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YTB Travel Network of Illinois, Inc. v. McGlaughlin

March 5, 2010

YTB TRAVEL NETWORK OF ILLINOIS, INC. AND YTB MARKETING, INC., PLAINTIFFS,
v.
KENT MCGLAUGHLIN, KIMBERLY MCGLAUGHLIN, WILLIAM HOFFMAN, JACQUES JOHNSON AND LYNETTA JOHNSON, DEFENDANTS.



The opinion of the court was delivered by: Donald G. Wilkerson United States Magistrate Judge

ORDER

Currently pending before the Court is Plaintiffs' Motion to Strike Defendants' Counterclaims or, in the alternative, for a More Definite Statement Pursuant to FED R. CIV. P. 12(e) and (f). For the reasons set forth below, the motion (Doc. 24) is DENIED.

BACKGROUND

Plaintiffs are an online, multi-level international travel business. Plaintiffs train, support, and recruit Referring Travel Agents ("RTAs") throughout the United States and internationally to sell travel packages, airline tickets, and other service through their online stores. Plaintiffs employ Independent Marketing Representatives ("REPs") to recruit RTAs and other REPs. An REP who has successfully recruited a significant number of RTAs and other REPs may become a Director, who receives bonuses based on enrollment of RTAs and REPs they recruited. Directors must enter into a Director Agreement which contains, inter alia, exclusivity, non-solicitation, and confidentiality provisions. Plaintiffs allege Defendants breached their Director Agreements by violating these provisions. They seek injunctive relief.

United States District Judge J. Phil Gilbert granted Plaintiffs' Motion for a Preliminary Injunction and denied the Defendants' Motion to Dismiss on June 9, 2009 (Doc. 17). On June 15, 2009, Defendants filed an answer to the complaint (Doc. 22) raising the following counterclaims:

10. Plaintiffs have breached the "Director Agreement" with Defendants in that Plaintiffs have failed to comply with the terms and conditions relating to the payment of bonuses and commissions to Directors, more specifically the terms and conditions set forth in Section 2. DIRECTOR BONUS provision of the "Director Agreement."

11. Plaintiffs have breached the "YTB Rep Director Bonus Program" Agreement which is incorporated into the "Director Agreement" as Exhibit "A" in that the Plaintiffs have failed to comply with the terms and conditions of Section 3. DIRECTOR ACHIEVEMENT LEVEL BONUSES provision of the "YTB Rep Director Bonus Program" of the "Director Agreement."

15. Plaintiffs have breached the "Rep Policies and Procedures Agreement" with Defendants in that Plaintiffs have failed to comply with the terms and conditions of Section 7. BONUSES AND COMMISIONS provision of the "Rep Policies and Procedures Agreement."

16. Plaintiffs have breached the "Rep Policies and Procedures Agreement" which is attached as Exhibit "D" to the Plaintiffs' Complaint in that Plaintiffs have failed to pay commissions to Counterclaim Plaintiffs in accordance with the Compensation Plan set forth in the "Rep Policies and Procedures Agreement."

21. Plaintiffs breached the "RTA Policies and Procedures Agreement" in that Plaintiffs failed to pay commissions to Counterclaim Plaintiffs in accordance with the commission structure referenced in Section 7.

BONUSES AND COMMISIONS

In the Motion to Strike the Counterclaims or for a More Definite Statement, Plaintiffs allege that Defendants' counterclaims are impermissibly vague and ambiguous and, thus, Plaintiffs are unable to respond. More specifically, Plaintiffs assert that Defendants' counterclaims do not identify the individual claims or damages sought by each individual Defendant and that it is impossible to ascertain from the pleading the injury alleged by the Defendants (Doc. 24). In response, Defendants maintain that their counterclaims comply with FED. R. CIV. P. 8(a)(2) which requires a pleading to "contain a short and plain statement of the claim showing that the pleader is entitled to relief" (Doc. 25).

ANALYSIS

The Federal Rules of Civil Procedure require only that a pleading provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "Specific facts are not necessary; the statement must only 'give the defendant fair notice of what the... claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 555 (2007)). The complaint must, however, "actually suggest that the plaintiff has a right to relief, by providing allegations that raise a right to relief above the speculative level." Bridges v. Gilbert, 557 F.3d 541, 546 (7th Cir. 2009) (quoting Windy City Metal Fabricators & Supply, Inc. v. CIT Technology Fin. Servs., Inc., 536 F.3d 663, 667 (7th Cir. 2008)). It must allege "enough facts to state a claim to relief ...


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