United States District Court, N.D. Illinois, Eastern Division
KAY BROTHERS ENTERPRISES, INC., an Illinois Corporation, Plaintiff,
JOSEPH PARENTE, DAWN PARENTE, PROVENCAL CONSTRUCTION COMPANY, an Illinois Corporation, Defendants. JOSEPH PARENTE and DAWN PARENTE, Third-Party Plaintiffs,
ROBERT MIFFLIN, d/b/a R.A MIFFLIN ARCHITECTS, Third-Party Defendant.
OPINION AND ORDER
L. ELLIS United States District Judge.
Plaintiffs Kay Brothers Enterprises (“Kay
Brothers”) sued Defendants and Third Party Plaintiffs
Joseph and Dawn Parentes for copyright infringement,
conversion, quantum meruit, and unjust enrichment following
the Parentes' construction of a custom residence using
plans allegedly owned by Kay Brothers, the Parentes
counter-sued Third Party Defendant Robert Mifflin, d/b/a R.A.
Mifflin Architects, (“Mifflin”) alleging that
Mifflin breached the Parentes' implied non-exclusive
license to use Mifflin's architectural plans to build
their custom home when he transferred his rights to the plans
to Kay Brothers Enterprises, Inc. (“Kay
Brothers”) and omitted and misrepresented material
information during his contract discussion with the Parentes.
The Parentes allege that Mifflin's actions delayed the
completion of the construction of their home and precipitated
Kay Brothers' lawsuit against the Parentes. The Parentes
bring third-party claims against Mifflin for breach of
contract (Count I), indemnification (Count II), and violation
of the Illinois Consumer Fraud and Deceptive Business
Practice Act (“ICFA”), 815 Ill. Comp. Stat. 505/2
(Count III), which Mifflin now moves to dismiss  pursuant
to Federal Rule of Civil Procedure 12(b)(6). The Court grants
in part and denies in part the motion. Because the Parentes
allege the existence of a valid agreement and a breach of
that agreement, the Court denies the motion with respect to
Count I. Because there is no right to indemnification for
copyright infringement, however, the Court dismisses Count II
with respect to that claim; nonetheless, Count II survives
with respect to the indemnification for Kay Brothers'
conversion and unjust enrichment claims against the Parentes
because the claim is not premature. The Court denies the
motion with respect to Count III because Mifflin fails to
adequately present an argument as to why the Parentes'
claim fails to satisfy Federal Rule of Civil Procedure 9(b).
2014, Joseph Parente contacted Kay Brothers, a custom home
building company, about building a custom home on a lot owned
by the Parentes at 8734 Johnston Road, Burr Ridge, Illinois
(“Johnston Residence”). On November 11, 2014, the
Parentes met with Kay Brothers and Mifflin to discuss the
December 9, 2014, Joseph Parente and Mifflin agreed Mifflin
would modify a set of architectural plans he had previously
produced for Kay Brothers, this time to be used for
construction of the Johnston Residence. The written agreement
included a list of fees Joseph Parente would pay to Mifflin
and the steps Mifflin would take to modify the original plans
to suit the Johnston Residence. Joseph Parente paid Mifflin
all payments required by the agreement and Mifflin completed
the modifications to the plans and delivered them to the
Parentes. At this point, Mifflin granted the Parentes an
implied non-exclusive license to utilize the plans to
construct the Johnston Residence.
in early 2015, the Parentes and Kay Brothers failed to come
to terms on a contract to complete the construction of the
Johnston residence and ended their relationship. The Parentes
then hired a different construction company, Provencal
Construction Company, to complete construction using the
December 15, 2015, Mifflin assigned all rights to the
original and the modified plans to Kay Brothers. Mifflin did
not disclose to Kay Brothers that he had previously provided
the Parentes with a license to use the modified plans to
construct the Johnston Residence. The document memorializing
Mifflin's assignment to Kay Brothers noted that Mifflin
had previously transferred his interest in the original plans
to Kay Brothers in 2002, even though Mifflin and Kay Brothers
did not memorialize the 2002 transfer at the time, nor had
Mifflin disclosed the alleged 2002 transfer to the Parentes.
January 1, 2016, Kay Brothers filed suit against the Parentes
and Provencal Construction Company alleging copyright
infringement, conversion, quantum meruit, and unjust
enrichment. The Parentes filed the instant third-party
complaint against Mifflin on March 22, 2016.
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). “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.” Iqbal, 556 U.S.
9(b) requires a party alleging fraud to “state with
particularity the circumstances constituting fraud.”
Fed.R.Civ.P. 9(b). This “ordinarily requires describing
the ‘who, what, when, where, and how' of the fraud,
although the exact level of particularity that is required
will necessarily differ based on the facts of the case.
AnchorBank, 649 F.3d at 615 (citation omitted). Rule
9(b) applies to “all averments of fraud, not claims of
fraud.” Borsellino v. Goldman Sachs Grp.,
Inc., 477 F.3d 502, 507 (7th Cir. 2007). “A claim
that ‘sounds in fraud'-in other words, one that is
premised upon a course of fraudulent conduct-can implicate
Rule 9(b)'s heightened pleading requirements.”
Breach of Contract (Count I)
Parentes allege that Joseph Parente and Mifflin entered into
an agreement to modify a set of existing architectural plans
to be used for the construction of the Johnston Residence. To
state a claim for a breach of contract under Illinois law a
party must allege “(1) the existence of a valid and
enforceable contract; (2) substantial performance by the
plaintiff; (3) a breach by the defendant; and (4) resultant
damages.” Reger Dev., LLC v. Nat'l City
Bank, 592 F.3d 759, 764 (7th Cir. 2010) (citing W.W.
Vincent & Co. v. First Colony Life Ins. Co., 814 N.E.2d
960, 967, 351 Ill.App.3d 752, 286 Ill.Dec. 734 (2004).
Mifflin argues that the Parentes have failed to meet the
first element: “the existence of a valid and
enforceable contract, ” and therefore, the Court must