The opinion of the court was delivered by: Norgle, District Judge.
Plaintiff, Coca-Cola Foods ("FOODS") sued Defendant, Olmarc
Packaging Company ("OLMARC") for breach of contract. Foods filed
a single count complaint. Olmarc answered and pleaded two
affirmative defenses, along with two counterclaims. Foods' motion
to strike the affirmative defenses and dismiss the counterclaims
is the subject matter of this Order. For the following reasons,
Foods' motion is granted in part and denied in part.
In early 1977 Foods and Olmarc entered into a Packing Agreement
("AGREEMENT"). Essentially Olmarc agreed to mix, package, store
and ship dry powdered drink bases received from Foods in return
for payment from Foods in accord with a set "Fee Schedule." The
Agreement required Foods to furnish Olmarc with instructions and
specifications for Olmarc's performance.
In addition to Olmarc's packaging and shipping obligations
under the contract, Paragraph 8 required payments for certain
losses and shortages of materials provided by Foods. Paragraph
Paragraph 5 of the Agreement required Olmarc to make certain
reports to Foods "in such forms as [Foods] may from time to time
request, including weekly reports showing packing supplies
received and . . . used and inventories of packing supplies and
daily reports of powders packed and . . . shipped and powders on
Further, Olmarc was required to make periodic reports to Foods
("Daily report of Hi-C DM and MMC," "Weekly Co-Packer Production
and Inventory Report") in accord with the "Co-Packers Accounting
Procedures Manual." Based on the various reports submitted by
Olmarc and its own annual inventory, Foods calculated Olmarc's
"actual performance" and billed or credited Olmarc for
"authorized or unauthorized usage, losses, variances, shortages
and damages." Complt at 5.
Foods determined Olmarc had "unfavorable usage variations,
and physical inventory shortages" totalling $92,829.29 for the
period January through December, 1981. Further variations
shortages and damaged goods were found for the period December,
1981 through December, 1982 ($38,309.96 and $329.19). The
Agreement was terminated in January of 1983. Thereafter Foods
billed Olmarc for "net unfavorable usage variations, physical
inventory shortages and damages" ($10,432.11) and for 5,500
"pallets" which were unaccounted for by Olmarc ($24,700.00).
Foods has repeatedly requested a total payment of $166,649.55
from Olmarc. Olmarc has repeatedly refused to pay Foods.
In its Answer Olmarc generally denies it is in breach of the
Agreement and raises two affirmative defenses (estoppel and
changed conditions) as well as two counterclaims (promissory
estoppel and fraud by omission). Before the Court at this time
is a motion by Foods to strike the affirmative defenses and to
dismiss the counterclaims.
Ruling on Foods' attack of Olmarc's affirmative defenses
requires a three part analysis.
1) Is the alleged "affirmative defense" really an
affirmative defense, or is it simply a mistitled
denial already contained in the answer?
2) If the matter is properly designated an
affirmative defense, is it adequately pleaded under
the Federal Rules of Civil Procedure (e.g.,
Fed.R.Civ.P. 8 and 9)?
3) Finally, is the affirmative defense legally
sufficient under the standard identified in
See Instituto Nacional de Commercializacion Agricola v.
Continental Illinois National Bank & Trust Co., 576 F. Supp. 985,
988 (N.D.Ill. 1983); Bobbitt v. Victorian House, Inc.,
532 F. Supp. 734, 736-37 (N.D.Ill. 1982).
In support of its first affirmative defense Olmarc alleges the
1) Foods was informed of usage variations and
inventory shortages in excess of those originally
contemplated by the parties throughout the life of
2) with that information in its possession, Foods
took no ...