United States District Court, N.D. Illinois
February 3, 2004.
IFC CREDIT CORPORATION, Plaintiff
B. BRAUN MEDICAL, INC., Defendant
The opinion of the court was delivered by: MILTON SHADUR, Senior District Judge
Just after IFC Credit Corporation ("IFC") had filed its multicount
Complaint against B. Braun Medical, Inc. ("Braun"), this Court issued a
December 10, 2003 memorandum order sua sponte because of the patent
insufficiency of IFC's fraud-based claims: their noncompliance with Fed.
R. Civ. P. ("Rule") 9(b). Then before the outside due date established by
that memorandum order for IFC's curative allegations in that respect,
Braun filed a January 20 motion and supporting memorandum seeking the
dismissal of IFC's Complaint under Rule 12(b)(6). At the
previously-scheduled status hearing date the following week, this Court
dealt with that motion orally, denying it in all but one respect:
1. As to all but IFC's negligent misrepresentation
claim under Illinois law, Braun's motion depended
on its counsel's mistaken views as to the nature of
the Rule 8(a) notice pleading regime and as to the
standard applicable for Rule 12(b)(6) purposes.
2. Because the negligent misrepresentation claim
clearly foreclosed by Illinois caselaw, that
portion of the Complaint (its Count II) was
Now IFC has tendered a First Amended Complaint ("FAC") that has dropped
the negligent misrepresentation claim and has fleshed out the fraud-based
claims considerably. This Court will not now express any view as to the
sufficiency of that effort, for Braun's counsel can be counted on to
raise any claimed deficiencies in that regard. Instead this sua sponte
memorandum order will focus on one facet of the FAC that, though it may
pass muster (as did the same aspect of the original Complaint) in notice
pleading terms, has been rendered troublesome by the newly detailed
In this Court's oral ruling rejecting the bulk of Braun's dismissal
motion, it ruled that IFC's "successor-in-interest" allegations
(Complaint ¶¶ 15-16, now FAC ¶ 14) were adequate in notice
pleading terms. At the same time, even though there is of course no
requirement to plead evidence in federally-filed complaints, this Court
could not help but be puzzled by the absence of any document, or any
reference to a document, that created such successor-in-interest status.
So far as the Complaint's documentation was concerned, the rights sought
to be enforced by IFC were vested in Spectrum Medical Leasing, Inc.
("Spectrum") or Old Kent Financial Services Corporation ("Old Kent") in
conformity with the "successors and assigns" provisions
of the two agreements involved. But nothing other than the
barebones "successor-in-interest" allegations put IFC into the loop.
This Court of course continues to adhere to the basic principle that
conclusions including conclusions of law are an integral
part of the notice pleading regime (see App. ¶ 2 to State Farm
Mut. Auto. Ins. Co. v. Riley, 199 F.R.D. 276, 279 (N.D. Ill. 2001)).
But a red warning flag goes up (1) when the fleshed-out fraud claim (FAC
Count III) is based upon allegations (see FAC ¶ 44) that Braun took
wrongful actions "without IFC's knowledge or consent" or entered into
side agreements "never disclosed or provided to IFC," with nothing being
alleged as to any notice to Braun that IFC had indeed become a
successor-in-interest, and (2) when none of the 11 exhibits attached to
the FAC has any mention of IFC rather than Spectrum or Old Kent.
Under the circumstances IFC owes more to Braun and this Court than has
been provided to date. On or before February 17, 2004 IFC is ordered to
file a suitable amendment to the FAC (not a self-contained Second Amended
Complaint) that provides more specifics as to what provides IFC with the
requisite successor-in-interest standing to assert its claims.
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