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Apps Communcations, Inc. v. S2000

August 3, 2010


The opinion of the court was delivered by: Judge Blanche M. Manning


According to Apps Communications, Inc., S2000, Corporation failed to pay certain invoices for information technology services which Apps rendered, so Apps filed suit against S2000 and its chief executive officer, Joseph Sforzo. S2000 and Sforzo have moved to dismiss certain counts of the First Amended Complaint ("FAC") and to temporarily stay this action due to another related action filed first in the Eastern District of New York. For the following reasons, S2000's motion to dismiss is denied in part and granted in part, and Sforzo's motion to dismiss is granted. In addition, the defendants' motion to temporarily stay this action is denied.


Apps is a telecommunications and internet technology firm which provided information technology services to S2000. Apps sent monthly invoices to S2000, but Apps alleges that S2000 failed to pay for services in the amount of $241,085.03. Apps filed suit against S2000 alleging breach of contract, unjust enrichment, fraud, and account stated. Additionally, Apps brought a breach of a fiduciary duty claim against S2000's chief executive officer, Joseph Sforzo. S2000 has moved to dismiss Apps' unjust enrichment and fraud claims based on Federal Rules of Civil Procedure 12(b)(6) for failure to state a claim. In addition, Sforzo has moved to dismiss the breach of fiduciary duty claim based on Rule 12(b)(2) for lack of personal jurisdiction and Rule 12(b)(6) for failure to state a claim.


A. Unjust Enrichment and Fraud-Rule 12(b)(6)

1. Standard of Review

A complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). However, a complaint must contain "enough facts to state a claim to relief that is plausible on its face" and also must state sufficient facts to raise a plaintiff's right to relief above the speculative level. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 547, 570 (2007). In Iqbal , the Supreme Court stated that a claim has facial plausibility "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 129 S.Ct. 1937, 1949 (2009). The Seventh Circuit has recently synthesized the relevant Supreme Court caselaw regarding Rule 12(b)(6) as follows:

So, what do we take away from Twombly , Erickson , and Iqbal ? First, a plaintiff must provide notice to defendants of her claims. Second, courts must accept a plaintiff's factual allegations as true, but some factual allegations will be so sketchy or implausible that they fail to provide sufficient notice to defendants of the plaintiff's claim. Third, in considering the plaintiff's factual allegations, courts should not accept as adequate abstract recitations of the elements of a cause of action or conclusory legal statements.

Brooks v. Ross , 578 F.3d 574, 581 (7th Cir. 2009). That being said, "in examining the facts and matching them up with the stated legal claims, we give 'the plaintiff the benefit of imagination, so long as the hypotheses are consistent with the complaint.'" Bissessur v. Ind. Univ. Br. Of Tr. , 581 F.3d 599, 603 (7th Cir. 2009). In addition, the court should also take into consideration the complexity of the case when addressing whether a complaint alleges sufficient facts. See Limestone Dev. Corp. v. Vill. of Lemon, Ill. , 520 F.3d 797, 803 (7th Cir. 2008) (amount of factual allegations required to state a plausible claim "will depend on the type of case" and "[i]n a complex antitrust or RICO case a fuller set of factual allegations than found in the sample complaints in the civil rules' Appendix of Forms may be necessary").

Finally, on a motion to dismiss under Rule 12(b)(6), the court accepts the allegations in the complaint as true, viewing all facts, as well as any inferences reasonably drawn therefrom, in the light most favorable to the plaintiff. See Marshall-Mosby v. Corporate Receivables, Inc. , 205 F.3d 323, 326 (7th Cir. 2000).

2. Unjust Enrichment (Count II)

S2000 asserts that Apps' unjust enrichment count must be dismissed because Apps has alleged a breach of contract count and, therefore, unjust enrichment is unavailable. Nesby v. Country Mut. Ins. Co. , 805 N.E.2d 241, 243 (Ill. App. Ct. 2004)("Where there is a specific contract that governs the relationship of the parties, the doctrine of unjust enrichment has no application."). "However, at this stage [Apps] is permitted to plead in the alternative claims of breach of contract and equitable theories premised on the lack of a binding contract." Reis Robotics USA, Inc. v. Concept Industries, Inc ., 462 F. Supp. 2d 897, 913 (N.D. Ill. 2006)(citing Rule 8(e)(2)); Hawthorne Partners v. AT&T Tech ., 831 F. Supp. 1398, 1406 (N.D. Ill. 1993). S2000 acknowledges that Apps may plead in the alternative but argues that Apps cannot include allegations regarding the existence of a contract that governs the parties' relationship in its count for unjust enrichment. Sharrow Group v. Zausa Development Corp ., No. 04 C 6379, 2004 WL 2806193, at *3 (N.D. Ill. Dec. 6, 2004)("[W]hile plaintiff may plead breach of contract in one count and unjust enrichment and promissory estoppel in others, it may not include allegations of an express contract, which governs the relationship of the parties, in the counts for unjust enrichment and promissory estoppel")(citations omitted).

In its unjust enrichment count, Apps does include previously pled allegations which discuss an alleged agreement with S2000. However, the court construes such allegations as simply providing background. Apps is not seeking double recovery under both breach of contract and unjust enrichment; rather, any relief would be in the alternative. Reis Robotics , 462 F. Supp. 2d at 913 ("If the contract is held to be invalid due to fraud or for some other reason, [Apps] may be able to recover under one of its equitable theories. Of course, [Apps] may not recover under both its contract-based and equitable theories, but that is not a concern at this stage of the proceedings.")(internal citation omitted). In this case, the court is not willing to place form over ...

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