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Best Construction, Inc. v. Empire Home Services

December 13, 2005

BEST CONSTRUCTION, INC., PLAINTIFF,
v.
EMPIRE HOME SERVICES, L.L.C., D/B/A EMPIRE TODAY, AND CARPET WORKSHOP, L.L.C., D/B/A CARPET WORKSHOP, DEFENDANTS.



The opinion of the court was delivered by: Murphy, Chief District Judge

MEMORANDUM AND ORDER

This matter came before the Court on December 12, 2005, for a hearing on Defendants' motion to dismiss (Doc. 17). For the reasons set forth on the record and below, the motion is granted in part and denied in part.

BACKGROUND

Best Construction, Inc., filed a first amended class action complaint against Empire Home Services, L.L.C, d/b/a Empire Today ("Empire"), and Carpet Workshop, L.L.C., d/b/a Carpet Workshop ("Carpet Workshop"), on May 20, 2005. Jurisdiction is invoked pursuant to the CLASS ACTION FAIRNESS ACT § 9, Pub. L. No. 109-2 (2005) ("CAFA"): Plaintiff is a Washington state corporation with its principal place of business in Snohomish, Washington; Empire is a limited liability company with three members who are citizens of Illinois and New York; Carpet Workshop is a limited liability company with one member, co-defendant Empire (a citizen of Illinois and New York). The amount in controversy is alleged to be approximately $16,000,000.00, an amount well in excess of the jurisdictional requirement of $5,000,000, exclusive of interest and costs.

According to the allegations of the first amended complaint (see Doc. 7), Empire sells carpeting, flooring, window treatments, and other similar home improvement products direct to the consumer. Empire operates in approximately 23 states and has a presence in most major cities throughout the country.

It is alleged that a consumer who is interested in home improvement contacts Empire either through its website or by phone and then meets with an Empire representative. If the consumer decides to purchase a home improvement product, Empire arranges installation through one of its many independent construction subcontractors. Best Construction is one of these independent construction subcontractors, and it seeks to represent others similarly situated by certifying the following class pursuant to Federal Rule of Civil Procedure 23:

From February 15, 2004 to the date this matter is certified, all subcontractors who had an 'agreement' to provide installation and construction services on a fee for service basis pursuant to a contract with the Defendants wherein its fees were discounted and/or omitted contrary to the agreement and/or wherein it was back-charged for services provided by another contractor.

Excluded from this class are employees, officers and agents of Defendant's [sic] or any subsidiary or affiliate of any Defendant their immediately [sic] family members and any Judge who may preside over this matter. (See Doc. 7, para. 16.)

Best Construction alleges that it (and each subcontractor who falls within the class definition) has a contract with Empire to provide installation in exchange for payment. Best Construction has not attached a copy of the contract to the amended complaint; a copy of the agreement, which is dated January 21, 2004, is attached to the affidavit of Steve Silvers, attached as an exhibit to the memorandum in support of the motion to dismiss (Doc. 18), and the Court considers it as part of the complaint.

Best Construction alleges that Empire and Carpet Workshop have breached this agreement by systematically and wrongfully making reductions and omitting fees or portions of fees for payment that are not allowed under the agreement. (See Doc. 7, para. 13.) Best Construction also seeks damages under the Illinois Consumer Fraud and Deceptive Practices Act and under a theory of unjust enrichment, as well as injunctive and equitable relief.

ANALYSIS

The Court first notes the standard under which it must consider a motion to dismiss for failure to state a claim upon which relief can be granted brought pursuant to Federal Rule of Civil Procedure 12(b)(6). In ruling on a motion to dismiss, a court must take all allegations in a complaint to be true and view them, along with all reasonable inferences to be drawn therefrom, in the light most favorable to the plaintiff. Powe v. City of Chicago, 664 F.2d 639, 642 (7th Cir. 1981). A motion to dismiss is properly granted only if it appears beyond doubt that a plaintiff is unable to prove any set of facts which would entitle him or her to relief. Benson v. Cady, 761 F.2d 335, 338 (7th Cir. 1985) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

Illinois Consumer Fraud and Deceptive Practices Act Claims

The Illinois Consumer Fraud Act defines a consumer as "any person who purchases or contracts for the purchase of merchandise not for resale in the ordinary course of his trade or business but for his use or that of a member of his household." 815 ILCS 505/1(e). The term person includes a corporation, see 815 ILCS 505/1(c), and merchandise includes intangibles and services, see 815 ILCS 505/1(b). Best argues that its contract is for services, "i.e. ability to provide home installation projects," and, therefore, it is a consumer under the statute. Best ...


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