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purchase of merchandise not for resale in the ordinary course of his trade or business but for his use
or that ofa member of his household.” 815 ILCS 505/1(e). The term “person” includes any business
entity or association. 815 ILCS 505/1(c). “Merchandise” includes services. 815 ILCS 505/1(b).
Because plaintiff, a business, contracted for defendant’s services for use in its business but not to
incorporate into a product resold by plaintiff, plaintiff is a consumer of defendant’s product and need
not meet the consumer nexus test. Duchossois, 2001 WL 59031 at * 3-4. Accordingly, defendant’s
motion to dismiss Count II is denied.

In Count III, plaintiff alleges that defendant fraudulently induced plaintiff into entering into
the License Agreement. Defendant has moved to dismiss, arguing that plaintiff cannot allege
reasonable reliance because the agreement contains a “reliance clause.” Paragraph 12 of the License
Agreement provides:

This agreement contains the entire agreement between the parties. The parties agree

that the execution of this agreement has not been induced by any promises,

understandings, or representations not expressed herein and there are no collateral

agreements between them dealing with the subject matter of this agreement.

Plaintiff does not dispute that paragraph 12 contains both an integration clause and a reliance
clause, nor that the general law is that such a reliance clause precludes any claim of deceit by prior
representation. See Rissman v. Rissman, 213 F.3d 381, 384 (7 Cir. 2000). Instead, plaintiff argues
that a reliance clause acts to foreclose only those claims based on contrary oral falsehoods when the
written document reveals the truth. Plaintiff discerns this theory from Judge Easterbrook’s statement
in Rissman that the principle behind the court’s holding on reliance clauses is “fundamentally the
same as a doctrine long accepted in this circuit: that a person who has received written disclosure

of the truth may not claim to rely on contrary oral falsehoods.” Id.


DISCUSSION

In Count Il, plaintiff alleges that defendant has violated the Consumer Fraud Act. Defendant
argues that the count fails to plead the fraud with the specificity required by Fed. R. Civ. P. 9(b),
which applies to all claims of fraud, including claims under the Consumer Fraud Act. Nakajima All
Co., Ltd. v. SL Ventures Corp., 2001 WL 641415 at *5 (N.D. Ill. 2001). To satisfy Rule 9(b), the
complaint must allege the circumstances of fraud with particularity. According to the Seventh
Circuit, “this means the who, what, when, where, and how: the first paragraph of any newspaper
story.” DiLeo v. Emst & Young, 901 F.2d 624, 627 (7" Cir. 1990).

The first amended complaint alleges that Fran Collins, at an October 31, 2001, meeting at
defendant’s offices in Chicago, told Larry Tucker of plaintiff that defendant had engaged in this type
of campaign previously, and that the malls had adequate and experienced staff to handle the
complete campaign. Later, on December 31, 2001, defendant, again through Collins, submitted a
written proposal under which each mall would erect temporary kiosks and see that they remained
fully stocked. The complaint further alleges that Collins knew that the malls did not have the
personnel to perform as required under that proposal. These facts are sufficient to inform defendant
of the alleged fraud and comply with Rule 9(b).

Defendant also argues that Count II fails to state a claim under the Consumer Fraud Act
because plaintiff is not a consumer and has not satisfied the “consumer nexus” test by alleging facts
to show that the conduct involves trade practices directed to the market generally or otherwise
implicates consumer protection concerns. Athay Products Corp. v. Harris Bank Roselle, 89 F.3d

430, 437 (7" Cir. 1996); Duchossois Industries, Inc. v. Crawford & Co., 2001 WL 59031 (N.D. Ill.

2001). Under the Act, a consumer is defined as “any person who purchases or contracts for the



According to plaintiff, the contract in questions does not “disclose truth,” but in fact contains
written disclosures of lies. Plaintiff essentially argues that the contract did in fact integrate all the
promises made to it, but that those promises were false. That, of course, merely articulates plaintiff's
breach of contract claim. To the extent that plaintiff also alleges that defendant lied about its intent
to perform, that is a claim for breach of a promise of future performance which is not actionable in

Illinois, See Clark v. Robert W. Baird Co., Inc., 142 F. Supp. 2d 1065, 1073-74 (N.D. Ill. 2001)

(Promissory fraud is actionable only when “the false promise or representation of future conduct is
alleged to be the scheme employed to accomplish the fraud.”). Therefore, because plaintiff
specifically agreed that it was not induced to enter the contract by any extra contractual promises,
it cannot state a claim for common law fraud based on any such promise.
CONCLUSION

For the reasons set forth above, defendant’s motion to dismiss is denied as to Count II and
granted as to Count III.
ENTER: November 20, 2003
“TGaorw, (eave —

Robert W. Gettleman
United States District Judge



Minute Order Form (06/97)

United States District Court, Northern District of Illinois

sare Mookie Jutge | Robert W. Gettleman — | “tintasigned fudge

CASE NUMBER 03 C 2107 DATE November 20, 2003
CASE We Deliver America v_ General Growth
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

of the motion being presented.]

MOTION:

DOCKET ENTRY:

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

(2) QO Brief in support of motion due

(3) a Answer brief to motion due . Reply to answer brief due.

(4) o Hearing

(5) oO Status hearing

(6) Oo Pretrial conference[held/continued to] {set for/re-set for] on set for at :

7) Oo Trial{set for/re-set for] on at

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

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

OUFRCP4(m) (General Rule21 OFRCP41(a)(1) OO FRCP41(a)(2).

(jo) ol [Other docket ent ry} Memorandum opinion and order entered.
Defendant’s motion to dismiss is denied as to count II and granted
as to count III. Status hearing date of 12/3/03 is to stand.

di) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court. Document

No notis .
ices required, nuniber of notices

Number

X | Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing to mail notices

Mail AO 450 form.

Copy to judge/magistrate judge.

date mailed notice

courtroom
Gps deputy’s
initials

Dan,

*"Date/time reecived in: | :
central Clerk's Office svailigg deputy nts

aay



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

WE DELIVER AMERICA, INC., a corporation,

Plaintiff,

No. 03 C2107
v.

Judge Robert W. Gettleman
GENERAL GROWTH PROPERTIES, INC.,
a corporation,

Defendant.

GENERAL GROWTH PROPERTIES, INC.,
a corporation,

Counterplaintiff, UU,
. No, Mey
2 ae
LARRY TUCKER, individually, d/b/a WE Np
DELIVER AMERICA,
Counterdefendant.

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MEMORANDUM OPINION AND ORDER

Plaintiff, We Deliver America, Inc., has brought a three count first amended complaint
against defendant, General Growth Properties, Inc., alleging breach of contract, violation of the
Illinois Consumer Fraud and Deceptive Business Practices Act (“Consumer Fraud Act”), 815 ILCS
505/1 et. seq., and common law fraud in the inducement in Counts I through III respectively.
Defendant has moved to dismiss Counts II and III for failure to plead fraud with the particularity

required under Fed. R. Civ. P. 9(b), and failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

a


For the reasons set forth below, defendant’s motion is denied as to Count II and granted as to Count
It.
FACTS

Plaintiff is a direct marketing company engaged in the distribution of coupons on behalf of
its customers to targeted members of the general public. One method plaintiff uses is to contract to
have packages containing the coupons distributed in various places where members of the public
congregate, such as shopping malls. Defendant is the owner and operator of approximately 125
shopping malls throughout the United States.

On August 9, 2002, plaintiff and defendant entered into a License Agreement under which
each of defendant’s 125 malls would accept freight delivery of approximately 32,000 coupon
packets, erect kiosks at exits in each mall, initially stock the kiosks with packets, store the packets
not yet stocked, and replenish the kiosks a minimum of five times a day, never allowing the kiosks
to be empty. Plaintiff alleges generally that defendant failed to accept delivery of the packets in a
timely manner, failed to timely erect the kiosks, failed to properly locate the kiosks near at least four
exists at each mall, and failed to fully stock and restock the kiosks, allowing them to become empty.
In addition, plaintiff alleges that during negotiation of the contract, Fran Collins of defendant
specifically represented that defendant had engaged previously in successful coupon distribution
campaigns, and that staff at each mall was experienced and able to successfully complete a campaign
of the size and duration being discussed. Plaintiff alleges that these representations were false, that
Collins knew they were false when made, and that Collins knew the malls did not have sufficient
staff or facilities to accept delivery of 32,000 coupon packets each, erect kiosks, store the unstocked

packets and replenish the kiosks with coupon packets in a timely manner.