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United States District Court, Northern District of Illinois

June 16, 2003


The opinion of the court was delivered by: James B. Zagel, Magistrate Judge


The Trustees of the Suburban Teamsters of Northern Illinois Welfare and Pension Funds ("Funds") filed a Complaint against Hope Cartage, Inc. ("Hope") seeking recovery of fringe benefit contributions owed pursuant to a collective bargaining agreement. The Funds alleged that Hope was party to a collective bargaining agreement which required it to make fringe benefit contributions to the Funds and that Hope now owes the Funds $43,866.78 in contributions. The Funds seek judgment against Hope for its contributions owed, as well as attorneys' fees, costs, interest, and liquidated damages pursuant to § 502(g)(2) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(g)(2) ("ERISA").

A few months ago, Hope filed a Third Party Complaint against the International Brotherhood of Teamsters Local 179 ("Local 179") and Robert White as third-party defendants alleging breach of contract and seeking indemnification on the basis of White's alleged statements that if Hope signed a contract with Local 179 it would not have to make contributions to the Funds. Local 179 and White moved to dismiss the Third Party Complaint under Federal Rule of Civil Procedure 12(b)(6). On April 1, 2003, I granted the motion holding that no basis existed for Hope's breach of contract claim and that Hope's claim for indemnification failed because Hope failed to allege that Local 179 and/or White knowingly made false representations with the specific intent to deceive.

Hope has now filed a Motion for Leave to File an Amended Third-Party Complaint against Local 179 and White setting forth an amended claim for indemnification. In addition to repeating the allegations set forth in its initial Third-Party Complaint, Hope now alleges that White's statements "were false and [that] White made said representatives with knowledge of their falsity." Opposing the motion, Local 179 and White claim that despite Hope's effort to invoke the proper talismanic words, its proposed pleading is still deficient under Federal Rule of Civil Procedure 9(b).

Rule 9(b) provides that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity" but that "[m]alice, intent, knowledge and other condition of mind of a person may be averred generally." Therefore, Rule 9(b) requires that a complaint allege fraud "with some specificity and state the time, place, and content of the alleged false representations, the method by which the representations were communicated, and the identities of the parties to those misrepresentations." Slaney v. Int'l Amateur Athletic Fed'n, 244 F.3d 580, 597 (7th Cir. 2001) (citing Goren v. New Vision Int'l, Inc., 156 F.3d 721, 726, 728-29 (7th Cir. 1998)).

Here, Hope has plead the instances of fraud with sufficient particularity in its proposed Amended Third-Party Complaint by identifying the time, place, and content of the alleged false representations. Hope avers that on or about March 30, 1989, in the offices of Local 179, which is located at 1000 N.E. I55 Frontage Road, Joliet, Illinois, Robert White, an officer of Local 179, orally represented to John Sinise, president of Hope Cartage, that Hope would only be required to pay dues to Local 179 and would not be required to contribute to the Funds if Hope executed a Collective Bargaining Agreement with Local 179.

As to the allegation of knowledge, Hope avers that those representations were false and that White made the statements with knowledge of their falsity in order to induce Hope to execute a Collective Bargaining Agreement. Although this alleged knowledge is averred generally, Rule 9(b) does not require a more particular allegation and thus the allegation is legally sufficient.

Nonetheless, I am staying the proceedings pertaining to Hope's third-party claim against Local 179 and White pending the full resolution of the Funds claims against Hope.

Accordingly, Hope's Motion for Leave to File Amended Third-Party Complaint is GRANTED.


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