United States District Court, N.D. Illinois, Eastern Division
THEODORE E. THOMAS, Plaintiff,
TODAY'S GROWTH CONSULTANT, INC., Defendant.
MEMORANDUM OPINION AND ORDER
J. Tharp, Jr. United States District Judge
Ted Thomas contracted with defendant Today's Growth
Consultants, Inc. (“TGC”) for TGC to build Thomas
an “authority” website on certain kinds of real
estate transactions. Def's Statement of Facts
(“Def's SOF”) ¶ 6, ECF No. 77-1. The
agreement required Thomas to pay $133, 000 up front to TGC,
which he did. The contract also set forth the
responsibilities of the parties regarding the website. TGC
was to provide 100 “keywords” to Thomas, who
would then “weed out” 10-20% of the keywords
and return the list to TGC. Id. ¶ 7; Consulting
Performance Agreement (“Contract”) ¶ J, ECF
No. 77-2. With the keywords established, the parties would
then decide on a domain name and TGC would begin to build the
site. Contract ¶ J. Thomas concurrently would begin
drafting content for the website based on the established
keywords. Once TGC received its 30th piece of content from
Thomas, it would recommend taking the site live. Id.
TGC held an “onboarding” meeting with Thomas in
which its employees explained to Thomas how to produce
content for the site. Def's SOF ¶ 13.
of providing Thomas with 100 keywords, TGC provided Thomas
with 800 keywords (which are better described as “key
phrases, ” as they are all more than one word).
Def's SOF ¶ 17; Silo Keywords, Def's Ex. 9, ECF
No. 77-2. In two separate emails, TGC employees instructed
Thomas to produce content based on 12 specific keywords from
the broader list of 800. Def's SOF ¶ 17; Wilterdink
E-Mails, ECF No. 77-2. Thomas provided five articles to
TGC-well short of the 30 necessary to launch the website.
Def's SOF ¶ 18. TGC nonetheless built the website in
anticipation of Thomas providing sufficient content.
Def's SOF ¶ 22. TGC employees also scripted four
podcasts for the website to assist Thomas in producing the
necessary content. Def's SOF ¶ 21. Regardless,
Thomas still has failed to provide TGC with 30 pieces of
content, and though the website is otherwise ready to launch,
TGC cannot take the website live without the requisite
content. Def's SOF ¶¶ 23-25.
filed suit against TGC alleging breach of contract and fraud
and seeking to rescind the parties' agreement. In
Thomas's Third Amended Complaint, the fraud count is
premised on allegations that unidentified TGC employee(s) at
some point prior to the inception of the parties'
agreement told Thomas that TGC could attain page one
placement on Google for Thomas's website. Third Amended
Complaint (“TAC”) ¶¶ 29-39, ECF No. 40.
According to the complaint, however, TGC was aware of recent
shifts in Google's algorithms that prevented TGC from
obtaining page one placement. Id. The unidentified
employee(s) also told Thomas that TGC had a team of writers
that could produce material for his website when, in reality,
no such team existed. Id. ¶¶ 24-27, 40-41.
TGC now moves for summary judgment on all counts.
Breach of Contract
succeed on a breach of contract theory under Illinois law, a
plaintiff must prove “(1) the existence of a valid and
enforceable contract; (2) performance by the plaintiff; (3)
breach of contract by the defendant; and (4) resultant injury
to the plaintiff.” Burkhart v. Wolf Motors of
Naperville, Inc., 2016 IL App (2d) 151053, ¶ 14, 61
N.E.3d 1155, 1159 (Ill.App.Ct. 2016). There is no dispute
that the parties in this case entered into a valid contract
for the construction of a website. TGC (explicitly, at least)
argues only that Thomas cannot establish the second element,
plaintiff's performance, because Thomas failed to provide
TGC with content necessary to launch the website.
Thomas's failure to produce content, however, is
justified if TGC materially breached the contract prior to
Thomas's nonperformance. See William Blair and Co. v.
FI Liquidation Corp., 358 Ill.App.3d 324, 346-47, 830
N.E.2d 760, 779 (Ill.App.Ct. 2005) (“[A] material
breach of a contract provision by one party will justify
nonperformance by the other.”).
problem with TGC's argument is that it does not account
for the order of operations provided for in the contract.
Paragraph J of the agreement establishes the schedule the
parties were to follow in building the site. The first step
in the process was for TGC to provide Thomas with 100
keywords related to the subject matter of the site. Thomas
would then be responsible for weeding out 10-20% of the
keywords and returning the list to TGC. The keywords were
then established, and at that point, Thomas was to draft
content based on the keywords.
record establishes that TGC materially failed to perform at
the first step. Whether a breach is material depends on
“whether the breach worked to defeat the bargained-for
objective of the parties or caused disproportionate prejudice
to the non-breaching party.” William Blair,
830 N.E.2d at 779. In this case, instead of providing Thomas
with 100 keywords, TGC provided Thomas with 800 keywords and
never narrowed it down to 100. In its briefing, TGC fails to
explain why it believes that providing Thomas with 800
keywords was sufficient to meet its contractual obligations.
Surely, TGC could not throw a dictionary at Thomas and claim
that it complied with the contract because the dictionary
contained more than 100 words. Indeed, the contract's
purpose-which was to produce an “authority site”
that would appear on the first page of Google search
results-suggests that providing substantially more than 100
keywords would impede, rather than benefit, the parties'
efforts. When it comes to search keywords, more is not
necessarily better; part of what Thomas bargained for, a jury
could reasonably conclude, was TGC's expertise and
judgment in identifying the best-not the most-terms to
highlight on the website. The 800th most useful keyword,
presumably, would not be as effective at gaming Google's
algorithm as the best 100 keywords would be. Moreover,
continuing to the next steps in the process outlined in the
contract was impossible until TGC provided Thomas with
100-and only 100-keywords. The second step required Thomas to
weed out 10-20% of the 100 keywords provided to him, after
which the base keys would be “established.”
Thomas could not weed out 10-20% of 100 keywords, and the
keywords could not be locked in, if Thomas was presented with
a list of 800 keywords and not told which 100 he should be
using. Thomas could not, consequently, “draft content
. . . addressing topics associated with 100 assigned keywords
provided by the project manager” without a list of 100
assigned keywords. Contract ¶ D, ECF No.
party to a contract may not complain of the nonperformance of
the other party where that performance is prevented by his
own actions.” Barrows v. Maco, Inc., 94
Ill.App.3d 959, 966, 419 N.E.2d 634, 639 (Ill.App.Ct. 1981).
Here, the only contractual duty that TGC argues Thomas failed
to perform-drafting sufficient content for the authority
site-was rendered impossible by TGC's own material
breach. Thomas assuredly could have drafted material
generically related to the theme of the website, but that
isn't what the contract called for; it called for him to
draft content “addressing topics associated with 100
assigned keywords.” TGC cannot defeat Thomas's
breach of contract claim by pointing to a failure to perform
that it caused. Accordingly, its motion for summary judgment
on Thomas's breach of contract claim is denied.
also argues that it is entitled to summary judgment on
Thomas's fraud count. It makes two arguments in support
of that position. The first is that the plaintiff's Third
Amended Complaint fails to comply with Federal Rule of Civil
Procedure 9's demand for particularity in alleging fraud.
This argument is unavailing. TGC's motion is styled as a
motion for summary judgment, and in any event TGC attached
several documents outside the pleadings to its motion. Rule
12(d) requires that “[i]f . . . matters outside the
pleadings are presented to and not excluded by the court,
” a motion to dismiss “must be treated as one for
summary judgment under Rule 56.” And in pursuing
summary judgment, TGC cannot rely on pleading deficiencies;
it must instead “show that there is no genuine
dispute as to any material fact and that [it] is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a);
see also Carlson v. CSX Transp., Inc., 758 F.3d 819,
827 (7th Cir. 2014) (summary judgment decisions address
“not the content of complaints but the evidence needed
to take a claim to a jury”); Szabo v. Bridgeport
Machines, Inc., 249 F.3d 672, 675 (7th Cir. 2001)
(“[A] motion to dismiss tests the legal sufficiency of
a pleading. Its factual sufficiency will be tested later-by a
motion for summary judgment under Rule 56, and if necessary
by trial.”); McCarthy v. Ameritech Pub., Inc.,
763 F.3d 469, 484 (6th Cir. 2014) (“Rule 9(b) imposes a
pleading requirement . . . and challenges to the sufficiency
of the pleadings must be asserted in a motion to dismiss
under Rule 12(b)(6) rather than on summary judgment.”).
To do so, it must adduce evidence to support a judgment in
its favor rather than rely on a claim that the opponent's
pleadings provide inadequate notice or otherwise fall short.
offers no evidence to show that it did not make the
fraudulent statements Thomas attributes to it; instead, it
attempts to avoid the need to make that showing by pointing
to the contract's integration clause. The clause notes:
“The Agreement and the agreements, Exhibits, Schedules,
and documents referred to herein contain the entire agreement
and understanding between the parties hereto with respect to
the subject matter hereof and supersede all prior agreements
and understandings, whether written or oral, relating to such
subject matter in any way.” Contract ¶ T(6). TGC
posits that this integration clause defeats Thomas's
fraud-in-the-inducement count because Thomas disclaimed
reliance on statements made outside the four corners of the
again mistaken. In Vigortone AG Products, Inc. v. PM AG
Products, Inc., 316 F.3d 641 (7th Cir. 2002), the
Seventh Circuit assessed the then-unsettled question of
whether, under Illinois law, an integration clause bars
consideration of extrinsic evidence in evaluating a
plaintiff's fraud-in-the-inducement theory. The court
distinguished between standard integration clauses and
so-called “no reliance” clauses, under which the
parties to a contract expressly indicate that they did not
rely on extrinsic statements in entering into the agreement.
The Seventh Circuit explained that while a “no
reliance” clause defeats an element of
fraud-in-the-inducement-reliance on the allegedly false