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Beanstalk Group, Inc. v. AM General Corporation

United States Court of Appeals for the Seventh Circuit
283 F.3d 856 (2002)


AM General Corporation (AM General) (defendant) manufactured a line of vehicles known as Hummers. In 1997, AM General entered into a representation agreement with Beanstalk Group, Inc. (Beanstalk) (plaintiff), by which Beanstalk agreed to act as AM General’s sole nonemployee representative for negotiating trademark-license agreements for the Hummer. The agreement defined a license agreement as “any agreement or arrangement, whether in the form of a license or otherwise, granting merchandising or other rights in the Property.” Any payments for license agreements negotiated by Beanstalk were tendered to Beanstalk, which then deducted a 35 percent commission and forwarded the balance to AM General. In 1999, AM General entered a joint-venture agreement with General Motors (GM) (defendant), by which GM assumed the Hummer trademark. The joint-venture agreement did not require GM to assume the representation agreement with Beanstalk. GM refused to pay Beanstalk a commission for any license agreements made after the date of the joint-venture agreement. Beanstalk brought a breach-of-contract action against AM General and GM. The district court granted the defendants’ motion to dismiss for failure to state a claim, and Beanstalk appealed to the United States Court of Appeals for the Seventh Circuit.

Rule of Law


Holding and Reasoning (Posner, J.)

Concurrence/Dissent (Rovner, J.)

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