IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

JENNIFER GRABIANSKI et al., 

Plaintiffs, 

v. 

BALLY TOTAL FITNESS HOLDING 

CORP. et al., 

Defendants. 

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No. 1:12-cv-284 

Honorable Elaine E. Bucklo 

DEFENDANT, BALLY TOTAL FITNESS HOLDING CORP.’S, 

MEMORANDUM IN SUPPORT OF ITS MOTION TO DISMISS 

PLAINTIFFS’ FIRST AMENDED CLASS ACTION COMPLAINT

REDACTED COPY

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I. INTRODUCTION 

Plaintiffs’ amended complaint fails to cure the defects identified by this Court in its 

September 11, 2012 Order (“Order”). That Order granted leave to amend on limited terms, 

ordering that “Plaintiffs are given until 10/11/2012 to address the deficiencies in their complaint 

noted herein.” (Order, at 23.) Instead of curing those defects, Plaintiffs have added five “new” 

named plaintiffs to this lawsuit (Fridman, Raecek, Dromgoole, Kehati, and Esposito), and now 

allege contract and consumer fraud claims under the laws of Arizona, Florida, New Jersey and 

New York.1

 

This addition of these “new” named plaintiffs (and vast expansion of the case) is 

inconsistent with the limited leave granted to plaintiffs by this Court “to address the deficiencies 

in their complaint noted herein,” (Order, at 23), and is precluded by United States District Judge 

Otis D. Wright, II’s order in Fridman et al. v. Bally Total Fitness Holding Corp. et al., No. 2:12-

cv-707-ODW(MRWx) (C.D. Cal.). Judge Wright dismissed the case filed in the Central District 

of California by these same five plaintiffs.2 These plaintiffs failed to appeal the Fridman Order 

by the October 25, 2012 deadline, at which time the order became final. Instead of appealing, 

these plaintiffs re-filed their claims in this Court. Settled doctrines of claim preclusion bar this 

re-filing. See Am. Nat’l Bank & Trust Co. of Chi. et al. v. Equitable Life Assurance Soc. of U.S.,

406 F.3d 867, 874-75 (7th Cir. 2005) (dismissals for want of jurisdiction are preclusive against 

re-filing). 

 

1

 The original complaint was limited to contract claims and claims under the Illinois Consumer Fraud and 

Deceptive Business Practices Act (“ICFA”). 

2

 Bally requests that this Court take judicial notice of the Fridman complaint and the order dismissing it 

(hereinafter the “Fridman Order”). (Def.’s Req. for Judicial Notice, Ex. A, B.) See, e.g., Gen. Elec. 

Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080-81 (7th Cir. 1997) (courts can take judicial 

notice of the contents of other courts’ records). A court may consider judicially noticed documents 

without converting a motion to dismiss into a motion for summary judgment. Id.; Doherty v. City of Chi., 

75 F.3d 318, 324 n. 4 (7th Cir. 1996); Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994). 

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The claims of the original plaintiffs, Grabianski and Stapleton (“Plaintiffs”), fare no 

better because they have not remedied the deficiencies in their claims as identified by this Court. 

Specifically, this Court pointed out that Plaintiffs had failed to “specify what contract terms 

Bally breached when it allegedly failed to assign Plaintiffs’ contracts to LA Fitness, or when it 

imposed the so-called ‘home club restriction.’” (Order, at 20 (citations omitted).) They still 

have not done so. 

Plaintiffs now allege that Bally failed to assign their contracts to LA Fitness and remains 

liable for not providing a club near their homes. But this theory fails because, among other 

reasons, their contracts expressly provide that Bally has the right “to close any facility . . . 

and/or modify any program, activity, class or service in our sole discretion.” (See, e.g., 

Corrected Ex. A. to Am. Compl., § 9.) Alternatively, Plaintiffs allege that Bally assigned their 

contracts to LA Fitness and that Bally is liable for LA Fitness’ subsequent breach of contract. 

But Plaintiffs do not allege with any proper basis how LA Fitness subsequently breached their 

contracts. It is not a breach of contract to close a club or to relocate a club. To the contrary, 

Plaintiffs’ contracts specifically contemplates such closures and provide Plaintiffs with a 

remedy: 

You may cancel this Contract if your club of enrollment permanently closes and 

you live more than 25 miles from any other club which you are entitled to use 

under the membership plan you have chosen or any substantially similar facility 

which will honor your membership at no additional charge. 

(Id., § 8.) 

MONTHLY DUES (cont.): Monthly dues charges will continue to be due each 

month regardless of your use of the club until you notify us in writing that you 

wish to cancel this Contract. 

(Id., § 21.) 

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Nothing in contracts alleged by Plaintiffs creates the right that they assert, namely the 

right to have a club near their home in perpetuity. Their remedy, in the event of a closure or 

relocation of a club (or for any other reason or no reason at all), is to cancel their contract and 

thereby stop paying any money. Moreover, to the extent that Plaintiffs are claiming, without a 

contractual basis, such a right in perpetuity, their claims fail as a matter of law because contracts 

of indefinite duration are terminable at will. Jespersen v. Minn. Mining & Mfg. Co., 700 N.E.2d 

1014, 1017 (Ill. 1998) (a contract that offers the possibility of perpetual duration is terminable at 

will). If, as Plaintiffs allege, Bally “effectively terminated” their memberships, (Am. Compl., 

¶ 51-52), then Bally was within its rights as established by the Supreme Court of Illinois. 

Finally, Plaintiffs’ attempt to state claims under the Illinois Consumer Fraud and 

Deceptive Business Practices Act (“ICFA”) fails miserably. Quite simply, they do not and 

cannot allege the essential elements of an ICFA claim. Additionally, Plaintiffs’ ICFA claim is 

barred by an order entered September 1, 2009 by the United States Bankruptcy Court for the 

Southern District of New York. 

II. ARGUMENT 

A. Pleading Standards 

This Court is well-familiar with the pleading standards under the Federal Rules of Civil 

Procedure. Rule 8(a) requires, among other things, “a short and plain statement of the claim 

showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). In alleging fraud, Rule 9(b) 

requires a statement with particularity of the circumstances constituting the fraud. See Fed. R. 

Civ. P. 9(b). Rule 12(b) requires the dismissal of complaints that fail to state claims upon which 

relief can be granted. See Fed. R. Civ. P. 12(b)(6). 

As the Supreme Court instructs, “[t]o survive a motion to dismiss, a complaint must 

contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its 

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face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 570 (2007)). A plaintiff must provide “enough detail to give the defendant fair notice 

of what the claim is and the grounds upon which it rests, and, through his allegations, show that 

it is plausible, rather than merely speculative, that he is entitled to relief.” Tamayo v. 

Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008) (quoting Lang v. TCF Nat’l Bank, 249 Fed. 

Appx. 464, 466 (7th Cir. 2007)). Plaintiffs’ claims do not pass muster under this standard. 

B. The Fridman Plaintiffs Cannot Re-file Their Claims In This Court. 

In their 49-page amended complaint, Plaintiffs add five “new” named plaintiffs to the 

lawsuit, and they now bring contract and consumer fraud claims under the laws of Arizona, 

Florida, New Jersey, and New York. The addition of these “new” named plaintiffs is a vast 

expansion of this case, as is evidenced by the 216 paragraphs of charging allegations. This Court 

granted the existing Plaintiffs leave “to address the deficiencies in their complaint noted herein.” 

(Order, at 23.) It did not grant Plaintiffs leave to add additional named plaintiffs to this lawsuit. 

Moreover, the addition of these five plaintiffs is precluded by the order of United States District 

Judge Otis D. Wright, II in Fridman et al. v. Bally Total Fitness Holding Corp. et al., No. 2:12-

cv-707-ODW(MRWx) (C.D. Cal.). 

The Fridman Order dismissed the identical claims of the same plaintiffs for lack of 

subject matter jurisdiction.3

 (Fridman Order, p. 4.) That order became final on October 25, 

2012 when Plaintiffs failed to file a timely notice of appeal. Judge Wright dismissed the entire 

case for lack of subject matter jurisdiction. (Fridman Order, p. 4 (“Therefore, this case is hereby 

dismissed without prejudice for lack of subject-matter jurisdiction.”) (emphasis added)). The 

dismissal of the entire action ends the litigation and permits appeal. Am. Nat’l Bank & Trust Co. 

 

3

 There are no means by which the attorneys for the Grabianski Plaintiffs were unaware of the Fridman

Order. The attorneys of record in Grabianski are among the attorneys of record in Fridman. 

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of Chi. et al. v. Equitable Life Assurance Soc. of U.S., 406 F.3d 867, 874-75 (7th Cir. 2005) 

(“[U]nlike the dismissal of a complaint, which can ordinarily be amended, the ‘dismissal of the 

entire action ends the litigation’ and therefore, permits an appeal under § 1291.”). This is true 

even though Judge Wright’s dismissal order was “without prejudice.” See, e.g., Hill v. Potter, 

352 F.3d 1142, 1146-47 n.6 (7th Cir. 2003). Indeed, the Seventh Circuit has expressly 

recognized that: 

Dismissals for want of subject-matter jurisdiction are always denominated 

without prejudice, because they signify that the court did not have the power to 

decide the case on the merits. But they are preclusive with respect to the 

jurisdictional ruling, . . . as otherwise the plaintiff would be free to refile the 

identical case in the same court. 

Id. (internal citations omitted); see also Am. Nat’l Bank, 406 F.3d at 875 (“The test for finality is 

not whether the suit is dismissed with prejudice or without prejudice, on the merits or on a 

jurisdictional ground or on a procedural ground . . . The test is whether the district court has 

finished with the case.”). 

If the Fridman plaintiffs were dissatisfied with Judge Wright’s order, the only proper 

course was to file an appeal. They have no legal right to re-file the dismissed claims in this 

Court. Hill, 352 F.3d at 1146-47 n.6. Thus, the claims of the five “new” Fridman plaintiffs 

(Fridman, Raecek, Dromgoole, Kehati, and Esposito) must be dismissed. Bally, therefore, will 

limit the remainder of this motion to the claims of Grabianski and Stapleton. 

C. Plaintiffs Fail To State A Claim For Breach Of Contract Against Bally 

(Count I). 

This Court directed Plaintiffs to correct, if possible, certain pleading deficiencies in their 

initial complaint: 

In regard to Bally, Plaintiff does not specify what contract terms Bally breached 

when it allegedly failed to assign Plaintiffs’ contracts to L.A. Fitness, or when it 

imposed the so-called “home club restriction.” They apparently believe that 

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Bally was required to assign their contracts, but do not allege a contractual basis 

regarding assignment. Although the federal rules provide for liberal pleading, 

“claimants must state enough direct or inferential allegations to establish the 

necessary elements under the selected theory of recovery to survive a 12(b)(6) 

motion.” 

(Order, at 20 (citations omitted). Plaintiffs have not complied with this Court’s direction. 

In their amended complaint, Plaintiffs alleged that they entered into “Premier” or 

“Premier Plus” memberships. (Am. Compl., ¶ 1.) 

 Plaintiffs attach to the 

amended complaint a copy of the Stapletons’ “Premier Plus” membership contract, (id., ¶ 68.), 

which is unsigned and contains handwritten modifications. (Corrected Ex. A. to Am. Compl., p. 

1-4.) According to Plaintiffs, the agreements contained “standardized terms.” (Id., ¶ 32). The 

gravamen of Plaintiffs’ amended complaint is that Bally breached Plaintiffs’ “Premier Plus” 

membership contract by closing clubs, thereby not providing clubs convenient to them. 

The closure of clubs plainly is not a breach under Plaintiffs’ contract. To the contrary, 

the contract expressly permits Bally to close its facilities at any time: 

9. RESERVATION OF RIGHTS. We reserve the right at any time to close any 

of our facilities or alter the hours of operation, and the right to amend the cost of, 

add, modify and/or eliminate any program, activity, class or service in our sole 

discretion . . . 

Moreover, to the extent that Plaintiffs rely on some alleged promise outside the contract, their 

reliance is mistaken because of the integration clause in the contract: 

15. EXCLUSIVE AGREEMENT. This Contract constitutes the entire and 

exclusive agreement between the parties and cancels and supersedes all prior 

promises, representations, understandings and/or agreements relating to the 

membership purchase. This Contract may be modified only be an instrument in 

writing . . . No change to any printed term in this Contract shall be valid. 

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An integration clause, such as the one cited above, “is a clear indication that the parties desire the 

contract be interpreted solely according to the language used in the final agreement. Air Safety, 

Inc. v. Teachers Realty Corp., 185 Ill.2d 457, 465 (Ill. 1999). 

Pleading in the alternative, Plaintiffs also allege that Bally breached their contracts by 

failing to assign their memberships to LA Fitness clubs near the members’ current residences. 

(Am. Compl., ¶ 11, 12(a).) A review of their contracts reveals that they have no such right to 

insist on assignment of their members to clubs near their current residences. Apparently 

recognizing this problem, Plaintiffs rely on purported rights that they say arise outside their 

contracts: (1) 

(id., ¶ 141), or (2) Bally represented to its members on a website4

 that “they would be able to 

transfer their home clubs if they relocated after purchasing their memberships.” (Id., ¶ 34.). 

Once again, the integration clause in Plaintiffs’ contracts prevents Plaintiffs from relying 

on alleged promises made outside their contracts. Air Safety, 185 Ill.2d at 465. 

 

 

 

4

 The website statements attributed to Bally are inapposite because they refer to “One Club Access” and 

“Local Access” memberships, and not Plaintiffs’ “Premier” and “Premier Plus” memberships. (Am. 

Compl., ¶ 34.). And, as discussed above, these statements do not modify Plaintiffs’ contracts. 

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In sum, despite prolix amended allegations, Plaintiffs still have not corrected the 

deficiencies identified by the court. (Order, at 20.) Nothing in the membership contract (which 

is “the entire and exclusive agreement between the parties”) prohibits Bally from closing clubs 

or from failing to assign memberships to other clubs close to Plaintiffs’ homes. To the contrary, 

the membership contracts expressly acknowledge Bally’s rights to close any of its facilities at its 

sole discretion and do not impose upon Bally any requirement to assign membership agreements 

to other clubs that may be convenient to a member. (Corrected Ex. A. to Am. Compl., § 9 (“We 

reserve the right at any time to close any of our facilities or alter the hours of operation.”).) If 

Plaintiffs are unhappy with the closure of a club or the assignment of their membership contract, 

their agreed contractual remedy is that they are relieved of their obligation to pay additional 

dues. (Id., § 7.) (“Monthly dues charges will continue to be due each month regardless of your 

use of the club until you notify us in writing that you wish to cancel this Contract.”) (Id., §21). 

Their remedy does not include a national federal class action that depends on strained legal 

theories that find no basis in their contracts. 

D. Plaintiffs’ Vicarious Breach Of Contract Liability Theory Is Defective. 

Implicitly recognizing that Bally did not breach any of its contractual obligations, 

Plaintiffs attempt to allege vicarious liability on Bally for LA Fitness’s alleged breach. Although 

difficult to discern, Plaintiffs’ strained theory appears to be that: a) Bally assigned the 

memberships to LA Fitness; b) LA Fitness imposed some sort of “home club” restriction and 

then refused to honor Plaintiffs’ contracts; and c) Bally, as the assignor of the contracts to LA 

Fitness, is vicariously liable for LA Fitness’ conduct. (Am. Compl., ¶ 13, 15, 41, 59.) As a 

result of these alleged events, Plaintiffs allege that Bally “effectively terminated” their 

memberships. (Id., ¶ 51-52.) 

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These allegations do not state claims upon which relief can be granted against Bally in 

favor of Plaintiffs. In this motion, Bally does not argue that by assigning contracts to LA Fitness 

it has relieved itself of liability through a novation. Gen. Elec. Railcar Leasing Servs. Corp. v. 

Carlson Mktg. Grp., Inc., No. 91-c-5345, 1992 WL 14175, at *3 (N.D. Ill. Jan. 16, 1992); 

Strauss v. Stratojac Corp., 810 F.2d 679, 684 n.4 (7th Cir. 1987). Bally, however, is not 

relieving itself of any liability to indefinitely provide club access near Plaintiffs’ homes 

(wherever they may be at any time in the future). As discussed above, Bally never had any such 

liability. The assignment to LA Fitness, therefore, neither created nor extinguished any such 

liability. 

Assuming for purposes of this motion that the Bally contracts with Plaintiffs created an 

obligation of indefinite duration to provide club access wherever and whenever Plaintiffs may 

reside, as Plaintiffs posit, this claim also fails. Under Illinois law, “contracts of indefinite 

duration are terminable at will.” See, e.g., Jespersen v. Minn. Mining & Mfg. Co., 700 N.E.2d 

1014, 1017 (Ill. 1998). “[C]ontracts are more likely to be found terminable at will when the 

duration clause gives one party the opportunity to terminate, because it is ‘reasonable for the 

court to conclude that if one of the parties could institute a termination-triggering event, then the 

contract should be considered terminable at will.’” Riverside Mktg., LLC v. Signaturecard, Inc., 

425 F.Supp.2d 523, 531 (S.D.N.Y. 2006) (applying Illinois law) (citing Yale Sec., Inc. v. 

Freedman Sales, Ltd., No. 96-cv-6501, 1997 WL 51428, at *3 (N.D. Ill. Feb. 3, 1997)); 

Experience Based Learning, Inc. v. Just Live, Inc., No. 09-c-50018, 2011 WL 4396922, at *3 

(N.D. Ill. Sept. 21, 2011) (“Because [one party] has the power to terminate the contract in its 

discretion at any time, and because it could not be determined when it would exercise that 

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discretion, the duration of the contract in this case is indefinite, and therefore, terminable at 

will.”). 

According to Plaintiffs, they had “long-term membership contracts,” (Am. Comp., ¶ 30, 

32), that could be used “for years, if not decades to come.” (Id., ¶ 147.) Moreover, according to 

Plaintiffs, they can terminate at will. (Corrected Ex. A to Am. Compl., p. 3-4, §§ 3-8, 21.) 

Finally, according to Plaintiffs, Bally “effectively terminated” their memberships. (Am. Compl., 

¶ 51-52). Assuming these allegations to be true, as we must under Federal Rule of Civil 

Procedure 12(b)(6), Bally did nothing wrong because the memberships are terminable at the will 

of either party. See, e.g., Riverside Mktg., 425 F. Supp. 2d at 531; Jespersen, 700 N.E.2d at 1017 

(“Both parties here enjoyed the right to terminate the agreement at will, which means they could 

terminate the agreement for any or no reason without committing a breach of contract.”). Bally 

cannot be vicariously liable under terminable at will contracts. 

E. Plaintiffs’ ICFA Claim (Count V) Must Be Dismissed. 

The ICFA provides a remedy for “‘unfair methods of competition and unfair or deceptive 

acts or practices’ in specified commercial transactions.” Greenberger v. GEICO Gen. Ins. Co., 

631 F.3d 392, 399 (7th Cir. 2011) (citing 815 ILCS 505/2). To state a cause of action under the 

ICFA, a plaintiff must allege: “(1) a deceptive act or practice by the defendant; (2) the 

defendant’s intent that the plaintiff rely on the deception; (3) the occurrence of the deception in 

the course of conduct involving trade or commerce; and (4) actual damage to the plaintiff; (5) 

proximately caused by the deception.” (Order, at 20); see also Avery v. State Farm Mut. Auto. 

Ins. Co., 835 N.E.2d 801, 850 (Ill. 2005). 

Allegations of deceptive conduct brought under the ICFA must be pled with enough 

particularity to satisfy Rule 9(b). Fed. R. Civ. P. 9(b); Freedom Mortg. Corp. v. Burnham 

Mortg., Inc., 720 F.Supp.2d 978, 1003-04 (N.D. Ill. 2010); DeLeon v. Beneficial Constr. Co., 55 

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F.Supp.2d 819, 825 (N.D. Ill. 1999) (stating that claims under the ICFA brought in federal court 

must comply with Rule 9(b)). Rule 9(b)’s heightened pleading standard “requires the plaintiff to 

state ‘with particularity’ any ‘circumstances constituting fraud.’” DiLeo v. Ernst & Young, 901 

F.2d 624, 627 (7th Cir. 1990). It demands a plaintiff plead “[t]he who, what, when, where, and 

how: the first paragraph of any newspaper story.” Id. at 627; see also Miller v. Showcase 

Homes, Inc., No. 98-C-2009, 1999 WL 199605, at *2 (N.D. Ill. Mar. 31, 1999) (under Rule 9(b), 

a plaintiff must state “the identity of the person making the representation, the time, place, and 

content of the misrepresentation, and the method by which the misrepresentation was 

communicated”). 

The amended complaint’s allegations do not meet this standard. Plaintiffs merely allege 

conclusions. (Am. Compl., ¶ 185-86.) Totally lacking are any allegations of fact that support 

these conclusions. For example, Plaintiffs fail to allege facts that, if proven at trial, would show 

that Bally intentionally made false statements or material omissions that induced these Plaintiffs 

to enter into Bally memberships. See, e.g., O’Brien v. Landers, No. 1:10-cv-02765, 2011 WL 

221865, at *4-5 (N.D. Ill. Jan 24, 2011). It is fundamental to an ICFA claim that the plaintiff 

allege that “[a] defendant planned in advance not to honor the representations it made in the 

contract or that it would not have been possible or feasible to do so.” Hausen v. PS Ill. Trust, 

2012 WL 266169, at *6 (N.D. Ill 2012) (emphasis added) (quoting Gabler v. Minnesota Mut. 

Life Ins. Co., 1993 WL 126286, at *2 (N.D. Ill. 1993)). An ICFA claimant “state[s] a valid claim 

of consumer fraud only where premised upon statements made prior to their dates of purchase.” 

Connick v. Suzuki Motor Co., Ltd., 675 N.E.2d 584, 594 (Ill. 1996) (emphasis added); see also 

Miller v. William Chevrolet/GEO, Inc., 762 N.E.2d 1, 12-13 (Ill. App. Ct. 2001). 

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Here, Plaintiffs do not allege that Bally planned in advance of entering into membership 

contracts with other parties that, in November 2011, it would sell many of its clubs to LA Fitness 

and thereafter not honor any contractual obligations it assertedly had under membership 

contracts. See, e.g., Greenberg v. United Airlines, 563 N.E.2d 1031, 1036 (Ill. App. Ct. 1990) 

(dismissing the ICFA claim because Plaintiffs failed to allege facts supporting a finding of 

preplanning by defendant). Moreover, as for Stapleton and Grabianski, it is completely 

implausible that Bally could have formed such an intention to trick Stapleton and Grabianski 

because they allege that these Plaintiffs purchased their contracts on the secondary market from 

other members, not from Bally. (Am. Compl., ¶¶ 68, 76.) 

At bottom, it is apparent that Plaintiffs have attempted to recast their breach of contract 

claims as ICFA violations. But “[a] breach of contract standing alone, ‘does not amount to a 

cause of action cognizable under [the ICFA]’ and the ICFA does not apply to simple breach of 

contract claims.” (Order, at 22 (citing Sindles v. Saxon Mortg. Servs., Inc., 2012 WL 1899401, 

at *4 (N.D. Ill. May 22, 2012) (citing Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 233 (1995)).

Claims averring fraud must be something more than reformulations of allegations of contractual 

breach. Avery, 835 N.E.2d at 844. “When allegations of consumer fraud arise in a contractual 

setting, the plaintiff must prove that the defendant engaged in deceptive acts or practices distinct 

from any underlying breach of contract.” Sindles at *4 (emphasis added). A deceptive act 

“involves more than the mere fact that a defendant promised something and then failed to do it.” 

Id. (citing Zankle v. Queen Anne Landscaping, 724 N.E.2d 992-93 (Ill. App. Ct. 2000)). “[I]t is 

settled that the Consumer Fraud Act was not intended to apply to every contract dispute or to 

supplement every breach of contract claim with a redundant remedy.” Id. No ICFA claim exists 

even if “widespread” or “systematic” breach of contract is alleged. Greenberger, 631 F.3d at 

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400. “What plaintiff calls ‘consumer fraud’ or ‘deception’ is simply defendants’ failure to fulfill 

their contractual obligations.” Avery, 835 N.E.2d at 844. 

F. The ICFA Claim Is Barred By An Order Confirming A Plan Of 

Reorganization Of The United States Bankruptcy Court. 

Even if Plaintiffs had pled viable ICFA claims against Bally, which they have not, their 

claims would be barred by an order of the United States Bankruptcy Court for the Southern 

District of New York. Specifically, on December 3, 2008, Bally Total Fitness Holding 

Corporation and its subsidiaries filed a Petition for Bankruptcy under Chapter 11 of the United 

States Bankruptcy Code, Case No. 08-14818 (BRL). A final order confirming Second Amended 

Joint Plan of Organization of Debtors under Chapter 11 of the Bankruptcy Code was entered on 

August 19, 2009, and became effective on September 1, 2009 (the “Effective Date”). As a result 

of this Bankruptcy Court Order, all persons, including but not limited to Plaintiffs, who held 

Claims against Debtors that arose on or before the Effective Date of September 1, 2009 were 

“permanently enjoined” from commencing or continuing any action or other proceeding against 

the Debtors with respect to such Claims, and such Claims were “discharged and released.” In 

particular, the Bankruptcy Order discharged all debts, including all contingent and unmatured 

claims, arising before September 1, 2009. See 11 U.S.C. § 1141 (d)(1)(A) (providing that a 

chapter 11 plan of reorganization discharges all debts arising before the date of confirmation, 

regardless of whether a proof of claim has been filed)5

; see Def.’s Req. for Judicial Notice, Ex. 

C, p. 42 (specifically barring any claims arising out of conduct occurring before the Effective 

Date, September 1, 2009). 

Plaintiffs’ ICFA claims are contingent claims that are barred by the Bankruptcy Order. A 

claim is contingent if there is a pre-petition relationship between the claimant and the debtor that 

 

5

 “Debt” is defined as “liability on a claim.” 11 U.S.C. § 101(12). “Claim” means any “right to payment, 

whether or not such right is . . . contingent . . . [or] unmatured.” 11 U.S.C. § 101(5)(A). 

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14 

provides sufficient contemplation of contingencies that may ultimately become payment 

obligations. See, e.g., In re Chateaugay Corp., 944 F.2d 997, 1005 (2d Cir. 1991). As long as 

the conduct underlying the claim occurred pre-petition, any injuries occurring after the petition 

are “sufficiently contingent prior to the petition date” such that they are barred. In re Worldcom, 

Inc., 339 B.R. 836, 841 (S.D.N.Y. 2006). If a claim relates back to pre-bankruptcy wrongful 

conduct, even if the claim is continuing, it is dischargeable. Id. The relevant date is when the 

wrongful conduct occurred and not the date with the injury manifested itself. In re Quigley Co., 

Inc., 383 B.R. 19, 22-27 (Bankr. S.D.N.Y. 2008) (“The claimant’s status in bankruptcy does not 

depend on the manifestation of the injury.”). If wrongful conduct occurs before the debtor’s 

bankruptcy filing date, the damaged party holds a contingent claim in the bankruptcy. Id. at 27. 

Such a contingent claim is barred after the bankruptcy. 

Here, Plaintiffs’ ICFA claim is only viable if they allege that Bally planned in advance 

not to honor Plaintiffs’ membership agreements. Hausen, 2012 WL 266169, at *6. Any intent 

or planning on Bally’s part that Plaintiffs rely on Bally’s allegedly deceptive acts would 

necessarily have had to have occurred before Plaintiffs entered into their membership 

agreements, see Avery, 835 N.E.2d at 850, in 1995 (Stapleton) and 1999 or 2000 (Grabianski). 

(Am. Compl., ¶ 68, 76). Because Plaintiffs allegedly purchased their memberships long before 

the Effective Date of September 1, 2009, such preplanning on Bally’s part would necessarily 

have had to occur before then. Plaintiffs’ ICFA claim, therefore, is barred by the Bankruptcy 

Order. 

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15 

III. CONCLUSION 

For the foregoing reasons, Bally respectfully requests that this Court dismiss Plaintiffs’ 

amended complaint with prejudice. 

DATED: November 5, 2012 By: /s/ Kimball R. Anderson

 Kimball R. Anderson 

 Kathleen B. Barry 

 Laura W. Lee 

 WINSTON & STRAWN LLP 

 35 West Wacker Drive 

 Chicago, Illinois 60601 

 (312) 558-5600 

kanderso@winston.com

 Paul J. Coady 

 WINSTON & STRAWN LLP 

 333 South Grand Ave. 

 Los Angeles, California 90071-1543 

 (213) 615-1721 

pcoady@winston.com

Attorneys for Defendant 

Bally Total Fitness Holding Corp. 

Case: 1:12-cv-00284 Document #: 87 Filed: 11/05/12 Page 16 of 17 PageID #:1046
16 

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on this 5th day of November, 2012, a copy of the 

foregoing Defendant, Bally Total Fitness Holding Corporation’s, Memorandum in Support 

of its Motion to Dismiss Plaintiffs’ First Amended Class Action Complaint was 

electronically filed with the Clerk of the Court through the CM/ECF system which will send a 

notice of electronic filing to all counsel of record who are registered for ECF as of this date. 

By: /s/ Kimball R. Anderson

 Kimball R. Anderson 

 Kathleen B. Barry 

 Laura W. Lee 

 WINSTON & STRAWN LLP 

 35 West Wacker Drive 

 Chicago, Illinois 60601 

 (312) 558-5600 

kanderso@winston.com

and 

 Paul J. Coady 

 WINSTON & STRAWN LLP 

 333 South Grand Ave. 

 Los Angeles, California 90071-1543 

 (213) 615-1721 

pcoady@winston.com

Attorneys for Defendant 

Bally Total Fitness Holding Corp.

CHI:2695882.1 

Case: 1:12-cv-00284 Document #: 87 Filed: 11/05/12 Page 17 of 17 PageID #:1047