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Burnham Nationwide, Inc. v. Oracle America

January 25, 2012

BURNHAM NATIONWIDE, INC.
v.
ORACLE AMERICA, INC.



Name of Assigned Judge or Magistrate Judge James F. Holderman

Sitting Judge if Other than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT

For the reasons stated in the Statement section of this order, Oracle America, Inc.'s "Motion to Dismiss Pursuant to F.R.C.P. 12(b)(6)" [5] is granted. To the extent Burnham Nationwide, Inc. can plead a claim for breach of contract against Oracle, it is given to and including Feb. 23, 2012 to do so. The case is set for a status hearing at 9:00 AM on March 1, 2012.

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Before the court is Defendant Oracle America, Inc.'s ("Oracle") "Motion to Dismiss Pursuant to F.R.C.P. 12(b)(6)." (Dkt. No. 5 (Def.'s Mot. to Dismiss.)) For the reasons stated herein, the motion is granted.

The instant dispute stems from a failed business relationship between Burnham Nationwide, Inc. ("Burnham") and Hambra Consulting Corp. ("Hambra"). On July 22, 2009, Burnham obtained a $456,397.55 judgment against Hambra in the Circuit Court of Cook County, but has been unable to collect it. Consequently, Burnham brought this lawsuit against Oracle, Hambra's alleged partner, in an effort to do so.

Burnham initially brought this action in the Circuit Court of Cook County, but Oracle properly removed it to this court on the basis of diversity jurisdiction. (Dkt. No. 1.) Burnham's one-count complaint seeks to recover the Hambra judgment from Oracle on the basis of joint and several liability. (Dkt. No. 1, Ex. A (Pl.'s Compl.).)

Burnham's complaint, the allegations of which will be accepted as true for the purposes of this motion, alleges that on May 18, 2006, Oracle entered into a partnership agreement with Hambra to distribute Oracle's programs and services. (Pl.'s Compl. ¶ 5.) Oracle held out Hambra as a partner through written agreements and declarations on its website. (Id. ¶ 6.) Oracle and Hambra continue to hold themselves out as partners, including through statements on their respective websites. (Id. ¶ 7.) In mid-November 2006, Oracle recommended Hambra to Burnham for the installation, implementation, and maintenance of certain software. (Id. ¶ 8.) On Feb. 13, 2007, Burnham purchased software and other services from Hambra based on Oracle's recommendation. (Id. ¶ 9.) Hambra breached its agreement with Burnham, and on May 8, 2008, Burnham filed a demand for arbitration against Hambra based on that breach. (Id. ¶¶ 10, 11.)

In November 2008, arbitration was held pursuant to the AAA Commercial Arbitration Rules and Mediation Procedures. (Id. ¶ 12.) On Jan. 20, 2009, the arbitrator, Jonathan S. Bain, issued an interim award declaring Burnham the prevailing party. (Id. ¶¶ 13, 14, and Ex. A.) On April 16, 2009, Bain issued a final award confirming Burnham as the prevailing party entitled to damages, attorney's fees, and certain other fees and expenses in the amount of $456,397.55. (Id. ¶ 15 and Ex. B.) On May 15, 2009, Burnham filed an application to confirm that award, and on July 22, 2009, a judgment was entered in that amount in the Circuit Court of Cook County. (Id. ¶¶ 16, 17, Ex C.) Burnham initiated collection proceedings against Hambra that have been unsuccessful to date. (Id. ¶¶18, 19.) Burnham contends that pursuant to 805 ILCS 206/308, Oracle is jointly and severally liable to it for the actions of its partner, Hambra. (Id. 23.)

Oracle moves to dismiss on the ground that Burnham is improperly seeking to enforce against Oracle a judgment resulting from proceedings to which Oracle was not a party. (Dkt. No. 7 (Def.'s Mem. in Supp. of Mot. to Dismiss, 1.) Burnham responds that Oracle's objection goes only to the manner in which Burnham must prove its claim. (Dkt. No. 12 (Pl.'s Resp., 1.) However, in light of the fact that Burnham's claim is pleaded as an effort to enforce the Hambra judgment against Oracle, which was not a party to the arbitration proceedings or the judgment, it must be dismissed.

To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain sufficient facts, accepted as true, "to state a claim for relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949--50 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Although a complaint's factual allegations need not be detailed, they must provide more than "labels, conclusions, or formulaic recitations of the elements of a cause of action, and allege enough to raise a right to relief above the speculative level." Ruiz v. Kinsella, 770 F. Supp. 2d 936, 941--42 (N.D. Ill. 2011) (citing Twombly, 550 U.S. at 555).

Burnham's complaint, labeled "Joint and Several Liability on Behalf of Partnership," clearly is an effort to enforce the Hambra judgment against Oracle because of its alleged partnership with Hambra without having to prove the breach of contract in this action. See Pl.'s Compl. ΒΆ 25. This is not appropriate under Illinois law, ...


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