IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

DR. NICHOLAS ANGELOPOULOS,

Plaintiff,

v.

KEYSTONE ORTHOPEDIC 

SPECIALISTS, S.C., WACHN, LLC, 

and MARTIN R. HALL, M.D.,

Defendants.

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Case No. 12-cv-5836

Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Before the Court are Defendants’ motion to amend/correct the proposed pretrial order to 

include a contested jury instruction on ratification [402] and Defendants’ request to include as 

part of the jury instruction on determining the existence of a partnership a sentence indicating 

that the applicable burden of proof is clear and convincing evidence. For the reasons set forth 

below, which elaborate on the rulings stated in open court on the morning of June 5, 2017, 

Defendants’ motion to add a jury instruction on ratification [402] is denied, and Defendants’ 

request to include a sentence on clear and convincing evidence in the partnership jury instruction 

is denied. 

I. Ratification Affirmative Defense 

On May 30, 2017, the fifth day of trial, Defendants filed a motion to amend/correct the 

proposed pretrial order to include a contested jury instruction on ratification. The proposed jury 

instruction states: “If you believe that the Plaintiff ratified an agreement, then you must find in 

favor of the Defendants. Ratification occurs when an individual who signs or otherwise accepts 

the terms of an agreement, even under duress, remains silent for any considerable length of time 
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afterward instead of trying to annul or void the agreement even though he had the opportunity to 

do so.” [402, Exhibit A.]

Federal Rule of Civil Procedure 8(c) requires a defendant to plead any affirmative 

defense—“including” but not limited to those enumerated in the Rule—in the answer to the 

complaint. Fed. R. Civ. P. 8(c). The purpose of that rule, as the Seventh Circuit has explained, 

“is to avoid surprise and undue prejudice to the plaintiff by providing her notice and the 

opportunity to demonstrate why the defense should not prevail.” Venters v. City of Delphi, 123 

F.3d 956, 967 (7th Cir. 1996). As the court of appeals explained, “as with other pleadings, the 

district court has the discretion to allow an answer to be amended to assert an affirmative defense 

not raised at the outset.” Id. In other words, Defendants are correct that there is no “bright-line 

rule” that a failure to plead an affirmative defense constitutes a waiver of the defense and that 

prejudice to the other side is the touchstone of the analysis. Neuma, Inc. v. Wells Fargo & Co., 

515 F. Supp. 2d 825, 850 (N.D. Ill. 2006); see also Best v. City of Portland, 554 F.3d 698, 700 

(7th Cir. 2009).

Leave to amend therefore frequently is permitted in response to a motion to dismiss and 

even at the summary judgment stage or later. See Neuma, 515 F. Supp. 2d at 850; see also 

Marwil v. Cluff, 2007 WL 2608845, at *10 (S.D. Ind. Sept. 5, 2007) (allowing assertion of 

additional defense four months before trial date). Nonetheless, as the Seventh Circuit stressed in 

Venters, “the defendant remains obligated to act in timely fashion.” 123 F.3d at 967. Thus, 

“[o]nce the availability of an affirmative defense is reasonably apparent, the defendant must alert 

the parties and the court to his intent to pursue that defense.” Id. Prompt action ensures both 

that the defendant has not been dilatory and that the plaintiff does not suffer prejudice. In 

considering prejudice, courts in the Seventh Circuit often have looked to the timing of a belated 
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assertion of an affirmative defense and have tended to deny leave to add a defense when it is 

asserted at or after the “eleventh hour.” See, e.g., Venters, 123 F.3d at 967–68 (rejecting 

additional defense “at the eleventh hour”); Marwil. 2007 WL 2608845, at *10 (permitting 

amended affirmative defense “not at the eleventh hour”). In Venters, for example, the Seventh 

Circuit reversed a district court’s decision to permit the assertion of a new defense in a reply 

brief on summary judgment filed a month before trial and on the eve of an oral argument in the 

district court. 123 F.3d at 967–68. By waiting until the “eleventh hour,” the court of appeals 

found that the defendant had “bushwhacked” the plaintiff, causing it prejudice because it had 

been “deprived of any reasonable opportunity to address the defense.” Id.

Applying this case law to the facts of this case, the Court denies Defendants’ motion to 

add a ratification affirmative defense jury instruction at the eleventh hour. This case is almost 

five years old, Defendants did not move to include this defense until the fifth day of trial, and the 

defense was never pled nor mentioned in parties’ pretrial order listing of claims and defenses. 

Since Plaintiff was not put on notice of this defense until the eleventh hour, Plaintiff did not have 

a reasonable opportunity to address the defense. See Marketing Specialists, Inc. v. Bruni, 135 

F.R.D. 35, 50–52 (W.D.N.Y. 1989) (denying motion for leave to add affirmative defense made 

during trial on prejudice grounds). As Plaintiff points out in his response, Defendants did not 

raise the specter of a ratification defense until after several key witnesses—Drs. Angelopoulos, 

Chang, and Weber—had testified, and Plaintiff may have taken a different approach to their 

direct examinations, not to mention in his opening statement, had he been on notice of the 

proposed defense.

The Court also notes that Defendants’ proposed ratification defense appears to overlap 

with their failure to mitigate affirmative defense, as both defenses are based at least in part on the 
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suggestion that Plaintiff should have left Keystone and WACHN earlier than he did, and the 

Court has instructed the jury on Defendants’ failure to mitigate defense. 

II. Existence of a Partnership: Clear and Convincing Evidence Burden of Proof

The Court denies Defendants’ request to add to the existence of a partnership jury 

instruction on page 40 a sentence explaining that the applicable burden of proof is clear and 

convincing evidence. The jury instruction on page 40 states:

A partnership between two or more persons is a contractual relationship and 

therefore there must be a meeting of minds of the parties to create a partnership. 

Written articles of agreement are not necessary, for a partnership may exist under 

a verbal agreement, and circumstances may be sufficient to establish such an 

agreement. Partnership agreements as to the division of profits may be express or 

implied from acts, transactions, and the previous conduct of the partners. 

In determining the existence of a partnership, the following factors are material: 

the manner the parties have dealt with each other; the mode in which each has, 

with the knowledge of the other, dealt with persons in a partnership capacity; 

whether the partner contributed capital; whether the alleged partnership has 

advertised using the firm name; whether the alleged partners shared the profits, 

whether the parties have filed a partnership certificate with the county clerk and 

whether they have carried telephone listings using the firm name. However, mere 

participation in profits does not alone create a partnership. The question of 

whether the parties intended that an agreement or arrangement constitutes a 

partnership, must be determined from the language and conduct of the parties and 

from all the facts and circumstances surrounding the transaction. It is an accepted 

partnership practice that one partner may be charged with greater managerial 

responsibilities.

Defendants seek to add a sentence stating: “When the evidence contains writings that distinctly 

indicate a relationship other than a partnership, the plaintiff must prove a partnership by clear 

and convincing evidence.” 

“The burden of proving the existence of a partnership rests on the party asserting it”—in 

this case, Plaintiff. Seidmon v. Harris, 526 N.E.2d 543, 546 (Ill. App. Ct. 1988). The burden of 

proof normally is a preponderance of the evidence. However, under Illinois law, where the 

evidence contains “writings of the parties that distinctly indicate a relationship other than a 
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partnership,” the plaintiff must establish the existence of a partnership by clear and convincing 

evidence. Id. (citing Baker v. Baker, 161 Ill. App. 430, 437 (Ill. App. Ct. 1911)). “Distinct 

evidence giving rise to the clear and convincing standard of proof is unambiguous evidence of a 

relationship other than a partnership.” Weiher v. Fluid Tech., Inc., 1990 WL 139050, at *1 n.4 

(N.D. Ill. Sept. 13, 1990).

Applying that controlling law to the case at hand, the Court concludes that the record in 

the case at hand does not contain a writing “of the parties” that “distinctly” and 

“unambiguous[ly]” indicates a relationship other than a partnership. See Seidmon, 526 N.E.2d at 

546; Weiher, 1990 WL 139050, at *1 n.4. Defendants offer several writings in support of this 

instruction, but they all fall short of the mark. 

First, Defendants cite to a letter by Dr. Weber written in support of Plaintiff, which states 

that Plaintiff was not a partner in Keystone [JX 65], a memorandum by Dr. Weber that states that 

they are not “actual partners” [JX 31], and a letter from Dr. Weber rejecting an offer of an 

ownership interest in Keystone [JX 58]. However, these letters do not meet the standard of a 

writing “of the parties” because Dr. Weber is not a party in this lawsuit. 

Next, Defendants offer the June 29, 2007 amendment to the WACHN Operating 

Agreement [DX 2]. This amendment is signed by Dr. Weber, Dr. Angelopoulos, Dr. Chang, and 

Dr. Narcissi and states that “not all members of WACHN are shareholders in Keystone.” 

However, this writing does not distinctly and unambiguously indicate that Plaintiff was not a 

partner or shareholder in Keystone. The amendment does not specify which members of 

WACHN are not shareholders of Keystone, and a reasonable explanation of this statement is that 

it refers to Dr. Narcissi, who according to the undisputed testimony at trial was not a partner or a 
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shareholder of Keystone. Thus, this writing is at least ambiguous on whether or not Plaintiff was 

a partner in Keystone. 

Finally, Defendants argue that all of Plaintiff’s tax returns include W-2s from Keystone, 

not K-1s that would indicate a partnership, and that Plaintiff’s letter to the IRS in relation to the 

1099-MISC at issue in this case states that he is an employee of Keystone. The Court is not 

convinced that these writings, when placed in context, distinctly evince something other than a 

partnership. The issues with the IRS regarding the 1099-MISC income from Plaintiff’s tax 

returns were triggered by Defendants’ decision to issue the W-2s—a decision into which 

Plaintiff had no input, much less control. In this context, Plaintiff’s correspondence with the IRS

was not the “natural place to look for evidence of the partnership arrangement.” Baker, 161 Ill. 

App. at 437. 

In sum, the Court concludes that there is no writing of the parties that distinctly and 

unambiguously indicates a relationship other than a partnership, and that the applicable burden of 

proof therefore is the preponderance of the evidence. See Legacy Seating, Inc. v. Commercial 

Plastics Co., 65 F.Supp.3d 542, 550–51 (N.D. Ill. 2014) (rejecting defendant’s argument that the 

higher burden of clear and convincing evidence should apply and explaining that defendant’s 

patent application did not “distinctly indicate a different relationship other than a partnership” 

even though the application never mentioned a partnership); Snyder v. Dunn, 638 N.E. 744, 747 

(Ill. App. Ct. 1994) (explaining that since the record did not contain any writings that contradict 

a partnership, plaintiff need only prove the existence of a partnership by a preponderance of the 

evidence); cf. Seidmon, 526 N.E.2d at 546 (applying the clear and convincing evidence burden of 

proof where the record included defendant’s promissory note, which indicated a debtor-creditor 

relationship, rather than a partnership since the check was payable to defendant as an individual, 
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rather than to a partnership); Baker, 161 Ill. App. at 437 (applying the clear and convincing 

evidence burden of proof where letters between the parties “clearly point[ed] to the fact that 

[plaintiff] was the local manager [ ] and was receiving from [defendant] a salary for such work” 

and plaintiff’s letters “repeatedly refer[ed] to the property and the enterprise as belonging to 

[defendant] alone”).

III. Conclusion

For the foregoing reasons, Defendants’ motion to add a jury instruction on ratification 

[402] is denied, and Defendants’ request to include a sentence on clear and convincing evidence 

in the existence of a partnership jury instruction is denied. 

Dated: June 6, 2017

____________________________

Robert M. Dow, Jr.

United States District Judge