MEMORANDUM OPINION AND ORDER
At issue in this case is a Phoenix life insurance policy purchased by a trust in the name of John and Patricia Nastav ("the Nastavs"). The trustees, the Nastavs' daughters ("the Trustees"), filed a complaint against Phoenix, in which they allege that the Nastavs improperly assigned the policy as collateral on a loan without the consent of the trustees. When the borrower defaulted on the loan, Phoenix provided payment to the bank in the amount of the policy and recorded it as a loan against the policy. The complaint seeks a declaratory judgment requiring Phoenix to remove the recorded loan from the policy and restore the face value.
Phoenix initiated a third-party complaint against the Nastavs based on their role in the assignment of the policy. The third-party complaint alleges fraudulent misrepresentation, negligent misrepresentation, unjust enrichment, indemnification, and contribution. The Nastavs filed an answer to the third-party complaint and subsequently file their counterclaims. After two amendments, the Nastavs filed their Third Amended Counterclaim alleging fraud (Count 1), intentional infliction of emotional distress (Count 2), abuse of process (Count 6), and violation of Illinois' Citizen Participation Act (Count 5), and voluntarily dismissing previously alleged Counts 3 and 4 against Phoenix. Phoenix now moves to dismiss the Nastavs' remaining counterclaims. For the following reasons, the Motion to Dismiss is granted.
A Motion to Dismiss under Rule 12(b)(6) requires that I analyze the legal sufficiency of the complaint, and not the factual merits of the case. Autry v. Northwest Premium Servs., Inc., 144 F.3d 1037, 1039 (7th Cir. 1998). I must take all facts alleged in Plaintiff's complaint as true and draw all reasonable inferences from those facts in favor of the Plaintiff. Caldwell v. City of Elmwood, 959 F.2d 670, 671 (7th Cir. 1992). Plaintiff, for her part, must do more than solely recite the elements for a violation; she must plead with sufficient particularity so that her right to relief is more than a mere conjecture. Bell Atl., Corp. v. Twombly, 550 U.S. 544, 555 (2007). Plaintiff must plead her facts so that, when accepted as true, they show the plausibility of her claim for relief. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Plaintiff must do more than plead facts that are "consistent with Defendants' liability" because that only shows the possibility, not the plausibility, of her entitlement to relief. Id. (internal quotations omitted).
Under Illinois law, the elements of fraud are: "(1) a false statement of material fact, (2) knowledge or belief of the falsity by the party making it, (3) intention to induce the other party to act, (4) action by the other party in reliance of the truth of the statements, and (5) damage to the other party resulting from such reliance." Indemnified Capital Investments, SA. v. R.J. O'Brien & Associates, Inc., 12 F.3d 1406, 1412 (7th Cir. 1993) (citation omitted); Board of Educ. v. A, C and S, Inc., 546 N.E.2d 580, 591 (1989). Pursuant to Federal Rule of Civil Procedure 9(b), the Nastavs' allegations of fraud must be pled with particularity.
In their Third Amended Counterclaim, the Nastavs, who are proceeding pro se,*fn1 allege one false statement by Phoenix asserting that the Nastavs signed a collateral assignment as trustees. This statement appears in Phoenix's Third Party Complaint against the Nastavs, and Phoenix allegedly knows this statement is false. The Nastavs maintain that Phoenix knew that this false statement would cause them to react negatively based on their reliance of the truth of the statement. In their response, the Nastavs elaborate that Phoenix made the alleged false statement in an attempt to induce them to file their own counterclaims against Phoenix. By inducing the Nastavs to participate in a protracted litigation, Phoenix would have time to search for evidence favorable to it. The Nastavs further explain that they relied on the truth of the statement as it was presented in the legal filing, assuming that Phoenix and its lawyers, both "reputable" entities, would only speak the truth. The Nastavs claim to have been damaged as a result, enduring lost time, sleep, worry, and costs.
Aside from setting forth conclusory allegations, the Nastavs fail to provide sufficient factual support for their allegations of Phoenix's intent to induce and the Nastav's reliance on the truth of the statements. The Nastavs plead no facts in support of their claim that Phoenix made the false statement in an attempt to induce the Nastavs to file a counterclaim, thereby buying time to look for evidence that the Nastavs claim doesn't exist. Furthermore, the record demonstrates that the Nastavs did not believe the false statement to be true. In their May 9, 2008 answer to Phoenix's Third Party Complaint, the Nastavs denied the alleged false statement and maintained that Phoenix misrepresented the facts and knew that the Nastavs did not and could not sign to authorize the release of funds. It was in denial of the statement, not in reliance of its truth, that the Nastavs filed their counterclaim. They have not succeeded putting forth anything other than conjecture as to Phoenix's intent to induce them into filing a counterclaim, and have failed to demonstrate the plausibility of their entitlement to relief. For these reasons, Count 1 is dismissed.
B. Count 2 - Intentional Infliction of Emotional Distress
To state a claim for Intentional Infliction of Emotion Distress ("IIED"), the Nastavs must allege (1) conduct by Phoenix that was extreme and outrageous; (2) Phoenix intended its conduct to cause severe distress or knew that there was a high probability that its conduct would inflict such distress; (3) Phoenix's conduct in fact caused severe emotional distress. Schiller v. Mitchell, 828 N.E.2d 323, 333 (Ill. App. 2005). Conduct is actionable only if it is "so outrageous in character and so extreme in degree, as to go beyond all possible bounds of decency[.]" Public Fin. Corp. v. Davis, 360 N.E.2d 765, 767 (Ill. 1976) (quoting Restatement (Second) of Torts § 46, cmt. D (1965).
According to the Nastavs, Phoenix is well aware that its third-party suit against them lacks merit and is unsupported by the evidence. It is the filing of the suit that the Nastavs claim to be extreme and outrageous. However, under Illinois law, "[a] person will not be liable where he has done nothing more than demand legal rights in a permissible way." Schiller, 828 N.E.2d at 335-36. In Khan v. American Airlines, the plaintiff customer failed to plead facts to support allegations of extreme and outrageous conduct where airline security guards entrapped him, arrested him, and had him criminally charged, with no factual basis to believe he had committed a crime. 639 N.E.2d 210, 211 (Ill. App. 1994) abrogation on other grounds recognized by Velez v. Avis Rent A Car Sys., Inc., 721 N.E.2d 652 (1999). Even if Phoenix's Third Party ...