (VI), Italy." (Mem. Supp. of
Def.'s Mot. to Dismiss 4) (emphasis in original). Thus, the forum
selection clause is mandatory.
Plaintiff counters that Christia's argument is based on an
incorrect translation of the Agreement. According to Plaintiff,
the Agreement merely states that "the parties voluntarily accept
the jurisdiction of Bassano del Grappa's Tribunal." (Pl.'s Mem.
Opp. Def.'s Mot. Dismiss 4) (emphasis in original). Thus, the
forum selection clause is not mandatory. Both parties have
attached declarations as to the true translation to their
As stated above, in deciding a motion to dismiss, the Court
must resolve factual conflicts in the parties' submissions in
Plaintiff's favor. See Moore, 177 F. Supp. 2d at 788. Because
the correct translation of the forum selection clause in the
Agreement is a factual conflict, this Court cannot accept
Christia's translation of the Agreement as binding. Consequently,
this Court will not dismiss Plaintiff's Complaint on the grounds
of improper venue. B. Forum Non Conveniens
Christia next argues that, even if this Court determines
Illinois is a proper venue, Illinois is a forum non conveniens.
According to Christia, an adequate alternative forum (Italy) is
available and the balance of the public and private factors
yields the conclusion that Italy, not Illinois, is the proper
forum for this dispute.
As stated above, the first of two steps in a forum non
conveniens analysis asks whether an adequate alternative forum
exists. This inquiry "requires a finding that all the parties are
within the jurisdiction of the alternative forum and are amenable
to process there." Hyatt International Corp., 302 F.3d at 718.
Under either of the Parties' translation of the forum selection
clause in the Agreement (venue "shall be" the Italian court or
the parties "accept the jurisdiction" of the Italian court) it is
clear that both Plaintiff and Defendant are within the
jurisdiction of the Italian court and are amenable to service of
process in Italy.
Still, "if the remedy provided by the alternative forum is so
clearly inadequate or unsatisfactory that it is no remedy at all
. . . the district court may conclude that dismissal would not be
in the interests of justice." Piper v. Reyno, 454 U.S. at 254.
Accordingly, Plaintiff argues that dismissal would not be in the
interest of justice because Plaintiff cannot obtain a remedy from
the Italian courts for "Christia's fraudulent and tortious
conduct, including Christia's violation of the [Illinois Consumer
Fraud and Deceptive Business Practices Act]." (Pl.'s Mem. Opp.
Def.'s Mot. Dismiss 6). While it is true that Plaintiff will be
unable to allege a cause of action based on the Illinois Consumer
Fraud and Deceptive Business Practices Act in Italy, it is not
clear that Plaintiff has no remedy at all should an Italian court
rule in Plaintiff's favor about Christia's conduct. See id.
at 255. Rather, is it clear the Parties voluntarily accepted the jurisdiction of Italy knowing that any number of disputes
could arise between them and could be resolved in Italy. Thus,
this Court determines that Italy is an adequate alternative
forum, and proceeds to the second step of the analysis.
The second step requires the court to balance several private
factors and public factors. Relevant private factors include "the
relative ease of access to sources of proof; the availability of
compulsory process for the attendance of unwilling witnesses; the
cost of having witnesses attend proceedings; and all other
practical problems that make trial of a case easy, efficient and
economical." Kamel v. Hill-Rom Co., 108 F.3d 799, 803 (7th Cir.
1997) (citing Piper v. Reyno, 454 U.S. at 241 n. 6). Relevant
public factors include "the administrative difficulties stemming
from court congestion; the local interest in having localized
disputes decided at home; the interest in having the trial of a
diversity case [in the forum familiar with] the law that must
govern the action; the avoidance of unnecessary problems in
conflict of laws or in the application of foreign law; and the
unfairness of burdening citizens in a unrelated forum with jury
As deciding whether to dismiss a case on the grounds of forum
non conveniens is within the "sound discretion" of this Court,
Piper v. Reyno, 454 U.S. at 257, this Court finds that the
balance of public and private factors weighs in favor of Illinois
as a convenient forum. Plaintiff is located in Illinois. Christia
has traveled to Illinois before for trunks sales and
consultations with Hana K., and has provided translations of the
relevant documents in its pleadings. It does not appear,
therefore, that litigating in Illinois makes attendance and
access to sources of proof and witnesses unduly difficult.
Morever, contrary to Christia's argument, the relationship
between the Parties was as much centered in the United States as
in Italy given Plaintiff's marketing and distribution of Christia products throughout North
America. The Parties' dispute is localized in that Plaintiff
conducts business from its facilities in Glencoe, Illinois.
Additionally, Christia's argument that Illinois is clearly a
forum non conveniens because this Court would have to apply
Italian law, pursuant to the choice of law provision in the
Agreement, in resolving some of Plaintiff's claims is
unpersuasive. This Court often must apply foreign law. Similarly,
Christia argues that Plaintiff previously chose to litigate
issues similar to those in this Complaint in Italy, and therefore
cannot object to Italy as a more convenient forum. The fact that
a party has previously litigated in a foreign forum, without
more, does not constitute a concession that the foreign forum is
convenient for all matters and for all disputes.
In sum, Plaintiff has offered several reasons supporting its
choice of forum. See Piper v. Reyno, 454 U.S. at 249 (stating
that dismissal is appropriate where a plaintiff cannot "offer any
specific reasons of convenience supporting his choice").
Plaintiff's choice of forum in this dispute deserves some
deference, and Christia has not shown that litigating in Illinois
imposes such a heavy burden on it that the Court should refrain
from exercising this deference. Id. at 242, 249. Consequently,
Christia's motion to dismiss the Complaint on the grounds of
forum non conveniens is denied.
C. Failure to State a Claim Upon Which Relief Can be Granted
Finally, Christia argues that each count of the Complaint fails
to state a claim upon which relief can be granted, a Rule
12(b)(6) grounds for dismissal. 1. Counts I and XII
Christia seeks to dismiss Counts I (breach of contract) and XII
(specific performance) by arguing, among other things, that an
Italian court decided the validity of its termination of the
Agreement in Christia's favor in 2002. On a 12(b)(6) motion,
however, the court takes as true all well-pleaded facts in the
complaint. The Complaint did not allege that Christia properly
terminated the Agreement. Nor did the Complaint discuss the
Italian court's decision. Consequently, Christia's motion to
dismiss Counts I and XII is denied.
2. Counts III, IV, VI, VII, VIII, and XI
Christia seeks to dismiss Counts III (promissory estoppel), IV
(equitable estoppel), VI (common law fraud), VII (violation of
the Illinois Consumer Fraud and Deceptive Business Practices
Act), VIII (constructive fraud), and XI (civil conspiracy)
because Plaintiff has not stated a cause of action for estoppel
or fraud. Christia argues that the Complaint only demonstrates
that Defendant made a "vague promise of future conduct" to
Plaintiff. (Mem. in Supp. of Def.'s Mot. to Dismiss 10).
"[P]romissory fraud is actionable [under Illinois law] only if
it either is particularly egregious or . . . embedded in a larger
pattern of deceptions or enticements that reasonably induces
reliance and against which the law ought to provide a remedy."
Desnick v. American Broadcasting Companies, Inc., 44 F.3d 1345,
1354 (7th Cir. 1995). The Parties do not agree whether Christia's
promise is especially egregious promise or embedded in a large
scheme inducing reliance; and case law provides little
assistance. As noted by the Seventh Circuit, "[t]he distinction
between a mere promissory fraud and a scheme of promissory fraud
is elusive, and has caused, to say the least, considerable uncertainty, as
even the Illinois cases acknowledge. Some cases suggest that the
exception has swallowed the rule. . . . Others seem unwilling to
apply the exception." Id. (internal citations omitted).
This Court must square the case law with the well-established
legal principle that a court should not dismiss a cause of action
on the pleadings unless it is clear that no set of facts can be
proved under the pleadings which will entitle the plaintiff the
recovery. Wallingford v. Zenith Radio Corp., 310 F.2d 693,
694-95 (7th Cir. 1962). This is so even though fraud must be
pleaded with particularity under Federal Rule of Civil Procedure
Plaintiff alleges that Christia represented, through words
(letters, statements on its website, requests to market Christia
products at specific times and places) and actions (continued
purchasing and selling on an exclusive basis until the spring of
2002), that it would continue to use Plaintiff as its exclusive
distributor in North America; that these representations were
false because Christia later contracted with FBLG; that Christia
made such knowingly false representations with the intent that
Plaintiff would rely on them and continue to purchase from and
market for Christia; and that Plaintiff reasonably relied on
This Court finds, based on these allegations, there are facts
that Plaintiff could conceivably prove to demonstrate that
Christia's promises were particularly egregious or embedded in a
larger fraudulent scheme. Moreover, taking the allegations as
true, Christia's promise was not as vague as Christia would have
the Court believe. The Complaint alleges that Christia promised
to continue to use Plaintiff as its exclusive distributor.
Christia argues that this promise is vague because it lacks
temporal limitation. (Reply in Supp. of Def's Mot. to Dismiss 8).
The promise, however, is specific in its commitment to an
exclusive relationship with Plaintiff; it was not a vague promise to merely continue to
use Plaintiff. Finally, Christia's argument that it simple
exercised its right to change distributors is inappropriate as
the issue of whether Defendant had this right is in dispute.
Therefore, this Court finds that Plaintiff's allegations
adequately state a claim for promissory fraud under the exception
state above in Desnick. See, e.g., Bensdorf & Johnson, Inc.
v. Northern Telecom, Ltd., 58 F. Supp. 2d 874 (N.D. Ill. 1999)
(recognizing that distributor stated a claim for promissory
fraud). Christia's motion to dismiss Counts III, IV, VI, VII,
VIII, and XI for failure to state a claim is denied.
3. Counts IX and X
In Counts IX (quantum meruit) and X (unjust enrichment),
Plaintiff argues that it provided benefits and services to
Defendant for which Defendant should pay. The "payment" Plaintiff
alleges it was owed at the time is "the exclusivity belonging to
Hana K. under the Distributorship Agreement." (Pl. Mem. in Opp.
to Def's Mot. to Dismiss 13). Christia asserts two grounds for
dismissal of these claims: (1) Plaintiff has not alleged any
wrongful or unconscionable conduct on the part of Christia, which
is a predicate for an unjust enrichment claim; and (2) Plaintiff
is merely complaining that it was not compensated enough, rather
than not at all, since the terms of the Agreement never promised
Plaintiff money for its services above any profit margin
Plaintiff earned from the sale of Christia products.
Christia's first argument is incorrect: Illinois law does not
require proof of a defendant's wrongdoing to sustain a claim for
unjust enrichment or quantum meruit. See Midcoast Aviation,
Inc. v. General Electric Credit Corp., 907 F.2d 732, 738 n. 3
(7th Cir. 1990). Christia's second point ignores the sufficiency of the facts alleged in the
Complaint. Under Illinois law, "The elements of quantum meruit
liability . . . are the performance of services by the plaintiff,
the receipt of the benefit of those services by the defendant,
and the unjustness of the defendant's retention of that benefit
without compensating the plaintiff." Id. at 737. Plaintiff's
complaint alleges that Plaintiff performed distributing,
marketing and advertising services for Christia products. (Am.
Compl. ¶ 99). Further, the Complaint alleges Christia accepted
the benefit of those services. (Am. Compl. ¶ 100). Finally, the
Complaint alleges that it would be inequitable for Christia to
retain the value of those services without payment for that
value. (Id.) These allegations sufficiently state a cause of
action for quantum meruit. Christia's motion to dismiss Count
IX for failure to state a claim is denied.
A plaintiff states a cause of action for unjust enrichment when
a plaintiff alleges that "the defendant has unjustly retained a
benefit to the plaintiff's detriment, and that defendant's
retention of the benefit violates the fundamental principles of
justice, equity, and good conscience." Johnson v. Gudmundsson,
35 F.3d 1104, 1114 (7th Cir. 1994). Plaintiff's Complaint alleges
that Christia has unjustly retained the benefit of Plaintiff's
"marketing, promotional, sales and administrative activities."
(Am. Compl. ¶ 104). Further, the Complaint alleges that Christia
did so by means of conduct that was fraudulent, deceptive,
wrongful or unlawful and that Christia was enriched in excess of
$50,000. (Id.) Thus, detriment to Plaintiff can reasonably be
inferred from this and other allegations in the Complaint. See,
e.g., Pleva v. Norquist, 195 F.3d 905, 911 (7th Cir. 1999)
(stating that 12(b)(6) motions require the court to construe all
inferences in favor of the plaintiff). Finally, the Complaint
alleges that it would be unjust for Christia to receive the
benefit of Plaintiff's activities without paying. (Am. Compl. ¶ 105). These allegations sufficiently state a cause of action for
unjust enrichment. Christia's motion to dismiss Count X for
failure to state a claim is denied.
4. Count VII
Christia seeks to dismiss Count VII because, Christia argues,
Plaintiff has not stated a cause of action under the Illinois
Consumer Fraud and Deceptive Business Practices Act ("Consumer
Fraud Act"). To state a cause of action under the Consumer Fraud
Act, the plaintiff must allege a deceptive act or practice; the
defendant's intent that the plaintiff rely on the deception; and
that the deception occurred in the course of conduct involving a
trade or commerce. Thacker v. Menard, Inc., 105 F.3d 382, 386
(7th Cir. 1997). The Parties agree that claims by
non-consumers*fn2 must also allege that the defendant's
conduct involves trade practices addressed to the market
generally or otherwise implicates consumer protection concerns.
Athey Products Corp. v. Harris Bank Roselle, 89 F.3d 430,
436-37 (7th Cir. 1996).
One of Christia's grounds for dismissing Count VII is that,
even when viewed in the light most favorable to Plaintiff, the
Complaint does not allege that Christia's conduct affected
Illinois consumers. This Court agrees. Plaintiff's complaint
merely asserts that "Christia's conduct involves trade practices
addressed to the market generally or otherwise implicates
consumer protection concerns." (Am. Compl. ¶ 92). Then, Plaintiff
pleads its damages harm to its reputation, lost good will, and
damage to its business. (Id.)
Plaintiff's plea of damages is sufficient. There is "no
requirement that [a] plaintiff plead any special damages other
than damages to `reputation', `business' or `prestige.'" Gadson
v. Newman, 907 F. Supp. 1412, 1421 (C.D. Ill. 1992). See also
Downers Grove Volkswagen, Inc. v. Wigglesworth Imports, Inc.,
190 Ill. App. 3d 524, 534 (Ill.App. Ct. 1989) (rejecting
defendant's argument that plaintiff's allegations of great damage
to its "standing, reputation, prestige, good will and business"
is deficient under the Consumer Fraud Act).
By contrast, Plaintiff's failure to identify which of
Christia's actions impacted consumers, to identify any harm at
all to consumers, or to identify the kind of consumers that have
been harmed is not sufficient. For example, the plaintiff in
Gadson v. Newman, 907 F. Supp. 1412, 1421 (C.D. Ill. 1992),
alleged, in addition to damage to his business, harm to medical
consumers because of defendant's fraudulent practices. In
Downers Grove, 190 Ill. App. 3d at 534, the court held that the
plaintiff had invoked consumer protection concerns where it
alleged that the defendant published false information about
plaintiff's prices to consumers.
Plaintiff's allegations better parallel those of the plaintiff
in Speakers of Sport, Inc. v. ProServ, Inc., 178 F.3d 862, 868
(7th Cir. 1999), where the Seventh Circuit held that the
plaintiff's allegation that defendant lured away a client's
business with fraudulent promises did not implicate consumer
protection concerns. See also Athey Products,
89 F.3d at 436-37 (finding that the defendant "failed to allege the
necessary nexus between the complained of conduct and consumer
protection concerns"); Lake County Grading Co. v. Advanced
Mechanical Contractors, Inc., 654 N.E.2d 1109, 1116 (Ill.App.
Ct. 1995) (finding that there was no inherent consumer interest
in a construction contract between a general contractor and a
subcontractor, and that plaintiff failed to explain how its
particular claim invoked consumer interests).
Plaintiff has failed to state how its claim invokes consumer
interests. In evaluating standing, the Consumer Fraud Act is to
be construed liberally. See Gadson, 907 F. Supp. at 1421 (construing Downers Grove, 190 Ill. App. 3d at 534).
Nonetheless, Plaintiff must do more than simply restate the
standard under the Consumer Fraud Act with no application at all,
general or specific, to its set of facts. From the allegations
presented, this Court cannot draw a reasonable inference in favor
of Plaintiff that Christia's false and misleading acts with
regard to Plaintiff and FBLG implicated consumer protection
concerns. Christia's motion to dismiss Count VII of the Complaint
is therefore granted.
5. Count XI
Finally, Christia seeks to dismiss Count XI (civil conspiracy)
because, it argues, Plaintiff has not identified the unlawful
purpose Defendant and FBLG sought to accomplish, or the unlawful
means they employed.
In a civil conspiracy, two or more persons act in concert to
commit an unlawful act or to commit a lawful act by unlawful
means. Lenard v. Argento, 699 F.2d 874, 882 (7th Cir. 1983).
The principle elements of a civil conspiracy are an agreement
between the parties to inflict wrong or injury on another and an
overt act resulting in damages. Id. A plaintiff does not have
to plead a civil conspiracy claim with particularity. Walker v.
Thompson, 288 F.3d 1005, 1007 (7th Cir. 2002). It is sufficient
to merely indicate the parties, the general purpose, and the
approximate date, so that the defendant is on notice of the
Plaintiff has alleged that two parties, Christia and FBLG,
acted in concert to commit the unlawful act of tortiously
interfering with Plaintiff's business relationship and contract
with Christia. Further, Plaintiff has alleged that Christia and
FBLG agreed to form, and made the overt act of forming, a
contract to replace Plaintiff as the exclusive distributor of
Christia's products in North America. Count XI incorporates by reference the
allegations in the Complaint that states dates from which this
Court can draw a reasonable inference as to when the alleged
civil conspiracy took place. Thus, under the liberal pleading
standard outlined above, Plaintiff has stated a claim for civil
conspiracy. Christia's motion to dismiss Count XI is denied.
III. ANALYSIS OF FBLG'S MOTION TO DISMISS
FBLG seeks to dismiss Counts II (tortious interference with a
contractual relationship), V (tortious interference with
prospective economic advantage), and XI (civil conspiracy) of the
Complaint for failure to state a claim upon which relief can be
granted pursuant to Federal Rule of Civil Procedure 12(b)(6).
A. Count II
FBLG seeks to dismiss Count II because it "it is legally
impossible for FBLG to have interfered with a contract that did
not exist." (Mem. in Supp. of Def's Mot. to Dismiss 1). FBLG
argues that Plaintiff's complaint concedes that Christia properly
terminated its contract with Plaintiff on October 29, 1999.
Therefore, FBLG could not have interfered with an existing
contract when it became Christia's exclusive distributor in 2002.
FBLG's argument ignores factual allegations in Plaintiff's
complaint, which are taken as true for the purposes of a 12(b)(6)
motion. The Complaint does not admit that Plaintiff's contract
with Christia was properly terminated at the time that FBLG began
to market and distribute Christia products. Each of FBLG's
statements to the contrary in its motion to dismiss, including its arguments about the Italian court's judgment in
2002 and Plaintiff's attempt to allege breach of an oral
contract, must be disregarded as a matter of law.
Furthermore, Plaintiff has sufficiently alleged tortious
inference with contract. Plaintiff has stated that: (1) A valid
and enforceable contract existed between Plaintiff and another
party, here Christia; (2) FBLG was aware of the contractual
relationship; (3) FBLG was unjustified in intentionally inducing
Christia to breach its contract; (4) Christia subsequently
breached its contract because of FBLG's inducement; and (5)
Plaintiff has suffered damages. See Williams v. Shell Oil,
18 F.3d 396, 402 (7th Cir. 1994).
Because it does not appear beyond all doubt that Plaintiff
cannot prove a set of facts to support its claim in Count II, the
Court cannot dismiss the claim. FBLG's motion to dismiss Count II
B. Count V
FBLG seeks to dismiss Count V (tortious interference with
prospective economic advantage) because, it argues, (a) Plaintiff
cannot show that it had a reasonable expectation of a continuing
business relationship with Christia and (b) even if it can,
competitors like FBLG are privileged to interfere with
Plaintiff's business relationships.
Plaintiff has stated a cause of action for tortious
interference with prospective economic advantage. The Complaint
alleges that: (1) Plaintiff had a reasonable expectation of
continuing a valid business relationship with Christia; (2) FBLG
knew of Plaintiff's expectancy; (3) FBLG's purposeful
interference prevented Plaintiff's legitimate expectancy from
being fulfilled; and (4) Plaintiff has been damaged as a result
of FBLG's interference. Delloma Consolidation Coal Co., 996 F.2d 168, 170-71 (7th Cir. 1993). Delloma further states
that, "if the defendant's interference is privileged, the
plaintiff bears the burden of proving that the defendant's
conduct was malicious," meaning "intentional? and without
justification." Id. at 171. Accordingly, Plaintiff has also
alleged that FBLG "intentionally and improperly" interfered with
Plaintiff's expectancy, and acted with malice. (Am. Compl. ¶¶ 74,
The Court finds that the facts alleged in the Complaint, taken
as true, are sufficient to show that Plaintiff had a reasonable
expectation that its business relationship with Christia would
continue. See, e.g., Am. Compl. ¶¶ 20-23. FBLG argues the
contrary by insisting that Plaintiff knew it no longer had a
contract with Christia after October 29, 1999. This argument
ignores the facts pleaded in the Complaint and, therefore, will
be disregarded. Moreover, FBLG's argument that it was privileged
to interfere with Plaintiff's business relationship is an
affirmative defense. See Cromeens, Holloman, Sibert, Inc. v.
AB Volvo, 349 F.3d 376, 398-399 (7th Cir. 2003) (recognizing
that courts characterize privilege as an affirmative defense);
Delloma, 996 F.2d at 170 (referring to privilege as an
affirmative defense). Affirmative defenses like privilege are not
properly raised in a motion to dismiss. See Fed.R.Civ.P.
Rule 8(c) (noting the affirmative defenses may be raised in a
"pleading to a preceding pleading"); Haven v. Polska,
215 F.3d 727, 732 (7th Cir. 2000) ("A motion to dismiss is not a
Because Plaintiff has stated a claim for tortious interference
with prospective economic advantage, FBLG's motion to dismiss
Count V is denied. C. Count XI
FBLG's motion to dismiss Count XI (civil conspiracy) is denied
for the same reasons this Court denied Christia's motion to
dismiss Count XI.
For the foregoing reasons, 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. FBLG's motion
to dismiss is DENIED.
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