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Bral Corp. v. CMN Components

May 13, 2008

BRAL CORPORATION, AN OHIO CORPORATION, PLAINTIFF,
v.
CMN COMPONENTS, INC., DEFENDANT.



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

Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiff Bral Corporation has brought a single count complaint against defendant CMN Components, Inc., alleging that defendant tortiously interfered with plaintiff's contract with Johnstown America Corp. ("Johnstown"). Defendant has moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(1), (6), and (7). For the reasons explained below, defendant's motion is denied.

FACTS

Plaintiff Bral is engaged in, among other things, importing metal products used in the railroad industry. Johnstown holds a patent on a MegFlowTM Door System for Coal-Carrying railcars that opens automatically for efficient off-loading of cargo. Johnstown uses the MegFlowTM Door System on its AutoFlood IITM and AutoFlood IIITM Aluminum Hopper Railcars.

Johnstown uses certain castings in its manufacture of the MegFlowTM Door System on the AutoFloodTM Hopper Railcars. On or about May 1, 2004, plaintiff entered into an Exclusive Supply Agreement ("Agreement") with Johnstown under which plaintiff was the exclusive and sole provider of certain castings that Johnstown required in the manufacture of the MegFlowTM System. The Agreement was amended twice. The first amendment, entered on May 10, 2004, gave Johnstown a limited right to develop a relationship with another supplier for post-Agreement purposes. The second amendment, entered December 6, 2004, extended the term of the Agreement to December 31, 2007.

According to the complaint, defendant knew of plaintiff's Agreement with Johnstown and knew the prices at which plaintiff agreed to sell the castings under that Agreement. Despite that knowledge, defendant actively solicited Johnstown to purchase castings from it during the term of the Agreement by offering prices. Johnstown began ordering castings from defendant, which has sold at least 3,884 sets of violating parts to Johnstown from June 2004 through November 2007.

DISCUSSION

The complaint alleges that defendant tortiously interfered with the Agreement by inducing Johnstown to breach by purchasing parts from defendant. Defendant has moved to dismiss arguing that: (1) the claim is premature and not ripe; (2) plaintiff has failed to join a required party under Fed. R. Civ. P. 19; and (3) the complaint fails to state a claim for tortious interference with contract. All three arguments fail.

Defendant first argues that plaintiff's claim is not ripe because plaintiff is currently negotiating with Johnstown to settle plaintiff's potential breach of contract claim. According to defendant, if plaintiff is made whole by that settlement it would have sustained no damage resulting from defendant's actions. Therefore, defendant argues that plaintiff's claim against it is dependent upon the outcome of another lawsuit (plaintiff's potential lawsuit against Johnstown) and cannot come into existence until the action on which it is based is terminated. See Cipa Mfg. v. Allied Golf, 1995 WL 337022 (N.D. Ill. 1995). Defendant is incorrect.

A claim is not ripe when a critical element is contingent or unknown. Marusic Liquors, Inc. v. Daley, 55 F.3d 258, 260 (7th Cir. 1995). The elements of a claim for tortious interference with contract are: (1) the existence of a valid and enforceable contract between the plaintiff and another; (2) the defendant's awareness of the relationship between the plaintiff and another; (3) the defendant's intentional and unjustified inducement of a breach of a contract; (4) a breach of the contract caused by the defendant's wrongful acts; and (5) damage to the plaintiff. Fieldcrest Builders, Inc. v. Antonucci, 311 Ill.App.3d 597, 611 (1st Dist. 1999).

Nothing about plaintiff's claims against defendant rests on any future event that may or may not happen. Plaintiff has pled that Johnstown breached, and as part of its case against defendant will have to prove that Johnstown breached. It does not have to do that in a separate lawsuit against Johnstown. In fact, plaintiff may choose not to sue Johnstown at all, electing simply to proceed against defendant. Whether Johnstown breached between 2004 and 2007 by purchasing castings from defendant, however, is an event that has already occurred, proof of which is not contingent on any other litigation. If, as defendant asserts, plaintiff settles with Johnstown, or sues Johnstown in another court and recovers, then defendant may have a set-off from any damage award plaintiff may get against it. If plaintiff sues Johnstown for breach and loses, then defendant may have a defense against plaintiff's claim. But there is nothing that requires plaintiff to sue Johnstown, and indeed its claim against Johnstown, which sounds in contract, is totally separate from its tort claim against defendant. Accordingly, defendant's motion to dismiss under Fed. R. Civ. P. 12(b)(1) based on ripeness is denied.

Next, defendant argues that the complaint should be dismissed under Fed. R. Civ. P. 12(b)(7) for failure to join a party required under Fed. R. Civ. P. 19(b), which provides in relevant part:

(1) Required Party. A person who is subject to service of process and whose joinder would not deprive the court of subject matter ...


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