Motion to Strike Affirmative Defenses

Affirmative defenses are pleadings and thus subject to the pleading requirements of the
Federal Rules of Civil Procedure. Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286,
1294 (7" Cir. 1989). While the general rule is that motions to strike affirmative defenses are
disfavored, where they serve to “remove unnecessary clutter from the case, they serve to
expedite, not delay.” Jd. A helpful three-pronged approach was articulated by Judge Milton I.
Shadur in Bobbitt v. Victorian House, Inc., for determining whether to strike an affirmative
defense: (1) determine whether the defense is a proper affirmative defense — if it clearly is not,
then strike it to make the pleadings more concise; (2) if is proper, then determine whether it is
appropriately pled under Rule 8(a) (short plain statement) or Rule 9 (fraud with particularity) — if
not, then strike it without prejudice to repleading; and (3) if it is a proper affirmative defense and
meets the Rule 8/9 pleading standards, determine whether the defense fails to state a claim upon
which relief can be granted, i.e. whether it is impossible for defendant to prove any set of facts
which would entitle it to relief. 532 F. Supp. 734, 737 (N.D. Ill. 1982).

Under the first prong, the question arises, what is a proper affirmative defense? Rule 8(c)
requires that, in addition to any of the 19 named affirmative defenses, a party set forth “any other
matter constituting an . . . affirmative defense” in a responsive pleading. Failure to do so
generally results in waiver. Roe v. Sears, Roebuck & Co., 132 F.2d 829 (7" Cir. 1943).
However, the failure to raise an affirmative defense in an answer does not forever bar a party
from raising it, but the proper remedy is a motion for leave to amend. Bobbitt, 532 F. Supp. at
736. Commentators have suggested that a proper affirmative defense is one which “raises a

matter outside the scope of plaintiff's prima facie case and is thus a matter not raised by a simple


an affirmative defense based on the facts argued by Willow Tree, which would not be merely
duplicative of its denials of plaintiff's claims, Willow Tree may amend to allege such an
affirmative defense in accordance with Rule 8.

Ocean Atlantic concedes that defenses 4 and 5, the estoppel and waiver defenses, are
proper affirmative defenses but argues they are conclusional and fail to meet Rule 8(a)’s pleading
requirement. The court agrees and strikes affirmative defenses 4 and 5 without prejudice. See
Heller, 883 F.2d at 12952

Affirmative defenses 6 and 7, “lack of causation,” merely deny an element of Ocean
Atlantic’s claims and, therefore, are stricken. Resolution Trust Corp. v. KPMG Peat Marwick,
845 F. Supp. 621, 625 (N.D. Ill. 1994) (striking affirmative defense that claims were barred by,
inter alia, “causation in fact, proximate cause, intervening cause” on the ground that it was not
an affirmative defense but merely an assertion that plaintiff could not prove a necessary element
of its claim). Willow Tree, of course, is not precluded from offering evidence of lack of

causation at trial. Id.

Because this court has dismissed the counterclaim, Willow Tree’s attempt to salvage the bare-bones
pleading deficiency by referring to facts therein fails. Willow Tree may replead these defenses in conformity with
Rule 8 in an amended answer.


affirmative defense on the basis that this defense is specifically set forth as a possible defense in
Form 20 of the Appendix of Forms of the Federal Rules of Civil Procedure and the use of such
forms is explicitly authorized by Rule 84. See General Elec. Capital Corp. v. Munson Marine,
Inc., 91 C 5090, 1992 WL 24067, at *2 (N.D. Iil. Jan. 29, 1992) (Conlon, J.); Mendrala v. Crown
Mortg. Co., No. 88 C 7386, 1990 WL 60705, at *3 (N.D. Ill. Apr. 23, 1990) (Kocoras, J.). Other
courts also note that pleading “failure to state a claim” as an affirmative defense is not
necessarily improper because Rules 12(b)(6) and 12(h)(2) give the defendant an option of
presenting its “failure to state a claim” defense in a responsive pleading or in a separate motion.
See, e.g., Fleet Bus. Credit Corp. v. Nat’l City Leasing Corp., 191 F.R.D. 568, 569 (N.D. Il.
1999) (Aspen, C.J.) (citing Codest Eng’g v. Hyatt Int’l Corp., 954 F. Supp. 1224, 1231 (N.D. Ill.
1996) (Coar, J.)). All courts appear to agree, however, that the mere conclusional assertion of a
“failure to state a claim” defense is insufficient under Rule 8. Although this court cannot say
“failure to state a claim” cannot be pled as an affirmative defense, it agrees that its mere
conclusional assertion is insufficient under Rule 8 and, therefore, is properly stricken. Moreover,
because Willow Tree is not foreclosed from bringing this defense by way of a proper motion
under Rule 12(c), the court will not will not give leave to replead this defense.

Affirmative defense 2 is “good faith.” Ocean Atlantic argues that because intent is not an
element in a contract case, “good faith” is irrelevant (in other words, Ocean Atlantic is arguing
that Willow Tree could prove no set of facts under this defense which would entitle it to relief).
Willow Tree responds that the defense is proper given that Ocean Atlantic has put Willow Tree’s

intent at issue in its complaint by pleading punitive damages in its breach of contract claim


denial,” see id. at 736 (citing 2A Moore’s Federal Practice J 8.27(3) at 8-250, 8-254), or
“generally admits the matters in a complaint but suggests some other reason why there is no right
of recovery.” Jd. (citing 5 Wright and Miller, Federal Practice and Procedure § 1270 at 292).
However, because such definitions are imprecise, a pleader, to avoid waiver, is “justified in
setting up as affirmative defenses anything that might possibly fall into that category, even
though that approach may lead to pleading matters as affirmative defenses that could have been
set forth in simple denials.” Jd.; see also CHARLES ALAN WRIGHT AND ARTHUR R. MILLER, 5
FEDERAL PRACTICE & PROCEDURE 2d § 1271 (Updated by 2002 Pocket Part) ( “[I]t is advisable
for defendant to allege affirmatively any new matter he believes may not be embraced by the
pleadings.”). A general principle to follow, therefore, is to strike a “so-called” affirmative
defense “if there is [no] real doubt about the defendant’s right, under his denial, to offer proof of
the matters.” Bobbitt, 532 F. Supp. at 736 (citing 2A Moore’s Federal Practice { 8.27(3) at 8-
251). Thus, the benefit of the doubt is given to the pleader, and an affirmative defense should be
stricken only “where it is completely certain [it has] been mistitled.” Jd.

Willow Tree’s affirmative defense 1, “failure to state a claim,” is no more than a
recitation of the standard for a motion to dismiss under Rule 12(b)(6), which some courts have
stricken as not a proper affirmative defense under Rule 8(c) because it is properly assertable
under Rule 12(b)(6) and does not raise matters outside of the scope of plaintiff's prima facie
case. See Instituto Nacional De Comercializacion Agricola (Indeca) v. Cont’l Ill. Nat’l Bank
and Trust Co., 576 F. Supp. 985, 991 (N.D. Ill. 1983) (Shadur, J.); Northwestern Corp. v.
Gabriel Mfg. Co., Inc., No. 95 C 2004, 1996 WL 732519, *14 (N.D. Ill. Dec. 18, 1996)

(Anderson, J.). A contrary line of authority, however, has permitted a “failure to state a claim”


jurisdictional and prudential limits on the court’s power. Indemnified Capital Inv. v. RJ.
O'Brien & Assoc., 12 F.3d 1406, 1408 (7" Cir. 1993) (citing Warth v. Seldin, 422 U.S. 490, 498
(1975)). Plaintiff bears the burden of proving it has standing. Jd. (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555 (1992)). Ocean Atlantic notes that Willow Tree’s conclusional standing
defense is “nonsensical” given that Willow Tree admitted that Ocean Atlantic is a party to the
contract with Willow Tree. (See Am. Answer ¥11.) In any event, Ocean Atlantic argues a
“lack of standing” defense is no more than a denial of its claim and is thus improper. Willow
Tree responds by pointing to certain language in the contract which it contends shows that the
rights to the easement are vested in the person who owns the property to be serviced and Ocean
Atlantic does not own the property, see Arnhold, 132 F. Supp. 2d 662. Willow Tree asserts that
only the person who now owns the property (Cambridge Homes) would have standing with
respect to the easement. Thus, Willow Tree appears to be asserting that Ocean Atlantic is not
entitled to enforce the easement. Ocean Atlantic replies that Willow Tree’s theory that
Cambridge Homes would have rights under the contract, to which it never was a party, is
unsupported by the language of the contract and any legal authority. The court is not convinced
that Willow Tree’s defense is properly one of lack of standing particularly where, as here,
Willow Tree admits entering into the easement contract with Ocean Atlantic. Moreover, the
court agrees that the defense is not pled to Rule 8's requirements and, for that reason, should be
stricken. Since a motion challenging subject matter jurisdiction may be made at any time and
even on the court’s own motion, see Rule 12(h)(3), the court does not grant leave to merely
replead a standing defense. Cf Cohn v. Taco Bell Corp., No. 92 C 5852, 1995 WL 247996, *5

(N.D. Ill. 1995) (N.D. Ill. Apr. 24, 1995) (Nordberg, J.). However, if there is a proper ground for


‘Minute Order Form (06/97)

= United States District Court, Northern District of Illinois
Name of Assigned Judg Sitting Judge if Oth
or Magistrate Judge Joan H, Lefkow than Assigned Judge
CASE NUMBER 01C 5014 DATE 3/29/2002
CASE Ocean Atlantic Development vs. Willow Tree Farm, L.L.C., et al.
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]

DOCKET ENTRY:

(1) Oo Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) a Answer brief to motion due . Reply to answer brief due

(4) a Ruling/Hearing on set for at

(5) Oo Status hearing[held/continued to] [set for/re-set for] on set for at

(6) go Pretrial conference[held/continued to} {set for/re-set for] on set for at

(7) ag Trial[set for/re-set for] on at

(8) Oo [Bench/Jury trial] [Hearing] held/continued to at

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) O General Rule21 CO FRCP4i(a)(1) OM FRCP41(a)(2).

(10) MM [Otherdocketentry] Enter Memorandum Opinion and Order. Motion of Ocean Atlantic to dismiss
Willow Tree’s amended counterclaim [5-1] is granted. Motion of Ocean Atlantic to strike Willow Tree’s
affirmative defenses [6-1] is granted without prejudice to repleading affirmative defenses 3, 4, and 5. The
Court strikes, on its own motion, Ocean Atlantic’s request for punitive damages in Count II. The parties
are given until 5/23/02 to file a second amended complaint and answer. Status hearing of 4/25/02 at 9:30
a.m. will stand, at which time parties will address the discovery schedule.

(11) ff [For further detail see order attached to the original minute order.]

No notices required, advised in open court.
2

ices required.
No notices requires number of notices,

Notices mailed by judge's staff
Notified counsel by telephone. MAR 2.9 .2002
Docketing to mail notices.

Mail AO 450 form.

188 oy nits
Copy to judge/magistrate judge.
sravago2
date mailed notice
courtroom
MD deputy's Mp
initials

Dateltime received in’ -
central Clerk's Office mailing deputy initials



CONCLUSION
For the reasons set forth above, the court grants Ocean Atlantic’s motion to dismiss
Willow Tree’s amended counterclaim [#5] and grants Ocean Atlantic’s motion to strike Willow
Tree’s affirmative defenses [#6] without prejudice to repleading affirmative defenses 3, 4, and 5.
The court strikes, on its own motion, Ocean Atlantic’s request for punitive damages in Count II.
The parties are given until May 23, 2002 to file a second amended complaint and answer.
5 Lécd. ep ety

JOAN HUMPHREY LEFKOW
United States District Judge

Dated: March 29, 2002

10


(Count Il). Willow Tree points out, in Illinois,’ “{a]s a general rule punitive damages are not
recoverable for breach of contract,” Morrow v. L.A. Goldschmidt Assoc., 112 Ill. 2d 87, 94, 492
N.E.2d 181,183 (Ill. 1986) (citation omitted), even for a “willful” breach since the sole purpose
of contract damages is to compensate the nonbreaching party. Jd. The exception to this rule is if
the conduct causing the breach “is also a tort for which punitive damages are recoverable.” Id. at
95, 492 N.E.2d at184. (citation omitted). In such a case, there must be proper allegations of
malice, wantonness or oppression. Jd. Generally, this is where the harm alleged goes beyond
defeated expectations of the contract. See id. In its reply, Ocean Atlantic ignores these principles
and merely repeats its contention that Willow Tree cannot avoid liability by claiming its own
conduct was in good faith, adding that the defense is not pled to Rule 8's standard. While the
court agrees with Ocean Atlantic that the defense is not pled in accordance with Rule 8, more
importantly, it agrees with the authority cited by Willow Tree that the complaint does not set
forth facts that would support tort damages. Thus, it would be futile for this court to allow
Willow Tree to replead a defense of good faith, as it has no bearing on matters raised in the
complaint. Further, the court will strike, on its own motion (see Rule 12(£)), Ocean Atlantic’s
request for punitive damages in Count II as well as grant Ocean Atlantic’s motion to strike
Willow Tree’s affirmative defense 2.

In affirmative defense 3, Willow Tree asserts “lack of standing.” The issue of standing

involves whether the court is entitled to decide the merits of the dispute and involves both

‘The parties have not raised or addressed the choice of law issue and both rely on Illinois law in their briefs.
Therefore, the court presumes that the substantive law of Illinois governs. Kritikos v. Palmer Johnson, Inc.,
821 F.2d 418, 421 (7 Cir. 1987) (“When the parties fail to consider the choice of law in a diversity case, the
substantive law of the forum is presumed to control.”) (quotation omitted).

7


(internal quotation omitted). The decision whether to grant declaratory relief is discretionary. Jd.
There must be an actual, “substantial controversy, between parties having adverse legal interests,
of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Jd.
(internal quotation omitted). Moreover, a declaratory judgment action is not a means to “try
issues or determine the validity of defenses in pending cases.” Cunningham Bros., Inc. v. Bail,
407 F.2d 1165, 1168 (7" Cir. 1969).

Ocean Atlantic argues that Willow Tree’s counterclaim should be dismissed since once
the issues have been decided on Ocean Atlantic’s claims, there will no longer be a continuing
controversy. Willow Tree responds that it needs the court’s protection from Ocean Atlantic’s
harassing and predatory behavior. Willow Tree points to a series of lawsuits involving Ocean
Atlantic and other parties and argues that even if Willow Tree defeats Ocean Atlantic’s claims,
there are “potentialities” that Ocean Atlantic might try to construe certain language in the
contract as supporting a right to “maintain” a storm drain (that another entity is building) and
“Ocean Atlantic might still try to intrude on the Willow Tree property and/or file additional
lawsuits.” (Resp. at 3.) However, Willow Tree points to no specific threat and its speculation
about what Ocean Atlantic “might” do does not give rise to a substantial controversy between the
parties of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.
Thus, the court dismisses Willow Tree’s counterclaim. See Natkin v. Winfrey, 111 F. Supp. 2d
1003, 1015 (N.D. Ill. 2000) (dismissing declaratory judgment claims stating “plaintiffs have not

identified a live controversy that will not be resolved by the close of this lawsuit”).


asserts that the premise of the contract was that Ocean Atlantic was the “owner of record” of the
properties it intended to service with the easement, but subsequently a court found that Ocean
Atlantic had no rights to purchase, develop or otherwise encumber the property. See Arnhold v,
Ocean Atlantic Woodlands Corp., 132 F. Supp. 2d 662 (N.D. Ill. Feb. 28, 2001) (Keys, J.), aff'd,
___ F.3d __, 2002 WL 435513 (7 Cir. Mar. 21, 2002). Thus, Willow Tree asserts Ocean
Atlantic’s claim for specific performance is in bad faith and is brought merely to prevent Willow
Tree from entering into an easement agreement with the rightful owners of the property.

On August 2, 2001, Ocean Atlantic moved pursuant to Federal Rule of Civil Procedure
12(b)(6) (“Rule”) to dismiss Willow Tree’s counterclaim and moved, pursuant to Rule 12(f), to
strike Willow Tree’s affirmative defenses. Ocean Atlantic subsequently filed an amended
complaint on February 7, 2002, alleging claims of tortious interference with contract against
three additional defendants, but not alleging any new claims against Willow Tree. On March 14,
2002, Willow Tree filed an amended answer and affirmative defenses and an amended
counterclaim. The affirmative defenses are identical to those contained in the original answer,
and the counterclaim is nearly identical and seeks the same remedy. The court construes Ocean

Atlantic’s motion to dismiss and strike as to Willow Tree’s March 14, 2002 amended answer and

amended counterclaim.

Motion to Dismiss Amended Counterclaim for Declaratory Judgment

The purpose of the Declaratory Judgment Act, 28 U.S.C. § 2201, is “to avoid accrual of
avoidable damages to one not certain of his rights and to afford him an early adjudication,
without waiting until his adversary should see fit to begin suit, after damage had accrued.”

NUCOR Corp. v. Aceros Y Maquilas de Occidente, S.A. de C.V., 28 F.3d 572, 577 (7TM Cir. 1994)


UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

OCEAN ATLANTIC DEVELOPMENT
CORPORATION, a Virginia Corporation,

pocnered
war 29 2002.
Plaintiff,

)
)
)
)
)
v. ) No. 01 C 5014
)
WILLOW TREE FARM L.L.C., )
DRH CAMBRIDGE HOMES, INC., a )
California Corporation, ELDA ARNHOLD, )
and BYZANTIO, L.L.C. )
)
)

Defendants.

MEMORANDUM OPINION AND ORDER

On June 29, 2001, plaintiff, Ocean Atlantic Development Corporation (“Ocean Atlantic”)
filed a two-count complaint against defendant, Willow Tree Farm L.L.C. (“Willow Tree”), in
which Ocean Atlantic alleges that it contracted with Willow Tree to obtain an easement to
construct and maintain a storm drain to service property that Ocean Atlantic was purchasing for a
development located adjacent to Willow Tree’s property. The construction was to be completed
by June 30, 2001. Ocean Atlantic alleges that Willow Tree failed to provide written approval of
specifications as required by the contract, did provide oral approval, but denied Ocean Atlantic
access to its property to begin construction. Ocean Atlantic seeks specific performance (Count I)
and damages (as well as punitive damages) for breach of contract (Count I).

On July 20, 2001, Willow Tree filed its answer and affirmative defenses and a
counterclaim asserting that Ocean Atlantic failed to comply with the contract terms, failed to
construct the storm drain by the June 30 date, and seeks a declaratory judgment pursuant to

28 U.S.C. §§ 2201, 2202, that the contract terminated on June 30, 2001. Willow Tree also

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