United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
S. Shah United States District Judge
(and counter-claimant) Donald Koziel entered into an
employment agreement with plaintiff (and counter-defendant)
ABC Acquisition Company, LLC (the parties refer to ABC as
Aetna Bearing Company, a name it uses to conduct business).
That agreement automatically renewed each year unless either
party sent timely written notice of their intent not to
renew. Aetna issued timely notice and eventually sued Koziel,
advancing claims not at issue here. Koziel has raised an
affirmative defense and filed a counterclaim, both of which
allege that Aetna breached the agreement (in part by
violating an implied covenant of good faith and fair dealing)
when it issued notice of nonrenewal and refused to pay him
severance. Aetna says that the contract distinguishes between
nonrenewal and termination, and there is no obligation to pay
severance for a nonrenewal. It moves to strike Koziel's
affirmative defense and dismiss his counterclaim.
complaint must contain a short and plain statement that
plausibly suggests a right to relief. Ashcroft v.
Iqbal, 556 U.S. 662, 677-78 (2009); Fed.R.Civ.P.
8(a)(2). In ruling on a motion to dismiss, although a court
must accept all factual allegations as true and draw all
reasonable inferences in the plaintiff's favor, the court
need not do the same for legal conclusions or
“threadbare recitals” supported by only
“conclusory statements.” Ashcroft, 556
U.S. at 678, 80-82. The plaintiff must provide “more
than labels” or “a formulaic recitation of a
cause of action's elements, ” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007), and the complaint
must “contain either direct or inferential allegations
respecting all the material elements necessary to sustain
recovery under some viable legal theory.” Id.
at 562. When ruling on a motion to dismiss, the court may
consider the allegations in the counterclaim and documents
attached thereto. Geinosky v. City of Chicago, 675
F.3d 743, 745 n.1 (7th Cir. 2012); N. Tr. Co. v.
Peters, 69 F.3d 123, 128 (7th Cir. 1995).
to strike are disfavored, and affirmative defenses will only
be struck when they are “insufficient on the face of
the pleadings.” Heller Fin., Inc. v. Midwhey Powder
Co., 883 F.2d 1286, 1294 (7th Cir. 1989). See
also Fed. R. Civ. P. 12(f) (“The court may strike
from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.”)
entered into an employment agreement with Aetna on April 11,
2016.  at 27, ¶ 5. That agreement had an initial
term of one year and “automatically renew[ed] for
consecutive one (1) year periods unless (a) either party
provide[d] the other party thirty (30) days advance written
notice of nonrenewal before the end of the then-current term,
or (b) sooner terminated in accordance with the terms of this
Agreement.” [19-1] § 2.
different section of the agreement ([19-1] § 5.4) reads,
§ 5.4 Termination Without Cause or Good Reason.
At any time the Company shall have the right to terminate the
Employee's employment hereunder without Cause by written
notice to the Employee, and the Employee shall have the right
to terminate the Employee's employment hereunder for Good
Reason (defined below) by written notice to the Company;
provided, however, that in either case the Company shall (a)
… (b) subject to the execution by the Employee of a
release agreement containing standard terms in the form
generally used by the Company, pay to the Employee, in
monthly installments consistent with the Company's normal
payroll schedule during the twelve (12) month period
following termination (the end of such period, the
“Severance Date”), an amount equal to twelve (12)
months of the Employee's Base Salary at the time of
March 6, 2018, Aetna told Koziel in writing that it would not
renew his employment agreement.  at 28, ¶ 7; [19-2].
The then-current term expired around April 11, 2018.
See  at 27, ¶ 5; [19-2]. Nonetheless,
Koziel continued working for Aetna until that September. 
at 28, ¶ 9. Koziel alleges that Aetna served the written
notice in bad faith,  at 28, ¶ 10, abused their
contractual discretion in violation of the covenant of good
faith and fair dealing, id. ¶ 12, and breached
the agreement by failing to pay him severance. Id.
¶ 14. His counterclaim does not allege that he executed
the release agreement described in § 5.4(b), nor that
all conditions precedent to the enforcement of the agreement
have occurred or been performed.  at 11;  at 28-29.
employment agreement is governed by Illinois law. Aetna
argues that Illinois law applies,  at 5 n.1, and Koziel
does not cite any law other than Illinois's. McCoy v.
Iberdrola Renewables, Inc., 760 F.3d 674, 684 (7th Cir.
2014) (parties can waive the choice of law issue by failing
to assert it, so long as they “submit to Illinois law
and rel[y] solely on it”) (quoting Lott v.
Levitt, 556 F.3d 564, 568 (7th Cir. 2009)). The
employment agreement is in accord. [19-1] § 10
(“[t]his Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois”).
a “breach of the covenant of good faith and fair
dealing is not an independent cause of action” outside
of the insurance context, APS Sports Collectibles, Inc.
v. Sports Time, Inc., 299 F.3d 624, 628 (7th Cir. 2002),
breach of contract is. See, e.g., Pepper Const.
Co. v. Palmolive Tower Condominiums, LLC, 2016 IL App
(1st) 142754, ¶ 85. Koziel's counterclaim (titled,
“Breach of Contract, ”  at 27) cites a breach
of the explicit terms of the agreement (as well as a breach
of the covenant of good faith and fair dealing). Id.
at 28, ¶¶ 12, 14. See also  at 4
(Koziel's briefing clarifies that his claim is based on
an explicit breach of the agreement).
said, the counterclaim fails to state a claim for breach of
the explicit terms of the agreement. Those terms were not
ambiguous. The agreement lasted for automatically renewing
one-year terms until either party provided thirty-days'
written notice of non-renewal. [19-1] § 2. Written
notice was provided on March 6, 2018,  at 28, ¶ 7;
[19-2], a little more than thirty days before the second term
ended. See  at 28, ¶ 7; [19-2]
(“Please accept this … formal written notice by
ABC Acquisition Company, LLC not to renew the Employment
Agreement.”). The notice made no mention of
termination, said that it was a notice “not to
renew” the ...