Servicios Especiales Al Comercio Exterior v. Johnson Controls Inc

Filing 30

ORDER signed by Judge J P Stadtmueller on 1/20/10 granting 14 defendant's Partial Motion to Dismiss Counts Four, Five and Six of the Amended Complaint; Counts Four, Five and Six of the Amended Complaint are dismissed without prejudice. See Order. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN
S E R V IC IO S ESPECIALES AL COMERCIO E X T E R IO R , s.c., P l a i n t if f , v. J O H N S O N CONTROLS, INC., D e fe n d a n t. C a s e No. 08-CV-1117

ORDER
Plaintiff Servicios Especiales Al Comercio Exterior, s.c. ("Servicios") filed this s u it against defendant Johnson Controls, Inc. ("JCI") alleging that JCI refused to re im b u rs e it for costs Servicios incurred while assisting JCI in importing raw m a te ria ls into Mexico. Servicios asserts claims for breach of contract, breach of the d u ty of good faith and fair dealing, unjust enrichment, joint venture breach of c o n tra c t, joint venture breach of the duty of good faith and fair dealing, and joint ve n tu re unjust enrichment. JCI contests the sufficiency of the "joint venture" claims a n d asks this court to dismiss Counts Four, Five and Six of the Amended Complaint, p u rs u a n t to Rule 12(b)(6). Based on the reasoning set forth below, the court will g ra n t this request. B AC K G R O U N D S e r vic io s is a Mexican corporation that provides financial, logistical, and te c h n ic a l services to businesses seeking to clear raw materials and goods through

c u s to m s at the Mexican border. (Am. Compl. ¶ 1). JCI is an American company that h o ld s itself out as a Tier 1 supplier to the automotive industry. (Id. at ¶ 2). Servicios, J C I, and a third entity, Johnson Controls Automotriz Mexico Sociedad De R e s p o n s a b ilid a d Limited De Capital Variable ("JCAM"), were parties to an a g re e m e n t whereby Servicios promised to pay customs expenses for certain raw m a te r ia ls imported into Mexico for use by JCAM. (Id. at ¶¶ 3, 4). JCAM is a M e xic a n company and uses the imported raw materials in the manufacture of JCI a u to m o b ile seats and interiors. (Id.). Under the parties' agreement, Servicios promised to pay customs taxes and o th e r customs-related charges on behalf of JCI and/or JCAM.1 (Id. at ¶ 7). In return, J C I and/or JCAM promised to reimburse Servicios for these expenses. (Id.). The p a rtie s proceeded under the arrangement and Servicios received partial re im b u rse m e n t for expenses incurred between 1998 and 2002. (Id. at 8). However, J C I and/or JCAM informed Servicios in 2002 that it believed Servicios had been o ve r-re im b u rs e d by approximately $300,000, and requested a reconciliation of bank d e p o s its with the customs expenses paid by Servicios. (Id. at ¶ 9). Review of the d o c u m e n ta tio n revealed that, in fact, Servicios had been under-reimbursed by 8 ,5 1 3 ,5 0 2 .2 0 MXN.2 (Id. at ¶ 12). JCI and/or JCAM refused to fully reimburse

Though the phrase "JCI and/or JCAM" is im p r e c is e , the plaintiff uses this phrase in the Am e n d e d C o m p la in t and the court will do likewise. MXN denotes Mexican pesos. The exchange rate of Mexican pesos per Am e r ic a n dollar in 2008 was approxim a t e ly 11.016. See The Central Intelligence Agency W o r ld Factbook, w w w .c ia . g o v /lib r a r y/p u b lic a t io n s /th e - w o r ld - f a c tb o o k /g e o s /m x .h t m l (last visited January 13, 2010).
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S e r vic io s until it provided further proof of the outstanding balance owed. (Id. at ¶ 13). Though Servicios provided additional proof confirming the outstanding

a m o u n t, JCI and/or JCAM continued to refuse to reimburse Servicios. (Id. at ¶ 15). T h is refusal prompted Servicios to file the instant suit on December 23, 2008. AN AL Y S IS J C I asks the court to dismiss Counts Four, Five and Six of the Amended C o m p la in t pursuant to Federal Rule of Civil Procedure 12(b)(6). The court may d is m is s a claim under Rule 12(b)(6) when, after accepting all factual allegations c o n ta in e d in the complaint as true, the complaint fails to describe a claim that is p la u s ib le on its face. Doss v. Clearwater Title Co., 551 F.3d 634, 639 (7th Cir. 2008); A s h c ro ft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). A plaintiff need not include detailed fa c tu a l allegations for his claims to survive a motion to dismiss, however, the facts h e alleges must be sufficient to raise a right to relief above the speculative level. See B e ll Atlantic Corporation v. Twombly, 550 U.S. 544, 555 (2007). J C I asserts that Servicios's claims for joint venture breach of contract, joint ve n tu r e breach of the duty of good faith and fair dealing, and joint venture unjust e n ric h m e n t fail because Servicios cannot establish a joint venture between JCI and J C A M . Counts Four, Five and Six allege that JCAM breached the contract by failing to reimburse Servicios, that JCAM breached its duty of good faith by demanding a d d itio n a l proof of outstanding amounts owed, and that JCAM was unjustly enriched b e c a u s e Servicios paid customs expenses on its behalf. These are all actions -3-

u n d e rta k e n by JCAM, who is not a defendant in the case. Servicios attempts to o ve rc o m e this obstacle by asserting that JCAM's actions were undertaken "within th e scope of the joint venture enterprise between JCI and JCAM." (Am. Compl., at ¶ ¶ 39, 44, 52). H o w e v e r, Servicios does not adequately plead the existence of a joint venture. S e rv ic io s need not provide detailed factual allegations, but it must raise a plausible c la im supported by more than "mere conclusory statements" or "naked assertions d e vo id of further factual enhancement." Iqbal, 129 S. Ct at 1949 (citing Twombly, 5 5 0 U.S. 544). Servicios fails to do so. Instead, Servicios states only the following to establish a joint venture between JCI and JCAM: U p o n information and belief, JCI is a partial owner of JCAM, which is a joint venture. Upon information and belief, within the scope of the jo in t venture enterprise, JCAM assists in the manufacture in Mexico of a u to m o b ile seats and interiors supplied to the automotive industry by J C I in its capacity as a Tier-1 supplier to the automotive industry. (A m . Compl. at ¶ 3). This epitomizes a naked assertion because it simply states the le g a l conclusion that a joint venture exists without any supporting factual allegations. A plaintiff must plead four elements to establish a joint venture: 1) contribution o f money or services by each of the parties; 2) joint proprietorship and mutual control o ve r the subject matter of the venture; 3) an agreement to share profits; and 4) an e xp re s s or implied contract establishing the relationship. See Ruppa v. American S ta te s Insurance Co., 91 Wis. 2d 628, 645, 284 N.W .2 d 318, 325 (1979). Servicios d o e s not allege facts suggesting that JCI and JCAM jointly contribute money, -4-

e xe rc is e mutual control, share profits, or have a contract establishing their r e l a t i o n s h ip . e le m e n ts . Servicios does not directly respond to JCI's allegations that the amended c o m p la in t insufficiently pleads the existence of a joint venture. Instead, Servicios a s s e rts that JCI's claim of ignorance regarding a joint venture between itself and J C A M is disingenuous. Servicios submits that JCI filed an action in Michigan in June 2 0 0 8 in which JCI's complaint alleged "JCI is a partial owner of JCAM, which is a jo in t venture." (Pl.'s Resp. Br. Mot. Dismiss, at 2). Therefore, Servicios concludes, J C I cannot deny that it is part of a joint venture and its motion to dismiss must fail. T h e court disagrees. First, the complaint JCI filed in a separate and unrelated le g a l action in a different state has no bearing on the adequacy of Servicio's p le a d in g in this case. Servicio's conclusory allegations do not satisfy even the le n ie n t requirements of notice pleading. Second, even if JCI's Michigan complaint w a s relevant, the court cannot consider any statements contained therein when re s o lvin g JCI's Rule 12(b)(6) motion. This is because a district court may not look to materials beyond the pleading itself in deciding a motion to dismiss. Alioto v. M a rs h a ll Field's & Co., 77 F.3d 934, 936 (7th Cir. 1996). Indeed, Servicios fails to even assert that it meets the required

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T h e court determines that Servicios fails to state a claim on Counts Four, Five a n d Six because it fails to adequately plead the existence of a joint venture.3 T h e re fo re , court will grant JCI's motion and dismiss these counts without prejudice. A c c o r d in g ly , IT IS ORDERED that the defendant's Partial Motion to Dismiss Counts Four, F ive and Six of the Amended Complaint (Docket #14) be and the same is hereby G R AN T E D . Counts Four, Five and Six are DISMISSED without prejudice. D a te d at Milwaukee, W is c o n s in , this 20th day of January, 2010. BY THE COURT:

J .P . Stadtmueller U .S . District Judge

Because the court finds Servicios failed to adequately plead the existence of a joint venture between J C I and JCAM, the court need not address JCI's alternative argum e n t that JCI cannot be liable for the actions o f JCAM, a separate legal entity, because Servicios fails to establish any basis for "piercing the corporate veil."

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