Druckzentrum Harry Jung GmbH & Co. KG v. Motorola, Inc.

No. 09-cv-7231, 2010 U.S. Dist. LEXIS 66043 (N.D. Ill. June 30, 2010)

 

RULE:

A motion under Rule 12(b)(6) challenges the sufficiency of the complaint. In ruling on a motion to dismiss, the court must accept as true all well-pleaded factual allegations and draw reasonable inferences in favor of the plaintiff. The allegations in the complaint "must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a 'speculative level'; if they do not, the plaintiff pleads itself out of court.

FACTS:

Plaintiff brough an action against Motorola, Inc. ("Motorola"), alleging breach of contract and fraudulent misrepresentation in connection with Motorola's entering into and terminating a contract with it for plaintiff's services of providing Motorola's printed material for its merchandise. Defendant conducted a bidding process for the outsourcing of its printed manuals. In order to compete in the process, plaintiff was required to enter into a Corporate Supply Agreement ("CSA") with Motorola in the form provided to him, which could not be amended. Plaintiff was later sent a Notice of Initial Award ("NIA") via email. Plaintiff was required to create or maintain the capacity required to meet Motorola's forecasted requirements. Plaintiff relied on Motorola's representations that Druckzentrum would be the exclusive printer for 37 million products and invested more than 1.5 million Euros in machinery and modifications in order to be able to maintain the necessary capacity. Motorola thereafter informed Druckzentrum that it intended to close its Flensburg facility.  Despite plaintiff's repeated requests for a specific date of closure and a transition plan, Motorola provided neither. Motorola informed Druckzentrum, via email, that no further orders would be placed and sent a "Notice of Cancellation" of the contract. On July 1, 2009, Motorola faxed a letter to Druckzentrum, stating that Motorola was terminating the CSA and RSI Award pursuant to CSA section 2.2(d), which allowed Motorola to terminate "for convenience upon ninety (90) days prior written notice to [Druckzentrum]." After Motorola moved to dismiss the original complaint, plaintiff sought and was granted, leave to file an amended complaint. Motorola's Motion to Dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) is presently before the Court. The Motion was granted in part and denied in part.

ISSUE:

Was defendant's Motion to Dismiss supported by sufficent factual allegations entitling it to the relief sought?

ANSWER:

No.

CONCLUSION:

Plaintiff sufficiently pled allegations of fraud sufficient to withstand a motion to dismiss. When all reasonable inferences are construed in plaintiff's favor, the allegations in the Amended Complaint sufficiently state a claim for fraudulent misrepresentation. Contrary to Motorola's position, plaintiff did not merely allege that Motorola provided an inaccurate forecast of its future sales. Plaintiff alleges that Motorola knowingly provided false, inflated forecasts to plaintiff for the purpose of inducing plaintiffo provide a lower bid and enter into an agreement with Motorola. If Motorola simply misjudged its forecasts, plaintiff would not prevail. If Motorola knowingly represented figures to plaintiff that were higher than its actual forecasts, such a statement would constitute, not a false promise as to future intent, but a false statement of then-existing material fact. Plaintiff has also sufficiently alleged reasonable reliance on Motorola's false statements. Motorola argues that such reliance could not have been reasonable because the CSA specifically provided that forecasts were non-binding and because the NIA provided that Motorola would not be liable for any variation from the target award. Motorola also asserts that reliance on oral representations is unreasonable as a matter of law where those representations contradict an integrated, written contract. 

 

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