Techniplas U.S. LLC v. Knill
| Decision Date | 02 August 2021 |
| Docket Number | 21-CV-159 |
| Parties | TECHNIPLAS U.S. LLC, Plaintiff, v. DAVID KNILL, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
DECISION AND ORDER ON DEFENDANT'S MOTION TO DISMISS FIRST AMENDED COMPLAINT
This case arises out of an alleged breach of an oral agreement between plaintiff Techniplas U.S., LLC and its former Chief Financial Officer, David Knill, to provide assistance to the company as it transitioned to a new CFO upon Knill's departure from the company. In its original complaint Techniplas sued for breach of contract under the theory that Knill, rather than providing assistance to Techniplas as promised, impermissibly solicited Techniplas employee Chris Mieska to leave Techniplas and join Knill at Neenah Enterprises, Inc. Knill moved to dismiss Techniplas' complaint for failure to state a claim under Fed.R.Civ.P 12(b)(6). The motion was granted, with leave to file an amended complaint. (Docket # 13.)
Techniplas filed its first amended complaint on April 16, 2021. (Docket # 14.) In the amended complaint, Techniplas sues Knill for breach of contract (verbal agreement), unjust enrichment, and breach of the duty of good faith and fair dealing. (Id.) Knill now moves to dismiss Techniplas' amended complaint for failure to state a claim. (Docket # 17.) For the reasons below, Knill's motion to dismiss is granted in part and denied in part.
Techniplas is a global provider of highly engineered plastic components primarily for the automotive sector as well as industrial consumer, medical, and other markets. ( In August 2015, Techniplas hired Knill as its CFO. (Id. ¶ 10.) Knill's responsibilities included, but were not limited to, accountability for the administrative, financial, and risk management operations of Techniplas; development of a financial and operational strategy, metrics tied to that strategy, and the ongoing development and monitoring of control systems designed to preserve company assets; and reporting accurate financial results. (Id. ¶ 11.) Knill reported directly to the President of Techniplas. (Id.) As part of his employment, Techniplas provided Knill with a leased vehicle for his personal use, on which Techniplas made the monthly payments. (Id. ¶ 13.)
On May 7, 2020, Techniplas filed for Chapter 11 Bankruptcy. (Id. ¶ 14.) In June 2020, Knill submitted his resignation, with his final day of employment on July 15, 2020. (Id. ¶ 16.) After submitting his resignation, however, Knill contacted Techniplas' Chief Executive Officer with a proposal to provide assistance to Techniplas after his employment ended. (Id. ¶ 17.) The specific proposal Knill offered was to assist Techniplas after his employment ended in order to help the company manage the transition to a new CFO and to maintain consistency of reporting and information as it emerged from the bankruptcy process. (Id. ¶ 18.) In exchange for Knill's assistance, Techniplas agreed to continue to make the monthly lease payments on Knill's company vehicle through December 31, 2020, at which time, if Knill had provided the assistance promised, Techniplas would consider purchasing the vehicle and placing it in Knill's name. (Id. ¶ 19.)
Due to an internal communication error at Techniplas, rather than waiting until December 31, 2020, Techniplas purchased the company vehicle for $66, 923.09 and placed the vehicle in Knill's name on July 30, 2020. (Id. ¶¶ 23-24.) Knill placed an "auto reply" on his email account on or about July 15, 2020 which informed external parties of his departure and that if they have any questions they should contact Steve Smith or Chris Mieska. (Id. ¶ 25.) Dean Nolden, Chief Financial Officer, had access to Knill's email account and monitored incoming and outgoing mail during the proposed period of "assistance." (Id. ¶ 26.) Knill sent 74 emails from his Techniplas account during the relevant time period and of those 74 emails, only 39 were related to Techniplas and none of them exhibited the "assistance" Knill agreed to provide. (Id. ¶¶ 27-31.) Knill did not perform any bank transactions during the relevant time period. (Id. ¶¶ 32-33.) Techniplas alleges that the only actions Knill took during the relevant time period consisted of signing legal documents for Board meetings and Bank Accounts, actions not falling under the "assistance" agreed to by the parties. (Id. ¶¶ 34, 36.) Knill did not engage in general discussions regarding tax, insurance and banking issues, intellectual property transfers, or other transactions for Techniplas. (Id. ¶ 35.) Thus, Techniplas alleges that Knill failed to provide the "assistance" he promised when entering into the verbal agreement with Techniplas, constituting a breach of the Agreement. (Id. ¶¶ 36-37.)
Techniplas further alleges that Knill's "true" intent in entering into the verbal agreement was to poach Techniplas' Consolidations Manager, Chris Mieska, a highly valuable employee essential to Techniplas' transition through bankruptcy. (Id. ¶¶ 38-43.) Upon learning of Knill's alleged breach of the verbal agreement, Techniplas demanded return of the company vehicle on September 23, 2020. (Id. ¶ 44.) To date, Knill has refused to return the vehicle, causing damage to Techniplas. (Id. ¶¶ 44-45.)
Knill moves to dismiss Techniplas' first amended complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Under the Federal Rules of Civil Procedure, a complaint must contain "a short and plain statement of the claim showing the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A short and plain statement" 'gives[s] the defendant fair notice of what the claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41 (1957)). In order to survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroji v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).
When determining the sufficiency of a complaint, the court should engage in a two-part analysis. See McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011). First, the court must "accept the well-pleaded facts in the complaint as true" while separating out "legal conclusions and conclusory allegations merely reciting the elements of the claim." Id. (citing Iqbal, 556 U.S. at 680). Next, "[a]fter excising the allegations not entitled to the presumption [of truth], [the court must] determine whether the remaining factual allegations 'plausibly suggest an entitlement to relief" Id. (citing Iqbal, 556 U.S. at 681). As explained in Iqbal, "[determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." 556 U.S. at 679. All factual allegations and any reasonable inferences must be construed in the light most favorable to the nonmoving party. Price v. Bd. of Educ. of City of Chicago, 755 F.3d 605, 607 (7th Cir. 2014).
Techniplas alleges three causes of action in its complaint- breach of contract (verbal agreement), unjust enrichment, and breach of the duty of good faith and fair dealing. I will address each in turn.
1. Breach of Contract (Verbal Agreement)
Techniplas alleges that a verbal agreement existed between the parties and Knill breached said agreement. To state a claim for breach of contract under Wisconsin law, the plaintiff must allege: (1) the existence of a valid contract; (2) that the defendant breached; and (3) damages flowing from that breach. Matthews v. Wisconsin Energy Corp. Inc., 534 F.3d 547, 553 (7th Cir. 2008) (citing Northwestern Motor Car Inc. v. Pope, 51 Wis.2d 292, 296, 187 N.W.2d 200 (Wis. 1971)). The creation of a contract under Wisconsin law requires an offer, an acceptance, and consideration. Skyrise Constr. Grp., LLC v. Annex Constr., LLC, 956 F.3d 950, 956 (7th Cir. 2020). "'The existence of an offer and acceptance are mutual expression of assent, and consideration is evidence of the intent to be bound to the contract.'" Id. (quoting NBZ, Inc. v. Pilarski, 185 Wis.2d 827, 520 N.W.2d 93, 96 (Wis. Ct. App. 1994)).
Techniplas argues that its complaint alleges a simple breach of contract (Pl's Br. in Opp. at 14, Docket # 19.)
Knill argues that Techniplas pleads itself out of court by alleging that Knill did perform the only assistance he agreed to provide. (Def.'s Br. at 5, Docket # 18.) Knill argues that the parties' oral agreement was that Knill would "assist Techniplas after [Knill's] employment in order to help [Techniplas] manage the transition to a...
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