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Turtle Wax, Inc. v. Zymol Enterprises

February 13, 2006

TURTLE WAX, INC. AND TURTLE WAX LIMITED, PLAINTIFFS,
v.
ZYMOL ENTERPRISES, INC. AND CHARLES BENNETT, DEFENDANTS.



The opinion of the court was delivered by: John F. Grady, United States District Judge

MEMORANDUM OPINION

Before the court are four motions. For the reasons explained below, (1) Turtle Wax, Inc.'s motion to dismiss Count XIV of the Counterclaims is granted; (2) Turtle Wax, Inc.'s motion to dismiss Count XIII of the Counterclaims for lack of subject matter jurisdiction is granted; (3) plaintiffs' motion for judgment on the pleadings as to Count XI of the Counterclaims is granted; and (4) plaintiffs' motion to set a briefing schedule on dispositive motions is denied.

BACKGROUND

Plaintiffs Turtle Wax, Inc. ("Turtle Wax"), an Illinois corporation, and Turtle Wax Limited ("TWL"), an English company, bring this suit against Zymol Enterprises, Inc. ("Zymol"), a Connecticut corporation, and Charles Bennett, Zymol's president. Defendants filed multiple counterclaims. The parties' claims arise out of License Agreements and Consulting Agreements they entered into.*fn1 A detailed recital of the underlying facts is unnecessary at this stage of the proceedings; the relevant allegations will be set forth in our discussion infra.

Plaintiffs/counter-defendants have filed motions regarding three of defendants'/counter-plaintiffs' counterclaims. Turtle Wax moves to dismiss Count XIV (state-law conversion) pursuant to Rule 12(b)(6) and to dismiss Count XIII (copyright infringement) pursuant to Rule 12(b)(1). Turtle Wax and TWL also move for judgment on the pleadings as to Count XI (seeking an accounting). In addition, Turtle Wax and TWL move for a briefing schedule to be set on a potential motion for partial summary judgment.

DISCUSSION

A. Count XIV (Conversion)

In Count XIV of the counterclaims, Zymol and Bennett allege that "Turtle Wax willfully and wantonly concealed from Zymol and Bennett the existence of its sales of Zymol products in the People's Republic of China with the intent that Zymol would rely upon the absence of information on such sales and not make inquiry about Turtle Wax's breach of the Turtle Wax License Agreement."

(Counterclaims ¶ 121.) Furthermore, it is alleged that "[a]ny profit earned by Turtle Wax through internet sales is the property of Zymol and Turtle Wax has failed and refused to make payment to Zymol despite the continuing requirement that it do so under the terms of the Turtle Wax License Agreement." (Id. ¶ 122.) According to Zymol and Bennett, as a result of Turtle Wax's "concealment of its sales" on the Chinese Web site and its "failure to pay over to Zymol the profits from those sales," Turtle Wax "converted" those profits and Zymol suffered damages. (Id. ¶ 123.)

Turtle Wax argues that it is black-letter law in Illinois that a claim for conversion lies only for specific chattels wrongfully converted and not for the mere obligation to pay money, citing In re Thebus, 483 N.E.2d 1258, 1261 (Ill. 1985). In Thebus, the Illinois Supreme Court stated:

[T]he subject of conversion is required to be an identifiable object of property of which the plaintiff was wrongfully deprived. Money may be the subject of conversion, but it must be capable of being described as a specific chattel, although it is not necessary for purposes of identification that money should be specifically earmarked. However, an action for the conversion of funds may not be maintained to satisfy a mere obligation to pay money. 483 N.E.2d at 1260. An action for conversion of money, then, may be maintained where "the converted funds are capable of being described, identified, or segregated in a specific manner." Bill Marek's The Competitive Edge, Inc. v. Mickelson Group, Inc., 806 N.E.2d 280, 285 (Ill. App. Ct. 2004).*fn2 "[A] claim of right to an indeterminate sum of money sounds in debt rather than in conversion." 3Com Corp. v. Electronic Recovery Specialists, Inc., 104 F. Supp. 2d 932, 940 (N.D. Ill. 2000) (applying Illinois law).

Here, Zymol and Bennett have simply alleged that pursuant to the License Agreement, Turtle Wax owes them a debt--the profits from sales on the Chinese Web site. They do not allege that they have a right to a specific, identifiable amount of money. Accordingly, they fail to state a claim for conversion under Illinois law, and Count XIV of the counterclaims will be dismissed with prejudice.

B. Count XIII (Copyright Infringement)

In Count XIII of the counterclaims, Zymol alleges that Turtle Wax infringed on its copyright in its "copyrighted materials." Paragraph 56 of the counterclaims describes those materials as follows: "Zymol's internet website, Zymol.com, contains inter alia, an article and accompanying images about the founding of Zymol and the development of its products. Said article and said images ...


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