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All Star Championship Racing, Inc v. O'reilly Automotive Stores

March 15, 2012


The opinion of the court was delivered by: David G. Bernthal U.S. Magistrate Judge


Thursday, 15 March, 2012 02:56:38 PM

Clerk, U.S. District Court, ILCD


Plaintiff All Star Championship Racing, Inc. has submitted a Motion for Leave to File Amended Complaint and to Reconsider (#35). Defendant has filed Response for Leave to File Amended Complaint and to Reconsider (#37). For the reasons discussed below, the Court hereby GRANTS Plaintiff's motion for leave to file an amended complaint (#35). Though Plaintiff's amended complaint may not satisfy the requirements of diversity jurisdiction, which was the basis of this Court's subject matter jurisdiction, this concern has been rendered irrelevant by Defendant's counter-claim, which has raised a federal question. See 28 U.S.C. § 1331.

The Court issues this written order for the benefit of the parties to clarify confusion resulting from terminology used by the parties and the Court up to this point in the proceedings.

Plaintiff previously filed a complaint seeking to enforce the terms of a written document, purporting to be a three-year contract. Because the document was not signed by Defendant, this Court granted Defendant's motion to dismiss, finding Plaintiff's claim was barred by the statute of frauds. In an order adopting this Court's report and recommendation, Chief Judge McCuskey noted:

Plaintiff is free to file a Motion for Reconsideration of this Order - only if Plaintiff has a legitimate, good faith basis, to amend its complaint in a manner which would have substantial impact on this court's analysis of the enforceability of the three-year sponsorship contract. An example would be that Plaintiff actually found a signed contract for the years in question. Any further argument based on an implied contract theory will be denied . . . . (#34, p. 3). Chief Judge McCuskey then ordered that Plaintiff's original complaint be dismissed with prejudice.

Plaintiff has now filed a proposed amended complaint, relying on different facts and legal theories than the original complaint. Defendant responds that these claims are barred by the court's previous order. This Court grants Plaintiff's motion to amend because it is based on a different legal theory and different facts, and therefore is not barred by the Court's previous order.

Plaintiff's original complaint was based on a theory of "implied contract," and the Plaintiff sought to enforce the terms of a purported three-year sponsorship and promotion agreement, where a written contract containing the terms was not signed by Defendant. As defined in Black's Law Dictionary, an "implied contract" is defined as follows:

An implied contract is one not created or evidenced by the explicit agreement of the parties, but inferred by the law, as a matter of reason and justice from their acts or conduct, the circumstances surrounding the transaction making it a reasonable, or even a necessary, assumption that a contract existed between them by tacit understanding.

BLACK'S LAW DICTIONARY 323 (6th ed. 1990). The concept of an "implied contract" overlaps with the concept of a contract "implied in fact," which is defined as "an agreement, founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in light of the surrounding circumstances, their tacit understanding." Baltimore & Ohio Railroad Co. v. United States, 261 U.S. 592, 597 (1923).

An implied contract is one that may be enforced in law, as opposed to enforced in equity. As this Court previously noted, "[t]he only difference between an implied contract and an express contract is that an express agreement is derived from an actual agreement, either verbal or written, and a contract implied in fact is inferred by consideration of the facts and conduct of the parties." In re Marriage of Bennett, 587 N.E. 2d 577, 580 (Ill. App. Ct. 1992). This Court found that even if there was an implied contract, it would be barred by the statute of frauds, just as an express contract lacking the signature of the party to be charged is unenforceable in this case. (#28). In adopting this Court's Report and Recommendation, Chief Judge McCuskey specified the only circumstances under which the Court would entertain any further consideration of Plaintiff's claim "based on an implied contract theory." (#34, p. 3, fn. 1). In sum, this Court determined that Plaintiff failed to state a claim for any remedy in law, which was the only remedy sought in Plaintiff's original complaint. Stated another way, the Court concluded that there is no legally enforceable contract between these parties.

Plaintiff's proposed amended complaint is based on two distinct legal theories. The first is a theory of quasi-contract, sometimes referred to as a contract "implied in law." This is not a subset of the concept of an "implied contract," but rather an entirely distinct ...

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