UNITED STATES, District Judge.
Plaintiff T.B. Allen and Associates, Inc. ("T.B. Allen") brought this action against Defendant Euro-Pro Operating LLC ("Euro-Pro"), alleging that Euro-Pro did not pay it commissions that it earned. T.B. Allen's claims include breach of contract and the implied covenant of good faith and fair dealing, promissory estoppel, unjust enrichment, and violations of Minnesota Statute § 181.145. Euro-Pro moves to dismiss all of T.B. Allen's claims, except its § 181.145 claim. Because T.B. Allen has failed to plead these claims with specificity, the Court will dismiss them without prejudice.
T.B. Allen asserts that it had an "oral sales representative agreement . . . of indefinite duration with [Euro-Pro] to act as [Euro-Pro's] exclusive sales representative for Target Corporation, Kohl's, Best Buy and certain other accounts." (Compl. ¶ 5.)
According to T.B. Allen, Euro-Pro notified it around November 2008 that it would withhold any and all commissions earned by T.B. Allen in excess of $800,000 during T.B. Allen's fiscal year 2009. (Id. ¶ 7.) Euro-Pro also notified T.B. Allen of its decision to "reduce certain of [T.B. Allen's] commission percentages in effect at that time but thereafter to be based on gross sales." (Id. ¶ 7.) T.B. Allen alleges that these "deductions" or "hold backs" by Euro-Pro were "wrongful." (Def.'s Mem. in Opp'n of Mot. to Dismiss, at 4, Dec. 20, 2011, Docket No. 7.) T.B. Allen attached a chart to its complaint, detailing "such actions taken by" Euro-Pro. (Compl. ¶ 7.) This chart, not all of which is legible, is dated November 1, 2008 and appears to show T.B. Allen's commission percentages and commissions associated with sales to various companies. (Compl., Ex. A.) The chart shows some variation among the commission percentages for fiscal years 2008 and 2009 and displays reductions in the commission percentages for the fiscal year 2010. A notation at the bottom of the chart states that T.B. Allen's commissions were capped at $800,000 for fiscal year 2009. (Id.)
Reviewing a complaint under a Rule 12(b)(6) motion to dismiss, the Court considers all facts alleged in the complaint as true and construes the pleadings in a light most favorable to the non-moving party. See, e.g., Turner v. Holbrook, 278 F.3d 754, 757 (8
T.B. Allen first asserts that Euro-Pro has committed a breach of contract by failing to pay commissions due and owing to T.B. Allen. To establish a breach of contract claim under Minnesota law, the plaintiff must prove that (1) an agreement was formed, (2) the plaintiff performed any conditions precedent, and (3) the defendant breached the agreement. Nicollet Cattle Co. v. United Food Group, LLC, No. 08-5899, 2010 WL 3546784, at * 7 (D. Minn. Sept. 7, 2010) (citing Commercial Assocs., Inc. v. Work Connection, Inc., 712 N.W.2d 772, 782 (Minn. Ct. App. 2006)).
There are two problems with T.B. Allen's breach of contract claim. First, the claim is based on Euro-Pro's failure to pay commissions, but T.B. Allen has not pled the terms of a contract entitling it to higher commissions.
T.B. Allen next asserts that Euro-Pro is liable under a theory of promissory estoppel. Promissory estoppel requires three elements: (1) a clear and definite promise;
(2) the promisor intended to induce reliance, and such reliance occurred; and (3) the promise must be enforced to prevent injustice. Olson v. Synergistic Techs. Bus. Sys., Inc., 628 N.W.2d 142, 152 (Minn. 2001). Although a promise must be clear and definite, a party need not always specify each precise term of a promise in order to state a claim. Newberg v. Schweiss, No. 08-4681, 2009 WL 3202380, at *3 (D. Minn. Sept. 30, 2009). Normally, promissory estoppel and breach of contract claims can only be asserted in the alternative. See Fed. R. Civ. P. 8(a)(3); Deli v. Univ. of Minn., 578 N.W.2d 779, 781 (Minn. Ct. App. 1981) ("Promissory estoppel implies a contract in law where no contract exists in fact."); Banbury v. Omnitrition Int'l Inc., 533 N.W.2d 876, 881 (Minn. Ct. App. 1995) ("[T]he doctrine of promissory estoppel only applies where no contract exists."). Promissory estoppel can also, at times, apply to promises associated with at-will employment contracts, where neither party was committed to performance due to the contract's bilateral power of termination. Krutchen v. Zayo Bandwidth Ne., LLC, 591 F.Supp.2d 1002, 1017-18 (D. Minn. 2008).
The Court finds that T.B. Allen has failed to assert a claim of promissory estoppel for two reasons. First, T.B. Allen has failed to identify a "clear and definite promise" entitling it to commissions. See Olson, 628 N.W.2d at 152. Accordingly, there are insufficient facts to support Euro-Pro's failure to pay promised commissions. Second, as pled, T.B. Allen's promissory estoppel claim relies on its breach of contract claim. See Krutchen, 591 F.Supp.2d at 1018 (dismissing a promissory estoppel claim because it was duplicative of a breach of contract claim). Specifically, T.B. Allen pled that Euro-Pro "promised [T.B. Allen] that it would honor the terms of their Agreement." (Compl. ¶ 14.). Because T.B. Allen's theory of promissory estoppel is insufficiently specific and is duplicative of its breach of contract claim, the Court will dismiss the promissory estoppel claim.
T.B. Allen next asserts a claim against Euro-Pro for unjust enrichment. To establish this claim under Minnesota law, a plaintiff must demonstrate "that another party knowingly received something of value to which he was not entitled, and that the circumstances are such that it would be unjust for that person to retain the benefit." Schumacher v. Schumacher, 627 N.W.2d 725, 729 (Minn. Ct. App. 2001). "[T]o ensure that unjust enrichment is not used to reward a bad bargain, Minnesota courts require proof that `a benefit was conferred unknowingly or unwillingly.'" Holmes v. Torguson, 41 F.3d 1251, 1256 (8
The Court will dismiss T.B. Allen's unjust enrichment claim for the same reasons as the promissory estoppel claim. First, T.B. Allen has pled insufficient facts to prove that Euro-Pro was unjustly enriched by failing to compensate T.B. Allen. Second, T.B. Allen has not pled unjust enrichment in the alternative, but has based its claim on violations of a contract. (See Compl. ¶ 21); Taylor Inv. Corp. v. Weil, 169 F.Supp.2d 1046, 1060 (D. Minn. 2001) ("The existence of an express contract between parties precludes recovery under theories of quasi-contract, unjust enrichment, or quantum meruit.").
Although T.B. Allen has failed to state facts sufficient to prove breach of contract, promissory estoppel, or unjust enrichment, it is possible that these claims may survive if properly alleged. Accordingly, the Court will grant T.B. Allen thirty days to amend the Complaint to address the deficiencies in pleading. T.B. Allen must not amend the Complaint, however, unless it has facts to support its claims.
Based on the foregoing, and the records, files, and proceedings herein,
It is