from the language of the instrument when properly interpreted and construed.”).’ However, the
fact that GI may have agreed to assume a less extensive warranty than Zenith agreed to provide
WEL-TV does not absolve GI of all warranty responsibilities in relation to the STBs sold to WH-
TV.

The court turns to the question of whether WH-TV has offered any evidence of defects
that would be covered by the warranty GI assumed. Specifically, WH-TV must show that defects
in the ZEC2 STBs it purchased from Zenith arose after the closing date of the asset sale, and
within twelve months after their delivery. ZEC2 STBs were shipped between May 28, 1999 and
January 19, 2000, and accordingly, the twelve-month warranty would be in effect as to at least
some of the STBs until January 19, 2001.

WH-TV points to defects identified in a December 11, 2000 Motorola “Open Bug
Report,” including units turning on by themselves, 8:00 p.m. reboots, audio-visual lock-up and
random reboots in multiple dwelling units. However, the Motorola document identifies these
defects as occurring the ZEC1 model of STB, not the ZEC2 model that is covered by the

assumed warranty.) WH-TV also points to a July 25, 2001 Motorola document titled “Software

4 WH-TV argues that even if the Asset Purchase Agreement limits GI’s obligations to
WH-TV to repair and replacement of defective STBs, GI may nevertheless be liable for
consequential damages because the repair remedy failed of its essential purpose. However, WH-
TV’s rights rest on GI’s liability under the Asset Purchase Agreement, which “cannot be
extended or enlarged on the ground alone that the situation and circumstances of the parties
justify or demand further or other liability.” See Trident Indus. Prods. Corp., 501 N.E.2d at 281.

5 WHLTV argues that because the ZEC1 is identical in all material respects to the ZEC2
model, “problems occurring with the ZEC1 were necessarily also occurring with the ZEC2.”
However, WH-TV does not offer any evidence that any of these problems occurred in the ZEC2
STBs, and the Asset Purchase Agreement expressly limits assumption of the warranty obligation
to that model.

13



Vice President of the Customer Care Group in the Network Systems Division; and the manager
of the digital support team of engineers who were responsible for installation, maintenance, and
support of the STBs sold to WH-TV.

Following the asset sale, Motorola continued the work that Zenith had been performing to
resolve problems with the STBs in WH-TV’s system. Starting in September 2000, Motorola’s
manager of the digital support team maintained ongoing contact with WH-TV’s director of
engineering regarding software issues and problems WH-TV was having with its system.
Motorola retained a consultant to analyze the cause of, and propose solutions for, software
deficiencies in the WH-TV STBs. Motorola delivered new operating system upgrades to WH-
TV in July 2001 and October 2001.

In November 2000, WH-TV representatives met with representatives of Motorola and
Zenith. At the meeting, WH-TV made a presentation regarding the technical problems it was
experiencing with the STBs, as well as its claim for damages. According to WH-TV, at that
meeting, Motorola representative Luehrs promised that Motorola would correct the remaining
technical defects in the STBs, and would “get you open.” Motorola denies that such statements
were made. At the conclusion of the meeting, the head of Motorola’s Satellite and Broadcast
Systems business unit stated that he would get back to WH-TV after speaking with Motorola’s
legal team.

Between November 26, 2000 and March 7, 2001, WH-TV sent numerous
communications to Motorola, asking for a response to the proposal WH-TV had made in the
November 2000 meeting. Meanwhile, according to WH-TV, in telephone calls in January and

February 2001, Luehrs informed WH-TV that work on various software fixes and DVB



and General Manager of the group that manufactured and serviced the STBs prior to the asset
sale, and worked for Motorola after the asset sale. Alexander testified that after the asset sale,
Motorola promised to provide an enhanced program guide. The court concludes that, at this
stage, WH-TV has produced sufficient evidence to establish a factual issue as to whether
Motorola made promises to WH-TV.

The court next considers whether WH-TV has shown that it reasonably and foreseeably
relied to its detriment on these promises. WH-TV argues that it relied on Motorola’s promises
by not entering into a contractual relationship with another engineering source that may have
been able to correct the defects in a timely manner. According to WH-TV, it was harmed as a
result of this reliance when it was forced to delay the launch of its digital television service. The
court finds that this is adequate evidence to withstand summary judgment on the reliance portion
of the inquiry. Since factual disputes remain as to WH-TV’s promissory estoppel claim, both
motions for summary judgment are denied as to Counts IV and VI.

B. Equitable Estoppel

WH-TV, Motorola, and GI also seek summary judgment on WH-TV’s equitable estoppel
claims, which are asserted against Motorola in Count III and against GI in Count V. To prevail
on its equitable estoppel claims, WH-TV must show, among other things, that it reasonably
relied upon GI’s and Motorola’s misrepresentations or concealment of material fact, in good
faith, and to its detriment. See Vaughan v. Speaker, 533 N.E.2d 885, 890 (Ill. 1988). The party
asserting equitable estoppel has the burden of proving it by “clear, precise and unequivocal

evidence.” Marks v. Rueben H. Donnelly, Inc., 636 N.E.2d 825, 832 (Ill. App. Ct.) (citations

omitted), appeal denied, 642 N.E.2d 1283 (Ill. 1994).


software fixes necessary to enable closed captioning on digitally tumed around channels. Neither
Motorola nor GI ever provided WH-TV with an enhanced program guide with a seven-day look-
ahead feature. According to WH-TV, the multicast plan implemented by Motorola in December
2001 does not allow WH-TV to operate DVB-compliant STBs from other manufacturers
alongside the Zenith STBs without experiencing loss of functionality. In addition, according to
WH-TV, even if the multicast plan was successfully implemented, it would result in a reduction
in the number of services that WH-TV can offer, because the plan uses more bandwidth. As of
December 31, 2002, the Zenith STBs in use by WH-TV still were not fully DVB compliant.

At some point, Motorola directed WH-TV to send defective STBs to Contec, Inc. for
repair. WH-TV states that Contec, Inc. eventually advised WH-TV that it no longer had the
technical resources necessary to repair WH-TV’s STBs. According to WH-TV, no repair options
currently exist for its broken or defective STBs. WH-TV’s system currently continues to have
symptoms suggesting that unresolved problems remain,

The ongoing operating problems and lack of promised features in the Zenith STBs
prevented WH-TV from launching its digital service. The Zenith STBs, as originally installed,
did not allow STBs from other manufacturers to operate alongside the Zenith STBs. The delay
due to the functionality problems and lack of DVB compliance caused WH-TV to miss the
opportunity to become the first company to offer digital television broadcasting with a full array
of local channels in its signal area.

Il. Analysis

Summary judgment shall be granted “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with [any] affidavits, show that there is no


compliance was ongoing. Luehrs testified that Motorola “continued to provide software
development support all through this process.”

In February 2001, Nagra, the subcontractor of WH-TV’s supplier that provided WH-TV’s
conditional access system, prepared a document entitled “DVB Migration Plan.” This document
describes the process by which the STBs were to be upgraded to DVB compliance (according to
WH-TV) or to allow other manufacturers’ STBs to work on the same system as the Zenith STBs
(according to GI and Motorola). Motorola also prepared a migration plan. Motorola
implemented the modifications to the STB software in accordance with its migration plan.

In a March 9, 2001 letter, Motorola advised WH-TV that it had decided to discontinue
production of STBs. Also in that letter, Motorola offered to accept purchase orders for STBs
until April 15, 2001. Motorola offered to deliver a version of software that would support
Nagra’s upgrade to a DVB-standard conditional access system by June 30, 2001. In addition,
Motorola offered to provide limited product warranty support and out-of-warranty support on a
mutually acceptable basis. Motorola stated that this offer was subject to the parties reaching a
commercial agreement.

In an April 5, 2001 letter to WH-TV, Motorola’s William Luehrs stated that “GI does not
have contractual or other legal obligations to WHTV for issues associated with prior equipment
sales from Zenith...except for limited product warranty repair work.” In an April 9, 2001
response to Motorola, WH-TV characterizes the April 5 letter as “‘a first ever attempt to disclaim
liability on your behalf. This is also the first time ever that you or anybody, on behalf of
Motorola or Zenith, has mentioned General Instrument as a party in interest.”

According to WH-TV, Motorola never repaired many software bugs, or provided the


Constr., Inc. v. American Airlines, Inc., 565 N.E.2d 990, 1004 (IIL. 1990); Fischer v. First

Chicago Capital Markets, Inc., 195 F.3d 279, 283 (7 Cir. 1999).

WHL-TV contends that GI and Motorola promised to provide software fixes and DVB
compliance. Some of the representations cited by WH-TV, however, were made by Zenith
employees prior to the asset sale. Although these employees may have later joined Motorola,
they certainly were in no position to make promises on Motorola’s behalf prior to doing so. WH-
TV also offers evidence that at a November 2000 meeting, Motorola representative Luehrs told
WH-TV that Motorola was “going to get you open,” apparently meaning DVB compliant, and
that Motorola would not “leave [WH-TV] high and dry.” These statements are not
“unambiguous promises.” Nor are the statements in a March 9, 2001 Motorola letter offering to
support an upgrade to a DVB-compliant conditional access system, and provide limited product
warranty and out-of-warranty support. The letter characterizes those statements as an “offer” that
is “subject to the parties reaching a commercial agreement,” and concludes with the statement
that “[w]e look forward to hearing back from you if you would like to pursue business dealings
on the basis described in this letter.”

However, according to WH-TV, at the November 2000 meeting, Luehrs also promised
that Motorola would correct the remaining technical defects in the STBs. Motorola and GI argue
that WH-TV’s evidence that Luehrs made the promise is not credible, because following the
meeting WH-TV repeatedly demanded a response to WH-TV’s proposal, and did not refer to any
promises that Motorola had made at the meeting. However, at this stage the court must draw all
reasonable inferences in WH-TV’s favor in considering Motorola’s and GI’s motion.

WH-TV also offers the testimony of Don Alexander, who was Zenith’s Vice President



‘Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge i Sitting Judge if Other
or Magistrate Judge George W. Lindberg than Assigned Judge
CASE NUMBER 01 C 4366 DATE 6/18/2003
CASE Zenith Electronics Corporation vs. WH-TV Broadcasting Corporation
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:

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

(2) Oo Brief in support of motion due

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

(4) oO Ruling/Hearing on set for at

(8) Oo 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) im {Bench/Jury trial] [Hearing] held/continued to at

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

COFRCP4(m) CLocal Rule 41.1 C\FRCP41(a)(1) Cl FRCP41(a)(2).

(0) 4 {Other docket entry] WH-TV’s motion for summary judgment (436-1) is denied. GI and
Motorola’s motion for summary judgment (441-1) is granted in part and denied in part. Enter
memorandum opinion and order.

(1) [For further detail see order attached to the original minute order.]

No notices required.

Mail AO 450 form.

No notices required, advised in open court.
Notices mailed by judge’s staff,
Notified counsel by telephone.

Docketing to mail notices.

Copy to judge/magistrate judge

Document
Number

536

number of notices

(o-\9-08

date dockeled

dockering deputy initials

SLB

date mailed notice

courtroom
deputy's
initials

U bathdtbaitld,

matting depucy initials

central Clerk's Office



finds this argument unpersuasive. According to WH-TV, Zenith was unsuccessful in repairing
the STBs and supplying the missing features during the time prior to the asset sale. There is no
evidence that if WH-TV had filed suit against Zenith immediately after the asset sale, Zenith
could or would have successfully resolved the problems with the STBs.

Second, WH-TV argues that it was harmed in relying on its misapprehension that
Motorola was contractually obligated to perform the work, by not engaging an engineering
source that was contractually obligated to WH-TV. However, WH-TV offers no evidence that
explains why it would have made a difference if the work done on the STBs had been done by
engineers who were contractually obligated to do so, as opposed to engineers who did the work
as a service to a customer. WH-TV has failed to show how it was harmed by not knowing that
Motorola was not contractually obligated to the work. GI’s and Motorola’s motion for summary
judgment is granted as to Counts III and V. ,

Cc. Breach of Warranty

WH-TV, Motorola, and GI also seek summary judgment on WH-TV’s breach of warranty
claim, which is asserted against Motorola and GI in Count VIL? GI and Motorola first argue that
WH-TV cannot prevail on its breach of warranty claim because GI did not assume a warranty
that formed a basis of WH-TV’s bargain with Zenith. A breach of express warranty claim cannot

stand where there has not been “‘a breach of an affirmation of fact or promise that was made a

> Although it is undisputed that only GI was a party to the Asset Purchase Agreement
with Zenith, WH-TV also seeks to hold Motorola liable for breach of warranty, under the theory
that Motorola acted as GI’s agent. As noted above, for the purpose of their motion for summary
judgment, GI and Motorola assume that WH-TV’s allegations apply equally to both entities.
Since GI and Motorola do not contest agency at this point, and WH-TV’s motion for summary
judgment fails on other grounds, the court need not address the issue of agency.

11



According to WH-TV, Motorola concealed the fact that it had not assumed all of Zenith’s
responsibilities to WH-TV at the time of the asset sale, under circumstances that made its silence
amount to a misrepresentation of material fact. WH-TV states that Zenith personnel made
representations prior to the asset sale that Motorola would support WH-TV’s STBs, and failed to
disavow these representations after they became Motorola employees following the sale. WH-
TV argues that Motorola’s failure to inform WH-TV that it had not assumed Zenith’s
responsibilities amounted to a misrepresentation of material fact, given its employees’ failure to
disavow their prior representations, along with Motorola’s November 2000 promises to resolve
the software defects and provide DVB compliance, and the fact that Motorola made substantial
efforts to fix problems with the software, provide certain features, and provide DVB compliance.

Putting aside the question of whether WH-TV has adequately shown that Motorola
concealed a material fact, the court concludes that WH-TV’s equitable estoppel claim fails for
lack of evidence that WH-TV relied to its detriment on any concealment by Motorola of the fact
that it did not assume all of Zenith’s obligations. WH-TV must show that it was harmed by its
reliance on a belief that Motorola was contractually obligated to perform the work it performed.
That is, WH-TV must offer evidence that it would have acted differently had it known that
Motorola was performing work as a service to a customer, rather than out of a contractual
obligation, and that it was harmed by failing to take such other action.

WH-TV argues that during the time Motorola was performing work on the STBs, WH-
TV relied on its misapprehension that Motorola was contractually obligated to perform the work
in two ways. First, WH-TV argues that it relied to its detriment by delaying filing suit against

Zenith or otherwise forcing Zenith to repair the STBs and supply the missing features. The court

10



genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c). The court must draw all reasonable inferences in favor of
the nonmoving party. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
The moving party bears the initial burden of demonstrating that no material issue exists for trial.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has properly
supported its motion, the nonmoving party must offer specific facts demonstrating that a material

dispute exists, and must present more than a scintilla of evidence to support its position.

Anderson v. Liberty Lobby, Inc., 477 U.S, 242, 251-52 (1986).

A. Promissory Estoppel

WH-TV, Motorola, and GI all seek summary judgment on WH-TV’s promissory estoppel
claims, which are asserted against Motorola in Count IV and against GI in Count VI. Those
claims allege that GI and Motorola should be estopped from asserting that their liability is limited
under the Asset Purchase Agreement, because after the asset sale they made promises to WH-TV
that they would correct the defects in the STBs, supply the missing features, and make the system
DVB compliant.”

To prevail on a claim of promissory estoppel under Illinois law, a plaintiff must show that
(1) the defendant made an unambiguous promise; (2) the plaintiff relied on the promise; (3) the

reliance was reasonable and foreseeable; and (4) plaintiff’s reliance caused it harm. Quake

? WH-TV does not claim that GI actually performed any of the work on the STBs, and
rests its estoppel claims against GI on a theory that Motorola acted as GI’s agent in performing
the work. For the purpose of their motion for summary judgment, GI and Motorola assume that
WH-TV’s allegations against Motorola also were made against GI. Since GI and Motorola do
not contest agency at this point, and WH-TV’s motion for summary judgment fails on other
grounds, the court need not address the issue of agency.

7


8,900 STBs from Zenith, in four purchase orders sent between May 3, 1999 and December 23,
1999. The STBs were delivered beginning in May 1999. WH-TV paid Zenith more than $2.6
million for the STBs.

From the outset, the STBs did not work properly. In addition, the STBs lacked certain
promised features, including an electronic program guide with a seven-day look-ahead feature.
Finally, the STBs were not DVB compliant. Jn an attempt to fix problems with the STBs, Zenith
delivered at least eight new operating system upgrades. In a May 25, 2000 presentation, Zenith
reiterated its promise to provide the enhanced electronic program guide and fully DVB-compliant
software, and stated that it would do so no later than the fourth quarter of 2000.

Meanwhile, in February 2000, Zenith had signed a letter of intent with GI regarding the
sale of certain assets of Zenith’s Network Systems Division, the division responsible for making
the STBs. On July 17, 2000, Zenith and GI entered into an Asset Purchase Agreement. Under
the Asset Purchase Agreement, GI agreed to assume portions of Zenith’s obligations, including a
twelve-month repair and replacement warranty on one model of STB supplied to WH-TV. In
addition, GJ agreed to assume Zenith’s obligations under its business contracts that arose after
the closing date of the asset sale. According to WH-TV, it did not receive a copy of the Asset
Purchase Agreement at the time of the asset sale.

Following the execution of the Asset Purchase Agreement, Zenith’s Network Systems
Division’s president, William Luehrs, left Zenith’s employ and entered into a consulting
agreement with GI. In addition, other Zenith employees associated with the division became
employees of Motorola, GI’s parent company. These employees included Zenith’s Vice

President and General Manager of the group that manufactured and serviced the STBs; Zenith’s


Release Notes,” which lists certain bugs as having been resolved. However, this document does
not indicate that the listed defects were present prior to the expiration of the assumed warranty in
January 2001. The court concludes that WH-TV has not offered any evidence of defects in the
ZEC2 STBs that occurred after the closing date, but before the expiration of the assumed
warranty in January 2001.

However, WH-TV does identify one problem that it contends Motorola is responsible for
causing. According to WH-TV, work done by a Motorola consultant on an audio-visual loss bug
caused a different loss of video problem in the STBs. If Motorola failed to use reasonable care in
performing work on the STBs (even if it was performing the work voluntarily, as it claims), it
may be liable for negligence. See generally Gust K. Newberg Constr. Co. v. E.H. Crump & Co.,
818 F.2d 1363, 1367 (7" Cir. 1987). Since WH-TV has brought to the court’s attention the legal
support for a negligence claim, it is of no moment that its complaint identifies its theory as one of

breach of warranty. See Ryan v. Illinois Dep’t of Children & Family Servs., 185 F.3d 751, 764

(7 Cir. 1999). Accordingly, GI’s and Motorola’s motion for summary judgment as to Count VII

is denied. WH-TV’s motion for summary judgment as to Count VII is also denied.

14


In 1998, WH-TV decided to convert its analog system to a digital system. One component of a
digital television system is a set-top box (“STB”), which is connected to the subscriber’s
television. The STB decodes and processes digital signals to allow the subscriber to watch
television programming, as well as allowing subscribers to access features such as electronic
program guides, secondary audio programming, and closed captioning.

In 1998, WH-TV sought proposals from various STB suppliers. WH-TV shopped for a
supplier that could provide “open” or “DVB compliant” equipment, which would allow its
system to broadcast a single signal to STBs manufactured by multiple companies. The advantage
of DVB-compliant equipment thus was that it would allow WH-TV to use more than one STB
supply source and obtain STBs on a competitive basis.

In September 1998, Zenith responded to WH-TV’s request for proposal. Zenith’s
proposal represented that its STBs were DVB compliant and fully capable of meeting WH-TV’s
requirements. It also represented that its STBs used a “standards based” design and technologies
to promote network interoperability, which provided the flexibility to “mix and match”
components from many vendors. Finally, the proposal included a one-year warranty, guaranteed
that the STBs would function as described in the proposal, and guaranteed that they would have a
meantime between failure of 100,000 hours (the equivalent to more than ten years),

Zenith representatives also made presentations to WH-TV, which included
representations that Zenith’s STBs were DVB compliant, and contained reliable software and
hardware. Zenith also promised to supply WH-TV with an electronic program guide with
enhanced features, including a seven-day look-ahead feature.

In response to Zenith’s written proposals and representations, WH-TV ordered a total of



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

ZENITH ELECTRONICS CORPORATION,

Plaintiff/Counter-Defendant,

01 C 4366

Judge George W. Lindberg
WH-TV BROADCASTING CORPORATION,

)
)
)
)
v. )
)
)
)
Defendant/Counter-Plaintiff. )
MEMORANDUM OPINION AND ORDER

Plaintiff Zenith Electronics Corporation (“Zenith”) brought this diversity action against
defendant WH-TV Broadcasting Corporation (“WH-TV”), alleging a state law claim of breach of
contract, and seeking a declaratory judgment as to the terms and conditions of the contract
between WH-TV and Zenith. WH-TV counterclaimed, alleging breach of contract. WH-TV also
brought third-party claims of promissory and equitable estoppel and breach of warranty against
General Instrument Corporation (“GI”) and Motorola, Inc. (“Motorola”). Before the court are
WH-TV’s, and GI and Motorola’s cross-motions for summary judgment as to Counts III through
VII of WH-TV’s Second Amended Third Party Complaint against GI and Motorola. For the
reasons stated below, WH-TV’s motion is denied. GI and Motorola’s motion is granted in part
and denied in part.

1. Factual Background!

WH-TV has broadcast analog wireless cable television service in Puerto Rico since 1987.

' The parties have filed several motions to strike various submissions made in connection
with the motions for summary judgment. The court is issuing separate minute orders addressing
these motions today. The facts contained in this opinion reflect the court’s rulings on the
motions to strike.

53!


part of the basis of the bargain.” Hasek v. DaimlerChrysler Corp., 745 N.E.2d 627, 634 (Ill. App.
Ct.), appeal denied, 755 N.E.2d 477 (Ill. 2001).

As WH-TV notes, its agreement with Zenith included a one-year warranty. In the Asset
Purchase Agreement between Zenith and General Instrument, General Instrument assumed
Zenith’s warranty repair obligations “on products manufactured by the Division and listed in
Section 2.28 of the Disclosure Schedule.” Schedule 2.28 lists the “DET-MMDS2-ZEC2" STBs
sold to WH-TV. Schedule 2.28 states that the warranty on the WH-TV STBs would extend for
twelve months after delivery. The schedule provides that the terms and conditions of the
assumed warranty were “Standard Terms,” which the Asset Purchase Agreement defines as
repair and replacement of defective or nonconforming goods. The same “standard terms” as
described in the Asset Purchase Agreement, appeared on Zenith’s sales orders, which WH-TV
denies receiving.

GI and Motorola argue that because the “standard terms” warranty is the only warranty
assumed by GI, and WH-TV denies having received it, GI did not assume any warranty that
formed the basis of WH-TV’s bargain. The court disagrees. GI assumed Zenith’s warranty
obligations on the products listed in Schedule 2.28, and some of the STBs purchased by WH-TV
appear on that list. To be sure, the extent of GI’s obligation to WH-TV is limited to the repair
and replacement of defective and nonconforming goods, since that is all GI agreed to undertake

in the Asset Purchase Agreement. See Trident Indus. Prods. Corp. v. American Nat’] Bank &

Trust Co., 501 N.E.2d 273, 281 (Ill. App. Ct. 1986) (noting that “the rights of a third-party

benefitted by a contract to sue thereon rest upon the liability of the promisor which must appear

12



ORDERED: WH-TV’s motion for summary judgment with respect to liability on Counts
II through VII of its Second Amended Third Party Complaint [436-1] is denied. GI and
Motorola’s motion for summary judgment as to Counts III through VIL of WH-TV’s Second
Amended Third Party Complaint [441-1] is granted in part and denied in part: the motion is

granted as to Counts III and V, and denied as to Counts IV, VI, and VIL.

DATED: JUN 1 8 2003

15