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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)

Written by Sara Rhee, JD

Facts

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.

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