Kolbe v. CZS Holdings LLC d/b/a Pur360, No. 20 C 6886, Slip Op. (N.D. Ill. Oct. 19, 2021) (Kendall, J.).
Judge Kendall granted in part counterclaim plaintiff CZS Holdings’ (“Pur360”) Fed. R. Civ. P. 12(b)(6) motion to partially dismiss counterclaim plaintiff’s (“Kolbe”) breach of contract claim in this trade secret misappropriation case.
As an initial matter, the Court noted that Kolbe’s counterclaim and his response brief were not signed as required by Fed. R. Civ. P. 11. The Court accepted the papers despite that, but warned it would reject future papers that were not properly signed.
Kolbe claimed that his compensation agreement was memorialized partially in a written agreement and partially orally, including an oral agreement for a variety of commissions and yearly bonuses based upon gross sales revenues. As an initial matter, the Court was allowed to consider the agreement and its integration clause, even though it was not attached to Kolbe’s counterclaim, because it was attached to the underlying complaint. The Court did not consider it, however, because Kolbe appeared to question its authenticity.
The parol evidence rule did not, at least at the pleading stage, preclude Kolbe’s claim because parol evidence would only restrict the claim if there were a writing that precluded additional oral agreements. As the Court was not considering the written agreement, it could not determine whether the parol evidence rule precluded Kolbe’s claim at the Rule 12 stage.
The Court dismissed Kolbe’s claim that part of the parties’ compensation agreement was governed by a schedule, other than the written contract, because Kolbe did not sufficiently describe the schedule such that Pur360 was able to know the allegation against it.
Kolbe also failed to sufficiently plead an oral contract. “Almost all” aspects of the alleged oral agreement were unclear. For example, Kolbe did not state the number of shares he was promised or the advisory position he was promised. There were also no allegations identifying when the oral agreement was entered or when it was to terminate.
Kolbe also failed to plead a claim for breach based upon unpaid royalties in light of Tampa’s overall sales. The only allegation was that Tampa’s sales exceeded $356,000. There was no indication if Tampa’s sales were new (10%) or recurring (3%).