Suburban Bus. Prods., Inc. v. Granite City Cmty. Unit Sch. Dist. No. 9
| Decision Date | 05 August 2013 |
| Docket Number | Case No. 13-cv-366-JPG-PMF |
| Parties | SUBURBAN BUSINESS PRODUCTS, INC. d/b/a SBP Image Solutions, Plaintiff, v. GRANITE CITY COMMUNITY UNIT SCHOOL DISTRICT NO. 9, Defendant. |
| Court | U.S. District Court — Southern District of Illinois |
This matter comes before the Court on the motion to dismiss for failure to state a claim and for lack of subject matter jurisdiction filed by defendant Granite City Community Unit School District No. 9 ("District") (Doc. 11). Plaintiff Suburban Business Products, Inc. ("SBP") has responded to the motion (Doc. 16), and the District has replied to that response (Doc. 18).
The District's arguments that SBP has failed to state a claim in its complaint are governed by Federal Rule of Civil Procedure 12(b)(6). When reviewing a Rule 12(b)(6) motion to dismiss, the Court accepts as true all allegations in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To avoid dismissal under Rule 12(b)(6) for failure to state a claim, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). This requirement is satisfied if the complaint (1) describes the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon which it rests and (2) plausibly suggests that the plaintiff has a right to relief above a speculative level. Bell Atl., 550 U.S. at 555; see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir.2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atl., 550 U.S. at 556).
In Bell Atlantic, the Supreme Court rejected the more expansive interpretation of Rule 8(a)(2) that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief," Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Bell Atlantic, 550 U.S. at 561-63; Concentra Health Servs., 496 F.3d at 777. Now, "it is not enough for a complaint to avoid foreclosing possible bases for relief; it must actually suggest that the plaintiff has a right to relief . . . by providing allegations that 'raise a right to relief above the speculative level.'" Concentra Health Servs., 496 F.3d at 777 (quoting Bell Atl., 550 U.S. at 555).
Nevertheless, Bell Atlantic did not do away with the liberal federal notice pleading standard. Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663, 667 (7th Cir. 2007). A complaint still need not contain detailed factual allegations, Bell Atl., 550 U.S. at 555, and it remains true that "[a]ny district judge (for that matter, any defendant) tempted to write 'this complaint is deficient because it does not contain . . .' should stop and think: What rule of law requires a complaint to contain that allegation?" Doe v. Smith, 429 F.3d 706, 708 (7th Cir. 2005) (emphasis in original). Nevertheless, a complaint must contain "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl., 550 U.S. at 555. If the factual detail of a complaint is "so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8," it is subject to dismissal. Airborne Beepers, 499 F.3d at 667.
Although even after Bell Atlantic and Iqbal liberal federal notice pleading standards ensure that minimally detailed complaints can survive a motion to dismiss, those standards will notprevent dismissal of complaints that plead too much. A case can be dismissed because a complaint pleads facts establishing that the defendant is entitled to prevail. Bennett v. Schmidt, 153 F.3d 516, 519 (7th Cir. 1998); Soo Line R.R. v. St. Louis S.W. Ry., 125 F.3d 481, 483 (7th Cir. 1997); see Hecker v. Deere & Co., 556 F.3d 575, 588 (7th Cir. 2009) ().
The District's arguments that there is no federal subject matter jurisdiction over certain claims are governed by Federal Rule of Civil Procedure 12(b)(1). As with a Rule 12(b)(6) motion, all well-pleaded factual allegations are accepted as true and construed in the light most favorable to the plaintiff. Lee v. City of Chi., 330 F.3d 456, 468 (7th Cir. 2003). The plaintiff has the burden of proving that subject matter jurisdiction exists. Id.
As a preliminary matter, the briefing on the motion to dismiss refers to matters outside the pleadings. Ordinarily when such material is presented in connection with a Rule 12(b)(6) motion to dismiss, the Court may treat the motion to dismiss as a motion for summary judgment or it may exclude the additional material from consideration. See Fed. R. Civ. P. 12(d). There are exceptions to this rule, however, where the additional material is an exhibit to the plaintiff's complaint, see Tierney v. Vahle, 304 F.3d 734, 738 (7th Cir. 2002), or where the additional material is something of which the Court may take judicial notice, see Menominee Indian Tribe of Wisc. v. Thompson, 161 F.3d 449, 456 (7th Cir. 1998). The Court may take judicial notice of public records, see Pugh v. Tribune Co., 521 F.3d 686, 691 n. 2 (7th Cir. 2008) (), including judicial proceedings, see Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994). In this case, the Court considers the exhibits to the complaint and takes judicial notice of another court proceeding related to this dispute, namely, Suburban Business Products, Inc. v. Granite City Community Unit School District No. 9 ("SBP I"), 4:12-CV-914 (CEJ) in theUnited States District Court for the Eastern District of Missouri. Considering this material in addition to the allegations in the complaint, the Court finds the following relevant facts for the purposes of this motion.
Prior to the 2006-07 school year, the District requested proposals for bids on providing digital copy machines and maintenance service to the District for the 2006-07 to 2010-11 school years. SBP submitted a bid, and on May 23, 2006, the District's Board of Education ("Board") awarded it the contract.
On that same day, SBP President Richard Shay and the District's Director of Finance Dennis Burnett signed the Equipment Rental Agreement ("Rental Agreement") and the Digital Copier Maintenance Agreement ("Maintenance Agreement"). The Rental Agreement states that SBP will provide thirty-four copy machines to the District for a term of five years, and in exchange the District will make quarterly payments of $17,246.04. It also states that the District is responsible for protecting the rented copiers from damage other than ordinary wear and tear. The Maintenance Agreement provides that SBP will provide maintenance and supplies for the copiers rented in the Rental Agreement. In exchange the District will make quarterly payments of $10,965.00 plus $0.0043 per page (referred to as a "per click" charge) for copies over 10,200,000 annually.
Until May 2008, SBC continued to service the rented copiers and the District continued to pay $10,965 quarterly and any other "per click" charges assessed. However, in May 2008, the District informed SBP that it would no longer allow SBP onto the District's property to service the rented copiers. Instead, the District hired another company to provide the needed service and stopped paying SBC quarterly payments of $10,965.00. The District also declined to pay $0.0043 "per click" for 5,281,768 copies over and above 10,200,000 annually, an amount totaling $22,711.60. At the conclusion of the 2010-11 school year, SBP found that one of the rentedcopiers had been damaged beyond normal wear and tear. That copier would have been worth $5,495.00 had it only suffered ordinary wear and tear, but in its damaged condition it was essentially worthless.
SBP filed suit in Missouri state court against the District on April 2, 2012, and the District removed the case to the United States District Court for the Eastern District of Missouri - SBP I. After a hearing, the District Court dismissed the suit on December 31, 2012, without prejudice for lack of personal jurisdiction over the District. Critical to that ruling was the finding that the Rental Agreement and the Maintenance Agreement were separate contracts such that a clause alleged to be in the Rental Agreement stating that the District consented to the jurisdiction of courts in Missouri did not apply to a dispute over the Maintenance Agreement. SBP I, No. 4:12-CV-914 (CEJ), 2012 WL 6738496, at *3 (E.D. Mo. Dec. 31, 2012) ().
On April 15, 2013, SBP filed suit in this district alleging claims for breach of contract for the terminated copier service relationship (Count I), a "suit on account" for the unpaid excess "per click" charges (Count II) and breach of contract for the failure to protect the damaged copier from damage beyond ordinary wear and tear (Count III).
The District asks the Court to dismiss Count I on the grounds that SBP filed this suit beyond the four-year statute of limitations period for default under a lease contract and that SBP failed to allege a valid contract with the District. It asks the Court to dismiss Counts II and III on the grounds that, without Count I, the Court should not exercise supplemental jurisdiction. Alternatively, it asks the Court to dismiss Counts II and III for failure to state a claim.
SBP argues that the ten-year statute of limitations for actions for payment based on writings applies and that, even...
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