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Objectwave Corporation v. Authentix Network, Inc.

United States District Court, N.D. Illinois, Eastern Division
Oct 15, 2001
No. 00 C 7823 (N.D. Ill. Oct. 15, 2001)

Opinion

No. 00 C 7823

October 15, 2001


MEMORANDUM OPINION AND ORDER


Before us is defendant Authentix Network, Inc.'s ("Authentix") motion to dismiss count two of plaintiff Objectwave Corporation's ("Objectwave") second amended complaint. For the following reasons, we will treat Authentix's motion as a sua sponte motion to reconsider our June 28, 2001 order granting judgment on the pleadings as to Objectwave's original count two. As such, we hereby dismiss without prejudice count two of Objectwave's second amended complaint and vacate that portion of our June 28, 2001 order pertaining to count two. Furthermore, Objectwave is hereby ordered to submit a third amended complaint in accordance with this opinion.

Background

Authentix and Objectwave were parties to a written agreement ("Agreement") by which Objectwave was to design and develop software for Authentix. When the Agreement was only partially completed, Authentix terminated it according to the Agreement's terms. Count one of the complaint alleges a straightforward breach of contract claim relating to monies allegedly due for work partially completed under the Agreement; our June 28th order denied Authentix' motion for partial judgment on the pleadings with regard to count one. It is count two that has caused some confusion.

Count two of the first amended complaint alleged a claim for quantum meruit claiming That the parties had agreed — apparently outside the terms of the written contract — that Authentix would provide 44% of the manpower for the project and that it failed to do so. The count goes on to allege that this failure resulted in Objectwave having to perform the entire project itself, hurting its ability to complete the project and unjustly enriching Authentix. We granted Authentix' motion for judgment on the pleadings as to this count because an action for quantum meruit cannot lie between parties to an enforceable contract. In doing so, we noted that count two appeared to state not a claim for quantum meruit but a claim for breach of oral contract.

Thereafter, Objectwave requested leave to file a second amended count two, which we granted. The amended count two states substantially the same facts as the original, but adds that Authentix' agreement to provide manpower was made via telephone and e-mail conversations. This count is now entitled "Breach of Oral and Written Modification to Contract." Authentix' motion to dismiss argues that our earlier order granting judgment on the pleadings is res judicata as to this issue. After reviewing our earlier opinion, we find that we need to vacate the part that dealt with count two because there are disputed issues of fact between the parties that preclude the issuance of a judgment on the pleadings.

Analysis

A motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) may only be granted if no material issues of fact remain to be resolved between the parties. National Fidelity Life Ins. Co. v. Karaganis, 811 F.2d 357, 358 (7th Cir. 1986). In this case, although neither side mentioned it in their briefs on Authentix' earlier motion for judgment on the pleadings, there are disputed issues of material fact that should have precluded our granting of the motion. Specifically, with regard to count two, the parties dispute whether Authentix ever agreed (through oral or written modification of the Agreement or otherwise) to provide a certain percentage of the workforce needed for the project. In its answer, Authentix denies some parts of this count and merely refers back to the Agreement in others; they certainly do not agree that they were to provide 44% of the labor needed. Thus, even though it is true that Objectwave could not maintain its quantum meruit count, our original decision to grant judgment on the pleadings was erroneous; given the dispute of facts, we should never have reached the merits.

As we noted in our earlier opinion, Objectwave's count two sounded in breach of contract, not quantum meruit. Since count one of the complaint also alleges breach of contract, what we should have instructed Objectwave to do (and what we order now), is for it to amend its complaint to include all at its breach of contract allegations in a single count, whether they relate to the Agreement or some alleged modification of the Agreement. The pates may then conduct discovery to determine the scope and nature of the Agreement and any modifications. If Authentix believes it has a legal argument that we should not accept any purported modifications, and if there are not issues of disputed fact, it may file a motion for summary judgment at a later date. For now, that part of our earlier order that granted Authentix' motion for judgment on the pleadings as to count two of the complaint is hereby vacated. Accordingly, count two is hereby dismissed without prejudice, and Objectwave is ordered to file a third amended complaint consistent with this opinion. It is so ordered.


Summaries of

Objectwave Corporation v. Authentix Network, Inc.

United States District Court, N.D. Illinois, Eastern Division
Oct 15, 2001
No. 00 C 7823 (N.D. Ill. Oct. 15, 2001)
Case details for

Objectwave Corporation v. Authentix Network, Inc.

Case Details

Full title:OBJECTWAVE CORPORATION, an Illinois corporation, Plaintiff, v. AUTHENTIX…

Court:United States District Court, N.D. Illinois, Eastern Division

Date published: Oct 15, 2001

Citations

No. 00 C 7823 (N.D. Ill. Oct. 15, 2001)