United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
B. Gottschall, United States District Judge
United States, Inc. (“Unilever”) intended to sell
a large, industrial facility as a “turnkey
operation.” (Compl. 1, ECF No. 1.) It contracted with
Johnson Controls, Inc. (“JCI”) to provide
security at the facility, but according to its complaint, JCI
did not prevent thefts of expensive electronic controls and
other items from the facility. Unilever filed a one-count
complaint for breach of contract. It seeks approximately $4
million in damages, which it estimates to be the difference
between the price at which it would have sold the facility if
the thefts had not occurred and the actual sale price. JCI
moves to dismiss the complaint for failure to state a claim
upon which relief can be granted, Fed.R.Civ.P. 12(b)(6),
contending primarily that Unilever cannot recover the
decrease in the facility's market value as general
General Factual Allegations
purposes of deciding the pending motion to dismiss, the court
assumes the following facts alleged in the complaint are true
and draws all reasonable inferences in Unilever's favor.
See, e.g., Manistee Apts., LLC v. City of
Chi., 844 F.3d 630, 633 (7th Cir. 2016). JCI and
Unilever executed a Master Services Agreement
(“MSA”) on May 1, 2007. Under the MSA, JCI
provides various services at Unilever-owned facilities;
“[t]he specific Services to be provided to each
applicable facility of [Unilever] shall be detailed on
separate Statements of Work to be executed by [JCI] and
[Unilever] for each such facility.” (Compl. ¶ 10
(quoting MSA) (alterations in original)).
bought the Alberto Culver Company in May 2010. The
acquisition included an 18.7-acre campus and 534,
000-square-foot manufacturing facility and offices in Melrose
Park, Illinois (“the facility”). (Compl. ¶
6.) Unilever stopped production at the facility on April 15,
2013, and closed it on May 31, 2013. (Id. ¶ 7.)
It intended to sell the facility as a “turnkey
manufacturing operation.” (Id. ¶ 8.) On
June 1, 2013, Unilever and JCI signed a Statement of Work
(“SOW”) to be performed at the facility.
(Id. ¶ 11 & Ex. 2.)
potential buyer visited the facility in August 2013 and
returned for a second visit in February 2014. The potential
buyer noticed during his second visit that “a
significant amount of the electronic controls and other
equipment had gone missing since” his first visit.
(Compl. ¶ 22.) Unilever alleges that sometime between
those two visits, approximately 175 items were stolen,
“rendering some equipment worthless and others
significantly devalued.” (Id. ¶ 23).
“Since thieves stole so many of the electronic controls
. . . the 2014 theft precluded Unilever from selling the
facility as a turnkey operation. According to one appraisal,
the 2014 theft reduced the value of the facility by nearly
$3.5 million.” (Id. ¶ 25.) Because of the
thefts, Unilever sold the facility to an industrial
auctioneer specializing in distressed assets. (Id.
¶¶ 26-27.) In 2015, Unilever contracted to sell the
facility to Reich Brothers. (Id. ¶ 27.)
additional thefts occurred on May 27 and 29, 2015, while the
facility was under contract for sale. (See id.
¶¶ 28-30.) In the first incident, electronic
controls were taken from a brand-new machine worth
approximately $250, 000, rendering it useless. (Id.
¶ 29.) “Because of the May 2015 thefts, Reich
Brothers demanded and received, after negotiation, a $400,
000 reduction in the purchase price” of the facility.
(Id. ¶ 31.)
alleges that “JCI knew and understood that Unilever
intended to sell the facility as a turnkey operation.”
(Id. ¶ 35.) The complaint seeks as damages the
“approximately $4 million on the sale of the
facility” Unilever estimates it lost because JCI did
not prevent the thefts. (Id. ¶ 32; accord.
id. ¶ 40.)
The Master Services Agreement and Statement of Work
parties highlight several provisions of the MSA. The first,
§ 6.2(d), reads:
Further, other than pursuant to the Liability Cap Exceptions,
neither party shall be liable to the other party, or any [of]
subsidiaries and affiliates, or their respective officers,
directors, employees, agents and representatives for
punitive, special, exemplary, incidental or consequential
damages in connection with or arising out of the Agreement
regardless of whether such claim may be based on contract,
warranty, tort (including negligence), or strict liability.
No. 1 Ex. 1 § 6.2(d), p. 8 [hereinafter
“MSA”].) The second, § 7.2, contains a