United States District Court, N.D. Illinois, Eastern Division
December 12, 2005.
APRILE SEAFREIGHT S.P.A Plaintiff,
GLOBAL FREIGHT, INC. and SEBASTIANO UZIELLI DE MARI, Defendants.
The opinion of the court was delivered by: WILLIAM HIBBLER, District Judge
MEMORANDUM OPINION AND ORDER
Aprile Seafreight ("Aprile") filed a nine-count complaint
against Global Freight ("Global") and Sebastiano Uzeilli De Mari
("Uzielli"), in his capacity of director of Global. According to
Aprile, after entering into a contract to arrange transportation
of Global's cargo, Global and Uzielli failed to comply with the
terms of the contract, thus breaching the contract. Further,
Aprile claims that Uzielli acted in a fraudulent manner with
regard to management of Global's assets and its capitalization.
Global and Uzielli have filed a motion to dismiss Counts I, III,
IV, V, and IX against them pursuant to Fed.R.Civ.P. 12(b)(6).
For the reasons stated herein, Global's Motion to Dismiss is
GRANTED in part and DENIED in part.
I. Factual Background
In resolving the motion to dismiss, the Court takes as true the
following facts from the Plaintiff's complaint. Aprile entered
into an agreement with Global, in which Aprile transported or
arranged transportation of cargo from foreign ports to various
U.S. ports on behalf of Global. Pursuant to the agreement, Global
shipped, or otherwise had title to, the cargo. Aprile arranged
and prepaid the freight costs of Global's cargo and then billed
Global for its services. Despite numerous requests for payment
and acknowledgment of the debt, Global refused to remit payment
for Aprile's services pursuant to the contract.
According to Aprile, Defendant Uzielli, the sole shareholder of
Global, maintained absolute control over Global's affairs. As director of Global,
Uzielli operated Global with the intent to defraud Aprile and
other creditors. Uzielli also undercapitalized Global in
furtherance of his scheme to defraud Aprile*fn1 and utilized
Global's assets for his personal benefit. Uzielli had a personal
financial interest in the scheme to defraud Aprile. In short,
Aprile alleges that Defendant Uzielli created and operated Global
solely with the purpose of defrauding third parties and to escape
II. Standard of Review
Motions to dismiss under Rule 12(b)(6) test the sufficiency
of the complaint rather than the merits of the case. Midwest
Gas. Serv. v. Indiana Gas Co., 317 F.3d 703, 714 (7th Cir.
2003). In reviewing a motion to dismiss, a court construes all
allegations in the complaint in the light most favorable to the
plaintiff, taking all well-pleaded facts and allegations within
the complaint as true. Albany Bank & Trust Co. v. Exxon Mobil
Corp., 310 F.3d 969, 971 (7th Cir. 2002). The moving party bears
the burden of showing beyond doubt that the plaintiff can prove
no set of facts in support of his claim that would entitle him to
relief. Conley v. Gibson, 355 U.S. 41, 45, 2 L. Ed. 2d 80,
78 S. Ct. 99 (1957). A complaint is not required to allege all or
any of the facts logically entailed by the claim. Bennet v.
Schmidt, 153 F.3d 516, 518 (7th Cir. 1998).
A. Count I Piercing the Corporate Veil
Defendant argues that Aprile has not alleged sufficient facts
to pierce Global's corporate veil. To pierce Global's veil,
Aprile's complaint alleges that Uzielli exercised absolute
control over Global's affairs and used Global as a cloak for
illegality. Aprile further alleges that Global was an
undercapitalized shell and Uzielli misappropriated Global and
Aprile's funds. Finally, Aprile also alleges that it was an intended victim of Uzielli's
fraudulent actions. Corporate veil claims are analyzed under the
state law. Van Dorn Co. v. Future Chemical & Oil Corp.,
753 F.2d 565, 570-71 (7th Cir. 1995). In order to pierce the
corporate veil under Illinois law, a plaintiff must demonstrate a
"unity of interest and ownership such that the separate
personalities of the corporation and the individual no longer
exist," and circumstances such that "adherence to the fiction of
a separate corporate existence would sanction a fraud, promote
injustice, or promote inequitable consequences." People of the
State of Illinois v. V & M Indus., Inc., 298 Ill. App. 3d 733,
700 N.E.2d 746, 750-51, 233 Ill. Dec. 218 (Ill.App. 1998).
Plaintiff's allegations, if taken as true, may indicate that
Global was undercapitalized and simply functioned as a facade for
the controlling shareholder, Uzielli. Plaintiffs are not required
to allege the specific factual basis for their claim to pierce
the corporate veil. See Liberty Mut. Fire Ins. Co. v. Reimer
Exp. Enterprises, Ltd., 82 F. Supp. 2d 887, 891-92 (N.D. Ill.
2000) (noting that "the specificity sought by defendants" to
justify piercing the corporate veil "is not required under the
notice pleading standard"). Further discovery may ultimately
support or disprove Plaintiffs' allegations, but for present
purposes they include the requisite elements, and are sufficient
to withstand Defendant's motion to dismiss.
B. Count III Unjust Enrichment
Defendant argues that plaintiff's unjust enrichment claim is
barred because an express contract governs their relationship.
Aprile argues that Count III is pled in the alternative to the
breach of contract count is allowed by Fed.R.Civ.P. Rule
8(e)(2). Aprile's argument is not persuasive. A claim for unjust
enrichment is based upon an implied, rather than a specific,
contract. Where a specific contract governs the relationship of
the parties, "the doctrine of unjust enrichment has no
application." People ex rel. Hartigan v. E&E Hauling, Inc.,
153 Ill. 2d 473, 607 N.E.2d 165, 177, 180 Ill. Dec. 271 (Ill. 1992)
(citations and quotations omitted). The Complaint does not
comport with Aprile's alternative pleading theory argument
because Aprile alleges that Global failed to pay Aprile for the
services rendered in accordance with their agreement. While Plaintiff is entitled under Federal Rule of
Civil Procedure 8(e)(2) to plead the alternative claims of breach
of contract and unjust enrichment despite the inconsistency
between those claims, Plaintiff's unjust enrichment claim must
not include allegations of a specific contract governing the
parties relationship. See Vanguard Fin. Serv. Corp. v. R W
Prof'l Leasing Servs. Corp., 1998 U.S. Dist. LEXIS 17449, No. 98
C 1741, 1998 WL 774984, at *4 (N.D. Ill. 1998); Cynthia Cooper
and Rapid Transit Products, Inc., v. Durhan School Services a/k/a
Robinson Bus Services, 2003 U.S. Dist. LEXIS 25005, No. 03 C
2431 (N.D. Ill. 2003). Here, Plaintiff has alleged that the
unjust enrichment is due to Defendant's failure to fulfill
contractual terms. As such, Plaintiff's unjust enrichment claim
must be dismissed without prejudice.
C. Count IV Fraud
The Defendant argues that Aprile's pleadings fail to meet the
level of specificity required under Fed.R.Civ.P. Rule 9(b).
The Court disagrees. In order to meet the requirements of Rule
9(b), a plaintiff must plead the identity of the person making
the misrepresentation and the time, place, and content of the
misrepresentation and the method by which the misrepresentation
was communicated. Uni*Quality, Inc. v. Infotronx, Inc.
974 F.2d 918, 923 (7th Cir. 1992). In other words, a plaintiff must plead
with specificity the who, what, where, and when of the alleged
fraud. Slanley v. Intl. Amateur Athletic Fedn., 244 F.3d 580,
597 (7th Cir. 2001).
Generally, plaintiff's complaint alleges that on several
occasions in 2004 and 2005, Global and Uzielli represented that
Global would pay its outstanding debt, these representations were
known to be untrue, were made to induce Aprile to rely on them,
and that reliance led to substantial injury. In affidavits
attached to Aprile's response to the motion to dismiss an
employee and a former employee of Aprile further specify the
dates and the representations made by Uzielli.*fn2
Specifically, the affidavit of Riccardo Pozzi, an Aprile officer,
indicates that on January 11, 2005, at a meeting in Genoa, Italy, Uzielli stated
that Global would pay all outstanding invoices and wanted to
continue doing business with Aprile. The affidavit of Diego Tari,
former Chief Financial Officer of Aprile, indicates that during a
meeting in Chicago on December 3 and 4, 2004 and in various phone
calls during the first few months of 2005, Uzielli represented
that Global would all outstanding invoices in weekly
installments. Thus, after examination of plaintiff's complaint
and affidavits, this Court finds that Aprile has sufficiently
pled the who, what, when, where, and how.
D. Count V Negligent Misrepresentation
Defendant also seeks to have plaintiff's negligent
misrepresentation claim dismissed. Defendant argues that
plaintiff is precluded from recovery of purely economic losses in
a tort action pursuant to the economic loss doctrine.
Specifically, Global argues that Aprile seeks economic damages in
a specified amount, thus its negligent misrepresentation claim is
not cognizable under the economic loss doctrine because economic
losses are not recoverable in a negligent misrepresentation
claim. See Moorman Mfg. Co. v. Nat'l Tank Co., 91 Ill. 2d 69,
88, 435 N.E.2d 443, 451, 61 Ill. Dec. 746 (1982). "The basic
principle of Moorman is that the type of loss, not the
defendant's conduct, is critical. When only economic loss is
incurred, the plaintiff may only raise contract theories even if
the defendant's alleged conduct constituted a tort as well as a
breach of contract." Federal Deposit Insurance Corp. v. Miller,
781 F. Supp. 1271, 1277 (N.D. Ill. 1991) (quoting Valenti v.
Qualex, Inc., 970 F.2d 363, 369 (7th Cir. 1992). Plaintiffs are
entitled to all reasonable inferences that can be drawn from the
pleadings. Cler v. Illinois Educ. Ass'n, 423 F.3d 726 (7th
Cir. 2005). It is reasonable to believe that plaintiff may seek
damages other than the damages for economic loss.
In order to recover for negligent misrepresentation in
Illinois, a plaintiff must prove that the defendant making the
negligent misrepresentation "is in the business of supplying
information for the guidance of others in their business
transactions." Orix Credit Alliance, Inc. v. Taylor Machine Works, Inc., 125 F.3d 468, 475 (7th Cir.
1997) (citations omitted). Again, Defendant believes that this
claim should be dismissed because plaintiff fails to state that
Global was in the business of supplying information. Plaintiff's
complaint alleges that Global and Uzielli made negligent
representations in their business capacity, upon which plaintiff
relied. Plaintiff further alleges that Global and Uzielli
breached a duty owed to plaintiff. These allegations, which must
be accepted as true for the purposes of this motion, meet the
requirements of Rule 8. Nevertheless, as stated above, plaintiff
does not have to allege all elements of its claim in order to
survive a motion to dismiss. Bennett, 153 F.3d at 518. Although
plaintiff does not allege the specific facts regarding whether
defendant is in the business of supply information, such specific
allegations are not required to satisfy the notice pleading
standing at his juncture. Therefore, Global's motion to dismiss
E. Count IV Failure to Perform Duty as an Officer and
Aprile alleges that Uzielli "failed to perform his duties as an
officer and director of Global," and, in particular, "those
duties in the management and disposition of Global's assets."
Global responds that Aprile lacks standing to bring this claim
and fails to state a claim for which relief can be granted.
Global further argues that Aprile's complaint which charges a
failure to perform duty as an officer and director, is a
distinctly different cause of action than a breach of fiduciary
duty. Therefore, according to the defendant, plaintiff's argument
than an officer or director may owe a fiduciary duty to a
creditor is inapplicable to the instant case. See Dexia Credit
Local v. Rogan, 2003 U.S. Dist. Lexis 18368 (N.D. Ill. 2003). As
reiterated above, plaintiffs are entitled to all reasonable
inferences that can be drawn from the pleadings. Cler v.
Illinois Educ. Ass'n, 423 F.3d at Accordingly, it is reasonable
that plaintiff's complaint, which does charge a breach of
fiduciary duty against Uzielli and Global in Count VII, may
further charge that Uzielli committed a breach of fiduciary duty
in management of Global's assets. Civil Procedure allows a
liberal pleading of claims regardless of consistency of
allegations. See Fed.R.Civ.P. 8(e)(2).*fn3
As a preliminary matter, the Court must determine whether
Seafreight has standing to bring this matter before the Court.
The Court in Dexia held that the question of standing in
fiduciary duty cases hinges upon whether or not the alleged
injury is personal to the individual creditor or one that affects
all creditors alike. Dexia Credit Local, 2003 U.S. Dist. LEXIS
18368 at 17, (citing Steinberg v. Buczynski, 40 F.3d 890, 892
(7th Cir. 1994)). The Court explained that this determination is
fact specific. Dexia Credit Local 2003 U.S. Dist. LEXIS 18368
at 18. "A cause of action is `personal' if the claimant himself
is harmed and no other claimant or creditor has an interest in
the cause." Id. (citing Koch Ref. v. Farmers' Union Cent.
Exch., Inc., 831 F.2d 1339 (7th Cir. 1987). Global argues that
the facts of the instant case are dissimilar to the circumstances
presented in Dexia, in that plaintiff fails to present facts or
statements which reflect that Uzielli misappropriated funds or
engaged in a fraudulent scheme. Nevertheless, plaintiff does not
have to allege all the facts or elements in order to survive a
motion to dismiss. In the instant case, Aprile makes a showing
that its claims are personal. Aprile argues that it was the
intended victim of Global and Uzielli's fraudulent action. It
also alleges that after Global and Uzielli represented that the
outstanding invoices would be paid, it continued to conduct
business with the defendants. These allegations are personal
enough in nature to survive defendant's motion to dismiss,
therefore the Court concludes that Aprile has standing to bring
As a general rule under Illinois law, a corporate officer does
not have a fiduciary duty to the corporation's creditors. See,
e.g., Technic Engineering, Ltd. v. Basic Envirotech, Inc.,
53 F. Supp. 2d 1007, 1010-11 (N.D. Ill. 1999). However, Illinois
does permit a creditor to make a claim against a corporate
officer for breach of fiduciary duty when the officer wrongfully
converts or misappropriates corporate assets and, by doing so,
affects the relation between the corporation and its creditors.
See, e.g., Dexia Credit Local 2003 U.S. Dist. Lexis 18368;
O'Connell v. Pharmaco, Inc., 143 Ill. App. 3d 1061, 1070-71,
493 N.E.2d 1175, 1182, 98 Ill. Dec. 154 (1986); Technic Engineering, Ltd.,
53 F. Supp. 2d at 1011 (holding that officers and directors have a fiduciary duty
to creditors once the corporation becomes insolvent). Plaintiffs
have specifically alleged that Uzielli fraudulently diverted
funds. Plaintiffs also alleged that Uzielli operated Global for
his personal benefit and to escape personal liability. At this
stage of the proceedings, plaintiff is only required to set forth
sufficient facts to place the defendant on notice of the claims,
he is not required to prove his case. Accordingly, the Court
denies Global and Uzielli's motion to dismiss.
IT IS SO ORDERED.
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