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TOA Systems Inc. v. Int'l Bus. Machs. Corp.

Claims of Pre-Termination Payments Owed Are Speculative, Damages Inadequately Alleged

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OPINION AND ORDER   Plaintiff TOA Systems, Inc. (“TOA”), brings this action against defendant International Business Machines Corporation (“IBM”), as successor in interest to WSI Corporation (“WSI”). Plaintiff asserts a state law claim for breach of contract. Before the Court is defendant’s motion to dismiss the amended complaint pursuant to Rule 12(b)(6). (Doc. #21). For the reasons set forth below, the motion is GRANTED. However, plaintiff is granted leave to replead its claim to the limited extent provided herein. The Court has subject matter jurisdiction under 28 U.S.C. §1332. BACKGROUND For the purpose of ruling on the motion to dismiss, the Court accepts as true all well-pleaded factual allegations in the amended complaint and draws all reasonable inferences in plaintiff’s favor, as summarized below. This case concerns a contract. TOA alleges that on January 11, 2007, it contracted with WSI to assist with the installation, development, and use of worldwide lightning data based on TOA’s sensors and technology. WSI, in turn, contracted to sell weather systems information to customers worldwide. The parties amended the contract three times. At some point after September 2014, IBM acquired WSI and became the successor in interest to WSI’s contract with TOA. On June 22, 2017, IBM terminated the contract with TOA. TOA bases its breach of contract claim on: (i) defendant’s failure to meet its pre-termination payment obligations; and (ii) defendant’s premature termination of the contract in 2017, when the parties had agreed the contract would run until 2022. Accordingly, plaintiff claims defendant has caused it to lose out on “approximately $1 million per year” in net revenue and that plaintiff has “sustained…and will continue to sustain substantial economic losses in the form of lost payments.” (Doc. #20 (“Am. Compl.”)

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