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White Pearl Inversions v. Cemusa

March 11, 2009

WHITE PEARL INVERSIONS, A FOREIGN CORPORATION, AND SANLO CORP., A FLORIDA CORPORATION PLAINTIFFS,
v.
CEMUSA, INC., A NEW YORK CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Wayne R. Andersen District Judge

MEMORANDUM OPINION AND ORDER

This case is before the court on the motion of defendant, Cemusa, Inc. ("Cemusa") to dismiss the complaint pursuant to Federal Rules of Civil Procedure 9(b), 12(b)(1) and 12(b)(6). For the reasons set forth below, the motion is granted.

BACKGROUND

Plaintiffs White Pearl Inversions ("White Pearl") and Sanlo Corporation ("Sanlo") originally filed a ten count complaint against Cemusa in the Circuit Court of Cook County. Cemusa then removed the case to this court on November 9, 2007. The dispute in this case involves the payment of commissions by Cemusa to White Pearl and Sanlo for services that the plaintiffs allegedly rendered to Cemusa in order to facilitate Cemusa's successful bid for a contract with the City of New York to build street furniture, including bus stop shelters and public restrooms.

Cemusa is a subsidiary of a Spanish corporation that builds and installs street furniture in the United States. The street furniture typically bears advertising space that is sold to advertisers, which creates a revenue stream for whomever installs it. Winning a bid to install street furniture in any given city is often competitive and involves a certain amount of lobbying. Accordingly, in 2002 and 2003 Cemusa discussed with the plaintiffs a strategy for putting together a successful bid in response to a request for proposal ("RFP") to build street furniture that Cemusa expected the City of New York would issue. Pursuant to those discussions Cemusa entered into an agreement (the "pre-RFP Agreement") with the plaintiffs on March 25, 2003. The relevant portions of the pre-RFP Agreement provide that the plaintiffs would,

(I) In anticipation to the release of the RFP, introduce Cemusa as an important international company operating with the design, manufacture, installation, leasing and management of street furniture in major markets, and as a competent party to provide such services to the City of New York within the same standards practiced by competitors such as J.C. Decaux, Clear Channel and Viacom;

(ii) Provide advice and guidance on the strategy to be adopted by Cemusa, as it relates to the City of New York street furniture market and local government concerns, starting on February, 2003 [sic].

Cmplt., Exh. 1 at p. 2.

The pre-RFP Agreement also provided that Cemusa was obligated to pay White Pearl $240,000 in four installments of $60,000 in exchange for the services listed above. Further, the agreement provided that, if Cemusa decided to present a response to the RFP issued by the City of New York, then the $240,000 "shall be deducted from any compensation owed by Cemusa to White Pearl pursuant to the Master Agreement or any other agreement arising therefrom." Cmplt., Exh. 1 at p. 2-3. The parties do not dispute that Cemusa paid White Pearl the $240,000 for the services White Pearl performed pursuant to the pre-RFP Agreement.

Further, the creation of the Master Agreement referred to in the language of the pre-RFP Agreement set forth above was contemplated by the pre-RFP Agreement, which stated,

In the event a RFP is released, White Pearl and Cemusa agree to act in accordance with the terms and conditions set forth in the Master Consulting Agreement, to be agreed in the near future among White Pearl, Cemusa and Sanlo Corp. ("the Master Agreement"). Cmplt., Exh. 1 at p. 2.

On April 1, 2003, Cemusa, White Pearl, and Sanlo entered into the Master Agreement, which provides that the plaintiffs would continue to assist Cemusa in its efforts to develop a successful bid for the RFP issued by the City of New York. The Master Agreement included a percentage compensation provision, which stated,

Percentage Compensation. The compensation (the "Percentage Compensation") payable to the Consultants, unless otherwise provided in the RFP Agreement, shall be in an amount equal to three and three-fourth percent (3.75%) of the Net Advertising Revenue, as hereinafter defined, received by Cemusa under the applicable Service Contract. Cmplt., Exh. 2. This lawsuit is based on this percentage compensation provision in the Master Agreement. Because Cemusa ultimately won the bid to provide street furniture to the City of New York, White Pearl and Sanlo claim that they are entitled to 3.75% of the value of the contract. Plaintiffs further allege that they have not been paid this amount and that Cemusa has indicated that it has no outstanding obligations to the plaintiffs. Accordingly, plaintiffs filed a ten count complaint which asserts claims for: 1) Breach of Contract; 2) Breach of the Covenant of Good Faith and Fair Dealing; 3) Promissory Estoppel; 4) Common Law Fraud; 5) Equitable Estoppel; 6) Quantum Meruit; 7) Unjust Enrichment; 8) Enforcement of Settlement Agreement; 9) Declaratory Relief; and 10) Accounting.

Cemusa brings the instant motion to dismiss the entirety of plaintiffs' claims because it contends that Cemusa terminated the Master Agreement prior to the issuance of the RFP by the City of New York, as it had a right to do according to the terms of the Master Agreement. Accordingly, Cemusa asserts that the terms of the Master Agreement are of no force and effect and cannot form the basis for plaintiffs' contract claims. Furthermore, Cemusa states, and plaintiffs do not ...


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