quantum meruit claim is denied.
IL. Fraudulent Concealment (Count V)

Defendant contends that Plaintiff has failed to plead the fraudulent concealment claim
with particularity as required by Fed. R. Civ. P. 9(b). It is clear that claims of fraudulent
concealment must be pled with sufficient particularity under Rule 9(b) to survive a motion to
dismiss. See Armstrong v. McAlpin, 699 F.2d 79, 90 (2d Cir. 1983).

The elements of a claim for fraudulent concealment include: (1) concealment of a
material fact; (2) the concealment must have been intended to induce false belief, under
circumstances creating a duty to speak; (3) the innocent party could not have discovered the truth
through reasonable inquiry or inspection and relied upon silence as misrepresentation that the
fact did not exist; (4) the concealed information was such that injured party would have acted
differently had it been aware of the information; and (5) reliance by the party from whom fact
was concealed led to that party’s injury. Fidelity Nat. Title Ins. Co. of New York v. Intercounty
Nat. Title Ins. Co., No. 00 C 5658, 2001 WL 477162, *2 (N.D. Ill. May 3, 2001) (citing Ruane v.
Amore, 287 Ill.App.3d 465, 475, 677 N.E.2d 1369, 1377 (Ill.App.Ct.1997)); Damian Services
Corp. v. White, No. 96 C 8623, 1998 WL 596466, at *3 (N.D. Ill Sept. 3, 1998).

Count V alleges that Defendants concealed the amount of commissioned sales procured,
which prevented JMR from collecting commissions on those sales. (R. 1-1, Compl. ff 38-39.)
The Complaint further alleges that the Defendant had a duty to make timely disclosures of JMR’s
commissioned sales. (Id. at 38). The Plaintiff also alleges that it did not demand commissions
it earned because the Defendant concealed commissioned sales information. (Jd.) Finally, the

Plaintiff claims that its reliance on the Defendant’s misrepresentations led to a loss of



unique to any one sales representative and, if proven, such conduct “will certainly have
ramifications for other MMC sales reps., and to the electronics sales rep. industry as a whole,
including competitors of JMR.” (See R. 5-1, Pl.’s Resp. to Mot. to Dismiss, at 7). Even reading
this allegation and the rest of the Complaint itself in the light most favorable to Plaintiff,
Plaintiff has failed to any nexus with consumer protection concerns or issues. At most, Plaintiff
has alleged that the Defendant’s alleged conduct will have ramifications for other sales
representatives, competitors of JMR, etc. Because Plaintiff JMR has failed to plead a nexus with
consumer interests, the Court dismisses Count VI of the complaint without prejudice.
CONCLUSION

Defendant’s motion to dismiss Counts IV, V and VI of the complaint (R. 3-1) is granted

in part and denied in part. It is denied with respect to Count IV. It is granted with respect to

Counts V and VI. Counts V and VI are hereby dismissed without prejudice.

Dated: October 9, 2002

ENTERED:

atte

United States District Court Judge



The claim of quantum meruit is based on a quasi-contract theory. It compensates a
plaintiff for acts of unjust enrichment where the defendant received services without
compensating plaintiff for them. Midcoast Aviation, Inc. v. General Elec. Credit Corp., 907 F.2d
732, 737 (7 Cir. 1990). In order to state a claim for quantum meruit, Plaintiff must allege that:
(1) it performed a service to benefit the Defendant; (2) Plaintiff performed the service
non-gratuitously; (3) Defendant accepted the service; and (4) “no contract existed to prescribe
payment of this service.” Owen Wagener & Co. v. U.S. Bank, 297 Ill. App.3d 1045, 1053, 697
N.E.2d 902, 908 (IIL App.Ct. 1998). See also Midcoast Aviation, 907 F.3d at 737.

It is clear that a party cannot recover under quantum meruit when a contract governs the
relationship between the parties. See First Commodity Traders, Inc. v. Heinhold, 766 F.2d 1007,
1011 (7" Cir. 1985); see also Klekamp v. City of Burbank, 266 Ill.App.3d 81, 86, 639 N.E.2d
241, 245 (IIl.App.Ct. 1994) (“The law will not imply a contract where an express contract
exists ...”); Allied Wire Prod., Inc. v. Marketing Techniques, Inc., 99 Ill.App.3d 29, 39, 424
N.E.2d 1288, 1296 (IIL. App.Ct. 1981) (if an enforceable express oral contract exists, a party may
not recover on a quantum meruit or implied contract theory).

Plaintiff's allegations of an implied contract, however, do not defeat the claim under
quantum meruit. Instead, they are quite consistent with the claim. Illinois !aw “view[s] the
theory of quantum meruit as based upon a contract implied at law.” Morris B. Chapman &
Associates, Ltd., v. Kitzman, 302 Ill.App.3d 780, 789, 706 N.E.2d 1065, 1072 (Ill.App.Ct. 1999).
Indeed, “[a] contract implied at law, or quasi-contract, is not a contract at all; rather, it is a rule of
law requiring the restitution of something belonging to the plaintiff in some sense that came into

the defendant’s hands..” Jd. (citation omitted). Accordingly, Defendant’s motion to dismiss the



commissions in the amount of $230,883.45.

Plaintiff does not specifically allege that the Defendant’s concealment of commissioned
sales was intended to induce false belief, but, drawing all reasonable inferences in favor of
Plaintiff, this element can reasonably be inferred from the other allegations in the Complaint.

More problematic, Plaintiff also fails to allege with any particularity the third element of
fraudulent concealment -- an innocent party could not have discovered the truth through
reasonable inquiry or inspection and relied upon silence as misrepresentation that the fact did not
exist. The Plaintiff may be able to address this deficiency in an amended pleading. Accordingly,
the Court grants Defendant’s motion to dismiss Count V without prejudice.

Il. —_ Illinois Consumer Fraud (Count VI)

Tn Count VI, Plaintiff alleges that Defendant’s concealment of commissioned sales also
violated the Illinois Consumer Fraud Act. Defendant challenges Plaintiff's ICFA claim on two
grounds. First, Defendant argues that Plaintiff does not have standing to bring such a claim.
Second, Defendant argues that Plaintiff has failed to plead this count with particularity as
Tequired under Rule 9(b).

The ICFA prohibits the “use or employment of any deception, fraud, false pretense, false
promise, misrepresentation or the concealment, suppression or omission of any material fact,
with intent that others rely upon the concealment, suppression or omission of such material
fact . . . in the conduct of any trade or commerce.” 815 ILCS § 505/2. Defendant essentially
contends that Count VI does not implicate any consumer protection concerns, thus Plaintiff does
not have standing to bring it.

It is clear that the ICFA is primarily concerned with protecting consumers, not business


Bi inate Order yprm (06/97)

United States District Court, Northern District of Illinois

ange Magistrate Judge Amy J. St. Eve “Than Assigned Judge

CASE NUMBER 02 C 1642 DATE 10/9/2002
CASE JMR vs. MMC
TITLE

{In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]

DOCKET ENTRY:

()) Oo Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due.
(3) Oo Answer brief to motiondue__. Reply to answer briefdue__
(4) ob Ruling/Hearing on setfor____—_at
(5S) 0 Status hearing[held/continued to] [set for/re-set for]on__—sset fora
(6) oO Pretrial conference[held/continued to} [set for/re-set for]on__—setfor__—s—saat__—
(7) oO Trial[set for/re-set for]on__—sat_—
(8) o [Bench/Jury trial] [Hearing] held/continued toa
(9) im This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) CO Local Rule 41.1 COFRCP41(a)\(1) CFRCP41(a)(2).
ao ff [Other docket entry} | Enter Memorandum Opinion and Order. Defendant’s motion to dismiss

Counts IV, V and VI of the complaint [doc. #3-1] is granted in part and denied in part. It is denied with
respect to Count IV. It is granted with respect to Counts V and VI. Counts V and VI are hereby
dismissed without prejudice.

(1) @f [For further detail see order attached to the original minute order.]
No notices required, advised in open court.

No notices required.

a | Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing to mail notices.

Mail AO 450 form. LMC gg
Copy to judge/magistrate judge.
els G-
courtroom
tad deputy's .
initials - -

~ “Date/tiine reetived in
central Clerk's Office



entities. See Web Communications Group, Inv. v. Gateway 2000, Inc., 889 F.Supp. 316, 323
(NLD. Ill. 1995) (“As its name indicates, the Consumer Fraud Act is primarily concerned with
protecting consumers.”); Lake County Grading v. Advance Mechanical Contractors, Inc., 275
Ill.App.3d 452, 457, 654 N.E.2d 1109, 1114 (Ill. App.Ct. 1995) (“[D]espite the broad language of
section 2, courts have recognized that it was not intended to cover all commercial transactions
regardless of the relationship between the parties involved.”).

A non-consumer plaintiff, however, has standing to pursue such claims where it can
demonstrate a nexus between the alleged injuries and injuries to the ultimate consumer. Jn re
Estate of Albergo, 275 Ill.App.3d 439, 449, 656 N.E.2d 97, 105 (Ill.App.Ct. 1995) (“Where the
alleged deception involves two businesses which are not consumers, a deceptive act or practice is
actionable under the Consumer Fraud Act if the alleged deception involves trade practices
addressed to the market generally or otherwise implicates consumer protection concems.”). Non-
consumer plaintiffs “must meet the consumer nexus test by alleging that the conduct involves
trade practices directed to the market generally or otherwise implicates consumer protection
concerns.” Athey Products Corp. v. Harris Bank Roselle, 89 F.3d 430, 437 (7" Cir. 1996); see
also Learning Curve Toys, L.P. v. Play Wood Toys, Inc, 2000 WL 343497, at *2 (N.D. Ill. Mar.
31, 2000) (the ICFA “does not authorize a suit by a non-consumer where there is no injury to
consumers.”).

Here, Plaintiff JMR is not a consumer as defined by the ICFA.' Nonetheless, Plaintiff

argues that it can make an ICFA claim because the the conduct alleged in the Complaint is not

' The Act provides that “The term ‘consumer’ means any person who purchases or contracts for
the purchase of merchandise not for resale . . . but for his use or that of a member of his
household.” 815 ILCS § 505/1(e).


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JMR SALES, INC., ) DOCKETED
a foreign corporation, ) oct 10 2002

Plaintiff, } No. 02 C 1642

v. ‘ Honorable Amy J. St. Eve

MMC ELECTRONICS AMERICA, INC., }
an Illinois corporation, : )

Defendant.

MEM PINION AND ORDER

Plaintiff JMR Sales, Inc. (“JMR”) was involved in the business of providing independent
sales representation to companies in the electronics industry. Defendant MMC Electronics
America, Inc. (“MMC”) manufactured and supplied electronic components to electronic
distributors and equipment manufacturers. JMR alleges that it was an independent sales
representative for MMC, and that MMC agreed to pay JMR commissions for all sales it
procured. JMR contends that MMC has failed to pay commissions to JMR as required under
their agreement. JMR initiated this lawsuit alleging the following claims: breach of contract
(Count I); violation of the Illinois Sales Representative Act (Count II); unjust enrichment (Count
IM); quantum meruit (Count IV); fraudulent concealment (Count V); and violation of the Illinois
Consumer Fraud Act (Count VJ).

MMC has moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss Counts IV, V and VI of

the complaint for failure to state a claim. For the reasons set forth below, defendant’s motion is

granted in part and denied in part. The motion is denied with respect to Count IV. The motion is



granted with respect to Counts V and VI, which are hereby dismissed without prejudice.
LEGAL STANDARD

A motion to dismiss tests the sufficiency of the complaint, not the merits of the suit. See
Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7" Cir. 1990); Majchrowski v. Norwest
Mortgage, 6 F.Supp.2d 946, 952 (N.D. Ill. 1998). In ruling on a motion to dismiss for failure to
state a claim, the court considers “whether relief is possible under any set of facts that could be
established consistent with the allegations.” Bartholet v. Reishauer A.G., 953 F.2d 1073, 1078
(7" Cir. 1992). The Court views all the facts alleged in the complaint, as well as any reasonable
inferences drawn from those facts, in the light most favorable to the plaintiff. Stachon v. United
Consumers Club, Inc., 229 F.3d 673, 675 (7" Cir. 2000); Doherty v. City of Chicago, 75 F.3d
318, 322 (7" Cir.1996). Dismissal is appropriate only where it appears beyond doubt that under
no set of facts would plaintiff's allegations entitle him to relief. Henderson v. Sheahan, 196 F.3d
839, 846 (7" Cir.1999). Nonetheless, the complaint must sufficiently allege the elements of each
cause of action in order to withstand a motion to dismiss. Lucien v. Preiner, 967 F.2d 1166,
1168 (7" Cir. 1992).

ANALYSIS
L Quantum Meruit (Count IV)

Count IV asserts a claim against MMC for quantum meruit, claiming that MMC was
unjustly enriched by JMR’s sales activities. Plaintiff alleges that if an actual contract did not
exist between JMR and MCC, an implied contract existed between them and that MCC breached
its implied contract. (R. 1-1, Compl. {{ 33-34). Defendant argues that Plaintiff's references to

“implied contract” in this count defeat Plaintiff's claim for quantum meruit.