Vertex Refining, NV, LLC v. National Union Fire Insurance Company of Pittsburgh, PA. et al

Filing 83

MEMORANDUM Opinion and Order: Vertex's motion to dismiss Assurance's counterclaims 67 is granted without prejudice. If it chooses, Assurance has leave to amend the counterclaim within 21 days. Signed by the Honorable Rebecca R. Pallmeyer on 7/11/2017. Mailed notice. (etv, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
VERTEX REFINING, NV, LLC,
Plaintiff
v.
NATIONAL UNION FIRE INSURANCE,
COMPANY OF PITTSBURGH, PA, and
ASSURANCE AGENCY, LTD.,
Defendants.

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No. 16 CV 3498

Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER
Omega Holdings Company, LLC (“OHC”), Omega Refining, LLC, and Bango Refining,
LLC (collectively, “Omega”) purchased an insurance policy from Defendant National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”) through Defendant Assurance Agency,
Ltd. (“Assurance”). Omega later assigned the proceeds from a loss claim to Plaintiff Vertex
Refining, NV, LLC (“Vertex”) as security for a loan. But National Union paid the claim amount to
Omega, not to Vertex. This lawsuit followed. Vertex alleges that Assurance and National Union
are liable for distributing insurance proceeds to Omega rather than Vertex. Evidently of the view
that the best defense is offense, Defendant Assurance alleges that Vertex made false
statements to Assurance and is therefore liable to Assurance on counterclaims of fraud,
negligent misrepresentation, and promissory estoppel.

Vertex has moved to dismiss the

counterclaims for failure to state a claim. For the reasons stated below, the motion is granted.
BACKGROUND
The facts underlying Vertex’s claims are laid out in the court’s earlier opinion, Vertex
Ref., NV, LLC v. Nat'l Union Fire Ins., Co. of Pittsburgh, PA, No. 16 CV 3498, 2017 WL 977000
(N.D. Ill. Mar. 14, 2017). In brief, Vertex alleges that Omega purchased an insurance policy
from National Union through Assurance, but later assigned policy proceeds to Vertex as security
on a note. Id. at *1–2. Assurance issued an insurance certificate confirming that Vertex was

1

entitled to the proceeds, but National Union nevertheless paid the proceeds to Omega, not
Vertex.

Id.

Vertex has alleged claims of breach of contract, negligence, and negligent

misrepresentation.
Assurance has answered the complaint but also alleges counterclaims and affirmative
defenses. (Assurance Answer [23] at 17–19.) For purposes of the motion to dismiss the
counterclaims, the facts alleged there are presumed true. See N. Trust Co. v. Peters, 69 F.3d
123, 129 (7th Cir. 1995). Assurance, allegedly “an Illinois insurance producer,” asserts that
Omega purchased the National Union policy through Assurance, and then made a claim under
the policy for an explosion and fire at one of its refineries. (Countercl. [65] ¶¶ 7–10.) Omega
“and/or” Vertex hired an insurance adjuster, Carter J. Auslander & Associates (“Auslander”).
(Id. at ¶ 11.) At some point, an adjuster from Auslander e-mailed blank Proof of Loss forms to
directors and employees of both Omega and Vertex. (Id.)
Assurance’s allegations suggest that if the insurance proceeds were misdirected, it was
Omega’s and Vertex’s own agents who are responsible. From January through October 2014,
“the team” (apparently consisting of employees of Omega and Vertex) 1 sent completed Proofs
of Loss to Auslander claiming various amounts of losses. 2 (Id. at ¶¶ 15–16.) Rick Silverberg,
the managing partner of OHC, signed the Proof of Loss forms, which directed that the proceeds
were to be paid to Omega. (Id. at ¶¶ 12–13.) The forms requested that Omega identify other
entities with interests in the proceeds; Omega identified Wells Fargo Bank and BBC Funding,
LLC, but not Vertex.

(Id. at ¶ 14.)

Auslander forwarded the Proofs of Loss to AIG—the

complaint does not explain the relationship between AIG and National Union, but AIG’s adjuster
1

This allegation does not specify who was on this “team,” but other allegations
state that a “management team comprised of employees, officers, and directors of Omega,
Plaintiff, and [Vertex’s parent]” “directed” the payments through the Proofs of Loss. (Countercl.
¶ 19.)
2

Assurance characterizes Vertex’s complaint as identifying two Proofs of Loss,
submitted on July 31 and October 6, 2014 and claiming a total of $4,892,137.00. (Countercl.
¶¶ 15, 20.)
2

processed the claim “with National Union’s senior management.” (Id. at ¶¶ 17–18.) National
Union paid the requested proceeds to Omega. (Id. at ¶ 19; see also id. at ¶ 60.) Assurance
alleges that these proceeds were deposited—it is not clear by whom—into a bank account that
Vertex controlled. (Id. at ¶¶ 29–33.)
Assurance identifies three individuals who were “members of the team that prepared the
Proofs of Loss[.]” (Id. at ¶ 22.) These individuals—Rick Silverberg, James Gregory, and Dave
Peel—allegedly worked for both Omega and Vertex (or its parent, Vertex Energy). (Id. at ¶ 23.)
Gregory e-mailed two of the Proofs of Loss to Auslander, while Silverberg e-mailed one; each
copied the others on the e-mails. (Id. at ¶¶ 25–27.) Other unnamed employees of Vertex and
its parent also “participated in the preparation and submission” of the Proofs of Loss. (Id. at
¶ 24.)
Meanwhile, Vertex acquired Omega’s assets on May 2, 2014, after “extensive” and
“lengthy” negotiations over six to nine months.

(Id. at ¶ 34.)

During these negotiations,

Assurance alleges, Vertex and Omega discussed the claim payments, which Omega was using
to repair assets that Vertex acquired as part of the asset purchase. (Id. at ¶¶ 35–36.) As part of
the transaction, a company called CDG Group, LLC “monitored the finances of OHC” and sent
to Vertex and Omega reports that confirmed that Omega was receiving the claim proceeds. 3
(Id. at ¶¶ 37, 38.)

Assurance acknowledges that some reports stated that “other entities,

including BBB Funding” 4 should have received the claim payments, but alleges that none of the
reports called for Vertex to receive them; and, though Vertex received the reports, Vertex did
not contact National Union to direct that Vertex receive the insurance proceeds. (Id. at ¶¶ 37–
39.)

3

The court has no information about CDG Group, the individuals who prepared
these reports, how they did so, or how CDG Group factored into the asset purchase agreement.
4

It is unclear if this is the same “BBC Funding” listed on the Proofs of Loss.
3

Eventually, however, after the claim was paid to Omega, Vertex “demanded payment of
$4,980,000 of the claim proceeds related to the Loss by National Union and/or Assurance.” 5
(Id. at ¶ 41.) Assurance does not say to whom this demand was made, but refers generally to
“false” demand letters sent to “National Union and/or Assurance[.]” (Id. at ¶ 51.) These letters
“falsely stated that [Vertex] should have received payment totaling $4,980,000 but did not
because Assurance Agency should have somehow directed National Union to pay Plaintiff
instead of Omega.” (Id. at ¶ 42.) Assurance also alleges that Vertex made “numerous false
claims to Assurance Agency and/or National Union,” including the Proofs of Loss, demands for
payment (again, Assurance does not say to whom the demands were made or their exact
contents), “and/or additional correspondences” (of which Assurance provides no detail). (Id. at
¶ 43.)
Assurance contends these allegations support a number of counterclaims. In Count I,
Assurance alleges insurance fraud in violation of 720 ILCS 5/17-10.5, and seeks statutory
damages of at least $9,960,000. Counts II through IV allege fraud, as well: common law fraud
(Count II), fraudulent concealment (Count III), and fraud in the inducement (Count IV);
Assurance also alleges negligent misrepresentation (Count V) and promissory estoppel (Count
VI).

In Counts II through VI, Assurance alleges three kinds of damages: (1) its costs of

defending itself in this lawsuit, (2) “additional damages” that Assurance “has incurred and in the
future will continue to incur,” and (3) any damages that Vertex might be awarded by virtue of its
own claims (which Assurance says would entitle it to a set-off). (Countercl. ¶¶ 61–62, 69–70,
76–77, 84–85, 91–92.) Vertex has moved to dismiss Assurance’s counterclaims.

5

This appears inconsistent with the allegation that Vertex did not direct National
Union to pay it instead of Omega after seeing the CDG Group reports. (Countercl. ¶ 39.) The
court does not know when Vertex “demanded payment,” or when it received the reports.
4

DISCUSSION
A pleading, including a counterclaim, must contain a “short and plain statement of the
claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a). To state a claim, the
pleading must allege “factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007); Roake v. Forest Pres. Dist. of Cook
Cty., 849 F.3d 342, 345–46 (7th Cir. 2017).
Allegations of fraud are subject to a heightened pleading standard: a fraud claim
requires the pleader to “state with particularity the circumstances constituting fraud,” though
“[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.”
FED. R. CIV. P. 9(b). A pleading alleges fraud with particularity when it includes “the identity of
the person making the misrepresentation, the time, place, and content of the misrepresentation,
and the method by which the misrepresentation was communicated to the plaintiff.” Rocha v.
Rudd, 826 F.3d 905, 911 (7th Cir. 2016) (internal citation and quotation marks omitted). Fraud
claims based in state law, including state statutes, are subject to this same heightened pleading
standard when they are brought in federal court. See Putzier v. Ace Hardware Corp., 50 F.
Supp. 3d 964, 972 (N.D. Ill. 2014) (citing Ackerman v. Nw. Mut. Life Ins. Co., 172 F.3d 467, 470
(7th Cir. 1999)). Under both the 8(a) and 9(b) standards, the court accepts the well-pleaded
facts in the complaint as true and draws all reasonable inferences in favor of the nonmovant.
Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016); Makor Issues & Rights, Ltd. v. Tellabs
Inc., 513 F.3d 702, 705 (7th Cir. 2008).
I.

Count I
In Count I, Assurance alleges that Vertex has violated 720 ILCS 5/17-10.5. This statute

provides for civil liability for those who commit insurance fraud:
A person who knowingly obtains, attempts to obtain, or causes to be obtained, by
deception, control over the property of any insurance company by the making of
a false claim or by causing a false claim to be made on a policy of insurance
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issued by an insurance company, or by the making of a false claim or by causing
a false claim to be made to a self-insured entity, intending to deprive an
insurance company or self-insured entity permanently of the use and benefit of
that property, shall be civilly liable to the insurance company or self-insured entity
that paid the claim or against whom the claim was made or to the subrogee of
that insurance company or self- insured entity . . . .
720 ILCS 5/17-10.5(e)(1) (emphasis added). The definition of “false claim” is broad; it
encompasses “any statement made to any insurer, purported insurer, servicing corporation,
insurance broker, or insurance agent, or any agent or employee of one of those entities, and
made as part of, or in support of, a claim for payment or other benefit under a policy of
insurance[.]” 720 ILCS 5/17-0.5. “Statement,” in turn, means “any assertion, oral, written, or
otherwise, and includes, but is not limited to: any notice, letter, or memorandum; proof of
loss; . . . .” 720 ILCS 5/17-0.5. Assurance argues at length that it is an “insurance company” or
“self-insured entity” under the statute; the issue of what type of company qualifies as an
“insurance company” for purposes of this insurance fraud statute has apparently not been
addressed by Illinois courts. Yet the court need not reach this issue, because (1) Assurance
has not alleged the false statements that Vertex made to it in sufficient detail, and (2) Assurance
is not an entity that paid a claim or against whom an insurance claim was made.
First, Assurance identifies three types of false claims that Vertex made to Assurance
“and/or” National Union: Proofs of Loss, demands for payment, “and/or additional
correspondences.” 6 (Countercl. ¶¶ 43, 49.) First, Assurance describes in detail the Proofs of

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Assurance also urges that because Vertex’s complaint states that it seeks
damages because it was not paid proceeds as required under the policy, Vertex’s complaint
itself is a “false claim.” (Assurance’s Resp. to Pl.’s Mot. to Dismiss Countercl. [75] at 10.) The
court cannot agree. First, assuming that Vertex’s lawsuit can be construed as an insurance
claim, it is not an insurance claim against Assurance: Vertex’s complaint alleges that National
Union, not Assurance, failed to pay the insurance proceeds. Second, the complaint seeks
damages in tort and contract, but does not purport to be a claim under the policy itself. If Vertex
wanted either Defendant to perform under the policy, it would seek specific performance, not
damages. Third, the court expects that Vertex’s complaint would be entitled to litigation
privilege under Illinois law. Cf. Scheib v. Grant, 22 F.3d 149, 156 (7th Cir. 1994) (applying the
Illinois litigation privilege to a state law claim other than defamation); Squires-Cannon v. Forest
Pres. Dist. of Cook Cty., No. 15 C 6876, 2016 WL 561917, at *8 (N.D. Ill. Feb. 12, 2016),
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Loss, but alleges that they were submitted to Auslander and ultimately National Union, who paid
the claim. (See id. at ¶¶ 16–19, 21–22.) Assurance itself seems uncertain whether it ever
received the Proofs of Loss—it simultaneous alleges that Vertex submitted the Proofs of Loss to
“National Union, and Assurance Agency[,]” and to “Assurance Agency and/or National Union[.]”
(Id. at ¶¶ 43, 53 (emphasis added).) Assurance has provided some detail about the Proofs of
Loss themselves, and their submission to National Union and Auslander, but Assurance offers
no detail about Assurance’s own receipt of them. For example, the counterclaim says nothing
about who sent or received the Proofs of Loss, when Assurance received them, or whether
Assurance was involved in paying the proceeds requested. Without these details, the allegation
that Vertex submitted this “false claim” to Assurance is insufficient.
Assurance also alleges that Vertex demanded payment and sent “additional
correspondences.” 7 (Countercl. ¶¶ 41, 43.) Again, the counterclaim offers no details about this
demand for payment, other than the amount that Vertex sought, nor about these additional
communications. Moreover, Assurance again alleges that these “false claims” were sent to
National Union “and/or” Assurance. Assurance ought to be able to say, without ambiguity,
whether and when it received Proofs of Loss, a demand letter, or “other correspondences.”
Without additional details, the court doubts that Assurance’s allegations on this issue would
even satisfy Rule 8(a).
But second, even if Assurance had adequately alleged the details of these false
statements, and adequately alleged that the false statements were made to Assurance,
Assurance has not adequately alleged that the circumstances of those false statements would
reconsideration denied, No. 15 C 6876, 2016 WL 3653578 (N.D. Ill. July 8, 2016) (citing Illinois
cases). A complaint seeking recovery through the legal system cannot be the basis for a fraud
claim.
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Assurance also alleges that “Plaintiff falsely stated that it should have received
payment totaling $4,980,000 but did not because Assurance Agency should have somehow
directed National Union to pay Plaintiff instead of Omega.” (Countercl. ¶ 42.) The lack of detail
about this “false statement” would likely not even pass Rule 8(a), much less Rule 9(b).
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support a cause of action under this statute. The language of the statute authorizes a suit only
by an entity “that paid the [false] claim or against whom the claim was made.” 8 720 ILCS 5/1710.5(e)(1); cf. Ultsch v. Illinois Mun. Ret. Fund, 226 Ill. 2d 169, 184, 874 N.E.2d 1, 10 (2007)
(“Where the language of a statute is plain and unambiguous, a court need not consider other
interpretive aids.”). Even if a false statement was made to Assurance, that statement would
have been made in support of an insurance claim against National Union, the issuer of the
insurance policy; it would not be a false claim against Assurance. 9

A false statement to

Assurance is not the same as a false claim against Assurance. In fact, it is unclear whether the
demand letter or “additional correspondences” were demands “under a policy of insurance,” or,
like the demands in this lawsuit, demands to be made whole as a result of Assurance’s alleged
wrongdoing. Count I of the counterclaim is dismissed.
II.

Counts II through V
Vertex has made several arguments for dismissal of Count II (fraud), Count III

(fraudulent concealment), Count IV (fraud in the inducement) and Count V (negligent
misrepresentation). The court need address just two of those arguments: that Assurance does
has not sufficiently pleaded damages or reliance on Vertex’s purported misrepresentations or
omissions.

8

Assurance does not allege that it is a subrogee, who can also bring a suit.

9

The parties extensively discuss Nomat v. Mota, 2016 IL App (1st) 140102-U,
¶¶ 3, 28 appeal denied, 50 N.E.3d 1140 (Ill. 2016), where the plaintiff filed suit seeking damages
from a vehicle accident. During discovery, the plaintiff initially stated that he was unemployed,,
but later claimed he had incurred significant lost wages and had been employed since before
the accident, and the defendants’ insurer brought an insurance fraud action against the plaintiff.
Id. at ¶ 29. But “plaintiff's allegation of damages for lost earnings was not a statement to [the
insurer] but, rather, to defendants[.]” Id. at ¶ 77. Accordingly, the court found that the insurer
did not have standing under the insurance fraud statute, because the “plaintiff did not make any
false claims on a policy of insurance.” Id. at ¶ 75. In Nomat, the entity to whom the false
statement was made (the defendants) was not the same entity who sought to hold the plaintiff
liable (the insurer). In this case, if Vertex did make a false statement to Assurance, then
Assurance is both the entity to whom the false statement was made and who seeks to bring
suit. Nomat therefore does not address the relevant issue here.
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A.

Failure to Adequately Plead Damages

Assurance alleges that it was damaged in three ways: (1) the cost of defending itself
against Vertex’s complaint, (2) unspecified “additional damages” that Assurance “has incurred
and in the future will continue to incur,” and (3) the cost of paying Vertex’s award if Vertex wins
its suit (specifically, Assurance asks for a set-off for any award Vertex wins). (Countercl. ¶¶ 61–
62, 69–70, 76–77, 84–85.) None of these are adequate to state a claim.
First, although a party can recover legal fees incurred when a wrongdoer causes it to
litigate against a third party, fees incurred in litigation against the alleged wrongdoer itself are
not recoverable as damages. Ritter v. Ritter, 381 Ill. 549, 553–55, 46 N.E.2d 41, 43–44 (1943)
(“[A]ttorney fees and the ordinary expenses and burdens of litigation are not allowable to the
successful party in the absence of a statute [or agreement.]”); see Tolve v. Ogden Chrysler
Plymouth, Inc., 324 Ill. App. 3d 485, 491, 755 N.E.2d 536, 541 (2d Dist. 2001); Bussman v.
Krizoe, 166 Ill. App. 3d 770, 772–73, 520 N.E.2d 971, 973–74 (5th Dist. 1988). Here, where
Assurance seeks recovery of its defense costs as damages, the same principle applies. That
Vertex may have committed some wrongful act does not provide an exception to the normal rule
that litigation costs are not recoverable as damages.
Second, vague allegations of “additional damages” that Assurance has incurred and will
incur in the future do not meet the pleading standard.

Merely stating that Assurance has

suffered or will suffer damages is a legal conclusion that does not entitle Assurance to relief
under Rule 8(a) or 9(b). See Twombly, 550 U.S. at 555.
Third, any award that Assurance may owe to Vertex does not constitute harm to
Assurance that would sustain a counterclaim. Assurance’s argument here essentially contends
that but for Vertex’s own wrongdoing, Assurance would not have to pay damages to Vertex—

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but that is a defense to liability, not a claim for independent relief. 10 Cf. Tenneco Inc. v. Saxony
Bar & Tube, Inc., 776 F.2d 1375, 1379 (7th Cir. 1985) (“What is really an answer or defense to a
suit does not become an independent piece of litigation because of its label.”). This recasting
does not itself require dismissal; under Rule 8(c), where a party “mistakenly designates a
defense as a counterclaim . . . the court must, if justice requires, treat the pleading as though it
were correctly designated[.]” FED. R. CIV. P. 8(c)(2). Even interpreted as affirmative defenses,
however, these allegations are no more than a denial of liability and would be stricken on
motion.
B.

Construing Counts II through V as Affirmative Defenses

The Seventh Circuit has not addressed the issue of whether affirmative defenses are
subject to the Rule 8(a) pleading standard. Several district courts have concluded that that they
are, and the court believes this is appropriate in circumstances where the defenses suggest
fraud. See Badshah v. Am. Airlines, Inc., No. 17 C 01254, 2017 WL 2021089, at *1 (N.D. Ill.
May 12, 2017); Shield Techs. Corp. v. Paradigm Positioning, LLC, No. 11 C 6183, 2012 WL
4120440, at *8 (N.D. Ill. Sept. 19, 2012). Reliance (on a statement or an omission) is an
element of each of the four defenses at issue. See Doe v. Dilling, 228 Ill. 2d 324, 342–43, 888
N.E.2d 24, 35–36 (2008) (fraud); Phillips v. DePaul Univ., 2014 IL App (1st) 122817, ¶ 82, 19
N.E.3d 1019, 1037 (fraudulent concealment); Enter. Recovery Sys., Inc. v. Salmeron, 401 Ill.
App. 3d 65, 72, 927 N.E.2d 852, 858 (1st Dist. 2010) (fraud in the inducement); Jane Doe-3 v.
McLean Cty. Unit Dist. No. 5 Bd. of Directors, 2012 IL 112479, ¶ 28, 973 N.E.2d 880, 889
(negligent misrepresentation); see also FED. R. CIV. P. 8(c)(1) (fraud is an affirmative defense).
The only specific statements described in the pleading, as noted above, are the Proofs
of Loss that Vertex allegedly submitted to Auslander and National Union. Assurance does not
10

Assurance confirms the court’s conclusion on this score by alleging that Vertex
concealed material facts “[i]f this Court finds that Plaintiff is entitled to insurance claim
proceeds.” (Countercl. ¶ 64.) Assurance’s liability is a prerequisite for this claim and it is
therefore an affirmative defense.
10

explain how Assurance itself relied on the Proofs of Loss or what actions it took in reliance on
them. Nor has Assurance described how it relied—that is, what actions it took—on any demand
for payment or other “additional correspondences.” Again, the pleading alleges that National
Union took action—paying the proceeds to Omega—while relying on the Proofs of Loss, but it
does not say what actions Assurance took in reliance on that or any statement or concealment.
Assurance responds that it does allege reliance, citing several allegations.

(Def.

Assurance’s Resp. to Pl.’s Mot. to Dismiss Countercl. (“Assurance Resp.”) [75] at 13–14 (citing
Countercl. ¶¶ 3, 13, 57–59, 79, 81).)

Contrary to Assurance’s assertions, several of the

allegations it invokes do not mention Assurance at all, and instead refer only to what Vertex
intended Assurance to do, not what Assurance actually did. Only one of the cited paragraphs
refers to “acts” that Assurance undertook, which are not specified.

(Countercl. ¶ 3.)

Assurance’s references to reliance are no more than vague assertions that Assurance relied on
Plaintiff’s statements, or “would have acted differently” if it knew the truth (id. at ¶¶ 60, 67, 68,
75, 82); Assurance does not describe how it relied on Vertex’s statements or omissions—what
specific actions it took, for example. The only specific action described (payment of the claim
proceeds to Omega) is that of National Union, not Assurance. Stating that Assurance “acted in
reliance” or “engaged in various acts” merely recites the reliance element. Because these
pleadings, construed as affirmative defenses, do not explain how Assurance relied on Vertex’s
statements or omissions, they must be stricken.
III.

Count VI
To establish a claim for promissory estoppel in Illinois, a plaintiff must prove “that (1)

defendant made an unambiguous promise to plaintiff, (2) plaintiff relied on such promise, (3)
plaintiff's reliance was expected and foreseeable by defendants, and (4) plaintiff relied on the
promise to its detriment.” Newton Tractor Sales, Inc. v. Kubota Tractor Corp., 233 Ill. 2d 46, 51,
906 N.E.2d 520, 523–24 (2009). Vertex argues that this claim should be dismissed because
Assurance has not alleged that Vertex made any promises to Assurance. Assurance responds
11

by identifying three promises that Vertex purportedly made to Assurance: (1) “through the
Proofs of Loss, demand letter, and other correspondences, that [Vertex], and not Omega, was
entitled to claim proceeds on National Union’s insurance policy;” (2) that “[Vertex] should have
been added by Assurance Agency as a Lender’s Loss Payee on the insurance policy;” and (3)
“that Vertex had ‘no additional interests’ in the claim proceeds[.]” (Assurance Resp. 15.)
These are not promises. A promise is “a declaration that one will do or refrain from
doing something specified”—in other words, they are statements about what one will do in the
future.

Promise, MERRIAM-W EBSTER COLLEGIATE DICTIONARY (11th ed. 2003).

These

statements, by contrast, concern the past or present. They say nothing about what Vertex will
do in the future. These are instead statements of fact that may be untrue, but that does not
transform them into promises.
Assurance also claims that Vertex made other, unspecified promises, but the
counterclaim refers only to unnamed “various promises[.]” (Countercl. ¶ 87; see also Assurance
Resp. 15.) The court can find no specific promises—statements about what Vertex would or
would not do in the future—described in the counterclaim. Count VI is dismissed.
CONCLUSION
For the reasons stated above, Vertex’s motion to dismiss Assurance’s counterclaims
[67] is granted without prejudice. If it chooses, Assurance has leave to amend the counterclaim
within 21 days.
ENTER:

Dated: July 11, 2017

_________________________________________
REBECCA R. PALLMEYER
United States District Judge

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