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Cheese Depot, Inc. v. Sirob Imports, Inc.

United States District Court, N.D. Illinois, Eastern Division

March 13, 2015

CHEESE DEPOT, INC., Plaintiff,
v.
SIROB IMPORTS, INC., Defendant.

MEMORANDUM OPINION AND ORDER

JOAN B. GOTTSCHALL, District Judge.

Plaintiff Cheese Depot and defendant Sirob Imports manufacture and distribute cheese. In this diversity action, Cheese Depot contends that Sirob is liable for money damages based on Sirob's alleged breach of a contract about the sale of cheese and property in Romania. Sirob's motion to dismiss for improper venue and failure to state a claim pursuant to Fed. R. 12(b)(3) and 12(b)(6), respectively, is before the court. For the following reasons, Sirob's motion is denied in its entirety.

I. BACKGROUND

The following facts are drawn from the complaint and are accepted as true for the purpose of the motion to dismiss. Cheese Depot is an Illinois citizen and Sirob Imports is a New York citizen. In July 2007, Cheese Depot entered into an agreement with Sirob relating to the sale of a building, along with certain equipment and inventory. The parties' agreement (the "Chicago agreement") is attached as Exhibit A to the complaint and provides, in full, as follows:

This agreement, made in Chicago, Illinois, July 24, 2007[, ] is between Nick Boboris and John Livadatis. In this agreement Nick Boboris, President, DBA Sirob Imports, 21 Gear Avenue, Lindenhurst, NY 11757[, ] is referred to as NB. John Livaditis, Director, DBA Lacto Baneasa, Cheese Factory, 16 E. Old Willow Road, Prospect Heights, IL, 60070, who has the power to enter into contracts on behalf of Cheese Factory, [is] referred to as JL.[1]
JL agrees to sell to NB 75% of the Lacto Baneasa building and equipment for $810, 000.00 with a $10, 000.00 down payment on signing of the contract. The balance is to be paid within 8 years with 7% interest. Interest only payment will start on January 1, 2008. The principal balance will be reduced by $30, 000.00 annually by December 31st each with the balance due on September 1, 2015[, ] or sooner.
INVENTORY:
NB will buy the inventory of the 2007 season; estimated amount is 85, 000 kg of Feta and 5, 000 kg of Hard Cheese. After he checks the quality at the factory, he will make a commitment to buy it or not to buy. Also all the new plastic containers ordered for the season 2008 will pay cost. The price of the Feta will be $3.85 per kg. plus shipping costs. The price of the Hard Cheese will be $4.85 per kg. plus shipping costs. The terms for the inventory will be 120 days, paying weekly, as he collects money for sales.

(Dkt. 1 at Ex. A.)

Cheese Depot alleges that it transferred the building and equipment and delivered the feta cheese, containers, and hard cheese to Sirob. According to Cheese Depot, Sirob made payments as promised but then stopped. In its single-count breach of contract complaint based on the Chicago agreement, Cheese Deport asserts that Sirob has refused to pay the outstanding amount of $269, 942.72 that it owes.

In its motion to dismiss, Sirob asserts that after the parties signed the Chicago agreement, Nick Boboris (Sirob's President) and John Livaditis (Cheese Depot's owner) executed a contract governing the sale of the Lacto Baneasa building, which is located in Romania (the "Romanian agreement, " which is attached to Sirob's memorandum in support of its motion to dismiss). (Dkt. 14-3.)[2] The Romanian agreement governs the transfer of shares owned by Livaditis to Boboris due to Livaditis' retirement.

Sirob argues that Cheese Depot's complaint fails to state a claim because the Chicago agreement merely reflects the parties' intention to enter in a contract about property in Romania. According to Sirob, the Chicago agreement's language about the intended purchase of real property was superceded by the Romanian agreement, which purportedly contains provisions about the sale of the property (even though the plain language of the Romanian agreement does not appear to correspond to this assertion). Thus, Sirob reasons that Cheese Depot cannot recover damages under the Chicago agreement based on Sirob's alleged failure to make all required payments for the property in Romania. In addition, based on its position that the Romanian agreement is the operative contract, Sirob contends that Boboris - who signed the Romanian agreement - is the proper defendant. Thus, Sirob asserts that venue in this district is improper because the events relating to the Romanian agreement took place in Romania, Boboris is a New York citizen, and Illinois has no connection to the Romanian agreement.

II. DISCUSSION

Sirob's position about venue is intertwined with its position on the merits. The court thus begins with Cheese Depot's Rule 12(b)(6) motion for failure to state a claim for which relief may be granted ...


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