MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART W.S. DARLEY & CO. ’S RULE 12(B)(6) MOTION TO DISMISS [15]
On March 16, 2012, plaintiff Al Maha Trading & Contracting Holding Company (“Al Maha”) filed a twelve-count complaint against defendant W.S. Darley & Co. (“Darley”), seeking damages and equitable remedies resulting from “Darley’s selection and sale of six fire trucks to Al Maha.” (Dkt. No. 1 (“Compl.”) ¶ 1.)
Pending before the court is Darley’s Rule 12(b)(6) motion to dismiss. (Dkt. No. 15.) For the reasons set forth below, Darley’s motion is granted in part and denied in part. Counts I, III, VI, VII, VIH, X, and XI are dismissed with prejudice, while Counts II, IV, V, IX, and XII remain pending before the court.
BACKGROUND
The following background facts are from the Complaint, as required at this stage of the litigation, and the court has accepted all of the Complaint’s well-pleaded factual allegations as true. Council 31 of the Am. Fed. of State, County & Municipal Employees, AFL-CIO v. Quinn,
Al Maha is a limited liability company organized under the laws of the Kingdom of Saudi Arabia, with its principal place of business in Al-Khobar, Saudi Arabia. (Compl. ¶ 2.) Al Maha specializes in the fields of fire protection, prevention, hazard mitigation, emergency medical services, and the provision of manpower for these fields, serving the Saudi Arabian and neighboring markets. (Id.) On August 24, 2008, Al Maha entered into a contract with Rabigh Refining and Petrochemicals Com
Darley is an Illinois corporation with its principal place of business in Itasca, Illinois. (Id. ¶ 3.) On its website, Darley advertises itself as “dedicated to serving the World’s Fire and Emergency Services.” (Id. ¶ 7.) Darley’s website states that Darley has over 60 years of experience in “supplying apparatus, pumps and firefighting equipment to ... governments and agencies around the world” and that it supplied a “major order in recent years” that included “500 HM pumps for Saudi Arabia Civil Defense.” (Id.)
In 2008, A1 Maha’s manager for the Petro Rabigh Contract, Christopher Gale (“Gale”), approached Darley to purchase fire trucks that would satisfy the requirements of the Petro Rabigh Contract and otherwise be fit for service in Saudi Arabia. (Id. ¶ 8.) The specifications of the Petro Rabigh Contract, which Gale provided to Darley, did not specify engine-type or fuel-type for the desired fire trucks. (Id.)
In early to mid-2009, Darley sold A1 Maha six fire trucks (“Fire Trucks”) for a total purchase price of U.S. $2,931,000.00 and shipped the Fire Trucks to Al Maha in Saudi Arabia. (Id. ¶¶ 10, 12.) Al Maha did not view or inspect the Fire Trucks before purchasing them. (Id. ¶ 8.) Darley knew that Al Maha needed the Fire Trucks for service and use in Saudi Arabia, and Al Maha relied on Darley’s expertise in the international sale of firefighting equipment, including fire trucks, to supply Al Maha with fire trucks that would be fit for service in Saudi Arabia. (Id. ¶ 8.)
“At some point after receiving shipment of the Fire Trucks,” Al Maha “ultimately learned” that the Fire Trucks could not be operated in Saudi Arabia due to a diesel fuel issue. (Id. ¶ 13.) Specifically, the Fire Trucks’ diesel engines required Ultra Low Sulfur Diesel (“ULSD”), which is not available in Saudi Arabia. (Id.) The Fire Trucks could not run on High Sulfur Diesel (“HSD”), the only type of diesel fuel available-in Saudi Arabia, and they could not be retrofitted to run on HSD. (Id.) Additionally, contrary to A1 Maha’s expectation and understanding, four of the six Fire Trucks were not new and had in excess of 6,000 miles on their odometers. (Id. ¶ 15.) Al Maha also learned that Darley had charged Al Maha “hundreds of thousands of U.S. dollars” over prevailing market prices, and that Darley had given Gale an undisclosed payment “in excess of $50,000” in connection with the sale of the Fire Trucks. (Id. ¶¶ 16-17.)
“In and around the period from mid- to late 2010,” Al Maha “communicated to Darley ... in -substance that the Fire Trucks could not be operated in Saudi Arabia due to the diesel fuel issue” and that the Fire Trucks “showed significant mileage on their odometers.” (Id. ¶ 18.)
“In or around early 2011,” A1 Maha’s retained expert reported to Al Maha that the Fire Truck engines could not be retrofitted to use HSD and that using more than a-few tanks of HSD would lead to “total engine destruction.” (Id. ¶ 19.) In February 2011, A1 Maha’s expert provided Al Maha with a five-page document from Freightliner, LLC, titled “CRITICAL WARNING for ALL U.S. and CANADIAN DEALERS REGARDING the EXPORT of VEHICLES EQUIPPED with U.S. EPA 2007 ENGINES,” which explained that “vehicle performance and customer satisfaction will be seriously affected if the required ultra low sulfur diesel fuel
Al Maha was unable to use or sell the Fire Trucks in Saudi Arabia, including under the Petro Rabigh Contract, or elsewhere in the Persian Gulf region where only HSD is available. (Id. ¶¶ 19, 23.) In March 2012, A1 Maha’s counsel provided Darley with notice of rejection and/or revocation of acceptance of the Fire Trucks. (Id. ¶ 24.) AI Maha alleges that Darley knew, or should have known, that the Fire Trucks “could not be operated in most of the rest of the world — and particularly including not in Saudi Arabia, due to the lack of availability of ULSD in Saudi Arabia.” (Id.H 22.)
Al Maha asserts claims against Darley under Illinois law for: breach of implied warranty of fitness for particular purpose (Counts I and II); unconscionable contract (Count III); mutual mistake (Count IV); unilateral mistake (Count V); fraud (Count VI); fraudulent inducement (Count VII); negligent misrepresentation (Count VIII); violation of the Illinois Consumer Fraud Act (Count IX); breach of fiduciary duty (Count X); constructive fraud (Count XI); and inducement of breach of fiduciary duties (Count XII). Jurisdiction is established in this court pursuant to 28 U.S.C. § 1332(a)(2).
LEGAL STANDARD
Rule 8 of the Federal Rules of Civil Procedure requires complaints to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In other words, the complaint must “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly,
I. Breach of Implied Warranty of Fitness for Particular Purpose (Remedy Pursuant to Section 2-711 of the UCC) (Count I)
In Count I of its Complaint, A Maha seeks to cancel its contract with Darley and recover as damages the $2,931,000.00 A Maha paid for the Fire Trucks, as well as A Maha’s incidental and consequential damages, alleging that Darley breached the Illinois Uniform Commercial Code’s (“UCC”) implied warranty of fitness for a particular purpose by selling fire trucks to A Maha that could not be operated in Saudi Aabia. Darley argues that Count I should be dismissed with prejudice because “A Maha failed, as a matter of law, to timely reject or revoke its acceptance of the Fire Trucks.” (Dkt. No. 19 (“Darley’s Mem.”) at 5.)
The Illinois UCC provides generally that every contract for the sale of goods includes an implied warranty of fitness for a particular purpose if “the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that they buyer is relying on the seller’s skill or judgment to select or furnish suitable goods.” 810 ILCS 5/2-315. If the buyer “rightfully rejects or justifiably revokes acceptance” of any nonconforming goods, the buyer may cancel the contract and recover the amount, of the price paid, as well as incidental and consequential damages. 810 ILCS 5/2-711(l)(b). See also 810 ILCS 5/2-713; 810 ILCS 5/2-715.
“Rejection of goods must be within a reasonable time after their delivery or tender [and] ... is ineffective unless the buyer seasonably notifies the seller.” 810 ILCS 5/2-602(1). “Whether a time for taking an action required by the Uniform Commercial Code is reasonable depends on the nature, purpose, and circumstances of the action.” 810 ILCS 5/l-205(a); see also 810 ILCS 5/l-205(b) (“An action is taken seasonably if it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time.”). If a buyer who has had a reasonable opportunity to inspect the good's “fails to make an effective rejection” under the Illinois UCC, the buyer is deemed to have accepted the goods. 810 ILCS 5/2-606(b). .
Even after a buyer has accepted nonconforming goods, the Illinois UCC permits the buyer to revoke acceptance if the non-conformity “substantially impairs” the value of the goods and the buyer accepted the goods “without discovery of such nonconformity if [the buyer’s] acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller’s assurances.” 810 ILCS 5/2— 608(l)(b). “Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects.” 810 ILCS 5/2-608(2). Like rejection of goods, revocation of acceptance “is not effective until the buyer notifies the seller of it.” Id.
Viewing the factual allegations of the Complaint in the light most favorable to A Maha, as required at this stage of the litigation, A Maha received the Fire Trucks in mid-2009 and rejected them, or revoked acceptance of them, over two and one-half years later, in March 2012.
On the other hand, Al Maha has alleged that it was aware of the full extent of the problem at least as early as “early 2011,” when Al Maha’s retained expert reported that “using more than a few tanks of the HSD available in Saudi Arabia would lead to ‘total engine destruction,’ and that the Fire Truck engines could not be retrofitted to use HSD.” (Compl. ¶ 19.) Al Maha argues that it needed still another year, until March 2012, to assess “its rights under U.S. law” and its options for salvaging its “considerable investment of time and money in acquiring the Fire Trucks and bringing them to Saudi Arabia,” and that these factors must be considered as part of the “circumstances of the transaction.” (Al Maha Resp. at 6.) Al Maha filed its Complaint against Darley on March 16, 2012, the same month that it provided its notice of rejection or revocation of acceptance.
Whether an action “is to be judged as reasonable” under the Illinois UCC is a determination that “rests with the trier of fact.” Veath v. Specialty Grains, Inc.,
Al Maha’s Complaint does not include any factual allegations describing Al Maha’s actions from February '2011 through March 2012. The Complaint also lacks allegations that Al Maha provided notice to Darley prior to its filing of the March 16, 2012 Complaint. It is possible that Al Maha’s efforts to assess its rights under U.S. law and to salvage its investment in the Fire Trucks may have been consistent with the purpose of the UCC’s notice provisions, for example, if Al Maha’s efforts in this regard included settlement discussions with Darley going beyond “mere complaints,” Midwest Generation,
Darley’s motion to dismiss Count I is therefore granted, and Count I is dismissed with prejudice for failure to state a claim.
II. Breach of Implied Warranty of Fitness for Particular Purpose (Remedy Pursuant to Section 2-714 of the UCC) (Count II)
Count II of its Complaint is similar to Count I, in that Al Maha again alleges that Darley breached the implied warranty of fitness for particular purpose by selling fire trucks to Al Maha that could not be operated in Saudi Arabia. In Count II, however, Al Maha seeks remedies under Section 2-714 of the Illinois UCC, which permits a buyer to recover damages arising from the buyer’s acceptance of nonconforming goods. See generally 810 ILCS 5/2-714. Darley argues that Count II should be dismissed with prejudice because “Al Maha waited far too long to provide Darley with notice of the alleged breach.” (Darley’s Mem. at 9.)
To recover damages under.Section 2-714, a buyer must first satisfy the notice requirement of subsection (3) of Section 2-607. Subsection (3) states, in relevant part: “Where a tender has been accepted ... the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.” 810 ILCS 5/2-607(3). “A notification of breach of warranty is sufficient if it lets the seller know that the particular transaction is still troublesome and must be watched.” Connick v. Suzuki Motor Co., Ltd.,
The purpose of Section 2-607’s notice requirement is “to provide a seller an opportunity to cure a defect and minimize damages, protect his ability to investigate a breach and gather evidence, and to encourage negotiation and settlement.” Maldonado v. Creative Woodworking Concepts, Inc.,
Accordingly, Darley’s motion to dismiss Count II is denied.
III. Equitable Remedies of Rescission and Restitution for Unconscionable Contract (Count III)
In Count III of its Complaint, AI Maha seeks to rescind its contract with Darley and recover as restitution the $2,931,000.00 Al Maha paid for the Fire Trucks, as well as Al Maha’s incidental and consequential damages, alleging that Darley’s sale of the Fire Trucks to Al Maha constituted an “unconscionable” contract under 810 ILCS 5/2-302. Darley argues that Count III should be dismissed because the allegations of the Complaint do not include “sufficient factual material to state a claim of procedural and/or substantive unconscionability.” (Darley’s Mem. at 12.)
Section 2-302 states that a court may “refuse to enforce” a contract that was “unconscionable at the time it was made,” provided that the parties first have been afforded “a reasonable opportunity to present evidence as to [the contract’s] commercial setting, purpose and effect.” 810 ILCS 5/2-302. Applying Section 2-302, the Supreme Court of Illinois has held that unconscionability “can be either ‘procedural’ or ‘substantive’ or a combination of both.” Razor v. Hyundai Motor Am.,
A contract is procedurally unconscionable if its terms are “so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware he was agreeing to [them].” Id. The question of procedural unconscionability focuses on whether there was “some impropriety during the process of forming the contract depriving a party of a meaningful choice.” Kinkel v. Cingular Wireless LLC,
Al Maha has alleged that Darley knew the Fire Trucks “could not be operated in ... Saudi Arabia, due to the lack of availability of ULSD in Saudi Arabia” and “failed to disclose this information to A1 Maha.” (Compl. ¶ 21.) Al Maha argues that this act of concealment “sufficiently state[s] a claim for procedural unconscionability.” (A1 Maha’s Resp. at 10 (relying on Championsworld, LLC v. U.S. Soccer Federation, Inc.,
Substantive unconscionability, on the other hand, “refers to those terms which are inordinately one-sided in' one party’s favor.” Razor,
For the reasons set forth above, Darley’s motion to dismiss Count III is granted, and Count III is dismissed with prejudice for failure to state a claim.
IV. Equitable Remedies of Rescission and Restitution for Mutual Mistake (Count IV) and for Unilateral Mistake (Count V)
Al Maha further seeks to rescind its contract with Darley and recover as restitution the $2,931,000.00 Al Maha paid for the Fire Trucks, as well as A1 Maha’s incidental and consequential damages, under the common law doctrine of mutual mistake (Count IV) and unilateral mistake (Count V). Darley argues that Counts IV and V should be dismissed because A1
Under Illinois law, rescission of a contract due to either mutual mistake or unilateral mistake is permitted if “the party seeking rescission shows by clear and convincing evidence that (1) the mistake is of a material nature; (2) the mistake is of such consequence that enforcement is unconscionable; (3) the mistake occurred notwithstanding the exercise of due care by the party seeking rescission; and (4) rescission can place the other party in status quo.” Siegel v. Levy Org. Develop. Co., Inc.,
Both parties rely on their arguments for and against Count III to support their respective positions regarding the unconscionability element of Counts IV and V. This approach is erroneous, because courts considering the question of unconscionability in the context of a claimed mistake may take into account conditions that “were never contemplated by the contract.” John Burns,
Darley next argues that Al Maha failed to sufficiently allege that it exercised due care with respect to the sale, such as an “independent analysis or inquiry to determine whether the Fire Trucks were suitable for use in Saudi Arabia.” (Darley’s Resp. at 13.) It is well established under Illinois law that “the unilateral mistake of one party to a contract may not be relied upon to relieve that party from its obligations under the contract where the party’s own negligence and lack of prudence resulted in the mistake.” Cummings v. Dusenbury,
Darley also argues that A1 Maha’s claim of mutual mistake must be dismissed because “the alleged mistake— that the Fire Trucks would be suitable for use in Saudi Arabia — is not a mistake of a present or past fact.” (Darley’s Mem. at 13.) Darley correctly notes that Illinois law requires that an alleged mutual mistake involve a question of present or past fact, see U.S. v. Southwestern Elec. Co-op., Inc.,
Finally, Darley argues that Al Maha “fails to allege that rescission would return Darley to the status quo.” (Darley’s Mem. at 13.) Although the Complaint is not a model of pleading on this point, the court agrees with Al Maha that the court can reasonably infer from Al Maha’s attempted March 2012 rejection of the Fire Trucks (Compl. ¶ 24) that Al Maha “could restore Darley to status quo by returning the Fire Trucks.” (Al Maha’s Resp. at 13.) Of course, it will be Al Maha’s burden to prove that it can return Darley to its status quo position before the court will grant Al Maha’s request for rescission of the sales contract.
For all of the reasons set forth above, Darley’s motion to dismiss Counts IV and V is denied.
V. Fraud (Count VI), Rescission for Fraudulent Inducement (Count VII), Breach of Fiduciary Duty (Count X), and Constructive Fraud (Count XI)
In Count VI of its Complaint, Al Maha seeks damages under a theory of common law fraud, alleging that Darley fraudulently omitted from its negotiations with Al Maha the material facts that the Fire Trucks’ engines “were designed, built and certified only to use ULSD, in compliance with 2007 U.S. EPA standards!,] and ULSD ... was not, at all relevant times, available in Saudi Arabia,” as well as the fact that “some if not all of the Fire Trucks had extensive mileage on their odometers.” (Compl. ¶ 51.) Al Maha further alleges that it “relied upon Darley’s expertise and judgment in the international sale of firefighting equipment, including fire trucks, to select and provide to Al Maha fire trucks that not only met Al Maha’s specifications, but that would be fit for service in Saudi Arabia.” (Id.) Al Maha relies on these same allegations to claim damages for fraudulent inducement (Count -VII),
“[T]o prove fraud by the omission of a material fact, it is necessary to show the existence of a special or fiduciary rela
“[0]rdinarily in a' business transaction each party guards his own interests and no fiduciary duty exists.” Ransom v. A.B. Dick Co.,
Al Maha asserts that its allegations “show more than a run-of-the-mill, arm’s length commercial transaction between Al Maha and Darley.” (A1 Maha’s Resp. at 15.) Specifically, Al Maha relies on its allegations that “Darley undertook to locate and select fire trucks for Al Maha that would satisfy the specifications of the Petro Rabigh Contract (which did not include an engine-type or fuel-type specification) and that would otherwise be fit for service and use in Saudi Arabia” and its allegation that “Al Maha relied upon Darley’s expertise in the international sale of firefighting equipment, including fire trucks, to supply Al Maha” with appropriate fire trucks. (Compl. ¶¶ 8-9.) Al Maha does not allege, however, that Darley specifically invited Al Maha to rely on Darley’s expertise in the international sale of firefighting equipment, or that Darley otherwise agreed to accept A1 Maha’s trust in a fiduciary arrangement. See Pilot v. Focus Retail Property I, LLC, No. 09 C 6879,
Moreover, Al Maha has not alleged “sufficient indicia of disparity in experience or knowledge such that defendants could be said to have gained influence or superiority over the plaintiff.” Go For It, Inc. v. Aircraft Sales Corp., No. 02 C 6158,
Viewing the allegations of the Complaint in the light most favorable to Al Maha, the court finds that Al Maha has failed to allege facts in its Complaint plausibly suggesting that Darley had “a special or fiduciary relationship” with Al Maha “which would raise a duty to speak.” Weidner,
VI. Negligent Misrepresentation (Count VIII)
In Count VIII of its Complaint, Al Maha seeks damages under a theory of negligent misrepresentation, alleging that Darley “should have known or ascertained” that, due to the diesel fuel issue, “the Fire Trucks would not be able to be operated in Saudi Arabia without causing substantial engine damage.” (Compl. ¶66.) Darley argues that Al Maha’s negligent misrepresentation claim “must be dismissed with prejudice ... because it is barred by the economic loss doctrine.” (Darley’s Mem. at 17.)
Under Illinois law, a “plaintiff seeking to recover purely economic losses due to defeated expectations of a commercial bargain cannot recover in tort, regardless of the plaintiffs inability to recover under - an action in contract.” Anderson Electric, Inc. v. Ledbetter Erection Corp.,
Illinois recognizes an exception to the economic loss doctrine if “one who is in the business of supplying information for the guidance of others in their business transactions makes negligent representations.” Id.,
There are two problems with this assertion. First, Al Maha has not alleged that Darley assumed an advisory role to A1 Maha in selecting suitable fire trucks. Rather, Al Maha alleges that Gale approached Darley “to purchase firefighting equipment, including fire trucks, that would satisfy the requirements of the Petro Rabigh Contract and otherwise be fit for service in Saudi Arabia” and that “Darley undertook to locate and select fire trucks for Al Maha that would satisfy the specifications of the Petro Rabigh Contract (which did not include an engine-type or fuel-type specification) and that would otherwise be fit for service and use in Saudi Arabia.” (Compl. ¶¶ 8-9.) Darley then sold the Fire Trucks to Al Maha and shipped them to Al Maha in Saudi Arabia. (Id. ¶¶. 10, 12.) In other words, the “end product” of A1 Maha’s agreement with Darley was to produce the Fire Trucks, not to produce Darley’s ideas about suitable fire trucks. Fox Assocs., Inc. v. Robert Half Int’l, Inc.,
Because Al Maha has not plausibly alleged in its Complaint that Darley is in the business of supplying information, Darley’s motion to dismiss Count VIII is granted and Count VIII is dismissed with prejudice.
VII. Violation of the Illinois Consumer Fraud Act (Count IX)
In Count IX of its Complaint, Al Maha seeks damages under the Illinois Consumer Fraud Act (“ICFA”), alleging that Darley “engaged in a deceptive act or practice, by failing to disclose and concealing from Al Maha” the diesel fuel issue and the “excessive mileage” on the Fire Trucks’ odometers. (Compl. ¶ 73.) Darley argues that Count IX must be dismissed “because it is based on a breach of a contractual promise — to provide Fire Trucks suitable for use in Saudi Arabia.” (Darley’s Mem. at 18.)
In Avery v. State Farm Mutual Automobile Insurance Company, the Supreme Court of Illinois stressed that “[a] breach of contractual promise, without more, is not actionable under the .Consumer Fraud Act.” Avery v. State Farm Mut. Auto. Ins. Co.,
Al Maha’s claim for breach of the implied warranty of fitness for particular purpose and its claim for ICFA violations are partly based on the same factual foundation — that “the Fire Trucks could not be used by Al Maha in service in Saudi Arabia without causing substantial engine damage” due to the diesel fuel issue. (Compl. ¶35; see also ¶73.) The only difference between the two claims is the additional allegation in Al Maha’s ICFA claim that Darley failed to disclose
This additional allegation is important. It is well established that “[a]n omission or concealment of a material fact in the conduct of trade or commerce constitutes consumer fraud.” Connick,
In its reply, Darley for the first time argues that Al Maha’s Complaint has failed to sufficiently allege “that Darley knew of this alleged ‘defect’ with the Fire Trucks, namely that they were unsuitable for use because of allegedly unavailable fuel in Saudi Arabia, at the time of purchase.” (Darley’s Reply at 15, n. 12.) ICFA claims must be pleaded with particularity in accordance with Federal Rule of Civil Procedure 9(b). Greenberger,
In this case, Al Maha has alleged “[o]n information and belief’ that Darley knew the Fire Trucks would not be operable in Saudi Arabia, in part based on Darley’s advertised sale “in recent years” of “500 HM pumps for Saudi Arabia Civil Defense.” (Compl. ¶¶ 7, 22, 74.) This court is required to review pleadings based on “judicial experience and common sense.” Iqbal,
For the reasons set forth above, Darley’s motion to dismiss Count IX is denied.
VIII. Inducement of Breach of Fiduciary Duties (Count XII)
Finally, in Count XII of its Complaint, Al Maha seeks damages for induced breach of fiduciary duties, alleging that “Darley made a payment to Mr. Gale, to induce him to breach his fiduciary duties [to Al Maha] by purchasing the Fire Trucks from Darley at an inflated price substantially above the prevailing market price at the time for the Fire Trucks and without seeking a more competitive price from Darley or from some other potential supplier.” (Compl. ¶ 89.) Darley argues that Al Maha’s claim for induced breach of fiduciary duties must be dismissed because “it fails to specifically describe the alleged collusion” between Darley and Gale. (Darley’s Mem. at 19.)
“Under Illinois law, a party is liable for tortious inducement if a plaintiff demonstrates that the defendant (1) colluded with a fiduciary in -committing a breach; (2) knowingly participated in or induced the breach of duty; and (3) knowingly accepted the benefits resulting from that breach.” Borsellino v. Goldman Sachs Group, Inc.,
Contrary to Darley’s assertion, the court finds that Al Maha has sufficiently described the alleged collusion between Darley and Gale. Al Maha has alleged that Gale “received a payment in excess of $50,000 from Darley in connection with Al Maha’s purchase of the Fire Trucks” and that this payment “was not disclosed to Al Maha by Darley or by Mr. Gale.” (Compl. ¶ 16.) Gale then agreed, on behalf of Al Maha, to purchase the Fire Trucks for “hundreds of thousands of U.S. dollars over prevailing market prices,” to Darley’s benefit and Al Maha’s detriment. (Id. ¶ 17.) In its claim for induced breach of fiduciary duties, Al Maha specifically alleges that “Darley made a payment to Mr. Gale, to induce him to breach his fiduciary duties [to Al Maha] by purchasing the Fire Trucks from Darley at an inflated price substantially above the prevailing market price at the time for the Fire Trucks and without seeking a more competitive price from Darley or from some other potential supplier.” (Compl. ¶ 89.) The court can reasonably infer from these allegations that Darley’s $50,000 payment to Gale is alleged to have been made without Al Maha’s consent and for the purpose of inducing Gale to breach his fiduciary duties to Al Maha. No more is required at this stage of the litigation. Darley’s mo
CONCLUSION
For the reasons set forth above, “W.S. Darley & Co.’s Rule 12(b)(6) Motion to Dismiss” (Dkt. No. 15) is granted in part and denied in part. Counts I, III, VI, VII, VIII, X, and XI are dismissed with prejudice. Counts II, IV, V, IX, and XII remain pending. Barley's Answer is due on or before 4/12/13. Counsel for both parties are requested to meet pursuant to Rule 26(f) and jointly file a Form 52 on or before 4/19/13. This case is set for a report on status and entry of a scheduling order on 4/23/13 at 9:00 a.m. The parties are encouraged to discuss settlement.
Notes
. Beginning on January 1, 2007, U.S. Environmental Protection Agency ("EPA”) standards required the use of ULSD for all Heavy Duty (Diesel) Engines ("HDEs”). (Compl. ¶ 13.)
. Al Maha does not allege or argue that its "communications]” with Darley in mid- to late 2010 constituted rejection of the Fire Trucks or revocation of acceptance. See also Midwest Generation, LLC v. Carbon Processing & Reclamation, LLC,
. In Count VII, Al Maha also seeks rescission.
. Darley initially also argued that Al Maha had not stated a plausible claim for fraudulent concealment, but appears to have accepted Al Maha’s clarification in response that it is pursuing a claim for fraudulent omission rather than fraudulent concealment. See Lefebvre Intergraphics, Inc. v. Sanden Mach. Ltd.,
. Illinois law also provides an exception to the economic loss doctrine "where one intentionally makes false representations.” Moorman,
. Al Maha also initially alleged in its Complaint that Darley concealed material facts from Al Maha, but Al Maha has affirmatively waived any claim for fraudulent concealment in this case and has not alleged any specific acts of concealment. (See Al Maha's Resp. at 26.)
. Darley also raises for the first time in its reply brief a potential concern that Al Maha "may not have standing under the ICFA” because it purchased the Fire Trucks for use in Saudi Arabia. (Darley's Reply at 15, n. 11.) To the extent Darley is attempting to assert an argument about standing, as opposed to merely flagging this issue for the court’s future consideration, this argument is considered waived, for purposes of Darley's motion to dismiss.