Cir. 2002).

UPS first argues that the Complaint should be dismissed because American is not entitled
to cquitable rclief because it has an adequate remedy at law and it has not alleged, and cannot
establish, irreparable harm.

A party seeking a preliminary injunction must demonstrate: (1) a likelihood of success on
the merits, (2) no adequate remedy at law, (3) and that it will suffer irreparable harm if the relief
is not granted. See Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808, 811 (7th Cir. 2002)
(Promatek), Because of the difficulty in assessing the damages associated with a loss of
company’s goodwill, such damages to goodwill can constitute an inadequate remedy at law. See
Promatek, 300 F.3d at 813; Gateway Eastern R.R. Co. v. Terminal R.R. Assoc. of St. Louis, 35
F.3d 1134, 1140 (7th Cir. 1994). (Gateway). Furthermore, loss of goodwill also qualifies as
irreparable harm. Gateway, 35 F.3d at 1140; Cleveland Hair Clinic, Inc. y. Puig, 968 F. Supp.
1227, 1246 (N.D, TIl, 1996) (potential threat of company’s ability to survive constitutes
inadequate remedy at law and irreparable injury).

In the instant case, American has pled that it has a reputation for excellent client service
that has allowed its market share to grow considerably and that is has never lost a major account
to a competitor. American further alleges that UPS’s breach of contract and violation of the
implicd covenant of good faith and fair dealing will cause irreparable harm to American’s
business reputation, 7.¢., goodwill. Furthermore, the alleged breach and violation of the implied
covenant of good faith and fair dealing will causc American to suffer incalculable damages. At

this stage of the litigation, American has sufficiently pled an inadequate remedy at law and an

irreparable hann. See Promatek, 300 F.3d at 813; Gateway, 35 F.3d at 1140.



received an inquiry from Aramark Corporation offering to buy equipment in anticipation that it
would be taking over the vending and food services American had been providing at the Facility.

On December 2, 2002, American sent a letter to UPS informing UPS that it was obligated
to comply with the notice and cure requirements in the Agreement and that any attempt to
terminate the Agreement would be invalid. American also placed UPS on notice that American
was invoking the dispute resolution procedures, arbitration, set forth in the Agreement. On
December 3, 2002, Volta contacted American by telephone. Volta refused to withdraw UPS’s
termination order effective January |, 2003.

On December 10, 2002, American filed its Complaint in the Circuit Court of Cook
County against UPS. American alleged a breach of contract and breach of implied covenant of
good faith and fair dealing claim. American sought a temporary restraining order, a preliminary
injunction, an award of damages, and to compel arbitration. On December 12, 2002, Judge
Thomas P. Quinn (“Judge Quinn”) entered an ex parte temporary restraining order barring UPS
from terminating the Agreement. Shortly thereafter, the case was removed to this Court.

In reviewing a motion to dismiss, the court reviews all facts alleged in the complaint and
any inferences reasonably drawn therefrom in the light most favorable to the plaintiff. See
Marshall-Mosby vy. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir.2000), Dismissal is
warranted only if the plaintiff can prove no set of facts in support of its claims that would entitle
it to relief. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). A plaintiff generally need not
plead facts or the elements of a claim. Instead, a plaintiff need only plead the bare minimum

facts necessary to put a defendant on notice of the claim so that the defendant can file an answer.

See Swierkiewicz v. Sorema, 524 U.S, 506, 512 (2002); Higgs v. Carver, 286 F.3d 437, 439 (7th



UPS also argues that American’s Complaint should be dismissed because American
agreed to submit all disputes to arbitration.

The court has discretion to preserve the status quo pending arbitration of the partics’
dispute via a preliminary injunction. See Merrill Lynch, Pierce, Fenner & Smith, Inc. y.
Cunningham, 736 F. Supp. 887, 889-90 (N.D, Tll, 1990), citing Sawer-Getriebe KG v. White
Hydraulics, Inc., 715 F.2d 348 (7th Cir, 1983). Both parties agree that the Agreement dispute is
to be addressed through the dispute resolution and arbitration procedures mandated by the
Agrcement. However, based on the allegations, UPS planned to terminate the Agreement prior
to any resolution through arbitration, causing both economic harm and harm to American’s
goodwill. Accordingly, the preservation of the status quo via a preliminary injunction is
appropriate in this case.

For the foregoing reasons, UPS’s Motion to Dismiss is denied.

\ sgh W. DARRAH
United States District Judge



‘Minute Onder Form (0697)

United States District Court, Northern District of Illinois

Name of Assigned Judge Sitting Judge if Oth
or Magistrate Judge John W. Darrah than Aselgned Judge
CASE NUMBER 02 € 9439 DATE 1/30/2003
CASE AMERICAN FOOD & VENDING vs, UNITED PARCEL SERVICE
TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3¢d party plaintiff, and (b) state briefly the nature
of the motion being presented.]

MOTION:

DOCKET ENTRY:

qd) Q Filed motion of [ use listing in “Motion” box above.]

(2) a Brief in support of motion due

(3) {] Answer brief to motion due. - Reply to answer briefdue__

(4) ia Ruling/Hearing on setfor, at

(5) oO Status hearing[held/continued to) [set for/re-set for]on set fort

(6) o Pretrial conference[held/continued to] [set for/re-sct for]on___setfor_at__
(7) Oo Trial[set for/re-set for] on at

(8) o [Bench/Jury trial] [Hearing] held/continued to at

(©) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) CO Local Rule 41.1 GFRCP41(a\(1) C FRCP41(a)(2).

qo) «=o [Other docket entry] Status hearing held. Plaintiff's motion to compel discovery is withdrawn [7-
1]. Preliminary injunction hearing is set for 4/15/03 at 10:30 a.m. Enter Memorandum Opinion And
Order. UPS's motion to dismiss is denied.

al) @ (For further detail sce order attached to the original minute order.]

No notices required, advised in open court,

No notices required, umber of notices

JAN 3 1 2093

dare dockesed

Notices mailed by judge's staff.

Notified counsel by telephone.

ov | Docketing to mail notices.

Mail AO 450 form.

ting deputy initiale

Copy to judge/magistrate judge.

courtroom
La deputy's
initials

Date/time received in

central Clerk’s Office nailing deputy initials



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

AMERICAN FOOD & VENDING CORPORATION, ) JAN 3.1 203
Plaintiff, }
v. } No. 02 C9439
UNITED PARCEL SERVICE OASIS SUPPLY } Judge John W. Darrah
CORPORATION, y
Defendant. }

MEMORANDUM OPINION AND ORDER

Plaintiff, American Food & Vending Corporation (“American”), filed a Verified
Complaint for Injunctive and Other Relief (“Complaint”) in the Circuit Court of Cook County,
seeking injunctive relief for Defendant’s, United Parcel Service Oasis Supply Corporation’s
(“UPS”), breach of contract. Subsequently, the case was removed to federal court. Presently
pending before this Court is UPS’s Motion to Dismiss.

A reading of the Complaint supports the following summary of the alleged conduct of the
parties.

On January 8, 2002, UPS and American entered into a seven-ycar Food and Vending
Service Agreement (“Agreement”) whercin American agreed to provide UPS all café, catering,
office, coffee, bottled water, and vending services to UPS employees at its Hodgkins, TMlinois
distribution facility (“Facility”), Pursuant to the Agreement, American agreed to install, service,
and maintain vending machines in the Facility.

In Apnil 2002, American initiated its service operations under the Agreement at the

Facility. American myested approximately $140,000 in labor, travel, repair, shipping,
y Pi PP’



equipment, recruiting, advertising, signage, permits, and fees to set up the operations. American
also made an additional capital contribution of $485,000 for new cquipment for the Facility.
Since April 2002, American has sold more than $1.4 million in vending machine products. In
addition, the Facility has generated morc than $1.5 million in sales in the first seven months of
opcration. During these seven months of operation, UPS personnel made only a limited number
of oral complaints about minor problems in the food service or vending operation.

On October 3, 2002, Tom Volta (‘Volta’), the manager of Human Resources for UPS,
forwarded a letter of termination of the Agreement to American. The Ictter informed American
that UPS was terminating the Agreement effective January 1, 2003. The letter indicated that the
basis of the termination was substantial violations of Scction Il of the Agreement, which
included: theft, food poisoning, inadequate water distribution, selling out-of-date food, serving
undercooked and/or spoiled food, and repeated failure to provide proper supplies.

On October 9, 2002, American responded to the October 3 letter, claiming that it was
unaware of any substantial violations of the Agreement. American further warned UPS that it
would seek legal action if UPS continued in its effort to terminate the Agreement. American
urged UPS to utilize the dispute resolution procedures in the Agreement and pledged to work
with UPS to correct whatever problems existed.

On November 11, 2002, after receipt of the October 9 letter, UPS again informed
American, during a telephone conversation, that UPS intended to terminate the Agreement on
Januaty t, 2003. UPS also offered to purchase American’s equipment. During the telephone

conversation, Volta acknowledged that he had instructed his personnel not to advise American of

any problems UPS now claimed it had experienced. Shortly after this conversation, American