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Terlato Wine Group, Ltd. v. Walsh

August 24, 2006

TERLATO WINE GROUP, LTD., PLAINTIFF,
v.
MATTHEW M. WALSH, DEFENDANT.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiff Terlato Wine Group, Ltd., brought a two-count amended complaint against defendant Matthew M. Walsh invoking this court's diversity jurisdiction, 28 U.S.C. §1332, alleging fraud and breach of contract. Defendant has moved to dismiss Count I pursuant to Fed. R. Civ. P. Rule 12(b)(6) and for judgment on the pleadings on Count II pursuant to Rule 12(c). For the reasons discussed below, the motion is denied as to Count I and granted as to Count II.

FACTS*fn1

Plaintiff is a privately held Delaware corporation with its principal place of business in Lake Bluff, Illinois. Defendant is an individual and former Chief Financial Officer ("CFO") of a company located in New Jersey and a citizen and resident of the State of New Jersey.

On or about March 1, 2006, defendant interviewed for the position of CFO with plaintiff at plaintiff's Lake Bluff headquarters. Thereafter, defendant traveled to Illinois on several occasions to meet with plaintiff's company executives.

At some point during the interview process, plaintiff informed defendant that it would make him an employment offer provided that plaintiff was defendant's "first choice" as an employer and was not being used as leverage for other job opportunities defendant may have been considering. Defendant represented to plaintiff that the CFO position was his first choice and that plaintiff's job opportunity was not being used as leverage in furthering other potential employers' interests in him. Defendant further represented that he was not using plaintiff's job opportunity as a back-up in case other positions did not become available.

Based on defendant's representations, plaintiff offered defendant the position of CFO. On or about March 17, 2006, plaintiff sent defendant an employment letter agreement ("Agreement"). Among the Agreement's terms, the closing paragraphs provide:

In addition to the conditions set forth above, this offer is contingent upon a favorable result from a pre-employment drug screen and background investigation.In addition, you will be asked to provide proper identification, such as a driver's license and Social Security card, passport or permanent resident card as proof of authorization to work under our country's immigration laws.

Your acceptance of this offer and the terms can be acknowledged by your signature below and by faxing that page to our HR department.It is understood by all parties that this is an at-will relationship and can be ended by either party at any time, and for any reason (subject to the provisions set forth above).

The Agreement also established a start date of May 7, 2006.

Defendant executed the Agreement with his signature on March 20, 2006. According to the complaint, on or about April 10, 2006, defendant "reneged" on the Agreement. In so doing, he informed plaintiff that he did not have another job lined up. The complaint alleges, however, that defendant had earlier informed his Illinois realtor, Carolyn McLaughlin, that he was not going to proceed with his position with plaintiff because he had acquired another job with a company in New York City.

DISCUSSION

Defendant has moved to dismiss Count I pursuant to Rule 12(b)(6), and moved for a judgment on the pleadings on Count II pursuant to Rule 12(c). As an initial matter, plaintiff argues that the court should deny defendant's motion for judgment on the pleadings because the motion was filed before defendant had answered the complaint, and therefore the pleadings were not closed. Although the rule is that a party may move for a Rule 12(c) judgment after the pleadings have closed (i.e. after the parties have filed the complaint and answer), Murray v. Household Bank (SB), N.A., 386 F.Supp.2d 993, 995 (N.D. Ill 2005), the court may convert a Rule 12(c) motion into a Rule 12(b)(6) motion to dismiss where the 12(c) motion is filed prematurely. U.S. ex rel. Bidani v. Lewis, No. 97 C 6502, 2001 WL 1609377, at *4 (N.D. Ill. Dec. 14, 2001) (citing Forseth v. Village of Sussex, 199 F.3d 363, 368 n.6 (7th Cir. 2000)). "The label is of no importance since the same standards apply for both types of motions." Id. The court therefore converts defendant's Rule 12(c) motion to one under Rule 12(b)(6).

The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint, not to rule on its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). When considering the motion, the court accepts the factual allegations as true and draws all reasonable inferences favorable to the plaintiff. Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1428 (7th Cir. 1996). Consideration of a Rule 12(b)(6) motion is restricted to the pleadings, which may include the complaint, any ...


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