Opinion
99 C 8237
February 16, 2000
MEMORANDUM OPINION
This matter comes before the Court on Plaintiff's motion to strike Defendant's affirmative defenses and portions of Defendant's/Counter-Plaintiff's counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, the Court grants Plaintiff's motion to strike Defendant's affirmative defenses, and denies Plaintiff's motion to dismiss portions of Defendant's/Counter-Plaintiff's counterclaims.
BACKGROUND
Plaintiff/Counter-Defendant Franklin Capital Corporation ("Franklin" or the "Plaintiff) filed a two-count complaint against Defendant/Counter-Plaintiff Baker Taylor, Inc. ("Baker" or the "Defendant") in the Circuit Court of Cook County. Baker subsequently removed the action to federal district court on the basis of diversity. Baker then answered, asserted affirmative defenses, and filed counterclaims and third-party claims against Franklin and third party, VR Record Co., Inc. ("VR"). Franklin, in this motion, seeks the Court to strike Baker's affirmative defenses and dismiss that part of Baker's counterclaim that may seek relief for damages suffered by Baker above and beyond the amount of certain accounts receivables at issue in this case.
LEGAL STANDARD
Motions to strike affirmative defenses are governed by Federal Rule of Civil Procedure 12(f), which provides:
Upon motion made by a party before responding to a pleading or, if no responsive pleading is permitted by these rules, upon motion made by a party within 20 days after the service of the pleading upon the party or upon the court's own initiative at any time, the court may order stricken from any pleading any sufficient defense or any redundant, immaterial, impertinent, or scandalous matter. Fed.R.Civ.P. 12(f).
Although motions to strike are generally not favored because of their potential dilatory nature, they are useful and appropriate for weighing the legal implications to be drawn from uncontroverted facts. See United States v. 416.81 Acres of Land, 514 F.2d 627, 631 (7th Cir. 1975). Affirmative defenses are to be stricken only when they are "insufficient on the face of the pleadings." Heller Financial, Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989). Thus, they ordinarily should not be stricken "if they are sufficient as a matter of law or if they present questions of law or fact." Id. Since affirmative defenses are pleadings, they are subject to all the pleading requirements of the Federal Rules of Civil Procedure. See Heller Financial, 883 F.2d at 1294; Flasza v. TNT Holland Motor Express, Inc., 155 F.R.D. 612, 613 (N.D. Ill. 1994). As such, they must set forth a "short and plain statement" of the defense, and if an affirmative defense is insufficient on its face or comprises no more than "bare bones conclusory allegations," it must be stricken. See Heller Financial, 883 F.2d at 1294-95; Flasza, 155 F.R.D. at 613-14.
The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the sufficiency of the complaint, not to decide the merits of the case. A defendant must meet a high standard in order to have a complaint dismissed for failure to state a claim upon which relief may be granted. In ruling on a motion to dismiss, the court must construe the complaint's allegations in the light most favorable to the plaintiff and all well-pleaded facts and allegations in the plaintiff's complaint must be taken as true. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993), cert. denied, 510 U.S. 1012, 114 S.Ct. 602, 126 L.Ed.2d 567 (1993). The allegations of a complaint should not be dismissed for failure to state a claim "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Nonetheless, in order to withstand a motion to dismiss, a complaint must allege facts sufficiently setting forth the essential elements of the cause of action. Lucien v. Preiner, 967 F.2d 1166, 1168 (7th Cir. 1992), cert. denied, 506 U.S. 893, 113 S.Ct. 267, 121 L.Ed.2d 196 (1992). With these principles in mind, the Court evaluates Defendant's motions.
DISCUSSION
I. Affirmative Defenses
Plaintiff Franklin moves to strike Baker's affirmative defenses, arguing that they are insufficient because they merely state conclusory allegations without any factual allegations. The Court notes that in its response to Franklin's motions, Baker has completely ignored Franklin's motion to strike Baker's affirmative defenses by failing to advance a single argument against this motion. This alone serves as a basis for granting Franklin's motion to strike Baker's affirmative defenses.
In addition, the Court finds that Baker's affirmative defenses are insufficient on their face because they are bare bones conclusory allegations, which simply name various legal theories without indicating how they are connected to the case at hand. The following comprise the whole of Baker's eleven affirmative defenses:
(1) Plaintiff's Complaint fails to state a claim upon which relief can be granted.
(2) Plaintiff's claims are barred, in whole or in part, by the doctrines of estoppel, waiver, and unclean hands.
(3) Plaintiff's claims are barred, in whole or in part, by the doctrines of consent, condonation, and ratification.
(4) Plaintiff's recovery is barred, in whole or in part, because Plaintiff failed to mitigate its alleged damages.
(5) Plaintiff's claims are barred because the transaction at issue in this litigation fails for want of consideration, since VR did not have ownership or distribution rights in the goods it purported to sell to Baker.
(6) Plaintiff's claims are barred by Plaintiff's failure to satisfy conditions precedent.
(7) Plaintiff's claims are barred because the transaction at issue in this litigation was illegal and therefore void ab initio.
(8) Plaintiff's claims are barred because Baker timely and effectively exercised its right of revocation.
(9) Plaintiff's claims are barred by VR's fraudulent inducement and concealment.
(10) Plaintiff's claims are barred by VR's misrepresentation.
(11) Plaintiff's claims are barred by the doctrine of mistake. (Headings omitted).
These allegations without more are insufficient. The Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases a claim. Rather, the claimant must simply provide a "short and plain statement of the claim." Fed.R.Civ.P. 8(a), (e). Although the Federal Rules allow liberal notice pleading, they do not allow a claimant "to abdicate the responsibility of alleging the basic facts demonstrating his entitlement to relief." Murphy v. White Hen Pantry Co., 691 F.2d 350, 353 (7th Cir. 1982).
Because Baker's affirmative defenses are completely devoid of facts and merely state legal conclusions, which do not state an entitlement to relief, the Court dismisses Baker's affirmative defenses on this basis as well.
II. Counterclaims
Franklin moves to dismiss certain portions of Baker's counterclaim pursuant to Rule 12(b)(6). Franklin claims that the relief sought is broader than is legally recoverable. Thus, Franklin seeks the Court to strike Baker's prayer for relief so as to limit any potential recovery by Baker to the amount of the account receivables. Because a determination of the potential amount Franklin can legally recover would require a premature analysis of the facts, the Court denies Franklin's motion to dismiss Baker's prayer for relief in its counterclaim.
Baker's prayer for relief includes a request that the Court award "Baker the damages it suffered as a result of the acts or omissions of Franklin and VR." Franklin argues that because of the breadth implied by "damages suffered as a result of acts or omissions," Baker's claims seem to impose a greater liability on Franklin than Baker's allegations would support. According to Franklin, because the only allegations Baker makes against Franklin are based on VR's assignment of its rights and obligations of certain account receivables at issue in this litigation to Franklin, Baker's recovery against Franklin would be limited to the amount of the account receivables in accordance with 810 ILCS 5/9-317 and 810 ILCS 5/9-318 of the Uniform Commercial Code, as enacted in Illinois. However, Franklin claims that Baker's prayer for relief by seeking to hold Franklin liable for acts or omissions appears to seek an award greater than is allowed by sections 9-317 and 9-318. Nevertheless, it is unclear from the pleadings alone whether sections 9-317 and 9-318 would control this litigation. Even if it were evident that these sections would apply, without delving into an analysis of the facts, the effect they would have on Baker is unclear.
Baker has alleged four counterclaims against Franklin: breach of warranty of title, breach of warranty against infringement, breach of contract, and breach of implied covenant of good faith and fair dealing. Franklin does not argue that these claims should be dismissed because they fail to state a claim. Rather, Franklin argues that Baker's claims are governed by sections 9-317 and 9-318, and because the alleged facts apparently operate under these sections to limit Baker's recovery, Baker's prayer for relief is overly broad and must be stricken. This conclusion is not only premature at this juncture, but it fails to support a Rule 12(b)(6) motion.
Finally, in its reply, Franklin attacks Baker's counterclaims as failing to meet the pleading requirements of Federal Rule of Civil Procedure 8. Not only does Franklin first raise this issue on reply, but Franklin fails to adequately support it as well. Specifically, Franklin challenges Baker's factual allegations because they are made "on information and belief" and argues that the Court needs to determine whether there does exist any factual basis for the "belief." Further, Franklin suggests that Baker should have conducted discovery first, and after gathering facts that would support its claims, then bring its claims. Although Franklin acknowledges that generally pleading facts "on information and belief" is sufficient to meet the requirements of Rule 8, Franklin seems to contend that in this case it is not sufficient. See Chisholm v. Foothill Capital Corp., 940 F. Supp. 1273, 1280 (N.D. Ill. 1996). Rather than demonstrate why, in this instance, stating allegations based on information and belief would fail to meet the requirements of Rule 8, Franklin chooses to attack Baker's beliefs as incorrect or inconsistent. Again, Franklin delves into an analysis of the facts and merits of this case to support its assertion that it would be unreasonable to conclude that Franklin would have been willing to accept the assignment of obligations from its customers. At this time, this would be premature. Although Franklin attacks the factual allegations Baker submits in support of its information and belief, Franklin sets forth no reason why Baker's allegations made on information and belief fail to meet the requirements of Rule 8. Further, the Court can find no reason to find that Baker's allegations violated Rule 8 simply because they were made on information and belief.
Thus, the Court denies Franklin's motion to dismiss parts of Baker's counterclaim.
CONCLUSION
For the reasons set forth above, the Court grants Plaintiff's motion to strike Defendant's affirmative defenses, and denies Plaintiff's motion to dismiss portions of Defendant's counterclaims.