Raziev v. Compass Truck Sales, LLC et al

Filing 72

MEMORANDUM Opinion and Order. Signed by the Honorable Geraldine Soat Brown on 1/16/2014.(psm, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ADIL RAZIEV,
Plaintiff,
v.
COMPASS TRUCK SALES, LLC, and
ALEX PETRUSHEVSKI,
Defendants.

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Case No. 13 C 737

Magistrate Judge Geraldine Soat Brown

MEMORANDUM OPINION AND ORDER
Before the court is plaintiff Adil Raziev’s motion to strike affirmative defenses raised by
defendants Compass Truck Sales, LLC (“Compass”) and its manager Alex Petrushevski. (Pl.’s
Mot.) [Dkt 50.] Defendants oppose the motion. (Defs.’ Resp.) [Dkt 62.] The court has jurisdiction
under 28 U.S.C. § 1331 and 28 U.S.C. § 1367, and the parties have consented to the jurisdiction of
the magistrate judge under 28 U.S.C. § 636. [Dkt 11.] For the following reasons, Raziev’s motion
is denied.

Background
The facts summarized here are discussed further in this court’s earlier order addressing
defendants’ motion to dismiss. Raziev v. Compass Truck Sales, LLC, No. 13 C 737, 2013 WL
4846894 (N.D. Ill. Sept. 10, 2013). Raziev sued Compass and Petrushevski under the Federal

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Odometer Act, 49 U.S.C. §§ 32701-32711, and various state laws, including the Illinois Consumer
Fraud and Deceptive Business Practices Act (“Consumer Fraud Act”), 815 Ill. Comp. Stat. § 505/1,
et seq. (Am. Compl. ¶¶ 25-30, 34-36.) [Dkt 27.] Raziev alleges that he agreed to buy a 2006 Volvo
truck after Petrushevski and another Compass employee falsely represented that the truck had an
odometer reading of 495,000 miles and a continuing warranty. (Id. ¶¶ 6-13.) Raziev agreed to pay
$41,000 for the truck and made a $12,000 down payment before learning from other sources that the
truck actually had 588,000 miles on its odometer. (Id. ¶¶ 12-18.) Razeiv claims that the defendants
tampered with the odometer by rolling it back and that he would not have bought the truck if he had
known its true mileage. (Id. ¶¶ 19, 21.)
On September 10, 2013, the court granted in part and denied in part defendants’ motion to
dismiss under Fed. R. Civ. P. 12(b)(6). Raziev, 2013 WL 4846894 at *1. In doing so, the court
rejected the defendants’ arguments that the complaint should be dismissed because Compass is
exempt from the Federal Odometer Act and Raziev suffered no actual damages. Id. at *2-3.
Because those two arguments also were raised as affirmative defenses in the defendants’ answer to
Raziev’s complaint (Defs.’ Ans. at 10-11) [dkt 49], Raziev now moves to strike the two defenses.

Legal Standard
The court may strike insufficient affirmative defenses under Fed. R. Civ. P. 12(f). Motions
to strike, however, “are not favored and will not be granted unless it appears to a certainty that
plaintiffs would succeed despite any state of the facts which could be proved in support of the
defense.” Williams v. Jader Fuel Co., 944 F.2d 1388, 1400 (7th Cir. 1991) (internal quotations
omitted). Motions to strike are useful primarily to expedite and “remove unnecessary clutter from
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the case.” Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989);
accord FDIC v. Mahajan, 923 F. Supp. 2d 1133, 1136 (N.D. Ill. 2013).

Discussion
I. First Affirmative Defense: Exemption from the Odometer Act
As to defendants’ first affirmative defense—that federal law exempts them from the
requirement to disclose the truck’s odometer reading—Raziev correctly points out that this court
previously refused to dismiss the federal claim on that basis because the exemption “only applies to
the disclosure section of the statute, 49 U.S.C. § 32705, and not the tampering section, 49 U.S.C.
§ 32703.” Raziev, 2013 WL 4846894 at *3. Raziev is mistaken, however, that the court’s earlier
ruling renders the exemption irrelevant to this case. Although the exemption does not apply to
Raziev’s allegations of tampering, he also alleges that, in addition to tampering, the defendants
falsely represented the truck’s mileage. (Compl. ¶¶ 27-29.) Raziev may be making this allegation
only to show that defendants acted “with intent to defraud,” as required for an award of treble
damages under 49 U.S.C. § 32710(a), but the same allegation could support a claim that defendants
gave “a false statement” in violation of § 32705(a)(2). There is a split of authority about whether
the weight-based exemption from the disclosure requirements also exempts false statements.
See Raziev, 2013 WL 4846894 at *3. Because the exact contours of Raziev’s allegations about false
statements have not been defined, it would be premature to strike the affirmative defense.

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II.

Second Affirmative Defense: No Actual Damages
Defendants’ second affirmative defense alleges that Raziev “has suffered no actual damages.”

(Defs.’ Ans., Second Aff. Def. ¶¶ 1-3.) The truck was declared a total loss after it was involved in
a collision in September 2012. Despite the allegedly increased odometer reading, the insurance
company valued it at the purchase price of $41,000 and paid that amount less a $1,000 deductible.
(Id. at ¶ 1.) The court previously refused to dismiss the complaint on this basis because defendants’
argument in its motion to dismiss relied on documents “outside the scope of the complaint.” Raziev,
2013 WL 4846894 at *2. The court also noted that some of Raziev’s claims do not require actual
damages. Id. at n. 1 (citing 49 U.S.C. § 32710).
Raziev now argues that the court’s ruling somehow precludes that argument as an affirmative
defense. (Pl.’s Mot. ¶ 11.) Nothing in the earlier decision, however, forecloses the possibility that
this defense, if supported by evidence at summary judgment, might defeat at least some of Raziev’s
claims. Thus, Raziev’s argument to strike this defense based on this court’s earlier ruling is
unpersuasive.
Raziev also mounts a challenge to the defense based on Illinois’s “collateral source rule,”
which holds that “benefits received by the injured party from a source wholly independent of, and
collateral to, the tortfeasor will not diminish damages otherwise recoverable from the tortfeasor.”
Wills v. Foster, 892 N.E.2d 1018, 1022 (Ill. 2008) (quotations omitted). Raziev argues that, because
the insurance proceeds came from a source independent from the defendants, the insurance payout
is irrelevant to this case. (Pl.’s Mot. ¶ 12-14.)
In response, the defendants contend that their second affirmative defense is still relevant
because incurring “actual damages” is a statutory requirement of the Consumer Fraud Act. (Defs.’
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Resp. ¶ 18.) Defendants note that, under § 10a(a) of the Act, recovery is allowed only by someone
“who suffers actual damages as a result of a violation of [the] Act.” 815 Ill. Comp. Stat.
§ 505/10a(a).
Defendants’ interpretation of the Consumer Fraud Act as imposing a statutory requirement
of actual damages is bolstered by Avery v. St. Farm Mut. Automobile Ins. Co., 835 N.E.2d 801, 859
(Ill. 2005). In Avery, the Illinois Supreme Court addressed a claim under the Act that an insurer
misrepresented the quality of parts used to repair a plaintiff’s vehicle. Id. The problem for the
plaintiff was that he sold the vehicle in question after the allegedly deficient repair and testified that
the allegedly inferior parts had not been a factor in the sale. Id. Citing § 10a(a), the Court concluded
that the plaintiff could not succeed under the Act because he had failed to show that he suffered any
actual damages. Id. According to defendants, Raziev’s claim under the Consumer Fraud Act shares
the same defect as the claim in Avery because Raziev has received payment for his vehicle (the
insurance proceeds) without regard to the alleged odometer tampering.
In light of Avery, defendants’ second affirmative defense must survive Raziev’s motion to
strike. Neither party has cited any decision that clearly addresses the interplay of the collateral
source rule and § 10a(a) of the Consumer Fraud Act. Avery suggests that, even if the collateral
source rule protects plaintiffs from having their damages offset by insurance proceeds in a typical
tort action, the rule may not preserve their ability to sue under the Consumer Fraud Act. It is too
soon, however, to rule on this defense at this stage, when discovery is ongoing. It may turn out that
Raziev’s insurer, like the buyer in Avery, did not know about the alleged odometer tampering when
it covered Raziev’s losses after the collision or knew about the allegations but did not change its
coverage decision as a result. In either scenario, Avery poses a possible hurdle for Raziev’s claim
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under the Consumer Fraud Act. Accordingly, Raziev’s request to strike defendants’ second
affirmative defense is denied.

Conclusion
For the reasons stated above, Raziev’s motion to strike defendants’ affirmative defenses [dkt
50] is denied.

____________________________
Geraldine Soat Brown
United States Magistrate Judge

Date: January 16, 2014

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