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Echo, Inc. v. Timberland Machines & Irrigation

August 26, 2009

ECHO, INCORPORATED, PLAINTIFF/COUNTER-DEFENDANT,
v.
TIMBERLAND MACHINES & IRRIGATION, INC., DEFENDANT/COUNTER-PLAINTIFF,
TIMBERLAND MACHINES & IRRIGATION, INC., PLAINTIFF,
v.
LAWN EQUIPMENT PARTS COMPANY, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Charles P. Kocoras, District Judge

MEMORANDUM OPINION

This matter comes before the court on the motion of Defendant Lawn Equipment Parts Company ("LEPCO") to dismiss three counts of the complaint of Plaintiff Timberland Machines & Irrigation, Inc. ("TMI") for failure to state a claim. Defendant Echo, Inc. ("Echo") moves for an award of attorneys' fees and other expenses incurred in connection with the transfer of this case to our court from the District of Connecticut.

For the reasons set forth below, the motion to dismiss is denied; the motion for attorneys' fees is granted in part and denied in part.

BACKGROUND

Echo is an Illinois manufacturer of outdoor power equipment. In August 2004, TMI, a Connecticut company, contracted with Echo to sell and service Echo's products in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, and New York.

Paragraph 9.9 of the agreement states: This agreement shall be deemed to have been made in the State of Illinois, and shall be construed according to the laws of that state, without regard to choice of law principles. [TMI] consents to the jurisdiction of any court...within the counties of Cook or Lake in the State of Illinois with respect to any legal proceedings arising out of this Agreement...[TMI] shall bring any legal proceeding arising out of this Agreement only in [those courts]. In the event [TMI] institutes any legal proceedings in any other court...it shall assume all of [Echo's] costs in connection therewith, including, but not limited to, reasonable attorneys' fees.

The relationship continued until October 2008, when Echo informed TMI that it was terminating the agreement sixty days thereafter. On December 11, Echo filed suit in this court, alleging that TMI had not paid for goods delivered to it. On Saturday, December 20, the agreement terminated, and LEPCO immediately assumed the sales territory previously held by TMI. The next day, TMI filed the instant complaint in federal court in Connecticut. Against Echo, it asserts statutory and common-law claims; against LEPCO, it asserts tortious interference with contractual relations, unjust enrichment, and violation of the Connecticut Unfair Trade Practices Act ("CUTPA"). Pursuant to a motion filed by Echo and LEPCO under 28 U.S.C. § 1404(a), the Connecticut court transferred the case to this court in April 2009.

LEPCO now moves to dismiss the three counts of the complaint directed at it pursuant to Fed. R. Civ. P. 12(b)(6). Echo moves for $53,759.25 in attorneys' fees and $1,898.73 for other expenses incurred in conjunction with the motion to transfer the case from Connecticut to Illinois.

LEGAL STANDARDS

A. Motion to Dismiss for Failure to State a Claim

Fed. R. Civ. P. 12(b)(6) evaluates the legal sufficiency of a plaintiff's complaint. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In ruling on a motion to dismiss, a court must draw all reasonable inferences in favor of the plaintiff, construe all allegations of a complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). To state a claim on which relief can be granted, a plaintiff must satisfy two conditions: first, the complaint must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon which it rests; and second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level. EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007); see also Ashcroft v. Iqbal, - U.S. -, 129 S.Ct. 1937, 1950 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964-65 (2007). The court will apply the notice-pleading standard on a case-by-case basis to evaluate whether recovery is plausible. Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008).

B. Motion for Attorneys' Fees and Expenses

Under the so-called "American rule," a party to a lawsuit pays its own attorneys' fees. However, a party can be required to pay the fees of its opponent pursuant to a provision of a statute, a rule of procedure, or prior agreement of the parties. See, e.g., 42 U.S.C. ยง 1988; West Lafayette Corp. v. Taft ...


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