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Resource Financial Corp. v. Interpublic Group of Companies

October 21, 2008

RESOURCE FINANCIAL CORP., PLAINTIFF,
v.
THE INTERPUBLIC GROUP OF COMPANIES, INC., AKRAM MIKNAS, AND FADI SALAMEH, DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER

Plaintiff Resource Financial Corp. (RFC) has sued The Interpublic Group of Companies, Inc. (IGC) for tortious interference with a contractual relationship. IGC has moved to dismiss RFC's claims. In the alternative, IGC requests that the Court stay proceeding on RFC's claim pending the outcome of a related arbitration between RFC and Akram Miknas and Fadi Salameh before the London Court of International Arbitration. For the reasons set forth below, the Court grants the motion to dismiss.

Facts

When considering a motion to dismiss, the Court accepts as true the complaint's factual allegations and draws reasonable inferences in favor of the plaintiff. See, e.g., Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 617 (7th Cir. 2007). The Court treats exhibits to a complaint as part of the complaint. Fed. R. Civ. P. 10(c).

In 2007, IGC owned 19.9% of a company, MCN. The rest of MCN was owned by two individuals, Miknas and Salameh. Miknas and Salameh entered into a contract with RFC dated January 28, 2008, under which Miknas and Salameh, along with a tobe-determined third party, would acquire a 100% interest in MCN (the Contract). The Contract is attached to RFC's amended complaint as Exhibit A. The prefatory language to the Contract states that RFC would "act in a financial advisory and investment banking capacity to assist Akram Miknas, Fadi Salameh and a third party investor . . . in acquiring 100% of the issued and outstanding stock of [MCN]." Am. Compl. Ex. A at 1 (emphasis added). Under the Contract, RFC was the exclusive agent for the purposes set forth in the Contract, including "Developing a valuation and deal structure for purposes of acquiring MCN." Id. at 2 (emphasis added).

When entering the Contract, RFC was aware that IGC had a right of first refusal regarding any direct sale by Miknas or Salameh of their MCN stock. To get around this problem and to maximize the sale price of MCN, the Contract appeared to envision a situation where a new company, P7, would purchase 100% of MCN's stock. In return, Miknas and Salameh agreed to pay RFC a monthly retainer and a success fee based on the final value of P7's purchase of MCN and how much of P7 Miknas and Salameh owned. The Contract is silent regarding the possibility of a direct sale of stock by Miknas and Salameh to IGC.

After the Contract was executed, RFC began to perform its obligations by soliciting potential investors for the acquisition of MCN. About that time, IGC made an offer to purchase MCN valued at $200 million. That offer was rejected, and RFC prepared a term sheet valuing MCN at $250 million. RFC provided the term sheet to IGC at Salameh's request. IGC then instructed Miknas and Salameh that it did not want RFC to be part of any further meetings with IGC and instructed them not to talk with RFC. After these instructions, Miknas and Salameh would not respond to communications from RFC, and RFC was excluded from any further negotiations. Eventually a deal was closed between Miknas, Salameh and IGC that valued MCN at $250 million.

RFC alleges that IGC was aware of the terms of the Contract. RFC also alleges that "Salameh and Miknas breached the Agreement by entering into the IPG deal with IPG directly and intentionally excluding RFC from the negotiations, structuring, financing and finalization of the IPG Deal." Am. Compl. ¶ 30.

Discussion

The Seventh Circuit has emphasized that, even after the Supreme Court's ruling in Bell Atlantic Corp. v. Twombly, --- U.S. ---, 127 S.Ct. 1955 (2007), federal courts continue to adhere to a notice-pleading standard. E.g., Tamayo v. Blagojevich, 526 F.3d 1074, 1083-83 (7th Cir. 2008). "A plaintiff must still provide only enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests. . . ." Id. at 1083 (quotation omitted). To succeed on a claim for tortious interference with contract, a plaintiff must show:

(1) the existence of a valid, enforceable contract between the plaintiff and a third party; (2) defendant's knowledge of that contract; (3) defendant's intentional and unjustified inducement of the third party to breach the contract; (4) occurrence of a breach resulting from defendant's conduct; (5) damages. . . .

Guice v. Sentinel Techs., Inc., 294 Ill. App. 3d 97, 102, 689 N.E.2d 355, 359 (1997).*fn1

IGC argues that RFC has not sufficiently alleged elements ...


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