The Frain Group, Inc. v. Steve's Frozen Chillers, Inc.

Filing 35

Enter MEMORANDUM, OPINION AND ORDER: For the reasons stated herein, the Court grants in part and denies in part Steves motion to dismiss, grants Frains motion to dismiss, and grants in part and denies in part Frains motion to strike. Count III of Fr ains Complaint is dismissed without prejudice, Count III of Steves Counterclaim is dismissed with prejudice, and Steves first affirmative defense is stricken without prejudice. Signed by the Honorable Virginia M. Kendall on 3/10/2015.Mailed notice(tsa, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
THE FRAIN GROUP, INC.,
Plaintiff,
v.
STEVE’S FROZEN CHILLERS,
Defendant.

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No. 14 C 7097
Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER
The Frain Group, Inc. instituted this action against Steve’s Frozen Chillers, Inc. after the
parties’ business relationship surrounding a purchase agreement went sour. Frain’s three-count
Complaint seeks (1) a declaratory judgment that the purchase agreement is valid and enforceable
and brings state law claims for (2) defamation and (3) tortious interference with prospective
business relationships. Frain alleges that it sold a refurbished Prodo Pak Form & Fill Machine to
Steve’s for use in the production of Steve’s Healthy Fruit Chillers Freezer Tubes. After Steve’s
experienced numerous problems with the Prodo Pak Machine, Frain alleges that Steve’s posted a
number of defamatory statements on Frain’s Facebook page that were false and interfered with
Frain’s relationships with its current and prospective customers. In response, Steve’s filed a
three-count Counterclaim, alleging (1) breach of contract, (2) violation of the Illinois Consumer
Fraud and Deceptive Practices Act, 815 ILCS 505/1 et seq., and (3) breach of implied warranties.
Both parties move to partially dismiss the claims filed by the other pursuant to Federal
Rule of Civil Procedure 12(b)(6). Steve’s moves to dismiss Frain’s defamation and tortious
interference claims while Frain moves to dismiss Steve’s breach of implied warranties claim.

Frain also moves to strike both of Steve’s affirmative defenses in its Answer pursuant to Federal
Rule of Civil Procedure 12(f). For the reasons set forth below, the Court grants in part and denies
in part Steve’s motion to dismiss Counts II and III of Frain’s Complaint (Dkt. No. 11), grants
Frain’s motion to dismiss Count III of Steve’s Counterclaim (Dkt. No. 18), and grants in part and
denies in part Frain’s motion to strike (Dkt. No. 21). Count III of Frain’s Complaint is dismissed
without prejudice, Count III of Steve’s Counterclaim is dismissed with prejudice, and Steve’s
first affirmative defense is stricken without prejudice.
BACKGROUND
The Court takes the following allegations from the Complaint and Counterclaim and
treats them as true for purposes of these motions. See Vinson v. Vermillion County, Ill., No. 123790, 2015 WL 343673, at *1 (7th Cir. Jan. 27, 2015).
Frain is an Illinois corporation with its principal place of business in Carol Stream,
Illinois that refurbishes, sells, and services pre-owned packaging and processing equipment.
(Dkt. No. 1, Compl. at ¶ 1.) Steve’s is a Florida corporation with its principal place of business in
Boynton Beach, Florida that manufactures and supplies pre-packaged drink mixes. (Id. at ¶ 2.)
Between March and May 2014, Frain and Steve’s negotiated a contract for the reconditioning,
sale, and setup of a used Prodo Pak Machine for use in Steve’s drink production. (Id. at ¶¶ 6-7.)
On May 20, 2014, Steve’s agreed to purchase the Prodo Pak Machine on an expedited basis and
Frain agreed to complete the project in four weeks for an additional fee. (Id.) Steve’s agreed to
Frain’s terms and conditions by signing Frain’s Project Acceptance. (Id. at ¶¶ 12-13.)
Frain received the preliminary material needed to refurbish the Prodo Pak Machine on
June 6, 2014. (Id. at ¶ 15.) After Steve’s agent, David Schoenberg, conducted a Factory
Acceptance Test for Steve’s, Frain shipped the Prodo Pak Machine on June 30, 2014. (Id. at

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¶¶ 17, 18.) Steve’s encountered numerous problems with the Prodo Pak Machine after its
delivery. (Id. at ¶ 19.) On multiple occasions, Frain serviced the Prodo Pak Machine and trained
Steve’s employees on its proper operation and maintenance. (Id.) After several visits, Steve’s
refused to pay the costs of Frain’s additional service and training and Frain accordingly ceased
servicing the Prodo Pak Machine. (Id at ¶ 20.) Frain alleges that Steve’s problems with the Prodo
Pak Machine stemmed from improper operation and not from any structural or mechanical
deficiencies. (Id.)
Steve’s posted a full-page statement on Frain’s Facebook page regarding the Prodo Pak
Machine on August 23, 2014. (Id. at ¶ 31; Dkt. No. 1-1, Ex. I, Facebook Post.) 1 Steve’s titled the
Facebook Post “Don’t Get Ripped Off By The Frain Group!” (Compl. ¶ 32(a).) The Facebook
Post contained a number of other statements regarding the efficacy of the Prodo Pak Machine,
including: “John Frain told me it was a 6 year old machine. It is 18 years old!,” “It was a shell of
an 18 year old ProdoPak machine,” “machine [] had been incorrectly rebuilt and could not work
properly,” “butchered piece of junk,” “The person [Frain] sent had NEVER operated this type of
machine and could not keep it running,” “the machine could not handle” the temperatures
required by Steve’s process, and “[Frain] refused to come back and fix it.” (Id. at ¶ 32(b-h);
Facebook Post.) Frain disputes the veracity of every statement Steve’s made in its post. (Id.)
Frain contends that Steve’s refused to remove the post or issue an apology and that Frain has
suffered damages as a result. (Id. at ¶¶ 33-35.)
LEGAL STANDARD
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the
viability of a complaint by arguing that it fails to state a claim upon which relief may be

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The Court considers exhibits attached to the Complaint when resolving a motion to dismiss. See Carmody v. Bd. of
Trs. of Univ. of Ill., 747 F.3d 470, 477 (7th Cir. 2014).

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granted. Fed. R. Civ. P. 12(b)(6); Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th
Cir. 2014). To survive a motion to dismiss under Rule 12(b)(6), the complaint must provide
enough factual information to “state a claim to relief that is plausible on its face” and “raise a
right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
All well-pled facts are taken as true and viewed in the light most favorable to the
plaintiff, Hatmaker v. Mem'l Med. Ctr., 619 F.3d 741, 742–43 (7th Cir. 2010), but “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
DISCUSSION
I.

Steve’s Motion to Dismiss Counts II and III of Frain’s Complaint
Steve’s moves to dismiss Frain’s defamation and tortious interference claims, arguing

primarily that (1) the alleged defamatory statements are nothing more than non-actionable
opinions and (2) Frain failed to factually substantiate its tortious interference claim and only
alleged conclusory statements. Because a majority of Steve’s alleged statements on the Facebook
Post constitute objectively verifiable facts, the Court denies Steve’s motion to dismiss Frain’s
defamation claim. The Court grants Steve’s motion with respect to Frain’s tortious interference
claim, however, because Frain failed to plausibly allege it had a reasonable expectation of
entering into a valid business relationship through Facebook or that Steve’s knew of Frain’s
expectation. Accordingly, Count III of the Complaint is dismissed without prejudice.
A.

Defamation

Frain brings a defamation per se claim based on Steve’s statements in the Facebook
Post. 2 Under Illinois law, “[a] defamatory statement is a statement that harms a person’s

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Although Frain did not expressly label its defamation claim as per se in its Complaint, Frain argued the statements
are defamatory per se in its Response brief. Because the statements fall within two of the five defamation per se

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reputation to the extent it lowers the person in the eyes of the community or deters the
community from associating with her or him.” Green v. Rogers, 234 Ill.2d 478, 491 (2009). The
elements of a defamation claim are “that the defendant mad a false statement about the plaintiff,
that the defendant made an unprivileged publication of that statement to a third party, and that
this publication caused damages.” Id. In a defamation per se action, damage is presumed if the
statement falls within one of the five defamation per se categories recognized in Illinois:
(1) statements imputing the commission of a crime; (2) statements
imputing infection with a loathsome communicable disease; (3)
statements imputing an inability to perform or want of integrity in
performing employment duties; (4) statements imputing a lack of
ability or that otherwise prejudice a person in his or her profession
or business; and (5) statements imputing adultery or fornication.
Tuite v. Corbitt, 224 Ill.2d 490, 501 (2006). Even if a statement falls within one of these
categories, it is not actionable if it is reasonably capable of an innocent construction. Id. at 502.
When applying the innocent construction rule, “courts must interpret the words ‘as they
appeared to have been used and according to the idea they were intended to convey to the
reasonable reader.’ ” Id. at 512 (quoting Bryson v. News Am. Publ’ns, Inc., 174 Ill.2d 77, 93
(1996)). The innocent construction rule “requires a court to consider the statement in context and
give the words of the statement, and any implications arising from them, their natural and
obvious meaning.” Madison v. Frazier, 539 F.3d 646, 654 (7th Cir. 2008). The Court considers
several nonexclusive factors when determining whether a statement qualifies as an opinion or
factual assertion: “(1) whether the statement has a precise and readily understood meaning; (2)
whether the statement is verifiable; and (3) whether the statement’s literary or social context
signals that it has factual content.” Id. (citing J. Maki. Constr. Co. v. Chicago Reg’l Council of
categories and Frain’s elaboration in its Response is consistent with its Complaint, the Court construes Frain’s claim
as one of defamation per se. See Geinosky v. City of Chicago, 675 F.3d 743, 745 (7th Cir. 2012) (“A party
[opposing] a Rule 12(b)(6) dismissal may elaborate on his factual allegations so long as the new elaborations are
consistent with the pleadings.”).

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Carpenters, 379 Ill. App. 3d 189, 200 (2008)). Only statements that cannot reasonably be
interpreted as stating actual facts are protected under the First Amendment. Kolegas v. Heftel
Broad. Corp., 154 Ill.2d 1, 14 (1992).
Here, Steve’s does not dispute that it made the alleged statements or that it published the
statements; instead, it contends that the statements are non-actionable opinions. But because the
bulk of the statements are objectively verifiable factual statements, the Court denies Steve’s
motion to dismiss Frain’s defamation claim.
Statements that do not contain verifiable facts, such as opinions or rhetorical hyperbole,
are not actionable as defamation. Madison, 539 F.3d at 654. Statements that do not concern the
plaintiff are similarly not actionable as defamation. See BASF AG v. Great Am. Assurance Co.,
522 F.3d 813, 820 (7th Cir. 2008) (citing Solaia Tech., LLC v. Specialty Publ’g Co., 221 Ill.2d
558, 579 (2006)). Frain alleges that a number of the statements in the Facebook Post fall within
the third and fourth defamation per se categories, while Steve’s argues that the statements are
merely portions of a customer’s review and opinions of a machine it purchased.
Read in context, the majority of the material in the Facebook Post suggests that Frain
misrepresented the Prodo Pak machine and its abilities to service the machine when negotiating
with Steve’s. Steve’s statements that (1) Frain told them the Prodo Pak Machine was six years
old when it was actually eighteen, (2) the Prodo Pak Machine had been incorrectly rebuilt and
could not work properly, (3) Frain’s employee had never operated a Prodo Pak Machine, (4) the
Prodo Pak Machine could not handle the temperatures required by Steve’s, and (5) Frain refused
to come back and fix the machine absent a $1900 payment are all objectively verifiable
statements of fact. Further, because the statements directly attack Frain’s business dealings and
representations, they qualify as defamation per se. See Cody v. Harris, 409 F.3d 853, 857 (7th

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Cir. 2005) (for statements to fall under the third and fourth defamation per se categories, “the
plaintiff must have been accused of lacking ability in his trade or doing something bad in the
course of carrying out his job”) (collecting Illinois cases). Because Frain’s alleged “want of
integrity” here is in performing its employment and professional duties, the above statements
constitute defamation per se. See Parker v. House O’Lite Corp., 324 Ill. App. 3d 1014, 1025
(2001).
Not all of the statements found within the Facebook Post qualify, however. Steve’s
commentary interspersed among its factual declarations do not support a defamation claim. The
statements suggesting that Frain “ripped off” Steve’s and that the Prodo Pak Machine was a
“butchered piece of junk” are non-actionable statements of opinion incapable of being
objectively verified. See Pease v. Int’l Union of Operating Eng’rs Local 150, et al., 208 Ill. App.
3d 863, 870 (1991) (“Words that are mere name calling or found to be rhetorical hyperbole or
employed only in a loose, figurative sense” are nonactionable). Accordingly, Count II of Frain’s
Complaint survives with respect to the statements in the Facebook Post regarding Frain’s
representations of the Prodo Pak Machine and Frain’s ability to service the machine.
B.

Tortious Interference with Prospective Business Relationships

Frain’s tortious interference claim fares worse than its defamation claim. To state a claim
for tortious interference with prospective economic advantage under Illinois law, Frain needed to
allege “(1) a reasonable expectancy of entering into a valid business relationship, (2) [Steve’s]
knowledge of the expectancy, (3) an intentional and unjustified interference by [Steve’s] that
induced or caused a breach or termination of the expectancy, and (4) damage to [Frain] resulting
from [Steve’s] interference.” Voyles v. Sandia Mortgage Corp., 196 Ill.2d 288, 300-01 (2001). A
reasonable expectancy of future business “requires more than the hope or opportunity of a future

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business relationship.” See, e.g., Huon v. Breaking Media, LLC, No. 11 C 03054, 2014 WL
6845866, at *16 (N.D. Ill. Dec. 4, 2014); Quantum Foods, LLC v. Progressive Foods, Inc., No.
12 C 1329, 2012 WL 5520411, at *3 (N.D. Ill. Nov. 14, 2012); Business Sys. Eng’g, Inc. v. Int’l
Bus. Mach. Corp., 520 F. Supp. 2d 1012, 1022 (N.D. Ill. 2007).
In its Complaint, Frain only alleges that “Steve’s actions . . . have threatened to interfere
with Frain’s relationships with current and prospective customers. Specifically, Steve’s has
intentionally disseminated false and misleading information in an attempt to convince actual and
potential customer[s] not to do business with Frain. Frain has been damaged . . . and believes that
it has and will continue to lose business as a result of Steve’s conduct . . .” (Compl. ¶¶ 37-38.)
These conclusory statements, without factual support that Frain actually had a reasonable
expectation of new business and that Steve’s conduct interfered with that business, are
insufficient to allege that Frain had a reasonable business expectancy. See, e.g., Huon, 2014 WL
6845866 at 16 (allegations that plaintiff had an “expectancy of entering into valid business
relationships with members of the public” and had suffered “a decline in business” were
insufficient to state a claim for tortious interference); Del Monte Fresh Produce, N.A., Inc. v.
Kinnavy, No. 07 C 5902, 2010 WL 1172565, at *6 (N.D. Ill. Mar. 22, 2010) (“Twombly [requires
a plaintiff] set forth facts that make it plausible that she had a reasonable expectancy . . .”). At
best, the statements establish that Frain hoped to garner new business opportunities through its
Facebook page. That allegation is not enough to state a claim for tortious interference with
prospective business relationships. Because Frain’s tortious interference claim relies solely on
threadbare conclusions and is unsupported by factual allegations, the Court dismisses Count III
of the Complaint without prejudice.

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II.

Frain’s Motion to Dismiss Count III of Steve’s Counterclaim
Frain moves to dismiss Steve’s claim for breach of the implied warranties of

merchantability and fitness for a particular purpose. To state a claim for breach of the implied
warranty of merchantability, a plaintiff must allege that (1) the defendant sold goods that were
not merchantable at the time of sale; (2) the plaintiff suffered damages as a result of the defective
goods; and (3) the plaintiff gave the defendant notice of the defect. See 810 ILCS 5/2-314; see
also, e.g., Baldwin v. Star Scientific, Inc., No. 14 C 588, 2015 WL 170407, at *12 (N.D. Ill. Jan.
13, 2015). Similarly, to succeed on its claim of breach of an implied warranty of fitness for a
particular purpose, Steve’s must demonstrate that Frain, at the time of contracting, had reason to
know a particular purpose for which Steve’s required the Prodo Pak Machine, that Steve’s relied
on Frain’s skill or judgment to select or furnish suitable goods to achieve that purpose, and that
the goods were not suitable to meet that purpose. See 810 ILCS 5/2-315. Frain does not dispute
that Steve’s Counterclaim pleads these elements; instead, Frain contends that the parties’
contract disclaimed these implied warranties. Because the contract to purchase the Prodo Pak
Machine does expressly and conspicuously disclaim the two implied warranties Steve’s now
seeks to enforce, the Court grants Frain’s motion to dismiss Count III of the Counterclaim.
“[T]o exclude or modify the implied warranty of merchantability or any part of it the
language must mention merchantability and in case of a writing must be conspicuous, and to
exclude or modify any implied warranty of fitness the exclusion must be by a writing and
conspicuous.” 810 ILCS 5/2-316(2). Whether a particular term is conspicuous is a determination
to be made by the Court “by asking if attention can reasonably [be] expected to be called to the
term or clause.” R.O.W. Window Co. v. Allmetal, Inc., 367 Ill. App. 3d 749, 753 (2006).
According to the UCC, “[a] term or clause is conspicuous when it is so written that a reasonable

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person against whom it is to operate ought to have noticed it.” Id.; see also 810 ILCS 5/1201(10).
Here, the “Terms and Conditions of Sale” within the contract to purchase the Prodo Pak
Machine states that: “THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE
DESCRIPTION ON THE FACE HEREOF AND SELLER HEREBY EXCLUDES ANY AND
ALL WARRANTIES OF ANY NATURE OR KIND, WHETHER EXPRESS OR IMPLIED,
INCLUDING

WARRANTIES

OF

MERCHANTABILITY

AND

FITNESS

FOR

A

PARTICULAR PURPOSE.” (Dkt. No. 15-4, Steve’s Counterclaim Exhibit D-8.) This written
disclaimer is conspicuous. In the contract, the disclaimer is contained in a section titled “Terms
and Conditions of Sale.” The disclaimer is printed in all capital letters and is surrounded by
lowercase text. See 810 ILCS 5/1-201(10)(B) (“Conspicuous terms include . . . language in the
body of a record or display in larger type than the surrounding text . . .”). Moreover, the language
used expressly disclaims the implied warranties now sought. Steve’s tries to minimize the
significance of the section by arguing that the two sections titled “terms and conditions” found
within the contract are confusing, but this position is belied by Steve’s own allegation in its
Counterclaim that it “signed and returned the Project Acceptance (D-5) incorporating in it The
Frain Group Terms and Conditions (D-4) and/or Terms and Conditions of Sale (D-8, D-9, D10)”. (Dkt. No. 14, Counterclaim ¶ 16.)
The disclaimer at issue therefore meets the test for conspicuousness. Though there are
two sections labeled “terms and conditions,” merely skimming the contract draws attention to the
disclaimer found within the Terms and Conditions of Sale, printed in all capital letters and in a
larger font than the surrounding text. Cf. R.O.W. Window, 367 Ill. App. 3d at 751 (disclaimer was
conspicuous where it “was the only text on the page to be listed in all capital letters”); Shurland

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v. Bacci Café & Pizzeria on Ogden, Inc., No. 08 C 2259, 2010 WL 3835874, at *6 (N.D. Ill.
Sept. 24, 2010) (disclaimer that was printed in the same font size as the rest of the agreement but
in all capital letters was conspicuous). Additionally, the contract itself is only ten pages in its
entirety. The Court therefore concludes that a “reasonable person” would have been able to
discover the warranty disclaimer through a relatively cursory investigation of the contract. The
Court’s decision is bolstered by the fact that the transaction here is between two business entities,
as courts are “less reluctant to hold [business entities] to the terms of contracts to which they
have entered than consumers dealing with skilled corporate sellers.” R.O.W. Window, 367 Ill.
App. 3d at 754 (citing Bowers Mfg. Co., Inc. v. Chicago Mach. Tool Co., 117 Ill. App. 3d 226,
233 (1983)). Because the contract expressly disclaims the warranties of merchantability and
fitness for a particular purpose, a defect that Steve’s cannot correct with an amended pleading,
the Court dismisses Count III of Steve’s Counterclaim with prejudice.
III.

Frain’s Motion to Strike Steve’s Affirmative Defenses
Frain also moves to strike both of Steve’s affirmative defenses pursuant to Federal Rule

of Civil Procedure 12(f). Under Rule 12(f), a court may strike from a pleading any “insufficient
defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f).
Motions to strike are “disfavored” because they “potentially serve only to delay.” Heller Fin.,
Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989). But where such motions
“remove unnecessary clutter from the case, they serve to expedite,” rather than delay. Id. As
pleadings, affirmative defenses are subject to the pleading requirements of the Federal Rules of
Civil Procedure. Id. Accordingly, “bare bones conclusory allegations” that fail to address the
necessary elements of a proposed defense are insufficient. Id. at 1294-95. The decision to strike

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under Rule 12(f) is a discretionary one. Delta Consulting Group, Inc. v. R. Randle Constr., Inc.,
554 F.3d 1133, 1141-42 (7th Cir. 2009).
Even under the liberal pleading standards of the Federal Rules of Civil Procedure, an
affirmative defense “must include direct or inferential allegations as to all elements of the
defense asserted.” See, e.g., LaSalle Bank Nat’l Ass’n v. Paramount Props., 588 F. Supp. 2d 840,
860 (N.D. Ill. 2008). Steve’s first affirmative defense asserts, in its entirety: “Without waiving
the general denial herein, this Defendant states that Count I of plaintiff’s complaint fails to state
a claim upon which relief may be granted and should be dismissed accordingly.” (Dkt. No. 14,
Answer at 11.) Although the defense of “failure to state a claim” can be properly raised as an
affirmative defense, see, e.g., Gleike Taxi Inc. v. DC Tops LLC, No. 13 CV 06715, 2015 WL
273682, at *7 (N.D. Ill. Jan. 20, 2015); Wylie v. For Eyes Optical Co., No. 11 CV 1786, 2011
WL 5515524, at *2 (N.D. Ill. Nov. 10, 2011); Reis Robotics USA, Inc. v. Concept Indus., Inc.,
462 F. Supp. 2d 897, 905 (N.D. Ill. Nov. 6, 2006), Steve’s has failed to adequately plead this
defense in accordance with Federal Rule of Civil Procedure 8. The grounds upon which Steve’s
bases its affirmative defense are unstated. Steve’s has not set forth “any of the minimal specifics
required by Rule 8 to provide [Frain] any notice as to how and in what portion” of Count I Frain
has failed to adequately state a claim. See, e.g., Wylie, 2011 WL 5515524 at *2; Paramount
Props., 588 F. Supp. 2d at 860-61; Reis, 462 F. Supp. 2d at 905 (striking affirmative defense of
failure to state a claim that did not incorporate by reference any allegations of the counterclaims
or state which of the counterclaim allegations supported the defense); Reynalds v. S.R.G. Rest.
Group, 119 F. Supp. 2d 800, 803-04 (N.D. Ill. 2000) (striking failure to state a claim defense
because it failed to identify specific deficiencies in the complaint). Accordingly, Steve’s first
affirmative defense is stricken without prejudice.

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Steve’s second affirmative defense states: “Plaintiff’s claims are barred, in whole or in
part, by the doctrine of mootness as this Defendant has filed a separate counterclaim against the
Plaintiff, which is presently pending in the Northern District of Illinois and material to claims
alleged in the present complaint.” (Dkt. No. 14, Answer at 11.) Federal courts lack subject matter
jurisdiction when a case becomes moot. See Medlock v. Trs. of Ind. Univ., 683 F.3d 880, 881
(7th Cir. 2012). Under the Federal Rules of Civil Procedure, the Court must dismiss an action if
it determines at any point that it lacks subject matter jurisdiction. See Fed. R. Civ. P. 12(h)(3).
While Steve’s second affirmative defense is lacking in factual detail, the gist of the defense is
clear: because Steve’s has filed a Counterclaim alleging that Frain breached the contract between
the parties, Steve’s necessarily must not dispute that the contract is valid and enforceable. This
defense, however, only corresponds to Count I of Frain’s Complaint. The Counterclaim is
completely unrelated to and has no effect on Frain’s defamation and tortious interference claims.
Accordingly, the defense survives as to Frain’s declaratory judgment claim. Moreover, the Court
finds there to be no prejudice to Frain in permitting the second affirmative defense to remain as
pleaded in the Answer. The Court therefore denies Frain’s motion to strike Steve’s second
affirmative defense.
CONCLUSION
For the reasons stated herein, the Court grants in part and denies in part Steve’s motion to
dismiss, grants Frain’s motion to dismiss, and grants in part and denies in part Frain’s motion to
strike. Count III of Frain’s Complaint is dismissed without prejudice, Count III of Steve’s
Counterclaim is dismissed with prejudice, and Steve’s first affirmative defense is stricken
without prejudice.

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________________________________________
Virginia M. Kendall
United States District Court Judge
Northern District of Illinois
Date: 3/10/2015

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