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Harrow Industries LLC v. Nexus Corporation

United States District Court, C.D. Illinois, Springfield Division

February 22, 2018

HARROW INDUSTRIES LLC, Plaintiff,
v.
NEXUS CORPORATION, a Colorado Corporation, Defendant.

          OPINION

          SUE E. MYERSCOUGH UNITED STATES DISTRICT JUDGE

         In October 2017, Plaintiff Harrow Industries LLC filed a two-count Complaint against Defendant Nexus Corporation, a Colorado Corporation, based on a 1990 Asset Purchase Agreement for the sale of National Greenhouse Company. Plaintiff alleges that Defendant is liable to Plaintiff for damages and is required to defend and indemnify Plaintiff in a pending state court lawsuit alleging asbestos exposure attributable to National Greenhouse Company.

         Defendant has moved to dismiss Plaintiff's Complaint, asserting that it was not a party to the Agreement and the Complaint is devoid of any facts articulating a basis for holding Defendant liable for claims based on the Agreement. Defendant asks the Court to take judicial notice of corporate documents showing that Defendant was not incorporated until 1994.

         Because Plaintiff has not plausibly alleged that Defendant is liable for claims based on the Agreement, the Motion is GRANTED. Plaintiff is granted leave to conduct limited discovery and file an amended complaint.

         I. JURISDICTION

         This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a) because complete diversity exists between the parties. Plaintiff is a Delaware limited liability company. The citizenship of a limited liability company is the citizenship of each of its members. Thomas v. Guardsmark, LLC, 487 F.3d 531, 534 (7th Cir. 2007). The Court requested, and Plaintiff provided, a statement of citizenship of each member of Plaintiff. See Statement (d/e 14).

         Schlage Lock Company LLC (Schlage) is the only member of Plaintiff. Schlage is a Delaware limited liability company. Allegion S&S Lock Holding Company Inc. (Allegion S&S) and Allegion U.S. Holding Company Inc. (Allegion US) are the only members of Schlage. Allegion S&S is a Delaware corporation with its principal place of business in Indiana. Allegion U.S. is a Delaware corporation with its principal place of business in Indiana.

         Therefore, Plaintiff is a citizen of Delaware and Indiana. Defendant is a citizen of Colorado. Complete diversity exists. In addition, the amount in controversy exceeds $75, 000 exclusive of interest and costs. Therefore, this Court's jurisdiction is established.

         II. LEGAL STANDARD

         A motion under Rule 12(b)(6) challenges the sufficiency of the complaint. Christensen v. Cnty. of Boone, Ill., 483 F.3d 454, 458 (7th Cir. 2007). To state a claim for relief, a plaintiff need only provide a short and plain statement of the claim showing he is entitled to relief and giving the defendant fair notice of the claims. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

         When considering a motion to dismiss under Rule 12(b)(6), the Court construes the complaint in the light most favorable to the plaintiff, accepting all well-pleaded allegations as true and construing all reasonable inferences in plaintiff's favor. Id.

         However, the complaint must set forth facts that plausibly demonstrate a claim for relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007). A plausible claim is one that alleges factual content from which the Court can reasonably infer that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Merely reciting the elements of a cause of action or supporting claims with conclusory statements is insufficient to state a cause of action. Id. A court may take judicial notice of documents in the public record when ruling on a motion to dismiss under Rule 12(b)(6). Olson v. Champaign Cnty., Ill., 784 F.3d 1093, 1096 n.1 (7th Cir. 2015).

         III. ALLEGATIONS IN THE COMPLAINT

         Plaintiff's claims are based on a 1990 Asset Purchase Agreement involving the sale of National Greenhouse Company, a company that designs and builds greenhouses and sells products for the use in greenhouses. Plaintiff alleges that Harrow Products, Inc. (Harrow) sold National Greenhouse Company to Defendant pursuant to an Asset Purchase Agreement dated November 14, 1990. Compl. ...


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