will bar a claim under an implied contract theory only where the two alleged contracts cover the
same thing.” Louis Glunz Beer, Inc., 864 F.Supp. at 818 (emphasis added). Similarly put, “no
quasi-contractual claim can arise when a contract exists between the parties concerning the same
subject matter on which the quasi-contractual claim rests.” Industrial Lift Truck Service Corp. v.
Mitsubishi Int'l Corp., 432 N.E.2d 999, 1002 (Ill. App. Ct. 1982) (emphasis added). The Court
explained:

When parties enter into a contract they assume certain risks with an expectation of return.

Sometimes, their expectations are not realized, but they discover that under the contract

they have assumed the risk of having those expectations defeated. As a result, they have

no remedy under the contract for restoring their expectations. In desperation, they turn to
quasi-contract for recovery. This the law will not allow. Quasi-contract is not a means
for shifting a risk one has assumed under contract.

Id.

Tn Count II, DW alleges that DW engaged in numerous activities over the last eighteen
years that enhanced the reputation and goodwill of the Wurlitzer trademarks, such as working
with the U.S. Postal Service on the issuance of stamps displaying Wurlitzer jukeboxes, donating
Wurlitzer jukeboxes to the Patent and Trademark Office Museum for use in a special exhibit, and
entering into arrangements with the owners of world-famous brands to manufacture and sell
special co-branded goods. DW argues that Baldwin would be unjustly enriched if it were
allowed to retain the benefits of these activities without compensating DW. Baldwin responds
that this claim is barred because DW was a party to the License Agreement, which covered the
“same thing” that is at issue in DW’s unjust enrichment claim - DW’s use, for whatever purpose,

of the Wurlitzer trademarks and the compensation it was paid. Louis Glunz Beer, Inc., 864

F.Supp. at 818. DW counters by saying that the Agreement does not cover the “same thing” at



the age discrimination claim and that sought to force defendant to do something it was not legally
compelled to do, was held to satisfy the requirements of abuse of process. In Helene Curtis
Indus., Inc., the Court found that allegations that plaintiff had brought a claim against a
competitor to accomplish an anti-competitive result in the market place, a result that could not be
accomplished through the regular use of process, stated a claim for abuse of process. 1985 WL
1282 at *2.

Here, by contrast, DW’s abuse of process claim does not allege that process was used to
accomplish some result that is beyond the purview of the lawsuit. For example, it claims that
Baldwin filed the lawsuit to “deprive [DW] of the business it had developed over the prior
eighteen years and take the economic benefits of that business for itself.” Presumably, DW
means by this allegation that by filing this lawsuit Baldwin intended to deprive it of the ability to
continue to use the Wurlitzer marks. But that is not beyond the purview of the process or
collateral to these proceedings. It is the natural and intended result of every trademark
infringement suit to halt the unauthorized use of the trademark owners’ marks.

Similarly, DW alleges that the lawsuit was filed to “coerce [DW] into accepting [the
termination] by filing suit on the day notice of termination was given.” Again, however, there is
nothing about this allegation that puts it outside the purview of process. If Baldwin prevails on
its claims, DW will be forced to accept the termination.

Finally, DW argues that abuse of process is present here because the suit will “harass”
DW and “cause it economic hardship in defending this suit.” Causing a defendant to present a
defense to litigation is not an abuse of process; it is the natural consequence of submitting claims

to a court to be resolved. If “harassing” a defendant by requiring it to defend itself in a lawsuit



day period and the Licensee has not requested arbitration, the Agreement shall terminate
upon thirty (30) days notice by Licensor. Licensor shall be entitled to withdraw any
notice of breach hereunder.

(emphasis added). As in Jespersen:
This termination provision is not sufficient to take this agreement of indefinite duration
out of the general rule of at-will termination for two reasons. First, the language of the
termination provision is permissive and equivocal; a party “may” terminate for the stated
grounds — the clear inference being that those grounds are not the sole or exclusive basis
for termination. This is in stark contrast to a case in which the parties included an
exclusive and specific right to terminate for cause in a contract otherwise of indefinite
duration. . . . Second, the termination [event is itself an instance] of material breach, and
any contract is terminable upon the occurrence of a material breach. . .. Where a contract
is indefinite in duration, the delineation of instances of material breach in the context of
permissible and nonexclusive termination provision will not create a contract terminable
for cause.

Jd. (emphasis in original). Therefore, the Agreement was terminable at will, and Baldwin’s

decision to exercise that right cannot, as a matter of law, constitute a breach. Accordingly, I

dismiss Count I.

Count I: Unjust Enrichment

An unjust enrichment claim exists when one party benefits from services provided by
another where, under equity and good conscience, the first party should not retain the benefits.
Louis Glunz Beer, Inc. v. Martlet Importing Co., Inc., 864 F.Supp. 810, 818 (quoting Bd. of Dirs.
of Carriage Way Prop. Owners Assoc. v. W. Nat’l Bank, 487 N.E.2d 974, 978 (Ill. App. Ct.
1985)). The claim “is based on a contract implied in law and, therefore, does not apply where
there is a specific contract that governs the relationship of the parties.” Perez v. Citicorp
Mortgage, Inc., 703 N.E.2d 518, 526 (Ill. App. Ct. 1998) (unjust enrichment claim properly

dismissed where an express contract existed). However, “[t]he existence of an express contract



issue in the unjust enrichment claim; rather, the unjust enrichment claim “exists entirely apart
from” any claims arising from the Agreement. Id.

Unfortunately for DW, the unjust enrichment claim and the Agreement do indeed address
the same subject matter - DW’s use, for whatever purpose, of the Wurlitzer trademarks and the
compensation it was paid for that use. That DW chose to use them to enhance their reputation
and goodwill was a risk that it took when it began doing so despite knowing that the Agreement
under which it was allowed to use them did not address the specific scenario of compensation for
any enhancement of reputation and goodwill. Although DW now finds itself in the position of
having no remedy under the contract for restoring their expectations of compensation, it cannot
be allowed to use a quasi-contractual theory of unjust enrichment to shift the risk that it had
previously assumed. See First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d

1007 (7th Cir. 1985). Accordingly, I dismiss Count IL.

Count III: Abuse of Process

In Count III, DW alleges that Baldwin’s motive in bringing this lawsuit is “to harass”
DW, cause it “economic hardship,” and “to coerce” it into accepting the wrongful purported
termination of the Agreement. DW alleges that in furtherance of “these malicious motives,”
Baldwin deliberately breached the Agreement on the same day it filed the complaint. DW further
alleges that filing the complaint was “part of a negotiating strategy designed to intimidate [DW]
into allowing Baldwin to avoid its obligations under the License and to deprive [DW] of the
business it bought in 1985 and the goodwill it has built up over the last eighteen years.”

Baldwin’s actions purportedly constitute abuse of process in violation of Illinois law.



was enough to constitute abuse of process, then the mere filing of a lawsuit with a “bad” motive
would be enough to state a claim, but it is clearly not. See, e.g., Commerce Bank, N.A., 627

N.E.2d at 748. Accordingly, | dismiss Count II.

For the reasons above, Baldwin’s Motion to Dismiss Counterclaim is GRANTED.

Bu

ENTER:

James Fal
UnitedStates Distri Kas)

DATE:



Minute Order Form (06/97),

United States District Court, Northern District of Illinois

Ni f Assigned Jud ‘9 iti i or
inde Magistrate Judge James B. Zagel “than Assigned dude
CASE NUMBER 03. C2105 DATE 8/4/2003
[ CASE BALDWIN PIANO, INC. vs. WURLITZER
TITLE

{In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendam, 3rd party plaimtilf, and (b) state brielly the nature
MOTION: of the motion being presented. |

DOCKET ENTRY:
a) oO Filed motion of [ use listing in “Motion” box above.]
(2) im) Brief in support of motion due
(3) o Answer brief to motion due . Reply to answer brief due
(4) Bb Ruling/Hearing on set for at
(5) a Status hearing[held/continued to] [set for/re-set for]on___set for at
(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) Oo [Bench/Jury trial] [Hearing] held/continued to at
(9) oa This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
OOFRCP4(m) OLocal Rule 41.1 OFRCP41(a)(1) OO FRCP41(a)(2).

(10) a (Other docket entry] Plaintiff’s motion to dismiss the counterclaim is granted.
dl) ff [For further detail see order attached to the original minute order.]

No notices required, advised in open court. Document

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Illinois courts have generally “taken a very restrictive view of the tort of abuse of
process.” Commerce Bank, N.A. v. Plotkin, 627 N.E.2d 746, 748 (Ill. App. Ct. 1994). To state a
claim, a plaintiff must allege: “(1) some act in the use of the legal process not proper in the
regular prosecution of such proceedings, and (2) the existence of an ulterior purpose or motive.”
Kirchner v. Greene, 691 N.E.2d 107, 116 (Ill. App. Ct. 1998). To satisfy the first element, the
plaintiff must allege that “process has been used to accomplish some result which is beyond the
purview of the process or which compels the party against whom it is used to do some collateral
thing which could not legally be compelled to do.” Doyle v. Shlensky, 458 N.E.2d 1120, 1128
(Ill. App. Ct. 1983). “The mere filing of a lawsuit, even with a malicious motive, does not
constitute an abuse of process.” Commerce Bank, 627 N.E.2d at 748.

In arguing for dismissal of this claim, Baldwin argues that even if DW could demonstrate
the existence of an ulterior purpose or motive for filing this lawsuit, it has not alleged facts
demonstrating that the lawsuit is improper. In response, DW cites International Union of
Operating Eng’rs v. Lowe Excavating Co., Inc., No. 98 C 7956, 1999 WL 350650 (N.D. Ill. May
21, 1999), and Helene Curtis Indus., Inc. y. Milo Corp., No. 84 C 5217, 1985 WL 1282 (N.D. Ill.
May 2, 1985) in support of the proposition that the lawsuit here is improper. Unfortunately for
DW, neither case supports such a conclusion. In Jnt’! Union of Operating Engineers, plaintiff
brought suit against the defendant, alleging that defendant had engaged in age discrimination.
Defendant filed a counterclaim for, inter alia, abuse of process, alleging that the plaintiff's
discrimination suit had been filed to force defendant into recognizing plaintiff as defendant’s
collective bargaining representative. Int'l Union of Operating Engineers, 1999 WL 350650 at

*2. This conduct, which was plainly a result that could not be obtained by regular prosecution of



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

BALDWIN PIANO, INC.,
Plaintiff,

v. No. 03 C 2105
Judge James B. Zagel
DEUTSCHE WURLITZER GMBH d/b/a
WURLITZER JUKEBOX COMPANY,

BOCKETED

AUG 07 2003

Defendants.

MEMORANDUM OPINION AND ORDER

Plaintiff and counter-defendant Baldwin Piano, Inc. (“Baldwin”) is the owner of several
federally registered “Wurlitzer” trademarks. For several years, defendant and counter-plaintiff
Deutsche Wurlitzer GMBH (“DW”) bas manufactured, advertised, marketed, and sold various
products bearing the Wurlitzer trademarks pursuant to a 1985 License Agreement. On March 24,
2003, Baldwin notified DW that the Agreement was being terminated immediately, that further
use of the Wurlitzer trademarks by DW would be unauthorized, and that a complaint would be
filed that day and served to protect its rights, which Baldwin subsequently did. In response, DW
filed its Answer, Affirmative Defenses and Counterclaim, in it which asserts three claims against
DW for breach of contract and implied covenant of good faith and fair dealing (Count I), unjust
enrichment (Count II), and abuse of process under Illinois law (Count Ii).' Baldwin now moves
to dismiss the Counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6). In considering
a motion to dismiss, all well-pleaded allegations are taken as true, with the facts viewed in the

light most favorable to the pleader. Wolfolk v. Rivera, 729 F.2d 1114, 1116 (7th Cir. 1984).

' The Agreement provides that it is to be governed by Illinois law.



Dismissal is proper if “it is clear that no relief could be granted under any set of facts that could

be proved consistent with the allegations.” Hishon v. King & Spaulding, 467 U.S. 69, 73 (1984).

Count I: Breach of Contract and Implied Covenant of Good Faith and Fair Dealing

In Count I, DW alleges that by attempting to terminate the License Agreement for reasons
other than material breach, Baldwin breached the contract and the implied covenant of good faith
and fair dealing. In response, Baldwin argues that the Agreement was terminable at will because
it was of infinite duration and that its termination of the license could thus not constitute a breach
of contract.’ Under Illinois law, “contracts of indefinite duration are terminable at the will of
either party.” Jespersen v. Minnesota Mining and Mfg. Co., 700 N.E.2d 1014, 1016 (Ill. 1998).
“An agreement without a fixed duration but which provides that it is terminable on/y for cause or
upon the occurrence of a specific event is . . . terminable only upon the occurrence of the
specified event and not at will.” /d (emphasis in original).

The Agreement here addresses termination as follows:

13. Except as herein provided, and as provided in Article 14 hereof, this Agreement

shall continue in force without limit of period but may be cancelled by the Licensor for

material breach. In the event of Licensee’s material breach of this Agreement,

Licensor shall notify Licensee of the breach and Licensee shall have ninety (90) days to

cure the breach or to request arbitration by a single arbitrator in accordance with the then

current rules of the American Arbitration Association. If (i) the decision of the arbitrators
is in favor of Licensor or (ii) the material breach has not been cured with the ninety (90)

> Regarding the claim for breach of the implied covenant of good faith and fair dealing,
the covenant does not create an “independent source of duties for the parties to a contract” under
Illinois law. Beraha v. Baxter Health Care Corp., 956 F.2d 1436, 1443 (7th Cir. 1992). Rather,
it is essentially a construction tool used to divine the parties’ intent or construe ambiguous
contract terms. Anderson v. Burton Assoc., Ltd., 267 N.E.2d 199, 203 (Ill. App. Ct. 1991). Here,
the Agreement is unambiguous, and DW does not allege otherwise. Accordingly, there can be no
claim for breach of the implied covenant.