Belvidere Pizza, Inc. v. McCain Foods USA, Inc.
Filing
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MEMORANDUM Opinion and Order: McCain's Motion to Dismiss 19 is granted. The Court dismisses Counts I and II as to Belvidere. Belvidere is granted leave to file an amended unjust enrichment claim by 2/14/25. In light of the pending settlement c onference 42 , the Court will stay any responsive pleading until after the mediation with the magistrate judge. The Court strikes the status report due on 3/17/25 and orders the parties to file a status report on 4/21/25. Signed by the Honorable Mary M. Rowland on 1/27/2025. Mailed notice. (jg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BELVIDERE PIZZA, INC., and
HAMPSHIRE PIZZA, INC. a/k/a
Rosati’s Pizza-Hampshire Group,
individually and on behalf of similarly
situated individuals,
Plaintiffs,
Case No. 24-cv-00667
Judge Mary M. Rowland
v.
MCCAIN FOODS USA, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER
For the reasons stated herein, Defendant’s Motion to Dismiss [19] is granted.
I.
Background
The following factual allegations taken from the operative complaint [14] are
accepted as true for the purposes of the motion to dismiss. See Lax v. Mayorkas, 20
F.4th 1178, 1181 (7th Cir. 2021).
Plaintiff Hampshire Pizza, Inc., a/k/a Rosati’s Pizza-Hampshire Group
(“Hampshire”) is a franchisor that franchises 84 locations of the restaurant brands
Rosati’s Pizza, Maciano’s Pizza & Pastaria, Vita Bella, and Chicago Pizza Authority
across the U.S. [14] at ¶¶ 5, 10. Plaintiff Belvidere Pizza, Inc. (“Belvidere”) is a
franchisee of Hampshire and operates a Rosati’s Pizza location in Belvidere, Illinois.
Id. at ¶ 11. Defendant McCain Foods USA, Inc. (“McCain”) is one of the nation’s
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leading suppliers of frozen potato and snack food products for the food service
industry. Id. at ¶ 9.
Hampshire’s primary business operations include providing management,
accounting, advertising, licensing, negotiating, purchasing, contracting, and other
support responsibilities associated with the operation of franchised restaurants. Id.
at ¶ 6. Around December 14, 2021, Hampshire entered into a Food Service Contract
(the “Contract”) with McCain for the year 2022. Id. at ¶ 16. The Contract contained
a provision that required McCain to provide Hampshire with 90 days written notice
before adjusting the pricing on products. Id. at ¶ 18. Hampshire would then have 45
days to provide a written objection to the pricing adjustment. Id.
On or around April 26, 2022, McCain issued a notice to Hampshire that due to
inflation and volatility in the market, McCain would be increasing prices. Id. at ¶¶
22-23, 28. The notice stated that increased prices would take effect on May 2, 2022,
which gave Hampshire six days’ notice of the price increase. Id. at ¶ 24. The notice
also stated that any orders placed on or after May 2, 2022 would be deemed an
acceptance of the revised pricing. Id. at ¶ 26.
Hampshire and Belvidere bring this putative class action on behalf of
themselves and all persons or entities who entered into food service contracts that
contain a 90-day notice provision with McCain between August 31, 2019 and the
present, and who paid increased prices without sufficient notice. Id. at ¶ 30.
Hampshire and Belvidere allege that the Contract was “for the direct benefit of third
parties, namely the members/franchisees of Rosati’s” such as Belvidere. Id. at ¶ 42.
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Hampshire and Belvidere allege that McCain breached the Contract, alleging direct
breach and third-party beneficiary (Count I). Id. at ¶¶ 40-46. In the alternative,
Belvidere alleges quasi-contract and unjust enrichment against McCain (Count II).
Id. at ¶¶ 47-50.
McCain moves to dismiss all of Belvidere’s claims pursuant to Federal Rule of
Civil Procedure 12(b)(6). [19].
II.
Standard
“To survive a motion to dismiss under Rule 12(b)(6), the complaint must
provide enough factual information to state a claim to relief that is plausible on its
face and raise a right to relief above the speculative level.” Haywood v. Massage Envy
Franchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018) (quoting Camasta v. Jos. A. Bank
Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014)); see also Fed. R. Civ. P. 8(a)(2)
(requiring a complaint to contain a “short and plain statement of the claim showing
that the pleader is entitled to relief”). A court deciding a Rule 12(b)(6) motion
“construe[s] the complaint in the light most favorable to the plaintiff, accept[s] all
well-pleaded facts as true, and draw[s] all reasonable inferences in the plaintiff’s
favor.” Lax, 20 F.4th at 1181. However, the court need not accept as true “statements
of law or unsupported conclusory factual allegations.” Id. (quoting Bilek v. Fed. Ins.
Co., 8 F.4th 581, 586 (7th Cir. 2021)). “While detailed factual allegations are not
necessary to survive a motion to dismiss, [the standard] does require ‘more than mere
labels and conclusions or a formulaic recitation of the elements of a cause of action to
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be considered adequate.’” Sevugan v. Direct Energy Servs., LLC, 931 F.3d 610, 614
(7th Cir. 2019) (quoting Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016)).
Dismissal for failure to state a claim is proper “when the allegations in a
complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 558 (2007). Deciding the plausibility of the claim is
“a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th
Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)).
III.
Analysis
A. Third Party Beneficiary
McCain moves to dismiss Belvidere’s breach of contract claim on the basis that
Belvidere is not a party to the Food Service Contract and was not an intended thirdparty beneficiary of the contract. [20] at 3. Under Illinois law, there is a “strong
presumption against conferring contractual benefits on noncontracting third parties.”
Sosa v. Onfido, Inc., 8 F.4th 631, 639 (7th Cir. 2021) (quoting Marque Medicos
Farnsworth, LLC v. Liberty Mut. Ins. Co., 117 N.E.3d 1155, 1159 (Ill. App. 1st Dist.
2018)). For a noncontracting third party to overcome that strong presumption, “the
implication that the contract applies to third parties must be so strong as to be
practically an express declaration.” Id. (quoting 155 Harbor Drive Condo. Ass'n v.
Harbor Point Inc., 568 N.E.2d 365, 375 (Ill. App. 1st Dist. 1991)). It is not enough to
show that the contracting parties knew, expected, or intended that others would
benefit from the agreement. Id. (quoting Marque, 117 N.E.3d at 1159). Express
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language of the contract “identifying the third-party beneficiary by name or by
description of a class to which the third party belongs” must show that the contract
was made for the “direct, not merely incidental, benefit” of the identified third party.
Id. (quoting Martis v. Grinnell Mut. Reinsurance Co., 905 N.E.2d 920, 924 (Ill. App.
3d Dist. 2009)).
Belvidere is not a party to the Contract, but Plaintiffs assert that Hampshire
entered into the Contract with McCain “on behalf of, and for the direct benefit of,
Rosati’s members/franchisees, including Plaintiff Belvidere.” [14] at ¶ 5. The
Contract 1 identifies Hampshire as a party to the agreement with McCain, as well as
six “authorized distributors” who are “authorized by ‘Customer’ to receive pricing
information on the following product(s), and to place purchase orders for the products
on behalf of the ‘Customer.’” [14-1] at 2. Belvidere is not identified in the contract as
an authorized distributor. Id. The Contract does not identify Belvidere, does not
reference any individual franchisee store, and does not reference franchisee stores as
a group. See e.g., id. The language of the Contract does not establish that the Contract
was made for the direct benefit of Belvidere. Even if McCain and Hampshire “knew,
expected, or intended” that Belvidere would benefit from the Contract, that is not
enough to overcome the strong presumption against conferring contractual benefits
The Court may consider the Contract at the motion to dismiss stage because
Plaintiffs attached the Contract to their complaint. See Williamson v. Curran, 714
F.3d 432, 443 (7th Cir. 2013) (“[A] written instrument attached to a pleading becomes
part of that pleading, so when the plaintiff has attached an instrument to her
complaint, a court may consider the contents of that instrument in ruling on a motion
to dismiss.”).
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on noncontracting third parties. See Sosa, 8 F.4th at 639; see also Community Assn.
Underwriters of Am., Inc. v. Constr. System Corp. of Illinois, 638 F. Supp. 3d 872,
877–78 (N.D. Ill. 2022).
McCain’s motion to dismiss Count I as to Belvidere is granted.
B. Unjust Enrichment
Belvidere pleads in the alternative that there is an implied contract between
Belvidere and McCain, and that McCain has unjustly benefited from the price
increases to Belvidere’s detriment. [14] at ¶¶ 47-50.
At the pleading stage, a party may plead breach of contract and unjust
enrichment claims in the alternative. Gociman v. Loyola U. of Chicago, 41 F.4th 873,
886 (7th Cir. 2022) (citing Fed. R. Civ. P. 8(a)(3)). However, “a party may not
incorporate by reference allegations of the existence of a contract between the parties
in the unjust enrichment count.” Id. at 887 (citing Mashallah, Inc. v. W. Bend Mut.
Ins. Co., 20 F.4th 311, 325 (7th Cir. 2021)). A party who makes this “pleading error
prevents their unjust enrichment claim from going forward.” Id.
Count II of the Complaint pleads “Quasi-Contract/Unjust Enrichment (In the
Alternative)” but also states that “Plaintiffs repeat the allegations set forth above, as
if fully set forth herein.” [14] at ¶ 47. By incorporating the preceding allegations,
Belvidere “include[d] the contract allegations in the breach-of-contract counts” in its
unjust enrichment claim. Hernandez v. Illinois Inst. of Tech., 63 F.4th 661, 672 (7th
Cir. 2023). Therefore, Belvidere’s unjust enrichment claim cannot go forward. See
Gociman, 41 F.4th at 886.
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McCain’s motion to dismiss Count II is granted.
IV.
Conclusion
For the stated reasons, McCain’s Motion to Dismiss [19] is granted. The Court
dismisses Count I and II as to Belvidere. Belvidere is granted leave to file an amended
unjust enrichment claim.
E N T E R:
Dated: January 27, 2025
MARY M. ROWLAND
United States District Judge
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