United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
THOMAS M. DURKIN, District Judge.
Royal Adhesives and Sealants, LLC ("Royal"), alleges that Advanced Manufacturing Technologies, Inc. ("AMT"), and AMT's sole-shareholder, John Affourtit (AMT and Affourtit collectively, "Defendants"), fraudulently sold Royal a piece of equipment known as an E-Beam, in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. (Count I), and Illinois common law, including claims of fraud (Count II), promissory estoppel (Count III), and money had and received (Count IV). See R. 1. Royal also labels its allegations that Affourtit should be held liable for the actions of AMT as "Count V" of its complaint. See id. Defendants have moved to dismiss all counts for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 23. For the following reasons, Defendants' motion is granted.
In October 2012, Royal entered into discussions with Affourtit to purchase an E-Beam. R. 1 ¶ 6. AMT sent Royal a document labeled "quotation, " which offered a "COMET ADTS 70/180 KV E-Beam Laboratory Test System, " for $165, 000, paid in installments of "25% with Purchase Order, 70% with shipment confirmation, 5% after start up & acceptance-net 30 days." R. 1-1. The quotation document also describes Affourtit as a "salesperson." Id. Royal alleges that Affourtit was the sole-shareholder of AMT, and that he falsely told Royal that he had earned a PhD, was an expert in E-Beam technology, and was an authorized representative of the COMET Group. R. 1 ¶¶ 9-10. Based on the quotation document and Affourtit's representations, Royal decided to purchase the "COMET ADTS 70/180 KV E-Beam Laboratory Test System." Id. ¶ 11.
On November 5, 2012, AMT sent Royal an invoice for a "COMET ADTS 70/180 KV E-Beam Laboratory Test System, " requiring payment of $41, 240, i.e., the first installment of 25% of the $165, 000 purchase price. R. 1-2. Royal paid this amount to AMT on or about November 15, 2012. R. 1 ¶ 14.
On January 21, 2013, AMT sent Royal another invoice requiring payment of $117, 277, i.e., the second installment of 70% of the purchase price plus $1, 777.37 in shipping costs. R. 1-3. Unlike the quotation document and the November 5 invoice, the January 21 invoice described the equipment as an "E-Beam 70/180 KV E-Beam Laboratory Test System, " as opposed to a "COMET ADTS 70/180 KV E-Beam Laboratory Test System." Id. Royal paid this amount to AMT on or about January 24, 2013. R. 1 ¶ 17.
Royal alleges that on or about February 14, 2013, Defendants delivered a piece of equipment that was not a "COMET ADTS 70/180 KV E-Beam Laboratory Test System." Id. ¶ 18. The equipment Royal received was not manufactured by the COMET Group and was "missing critical components making the equipment useless to Royal." Id.
Royal notified AMT and Affourtit that the wrong piece of equipment had been delivered, and requested immediate delivery of the "COMET ADTS 70/180 KV E-Beam Laboratory Test System" or refund of Royal's money. Id. ¶ 20. Defendants did not comply with Royal's request. Id. ¶ 21.
A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief, " Fed.R.Civ.P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. The complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). "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.'" Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.
I. Count V - Affourtit's Liability
Royal alleges that Affourtit is personally liable for the four substantive counts of its complaint, and Royal reiterates this allegation in "Count V" in which it asks the Court to "pierc[e] the corporate veil." See R. 1. Defendants argue that the complaint "fails completely in making any substantive factual allegations against John Affourtit in his individual capacity, " R. 24 at 4, and that Royal "pleads only... conclusory statements in support of its piercing the corporate veil count." Id. at 6.
Under Illinois law, "a corporation as a legal entity exists separately from its shareholders, directors, and officers, who are not ordinarily liable for the corporation's liabilities." Forsythe v. Clark USA, Inc., 836 N.E.2d 850, 854 (Ill.App.Ct. 1st Dist. 2005), aff'd 864 N.E.2d 227 (Ill. 2007). However, a party may "pierce the corporate veil" and assert a claim against an individual "when an individual or entity uses a corporation merely as an instrumentality to conduct that person's or entity's business.'" Laborers' Pension Fund v. Lay-Corn, Inc., 580 F.3d 602, 610 (7th Cir. 2009) (quoting Fontana v. TLD Builders, Inc., 840 N.E.2d 767, 775 (Ill. 2005)). Thus, in an action to pierce a corporate veil under Illinois law, a plaintiff must allege that "(1) there [is a] unity of interest and ownership [such] that the separate personalities of the corporation and the individual no longer exist; and ...