Summary
dismissing a counterclaim alleging the same facts, claims, and requested relief
Summary of this case from Reid v. Unilever United States, Inc.Opinion
Case No. 11-CV-1089
01-25-2012
THE TUCKER FIRM, LLC, Plaintiff, v. KIMBERLY ALISE, Defendant. KIMBERLY ALISE, Counter-Plaintiff, v. DEBRA TUCKER and THE TUCKER FIRM, LLC, Counter-Defendants.
Judge John W. Darrah
MEMORANDUM OPINION AND ORDER
Defendant/Counter-Plaintiff Kimberly Alise ("Alise") moves to dismiss Count IV of Plaintiff/Counter-Defendant the Tucker Law Firm's Amended Complaint and to strike certain allegations of the Complaint. Counter-Defendants Debra Tucker and The Tucker Law Firm, LLC (collectively, "Tucker") move to dismiss Alise's counterclaims and further move to strike Alise's affirmative defenses. For the reasons presented below, Alise's motion to dismiss Tucker's conspiracy claim is denied, and Alise's motion to strike certain allegations relating to the alleged conspiracy is also denied. Furthermore, Tucker's motion to dismiss Alise's counterclaims is granted in part and denied in part; Tucker's motion to dismiss Alise's legal malpractice claim is denied and granted as to all other counterclaims. Tucker's motion to strike Alise's affirmative defenses is denied.
BACKGROUND
The Tucker Firm filed an Amended Complaint against Alise, alleging: (1) breach of contract; (2) quantum meruit in the alternative of breach of contract; (3) unjust enrichment in the alternative of breach of contract; and (4) conspiracy to breach contract. Alise filed a response and counterclaims against Tucker, alleging: (1) legal malpractice and (2) in the alternative, breach of fiduciary duty. Tucker is in Illinois, while Alise is a citizen of Florida, and the amount in controversy exceeds $75,000; thus, jurisdiction is proper. Venue is also properly established in the Northern District of Illinois because a substantial part of the events giving rise to the claims alleged occurred in this district.
Debra J. Tucker is an attorney at the Tucker Law Firm, LLC, located in Chicago, Illinois. Alise contacted Tucker in May 2009 to discuss using Tucker's legal services. Alise agreed orally to retain Tucker. In September 2009, the terms of their retention agreement were memorialized in writing. Alise hired Tucker because she was involved in a dispute with an individual named Dr. Seth Guterman ("Guterman"). It appears the legal disputes between Guterman and Alise were extensive.
Alise and Guterman managed a business called Emergency Care Dictation Services, Inc. ("ECDS") and also had a personal relationship. Alise's ownership in ECDS was derived from her 51 percent ownership interest in the holding company of ECDS, Malo the Dog, LLC ("Malo"). The dispute between Alise and Guterman prevented Alise from maintaining her position as CEO of ECDS. Alise sought legal services, at least in part, to be reinstated as the CEO of ECDS. Tucker allegedly provided services to Alise relating to her employment discrimination claims against ECDS filed with the United States Equal Employment Opportunity Commission, the State of Illinois Department of Human Rights, and the City of Chicago Commission on Human Relations. Tucker also represented Alise in a marriage dissolution action against Guterman in the Circuit Court of Cook County, Illinois; though, Alise was also represented by another firm, Beermann Swerdlove LLP, in this action. Additionally, Alise received legal defense from Tucker in an action brought against Alise by Guterman in the Chancery Division of Cook County Court, where Guterman sought to nullify Alise's rights in ECDS.
Based on the claims and counterclaims filed, it is clear Tucker and Alise disagree as to the amount of money recovered by Tucker for Alise and also disagree on the extent of and quality of Tucker's representation of Alise. Tucker asserts, as a result of Tucker's legal representation, Alise gained at least $2 million in benefits. Tucker further alleges that Alise conspired with Guterman to avoid paying outstanding legal fees due to Tucker; Tucker claims Guterman's settlement with Alise is confidential to prevent Tucker from discovering how much Alise gained in her settlement. Alise disputes Tucker's assertions. According to Alise, Tucker, despite being aware of Alise's limited funds, pursued questionable legal strategies while charging Alise highly excessive fees. Alise claims Tucker committed legal malpractice or, in the alternative, breached fiduciary duties owed to Alise.
LEGAL STANDARD
To properly assert a claim in a complaint, the plaintiff must present "a short and plain statement of the claim showing that the pleader is entitled to relief... and a demand for the relief sought." Fed. R. Civ. P. 8. Rule 8 "does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (Iqbal) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (Twombly)). While a court is to accept all allegations contained in a complaint as true, this principle does not extend to legal conclusions. Iqbal, 129 S. Ct. at 1949. The Federal Rules further provide that a defendant may assert a defense that the plaintiff failed "to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To defeat a motion to dismiss under Rule 12(b)(6), a plaintiff must plead sufficient factual matter to state a claim for relief that is "plausible on its face." Iqbal, 129 S. Ct. at 1949 (citing Twombly at 570).
Additionally, the Federal Rules permit the court to strike language from a pleading it considers "redundant, immaterial, impertinent, or scandalous." Fed. R. Civ. P. 12(f). The decision to strike material is within the discretion of the court. Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 665 (7th Cir. 1992) (Talbot). Motions to strike are disfavored; they shall not be granted unless it is apparent a plaintiff would succeed "despite any state of the facts which could be proved in support of the defense" and can be inferred from the pleadings. Williams v. Jader Fuel Co., Inc., 944 F.2d 1388, 1400 (7th Cir. 1991) (quoting Glenside West Corp. v. Exxon Co., 761 F.Supp. 1100, 1115 (D.N.J. 1991)). In considering a motion to strike an affirmative defense, the court employs the familiar standard used for motions to dismiss under Rule 12(b)(6). Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989) (Heller). Affirmative defenses will not be stricken if they are sufficient as a matter of law or present questions of law or fact. Id.
ANALYSIS
Dismissal of Count IV of Plaintiff's First Amended Complaint
The Tucker Firm, LLC alleges in Count IV of its First Amended Complaint that Alise conspired with Guterman to breach the agreement between Tucker and Alise by failing to pay her outstanding legal fees. The Complaint further alleges Alise undertook unlawful means to thwart Tucker's ability to collect the unpaid legal fees, totaling $889,822.76. Alise moves to dismiss Count IV under Rule 12(b)(6) with prejudice, arguing the claim of conspiracy to breach contract is duplicative of Count I, which claims breach of contract.
Civil conspiracy consists of a combination of two or more persons for the purpose of accomplishing, by some concerted action, either an unlawful purpose or a lawful purpose by unlawful means. Adcock v. Brakegate, Ltd., 645 N.E.2d 888, 894 (Ill. 1995) (citing Smith v. Eli Lilly & Co., 560 N.E.2d 324 (Ill. 1990)). Alise argues Tucker's conspiracy claim is duplicative of the breach-of-contract claim in Count I of the Amended Complaint. In support of its position, Alise presents case law which provides: "a conspiracy claim alleging a tort as the underlying wrongful act is duplicative where the underlying tort has been pled." Tamburo v. Dworkin, No. 04-C-03317, 2010 WL 5476780, at *9 (N.D. Ill . Dec. 29, 2010). See also Thomas & Betts Corp. v. Panduit Corp., 108 F. Supp 2d 968, 975 (N.D. Ill. 2000). Alise's reliance on this case law is misplaced because Tucker's conspiracy claim is not duplicative of a tort but, rather, relates to an underlying alleged breach of contract.
Had Count I of Tucker's Amended Complaint been a tortious claim, rather than a contractual breach claim, Alise's argument of a duplicative claim would be correct. However, a breach of contract is not a tort. A conspiracy to breach a contract is a claim distinct from a mere breach-of-contract claim and requires additional elements to be pled, as Plaintiff has done. "While it is true that a party cannot be sued in tort for inducing the breach of his own contract, he can be sued for conspiracy with a third person who was induced him to breach his contract resulting in actual damage." Blivas v. Klein, 282 N.E.2d 210, 214 (Ill. App. Ct. 1972) (Blivas). See also F & D Group Ltd. v. American Autofran, Inc., No. 89-C-3621, 1990 WL 205839, at *6 (N.D. Ill. Nov. 30, 1990) (stating "Blivas remains good law."). "Illinois does recognize a cause of action for conspiring with a third party to breach one's own contract." Miyano Machinery USA, Inc. v. Zonar, et al., No. 92-C-2385,1994 WL 23649, at *6 (N.D. Ill. May 23, 1994) (citations omitted).
While courts have recognized, as Alise argues, a tort claim and a related claim of civil conspiracy to commit the tort are duplicative, this rule does not extend to a breach-of-contract claim and a related claim of civil conspiracy to breach the contract. There is no reason to consider Tucker's conspiracy claim in Count IV as duplicative of the breach claim in Count I of the Amended Complaint. The law recognizes the conspiracy to breach a contract as separate and distinct from a breach-of-contract claim, as explained above. Alise's motion to dismiss Tucker's claim of conspiracy to breach a contract is denied.
Striking Allegations from Plaintiff's First Amended Complaint
Alise also seeks to have paragraphs thirty-one through forty-seven of Tucker's First Amended Complaint stricken as immaterial or prejudicial. Alise's Motion to Strike is denied.
The paragraphs at issue appear in the section of the Amended Complaint titled "The Defendant's Conspiracy with Guterman." Alise argues Tucker provided these allegations to support the claim of conspiracy, addressed above, and that the statements are no longer relevant as Alise moves to dismiss Tucker's conspiracy claim in Count IV of the Amended Complaint. Count IV of the Amended Complaint survived Alise's motion to dismiss; thus, the facts provided in this section of Tucker's Amended Complaint continue to be relevant and provide the factual basis for the conspiracy claim.
Alise's motion to strike this language as immaterial in the Amended Complaint is also denied. "Courts generally do not grant motions to strike unless the defect in the pleading causes some prejudice to the party bringing the motion." Hoffman v. Sumner, 478 F.Supp. 2d 1024, 1028 (N.D.Ill. 2007). To the extent Alise also attempts to strike these statements as scandalous or prejudicial under Rule 12(f), Alise's motion to strike is denied. The statements included in the "Defendant's Conspiracy with Guterman" section of the Amended Complaint seek to support and provide context to Tucker's claims. That the statements involve a third party does not create undue prejudice against Alise; rather, the allegations are provided to support Tucker's claims of the alleged conspiracy between Alise and Guterman, the third party. Alise's motion to strike is denied.
Dismissal of Counterclaims
Alise alleges two counterclaims against Tucker: legal malpractice or, in the alternative, breach of fiduciary duty by charging excessive fees. Tucker has filed a motion to dismiss these counterclaims pursuant to Rule 12(b)(6). Tucker argues Alise has failed to state a claim upon which relief may be granted. Tucker's primary assertions supporting the motion to dismiss the counterclaims are: (1) Alise never had the legal right to be the CEO of ECDS; (2) Alise cannot accuse Tucker of charging excessive legal feels because the majority of these fees remain unpaid; and (3) Alise's counterclaim of breach of fiduciary duty is duplicative of her legal malpractice claim. Tucker's motion to dismiss Alise's counterclaim of legal malpractice is denied; the motion to dismiss the breach of fiduciary duty counterclaim is granted.
First, Alise's legal malpractice claim is sufficient to survive a motion to dismiss. Tucker's motion to dismiss fails to provide an assessment (or an acknowledgment, other than in the many footnotes) of the multiple assertions alleged in Alise's legal malpractice claim. In the motion to dismiss, Tucker focuses on the issue of Alise's being CEO of ECDSO, however, Tucker fails to address why Alise's other allegations do not support her malpractice claim. In ruling on a motion to dismiss under Rule 12(b)(6), a court will accept all the factual allegations as true. Iqbal, 129 S. Ct. at 1949. Taken on its face, the facts alleged in the malpractice claim are sufficient to put Tucker on notice as to what is at issue in Alise's malpractice claim. Tucker concentrated on Alise's right to be the CEO of ECDS and neglected Alise's other allegations, such as: Tucker's pursuit of untenable legal strategies, using strategies that sought to increase Tucker's fees and costs, and taking on work in a field of law in which Tucker did not have experience. All of these allegations, particularly when taken together, are sufficient to support a claim of legal malpractice; Alise's legal malpractice claim survives Tucker's motion to dismiss.
Next, Tucker argues Alise's malpractice claim fails under Rule 12(b)(6) for lack of damages, maintaining Alise does not allege any monetary loss suffered by not being reinstated as the CEO of ECDS. Again, Tucker fails to acknowledge the other alleged injuries relating to the legal malpractice claim. Furthermore, taking Alise's factual allegations as true, it appears Alise has sufficiently pled monetary damages. If Alise's allegations are true, it is possible that Tucker may be liable for Alise's alleged loss in settlement value, the sanction incurred by Alise in California, and the full benefits and rights associated with Alise's ownership interest in Malo, the holding company of ECDS. If the allegations against Tucker are true, it is possible Tucker would be liable to Alise for committing legal malpractice, and Alise could recover the related damages. Alise's malpractice claim shall not be dismissed for failing to allege damages.
Additionally, to the extent Alise alleges in her counterclaims that Tucker charged excessive fees, these claims shall survive Tucker's motion to dismiss. Tucker argues the allegations of excessive fees should fail because Alise has not paid the fees. However, the issue is whether Alise is legally obligated to pay the fees, not whether she has paid them. Alise admits she paid at least some fees charged by Tucker. As pled, the fees sought from Alise are excessive. Under the Iqbal standard, Alise's claim of excessive fees is sufficient to survive Tucker's motion to dismiss.
Finally, Tucker argues Alise's breach of fiduciary duty claim is duplicative of the legal malpractice claim. "[A] plaintiff must plead the same elements in an action for breach of fiduciary duty as in an action for legal malpractice." Charette v. Emanuel, No. 89-C-6497, 1990 WL 86039, at *3 (N.D. Ill. June 13,1990). Alise pleads a breach of fiduciary duty claim using all of the same facts provided to support her legal malpractice claim. As both Alise's legal malpractice and breach of fiduciary duty claims arise from the same operative facts and plead the same elements, they are indistinguishable. See Kurtz v. Toepper, No. 11-CV-4738, 2012 WL 33012 (N.D. Ill. Jan. 6, 2012) (holding when two claims stem from the same nucleus of operative facts and result in the same injury, the claims are duplicative). A legal malpractice claim may not be re-characterized as a breach of fiduciary duty claim to avoid dismissal. Hoagland ex rel. Midwest Transit, Inc. v. Sandberg, Phoenix & von Gontard, P.C., 395 F.3d 737, 744 (7th Cir. 2004). "Courts have the authority to dismiss duplicative claims if they allege the same facts and the same injury." F.D.I.C. v. Saphir, No. 10-CV-7009, 2011 WL 3876918, at *9 (N.D. Ill. Sept. 1, 2011). Though pleading in the alternative is generally allowed under Rule 8(d)(2) of the Federal Rules of Civil Procedure, the Rule does not prohibit dismissal of duplicative claims. See Van Vliet v. Cole Taylor Bank, No. 10-CV-3221, 2011 WL 148059, at *2 (N.D. Ill. Jan. 18, 2011). Because Alise's counterclaims allege the same facts, claims, and requested relief, Alise's counterclaim alleging breach of fiduciary duty is dismissed.
Striking Alise's Affirmative Defenses
Finally, Tucker seeks to strike Alise's affirmative defenses. Alise asserted seven affirmative defenses: (1) Tucker failed to state a claim upon which relief may be granted; (2) Tucker failed to mitigate damages; (3) Tucker materially breached their contract; (4) Tucker's claims are barred by set-off to be determined at trial; (5) Tucker's claims are barred by alleged legal malpractice; (6) Tucker's claims are barred by the unreasonableness of the charges; and (7) Tucker's claims are barred by an alleged breach of fiduciary duty. Tucker moves to strike Alise's first, second, third, and sixth affirmative defenses for failing to be specific enough. Tucker seeks to have Alise's fourth, fifth, and seventh defenses stricken because they fail to meet the requirements of Federal Rule 12(b)(6). Tucker further moves to strike Alise's fourth defense of set-off because a set-off cannot destroy the plaintiff's right of action; and Tucker moves to strike the sixth defense of unreasonableness of charges because it attempts to controvert the allegations in Tucker's claims to collect the unpaid fees.
The striking of affirmative defenses is disfavored. Heller, 883 F.2d at 1294. "Ordinarily, defenses will not be struck if they are sufficient as a matter of law or if they present questions of law or fact." Id. at 1293. "Indeed, unless a defense is 'patently defective and could not succeed under any circumstances,' it should remain." Say ad v. Dura Pharmaceuticals, Inc., et al., 200 F.R.D. 419, 420 (N.D. Ill. 2001) (Sayad) (quoting Mobley v. Kelly Kean Nissan, Inc., 864 F.Supp 726, 732 (N.D. Ill. 1993)). However, it is appropriate to strike an affirmative defense that creates unnecessary clutter to a case. Id. There is a three-part test to determine if an affirmative defense should be stricken: "(1) the matter must be properly pleaded as an affirmative defense; (2) the matter must be adequately pleaded under the requirements of Federal Rules of Civil Procedure 8 and 9; and (3) the matter must withstand a Rule 12(b)(6) challenge." Sayad, 200 F.R.D. at 421 (citing Heller, 883 F.2d at 1294). Essentially, a defense will be stricken as legally insufficient if the defendants cannot prove a set of facts in support of the affirmative defense that would defeat the complaint.
Tucker argues Alise's fourth (set-off), fifth (legal malpractice), and seventh (breach of fiduciary duty) defenses are duplicative of Alise's counterclaims and should be stricken for the same reasons the counterclaims should be dismissed. Alise's affirmative defenses of set-off, legal malpractice, and breach of fiduciary duty survive because it is entirely possible, taking Alise's pled facts as true, that these defenses could defeat Tucker's Amended Complaint. Tucker presents no reasons why an affirmative defense should be stricken simply because they are similar to the filed counterclaims. Even though Alise's counterclaim of breach of fiduciary duty fails as it was duplicative of the legal malpractice claim, it is possible that the affirmative defense of breach of fiduciary duty can defeat one or more of the claims in Tucker's Amended Complaint.
Tucker's motion to strike Alise's first (failure to state a claim), second (failure to mitigate), third (breach of contract) and sixth (unreasonableness of the charges) affirmative defenses is also denied. Tucker argues these defenses lack the specificity necessary to provide Tucker with sufficient notice. However, Alise's affirmative defenses were filed in conjunction with her response and counterclaims, and the factual basis pled to support these claims would also provide Tucker with sufficient notice of each defense. An affirmative defense admits the plaintiff's action but provides a reason the defendant is excused from some or all liability. Evergreen Media Corp. v. Radio & Television Broad. Eng's Local 1220, 983 F. Supp. 731, 737 (N.D. Ill. 1997). Alise's affirmative defenses are brief; but the defenses, when read together with her additional plead facts, are sufficient to survive Tucker's motion to strike them.
To the extent Tucker seeks to strike various allegations in Alise's counterclaims, these cursory arguments (found in footnotes 7, 9, and 10 of Tucker's motion) are unsupported and without merit. Tucker's motion to strike these allegations is denied.
CONCLUSION
For the reasons set forth above, Alise's motion to dismiss Tucker's conspiracy claim in Count IV of the Amended Complaint is denied, and Alise's motion to strike certain allegations relating to the alleged conspiracy is also denied. Tucker's motion to dismiss Alise's counterclaims is granted in part and denied in part; Tucker's motion to dismiss Alise's counterclaim of legal malpractice is denied, and Tucker's motion to dismiss the counterclaim of breach of fiduciary duty is granted. Tucker's motion to strike Alise's affirmative defenses and certain other allegations is denied.
_________________
JOHN W. DARRAH
United States District Court Judge