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Harley-Davidson Financial Services, Inc. v. Bank of America

July 31, 2006


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


Plaintiff Harley-Davidson Financial Services, Inc. (HDFS) filed a complaint against Bank of America, N.A. (BOA) for violating the Illinois Trade Secrets Act, 765 ILCS 1065. BOA filed a three-count counterclaim, alleging tortious interference with contract (Count 1), tortious interference with prospective economic advantage (Count 2), and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), 815 ILCS 505/2.

HDFS now seeks to dismiss BOA's counterclaim pursuant to Fed. R. Civ. P. 12(b)(6) and 9(b). For the reasons stated below, the Court grants HDFS' motion to dismiss as to Count 3 but otherwise denies the motion.

Factual Background

For the purposes of a motion to dismiss, the Court accepts as true the following facts from the counterclaim. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). HDFS, a subsidiary of Harley-Davidson, Inc., provides retail and commercial financing and insurance products to dealers and end users of Harley-Davidson motorcycles and other recreational vehicles. Countercl. ¶ 3. In late 2004, BOA, a national banking association, launched a motorcycle financing program through its Dealer Financial Services Group to provide indirect and wholesale lending contracts to Harley-Davidson dealers, offering monetary incentives as an inducement.

Id. ¶¶ 5, 6, 8. After HDFS sued BOA for allegedly acquiring, disclosing, and using HDFS' trade secrets, BOA counterclaimed, alleging that HDFS maliciously engaged in a course of conduct calculated to drive BOA out of the Harley-Davidson dealer and purchaser financing market by interfering with BOA's valid contractual and prospective business relationships. Id. ¶¶ 10-12. More specifically, BOA alleges that HDFS made false statements and misrepresentations to Harley-Davidson dealers and customers that called into question BOA's viability, reliability, intent, and ability to deliver its products and services. Id. ¶ 12(a)-(h); Def.'s Resp. at 3.


A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint, not its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A complaint may not be dismissed for failure to state a claim "unless it appears beyond 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). Though the plaintiff is not required to allege all of the facts involved in the claim and can plead conclusions, Higgs v. Carver, 286 F.3d 437, 439 (7th Cir. 2002), the plaintiff must include enough "operative facts" to provide the defendant with fair notice of its claims. Kyle v. Morton High School, 144 F.3d 448, 454-55 (7th Cir. 1998), Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991).

A. Count 1: Tortious Interference With Contract

HDFS contends that BOA has failed to state a claim for tortious interference with contract. A claim for tortious interference with contract requires (1) the existence of a valid and enforceable contract between the plaintiff and another; (2) the defendant's awareness of this contractual relation; (3) the defendant's intentional and unjustified inducement of a breach of the contract; (4) a subsequent breach by the other, caused by the defendant's wrongful conduct; and (5) damages.

Int'l Marketing, Ltd. v. Archer-Daniels Midland Co., Inc., 192 F.3d 724 (7th Cir. 1999).

BOA sufficiently alleges the five elements in its counterclaim. First, it alleges the existence of valid and enforceable contracts between BOA and Harley-Davidson dealers. Countercl. ¶ 8. Second, it alleges that HDFS knew of these contracts. Id. ¶ 10. Third, BOA alleges that HDFS wrongfully induced Harley-Davidson dealers to cease doing business with BOA under the terms of their contractual relationships with BOA, thereby (fourth) resulting in breach. Id. ¶ 17. Fifth, BOA also alleges that it suffered economic and reputational damage. Id. ¶ 19.

HDFS argues that Count 1 is insufficient because BOA did not specify the contract terms that it says were breached. Such specificity is not required under the notice pleading standard used in federal courts. Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994). HDFS also contends that because BOA's allegations focus on HDFS' alleged inducement of the dealers, not the dealers' alleged breach, BOA did not allege a breach of contract. HDFS argues that a breach cannot be inferred from the complaint; it argues that the court should "'take all well-pleaded facts as true, but [should] not strain to find inferences favorable to the plaintiffs which are not apparent on the face of the complaint.'" Beam v. IPCO Corp., 838 F.2d 242, 245 n.3 (7th Cir. 1988) (quoting Coates v. Ill. State Bd. of Ed., 559 F.2d 445, 447 (7th Cir. 1977)). The contractual breach underlying BOA's claim is, however, readily apparent from the complaint; no straining or stretching is needed to find it. Specifically, BOA alleges in paragraphs 14 and 15 that it had contracts with dealers that it expected to maintain, and it alleges in paragraphs 17 ...

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