Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

P.H. INTERNATIONAL TRADING COMPANY v. CONFEZIONI

September 29, 2005.

P.H. INTERNATIONAL TRADING COMPANY d/b/a HANA K. FASHIONS Plaintiff,
v.
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. ¶ 4).

  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. ¶ 37).

  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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.