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Sweig v. ABM Industries

June 20, 2008

MICHAEL SWEIG, PLAINTIFF,
v.
ABM INDUSTRIES, INC. DEFENDANT.



The opinion of the court was delivered by: Judge Joan H. Lefkow

MEMORANDUM OPINION AND ORDER

Plaintiff, Michael Sweig ("Sweig"), has filed a two-count action for breach of contract and quantum meruit against defendant, ABM Industries, Inc. ("ABM").*fn1 ABM has moved to dismiss Sweig's breach of contract and quantum meruit claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the following reasons, ABM's motion [#6] will be denied.

I. Motion to Dismiss Standard

A motion to dismiss under Rule 12(b)(6) challenges the complaint for failure to state a claim upon which relief may be granted. General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). In ruling on a motion to dismiss, the court accepts as true all well-pleaded facts alleged in the complaint and draws reasonable inferences from those facts in the plaintiff's favor. Dixon v. Page, 291 F.3d 485, 486 (7th Cir. 2002). In order to survive a motion under Rule 12(b)(6), the Seventh Circuit has found that the complaint must provide the defendant with "fair notice of what the . . . claim is and the grounds upon which it rests." EEOC v. Concentra Health Servs., Inc.,496 F.3d 773, 776-77 (7th Cir. 2007) (citing Bell Atl. Corp. v. Twombly, --- U.S. ---, 127 S.Ct. 1955, 1964, 167 L.E.2d 929 (2007)). The allegations in the complaint must also be "enough to raise a right to relief above a speculative level." Twombly, 127 S.Ct. at 1965.

II. Facts*fn2

Sweig is the former chairman and CEO of Lakeside Building and Maintenance and Lakeside Michigan, companies that provided janitorial and facility maintenance services for large-scale facilities. On or about July 12, 2002, ABM acquired substantially all of the assets, business, and goodwill of Sweig's companies, and also entered into a Sales and Marketing Employment Agreement (the "Employment Agreement").

Under the Employment Agreement, Sweig was to perform marketing and sales duties such as maintaining and generating new customer accounts, preserving and building new and existing business relationships, and occasionally carrying out tasks as assigned by ABM's CEO, Henrik C. Slipsager ("Slipsager"). Sweig alleges in his complaint that the "[a]cquisition of companies is a matter unrelated to [his] duties and responsibilities under the [Employment Agreement]." Compl. ¶ 9.

Sweig's claims arise from the prelude to ABM's acquisition of the company, OneSource. In or about the summer of 2005, Slipsager and Sweig had a discussion about the possibility of ABM's acquiring other companies, wherein Sweig recommended OneSource as a potential target. Sweig had a long-standing relationship with the Chairman of OneSource, Lord Michael Ashcroft ("Lord Ashcroft"), and offered to introduce Slipsager to him. During this conversation, he explained to Slipsager that he expected to be compensated if the relationship ultimately resulted in an acquisition. In 2006 and 2007, Slipsager and Sweig again discussed a possible business relationship between the two companies. In or about spring 2007, Slipsager asked Sweig to approach Lord Ashcroft about the possible deal, and Sweig and Slipsager agreed orally at that time that Sweig would be compensated if the deal went through. Sweig then contacted Lord Ashcroft to discuss the possible acquisition. Sweig again told Slipsager that he expected to be compensated if a deal resulted. Slipsager did not disagree. Sweig then reported the information regarding his meeting with Ashcroft to Slipsager, after which Slipsager and Lord Ashcroft discussed the potential acquisition. Following Slipsager and Lord Ashcroft's discussion, Slipsager "assured Sweig that he would receive a one percent (1%) business opportunity fee if the deal closed." Compl. ¶ 17. ABM officially acquired OneSource on October 7, 2007 for $365 million. According to press releases issued by ABM, the company expected to receive "$28 million to $32 million worth of cost synergies" and would realize $14 million in tax cost savings due to the merger. Compl. ¶ 20.

Following the acquisition of OneSource, ABM refused to compensate Sweig in the form of a business opportunity fee, despite their oral agreement, and the present suit ensued.

III. Discussion

ABM has moved to dismiss Sweig's breach of contract claim on the grounds that (1) the oral agreement ("Oral Agreement") to compensate Sweig for his assistance with the OneSource acquisition was covered by the Employment Agreement and, as such, it qualified only as a modification of that contract, which was void under its integration clause; (2) the Oral Agreement is not an enforceable contract because of its indefinite price term; and (3) the Illinois Business Brokers Act, 815 Ill. Comp. Stat. 307/10-1 to 307/99-1, bars Sweig's claims.

A. Argument that Oral Agreement Is Covered by Employment Agreement

ABM has attached the Employment Agreement entered into by ABM and Sweig to its motion to dismiss. The Employment Agreement is properly considered part of the complaint since Sweig refers to it in his pleading, and it is integral to providing the context for the Oral Agreement. See Wright v. Associated Ins. Cos., Inc., 29 F.3d 1244, 1248 (7th Cir. 1994) (citing Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 431 (7th Cir. 1993)). Further, if Sweig's allegations in his complaint conflict with the terms of the Employment Agreement, the court does not have to accept those allegations as true. Jackson Nat'l Life Ins. Co. v. Gofen & Glossberg, Inc., 882 F. Supp. 713, 718 (N.D. Ill. 1995) (citing Graue Mill Dev. Corp. v. Colonial Bank & Trust Co., 927 F.2d 988, 991 (7th Cir. 1991) (finding that the terms of a written contract will prevail over the pleadings)).

In its motion to dismiss, ABM first argues that the Oral Agreement between ABM and Sweig was covered by the parties' Employment Agreement. ABM specifically notes that the Employment Agreement stipulates in the "Duties and Responsibilities" clause (the "Duties Clause") that Sweig "shall be expected to assume and perform such sales and marketing duties and responsibilities as are assigned from time to time by the Chief Executive Officer of the Company to whom [Sweig] shall report and be accountable," and that his sales and marketing duties were to include "without limitation . . . preservation and building of new and existing business relationships of [ABM] and its affiliates." Def.'s Mot. to Dismiss, Ex. 1, at ยง C. This text, ABM contends, indicates that Sweig's interaction with Lord Ashcroft occurred at the direction of Slipsager (and thus was within the terms of the Employment Agreement) and also qualified as building a new business relationship for the company. ABM urges the court to look at the document alone to determine what is meant by "building new business relationships." See Air Safety, Inc. v. Teachers Realty Corp., 706 N.E.2d 882, 884, 185 Ill.2d 457, 236 Ill. Dec. 8 (1999) (noting that Illinois contracts are interpreted according to the "four corners" rule). ABM further argues that the unambiguous language of the document requires that the court dismiss this claim ...


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