United States District Court, N.D. Illinois, Eastern Division
WABASH CASTINGS, INC., a Michigan corporation, Plaintiff/Counter-Defendant,
FUJI MACHINE AMERICA CORPORATION, an Illinois corporation, Defendant/Counter-Plaintiff.
ST. EVE United States District Court Judge.
Court denies Plaintiff/Counter-Defendant's motion to
dismiss Counts I and II of the First Amended Counterclaim
brought pursuant to Federal Rule of Civil Procedure 12(b)(6).
. Plaintiff/Counter-Defendant's answer to the First
Amended Counterclaim is due on or before November 14, 2016.
Status hearing set for November 30, 2016 is stricken and
reset to November 16, 2016 at 8:30 a.m.
29, 2016, Plaintiff/Counter-Defendant Wabash Castings, Inc.
(“Wabash”) filed a six-count Second Amended
Complaint against Defendant/Counter-Plaintiff Fuji Machine
America Corporation (“Fuji”) based on the
Court's diversity jurisdiction. See 28 U.S.C.
§ 1332(a). On August 12, 2016, Fuji filed a two-count
First Amended Counterclaim alleging breach of contract and
account stated claims. Before the Court is Wabash's
motion to dismiss both Counts I and II of Fuji's
Counterclaim. For the following reasons, the Court denies
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6) challenges the viability of a complaint by arguing
that it fails to state a claim upon which relief may be
granted.” Camasta v. Jos. A. Bank Clothiers,
Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under Rule
8(a)(2), a complaint must include “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). The short and plain
statement under Rule 8(a)(2) must “give the defendant
fair notice of what the claim is and the grounds upon which
it rests.” Bell Atlantic v. Twombly, 550 U.S.
544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation
omitted). Under the federal notice pleading standards, a
plaintiff's “factual allegations must be enough to
raise a right to relief above the speculative level.”
Id. Put differently, a “complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009) (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.” Iqbal, 556 U.S.
determining the sufficiency of a complaint under the
plausibility standard, courts must “accept all
well-pleaded facts as true and draw reasonable inferences in
the plaintiffs' favor.” Roberts v. City of
Chicago, 817 F.3d 561, 564 (7th Cir. 2016). Also,
district courts can take judicial notice of matters of public
record without converting a motion to dismiss into a motion
for summary judgment. See Ennenga v. Starns, 677
F.3d 766, 773 (7th Cir. 2012). Similarly, courts may consider
documents attached to the pleadings without converting the
motion to dismiss into a motion summary judgment, as long as
the documents are referred to in the complaint and central to
the plaintiff's claims. See Adams v. City of
Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014);
Second Amended Complaint, Wabash, a Michigan corporation,
alleges that it is an aluminum casting, machining, assembly,
and testing producer in the automotive industry. (R. 43,
Second Am. Compl. ¶ 2.) Wabash asserts that it holds
title to certain claims after acquiring the assets of certain
Harvey Entities, discussed below. (Id. ¶¶
2, 5, 24, 25.) Further, Wabash alleges that the present
lawsuit relates to various claims arising from Fuji's
failure to supply properly functioning machinery used by the
Harvey Entities. (Id. ¶¶ 1, 11.) At issue
in this motion are the “Harvey Contracts, ” which
involve certain purchase orders involving Fuji, an Illinois
corporation that sells and services automated machines and
tools, and certain Harvey Entities. (Id.
¶¶ 3, 10.) Fuji alleges that Wabash is the assignee
of the “Harvey Contracts.” (R. 49, First Am.
Counter. ¶¶ 27, 36.)
First Amended Counterclaim, Fuji alleges that on or about
July 17, 2012, Harvey Industries Die Castings, LLC
(“Harvey Castings”) submitted to Fuji a purchase
order for one Fuji lathe at the price of $666, 164.00
(“PO 2621”) and a purchase order for another Fuji
lathe for $816, 500.00 (“PO 2622”). (Id.
¶ 4.) Pursuant to PO 2621, Fuji maintains that it
delivered and installed two Fuji lathes, one bearing serial
number SE0095413 (the “95413 Lathe”) and another
bearing a serial number of SE0095414 (the “95414
Lathe”), at Harvey Castings' Aiken, South Carolina
facility and that Harvey Castings accepted both lathes and
placed them into production. (Id. ¶ 5.)
addition, Fuji alleges that on or about July 25, 2012, Harvey
Industries, LLC (“Harvey Industries”) submitted
to Fuji four purchase orders (PO 96932, 96933, 96934, and
96935) for the purchase of one Fuji lathe and other equipment
for the aggregate purchase price of $712, 999.98.
(Id. ¶ 6.) Fuji asserts that these four
purchase orders were amended to reflect that the lathe and
other equipment should be delivered to Harvey Castings'
facility in Aiken, South Carolina instead of Harvey
Industries in Laredo, Texas. (Id. ¶ 7.) Also,
Fuji alleges that pursuant to PO 96932-35, Fuji delivered and
installed a Fuji lathe, serial number SE007050, and other
related equipment (collectively, the “97050
Lathe”) at Harvey Castings' Aiken, South Carolina
facility, and Harvey accepted the 97050 Lathe and placed it
into production. (Id. ¶ 8.) According to Fuji,
Harvey made some, but not all, of the payments on POs 2621,
2622, and 96932-35 (collectively, “Purchase
Orders”), and there remained, and still remains, an
aggregate principal amount of $317, 041.40 due on these
Purchase Orders. (Id. ¶ 9.)
motion to dismiss, Wabash argues that “Fuji's
Counterclaim is fatally flawed because Fuji fails to state a
legal basis to recover against Wabash.” Specifically,
Wabash argues that although Fuji alleges that it was an
assignee to the applicable purchase orders, in fact, Wabash
is not an assignee, but instead purchased certain claims and
causes of actions relating to the Harvey Contracts pursuant
to an earlier lawsuit and consequent Asset Purchase Agreement
(“APA”). In support of its argument, Wabash asks
the Court to take judicial notice of the court proceedings in
Callidus Capital Corp. v. Harvey Industries LLC, No.
15-cv-10616 (E.D. Mich. March 26, 2015), based on Callidus
Capital Corporation (“Callidus”) loans to Harvey
Industries. See Spaine v. Cmty. Contacts, Inc., 756
F.3d 542, 545 (7th Cir. 2014) (courts “may take
judicial notice of publicly available records of court
proceedings”). Wabash also asks the Court to review
documents attached to the parties' pleadings.
See Fed.R.Civ.P. 10(c).
Michigan lawsuit, Callidus extended commercial loans to
Harvey Industries (although not Harvey Castings) in the
amount of more than $41 million in principal. (Ex. 1, 3/26/15
Stipulated Order to Appoint Receiver, at 3-5.) After Callidus
filed the Michigan lawsuit against Harvey Industries to
recover its debt, on June 10, 2015, a Receiver conducted an
auction of Harvey Industries' assets. (15-cv-10616, R.
37, Mot. Approve Sale Assets.) Callidus was the winning
bidder, and on August 18, 2015, the Michigan district court
entered an order approving the sale to Callidus as the
purchaser. (Ex. 4, 8/18/15 Sale Order.) The Sale Order stated
that the “Lender and Purchaser” shall not be
liable for any claims “other than as expressly provided
for in the [Asset] Purchase Agreement.” (Id.
¶ 11.) On October 30, 2015, the Receiver, Harvey
Industries (but not Harvey Castings), Wabash, and Callidus
entered into an APA and, as part of the APA, Wabash alleges
that it purchased claims and causes of actions relating to
Harvey Industries' and Fuji's business relationship.
(Second Am. Compl. ¶ 25.) Wabash contends that the
Harvey Contracts that are subject of Fuji's Counterclaim
were not assigned to Wabash under the APA pursuant to the
APA's Disclosure Schedule 1, which excludes: ...