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Website is Anonymous: WENDLER & EZRA, P.C., Plaintiff, v. AIG, INC., AMERICAN INTERNATIONAL GROUP DATA CENTER, INC., AMERICAN INTERNATIONAL GROUP, INC., and UNKNOWN DEFENDANTS, Defendants. (United States of America)

WENDLER & EZRA, P.C., Plaintiff, v. AIG, INC., AMERICAN INTERNATIONAL GROUP DATA CENTER, INC., AMERICAN INTERNATIONAL GROUP, INC., and UNKNOWN DEFENDANTS, Defendants.
Cause No. 04-CV-641-WDS
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS
2005 U.S. Dist. LEXIS 16452

August 3, 2005, Decided
August 3, 2005, Filed
SUBSEQUENT HISTORY: Vacated by, Remanded by Wendler & Ezra, P.C. v. Am. Int’l Group, Inc., 2008 U.S. App. LEXIS 7517 (7th Cir. Ill., Apr. 9, 2008)

PROCEDURAL POSTURE: Plaintiff law firm filed suit against defendants, a corporation, its subsidiary, and unknown parties, alleging claims for defamation, tortious interference with advantageous economic relations, negligence, willful and wanton conduct, civil conspiracy, violation of the Consumer Fraud Act, negligent and fraudulent misrepresentation, and relaying false information. Defendants filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).

OVERVIEW: The firm specialized in representing truck drivers who were injured while loading and offloading cars from carrier trailers. Defendants provided insurance coverage for car hauler companies. An anonymous message was posted on an internet website frequented by truck drivers, stating that one of the attorneys from the firm was arrested and that doing business with the firm was a waste of time and money. The message was traced to the subsidiary. The court held that (1) the defamation claims were sufficiently pleaded because there was publication of the statement and the statement was defamatory per se, so that injury to reputation could be presumed; (2) the conspiracy claim had to be dismissed because the firm did not specify the parties involved or where the conspiracy took place; (3) the misrepresentation claims had to be dismissed because the firm did not allege that it relied on the statement but that the firm’s potential clients relied on it; and (4) the claim for relaying false information had to be dismissed because it was brought against unknown defendants and did not give enough detail about these defendants to provide notice of the claims against them.

OUTCOME: The court granted defendants’ motion to dismiss with regard to the claims for civil conspiracy, negligent and fraudulent misrepresentation, and relaying false information. The motion to dismiss was denied as to the remainder of the claims.

CORE TERMS: misrepresentation, defamation, conspiracy, notice, defamatory, expectancy, unknown, impute, per se, fraudulent, actionable, failure to state a claim, negligent misrepresentation, business relationship, website, message, law firm, civil conspiracy, reputation, internet, innocent, lawful, newspaper, teamster, posted, overt act, insurance coverage, false information, false statement, reasonable expectation
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HN1Go to this Headnote in the case. A party to a case may move for a dismissal of the complaint for failure to state a claim. Fed. R. Civ. P. 12(b)(6). When reviewing a Rule 12(b)(6) motion to dismiss, a court must assume that all of the factual allegations in the plaintiff’s complaint are true and draw all reasonable inferences from those allegations in the plaintiff’s favor. A motion to dismiss for failure to state a claim should be granted only if it appears beyond doubt that the plaintiff can prove no set of facts in support of their claim which would entitle them to relief. The purpose of a motion to dismiss under Rule 12(b)(6) is to review the adequacy of the pleadings, not the factual basis for a claim. When ruling on a motion to dismiss, the court generally should consider only the allegations of the complaint. Given this standard, the court must determine if the plaintiff has sufficiently put the defendants on notice to allow them to respond to the plaintiff’s claims.  More Like This Headnote

HN2Go to this Headnote in the case. The law of defamation is well-settled in Illinois: A statement is considered defamatory if it tends to cause such harm to the reputation of another that it lowers that person in the eyes of the community or deters third persons from associating with him. Certain limited categories of defamatory statements are deemed actionable per se because they are so obviously and materially harmful to the plaintiff that injury to the plaintiff’s reputation may be presumed.  More Like This Headnote

HN3Go to this Headnote in the case. To support a claim for defamation under Illinois law, a plaintiff must show that the defendant made a false statement about the plaintiff, that there was an unprivileged publication to a third party by the defendant, and the publication damaged the plaintiff. Statements can be either defamatory per quod, i.e., requiring extrinsic facts to explain the defamatory character of the statements, or defamatory per se.  More Like This Headnote

HN4Go to this Headnote in the case. Under Illinois law, the communication of interoffice reports within a corporation constitutes a publication for defamation purposes.  More Like This Headnote

HN5Go to this Headnote in the case. Under Illinois law, four categories of statements are considered defamatory per se: (1) words that impute the commission of a crime, (2) words that impute infection with a loathsome communicable disease; (3) words that impute an inability to perform or a want of integrity in the discharge of duties of office or employment; or (4) words that prejudice a party, or impute lack of ability, in his or her trade, profession, or business.  More Like This Headnote

HN6Go to this Headnote in the case. A statement that is defamation per se is considered so obviously and materially harmful to the plaintiff that injury to the plaintiff’s reputation may be presumed.  More Like This Headnote

HN7Go to this Headnote in the case. Even, where a defamatory statement falls into one of the categories recognized to be actionable per se, the statement will not be found to be actionable if it is reasonably capable of an innocent construction. In applying the innocent construction rule, courts consider the statement in context, giving the words and their implications their obvious and natural meaning. As construed, if a statement may reasonably be innocently interpreted or reasonably be interpreted as referring to someone other than the plaintiff, it cannot be actionable per se. Determining whether a statement is reasonably susceptible to an innocent interpretation is a question of law.  More Like This Headnote

HN8Go to this Headnote in the case. In order to sustain a cause of action for tortious interference with an advantageous economic relation, a plaintiff must plead and prove: (1) his reasonable expectation of entering into a valid business relationship; (2) the defendant’s knowledge of the plaintiff’s expectancy; (3) purposeful interference by the defendant that prevents the plaintiff’s legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference.  More Like This Headnote

HN9Go to this Headnote in the case. The Federal Rules of Civil Procedure do not require that a plaintiff’s complaint, in setting forth a cause of action for tortious interference with an advantageous economic relation, allege the specific third party or class of third parties with whom he claims to have had a valid business expectancy.  More Like This Headnote

HN10Go to this Headnote in the case. A civil conspiracy involves two or more persons combining to accomplish either a lawful purpose by unlawful means or an unlawful purpose by lawful means. The elements of a civil conspiracy are (1) an agreement between two or more persons; (2) to participate in an unlawful act, or a lawful act in an unlawful manner; (3) an injury caused by an unlawful overt act performed by one of the parties; and (4) the overt act was done pursuant to and in furtherance of the common scheme. Although notice pleading standards apply, a bare allegation of a conspiracy is not enough.  More Like This Headnote

HN11Go to this Headnote in the case. The Illinois Consumer Fraud Act is subject to the heightened pleading requirements of Fed. R. Civ. P. 9(b) and claims under the Act must be stated with particularity. In order to comply with this standard, a plaintiff must state the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated.  More Like This Headnote

HN12Go to this Headnote in the case. To make a claim for negligent misrepresentation under Illinois law, a plaintiff must show: (1) a false statement of material fact; (2) carelessness or negligence in asserting the truth of the statement by the party making it; (3) an intention to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; (5) damage to the other party resulting from such reliance; and (6) the party making the statement is under a duty to communicate accurate information. The only difference between fraudulent and negligent misrepresentation is the state of mind required by the defendant. Fraudulent misrepresentation requires knowledge or belief of the falsity of the statement by the party making it. The United States Court of Appeals for the Seventh Circuit requires that the plaintiff have relied on the misrepresentation of which he is complaining. Further, there is no authority for maintaining a suit for negligent misrepresentation on the ground that other people were deceived by the misrepresentation and as a consequence injured the plaintiff.  More Like This Headnote

HN13Go to this Headnote in the case. Although there is not a general prohibition against suing “unknown defendants” nevertheless, the pleadings must be sufficiently detailed so as to provide notice to opposing parties of the claims against them. Including anyone involved without further identification does not provide sufficient notice to those potential defendants of possible claims against them.  More Like This Headnote

COUNSEL: [*1] For Wendler & Ezra, P.C., Plaintiff: Charles W. Armbruster, III, Lakin Law Firm, Wood River, IL.

For AIG, Inc., American International Group Data Center, Inc., American International Group Inc., Defendants: Stephen J. Maassen, Hoagland, Fitzgerald et al., Alton, IL.

JUDGES: WILLIAM D. STIEHL, DISTRICT JUDGE.

OPINION BY: WILLIAM D. STIEHL

MEMORANDUM & ORDER

STIEHL, District Judge:

Before the Court is defendants’ motion to dismiss Plaintiff’s’ complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Plaintiff is a law firm in Madison County Illinois, consisting of attorneys Brian M. Wendler and D. Jeffrey Ezra which specializes in personal injury litigation. The complaint alleges that defendant AIG (also known as American International Group Click for Enhanced Coverage Linking Searches) is an insurance company and insurance underwriting company, specializing in industrial insurance coverage, and that defendant American International Group  Click for Enhanced Coverage Linking SearchesData Center, Inc. Click for Enhanced Coverage Linking Searches is the wholly owned subsidiary and agent of AIG.

The plaintiff law firm specializes in representing truck drivers, known as “car haulers” who may be injured during the process [*2] of loading and offloading automobiles from carrier trailers. These potential clients are typically members of the teamsters union and are employed by union carriers. Defendants provide insurance coverage to many of the car hauler companies.

BACKGROUND

On or about July 18, 2002, an anonymous message was posted on a website frequented by teamsters, www.teamster.net which included a newspaper clipping that identified Brian M. Wendler, 41, as having been arrested and taken to the Madison County Jail. The message posted on the website allegedly stated: “Just sending along a newspaper clip from our local newspaper those of you in the Illinois/Missouri area. Don’t make the same mistake me and my husband did-it’s a waste of time and money.” The complaint further alleges that this message was traced to an IP address registered to American International Group  Click for Enhanced Coverage Linking SearchesData Center, Inc. Click for Enhanced Coverage Linking Searches, and that it was, therefore, not posted by a current or former client of Plaintiff’s.

The Complaint is framed in twelve counts. Counts I-III seek recovery against the defendants based on defamation theories. Count IV alleges tortious interference with advantageous economic relations with current or future [*3] clients. Counts V and VI seek recovery for negligence. Count VII seeks recovery for willful and wanton conduct; Count VIII for civil conspiracy; Count IX for violation of the Consumer Fraud Act; and Counts X and XI for Negligent and Fraudulent Misrepresentation. Count XII, which seeks damages for relaying the false information to one or more of the named defendants, but is directed to “unknown defendants” who are believed to reside in the States of Illinois or Missouri.

DISCUSSION

HN1Go to the description of this Headnote.A party to a case may move for a dismissal of the complaint for failure to state a claim. Fed. R. Civ. P. 12(b)(6). When reviewing a Rule 12(b)(6) motion to dismiss, a court must assume that all of the factual allegations in the plaintiff’s complaint are true and draw all reasonable inferences from those allegations in the Plaintiff’s favor. MCM Partners v. Andrews-Bartlett & Associates., 62 F.3d 967, 972 (7th Cir. 1995). A motion to dismiss for failure to state a claim should be granted only if “it appears beyond doubt that the plaintiff can prove no set of facts in support of [their] claim which would entitle [them] to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)[*4] The purpose of a motion to dismiss under Rule 12(b)(6) is to review the adequacy of the pleadings, not the factual basis for a claim. When ruling on a motion to dismiss, the court generally should consider only the allegations of the complaint. Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 661 (7th Cir. 2002). Given this standard, the Court must determine if Plaintiff’s have sufficiently put defendants on notice to allow them to respond to plaintiff’s claims.

COUNTS I-III — Defamation Claims Under Illinois Law

Counts I-III seek recovery for defendant’s alleged defamation. HN2Go to the description of this Headnote.The law of defamation is well-settled in Illinois:

A statement is considered defamatory if it tends to cause such harm to the reputation of another that it lowers that person in the eyes of the community or deters third persons from associating with him. Certain limited categories of defamatory statements are deemed actionable per se because they are so obviously and materially harmful to the plaintiff that injury to the Plaintiff’s reputation may be presumed.

Van Horne v. Muller, 185 Ill. 2d 299, 705 N.E.2d 898, 903, 235 Ill. Dec. 715 (1998) (citations omitted) (quoted in Parker v. House O’Lite Corp., 324 Ill. App. 3d 1014, 756 N.E.2d 286, 292, 258 Ill. Dec. 304 (Ill. App. Ct. 2001)). [*5] HN3Go to the description of this Headnote.To support a claim for defamation under Illinois law, a plaintiff must show that the defendant made a false statement about the plaintiff, that there was an unprivileged publication to a third party by the defendant, and the publication damaged the plaintiff. Gibson v. Philip Morris, Inc., 292 Ill. App. 3d 267, 685 N.E.2d 638, 643, 226 Ill. Dec. 383 (Ill. App. Ct. 1997). See also; Parker, 756 N.E.2d at 292. “Statements can be either defamatory per quod, i.e., requiring extrinsic facts to explain the defamatory character of the statements, or defamatory per se.” Gibson, 685 N.E.2d at 643 (citing Kolegas v. Heftel Broadcasting Corp., 154 Ill. 2d 1, 607 N.E.2d 201, 206, 180 Ill. Dec. 307 (1992)). Here, there clearly was publication of the statement when it was put on an internet website chat page. See Jones v. Britt Airways, Inc., 622 F. Supp. 389, 391-92 (N.D. Ill.1985) HN4Go to the description of this Headnote.(applying Illinois law and holding that the communication of interoffice reports within a corporation constitutes a publication for defamation purposes). HN5Go to the description of this Headnote.Under Illinois law,

four categories of statements . . . are considered defamatory per se: (1) words that impute the commission of a crime, (2) words [*6] that impute infection with a loathsome communicable disease; (3) words that impute an inability to perform or a want of integrity in the discharge of duties of office or employment; or (4) words that prejudice a party, or impute lack of ability, in his or her trade, profession, or business.

Myers v. Levy, 348 Ill. App. 3d 906, 808 N.E.2d 1139, 1147, 283 Ill. Dec. 851 (Ill App. Ct. 2004). Clearly, this statement falls within the first and fourth category of statements, i.e. “words that impute the commission of a crime,” “words that prejudice a party, or impute lack of ability, in his or her trade, profession, or business.” Id. HN6Go to the description of this Headnote.This type of statement, defamation per se, is considered so obviously and materially harmful to the plaintiff that injury to the plaintiff’s reputation may be presumed. Bryson v. News Am. Publs., 672 N.E.2d 1207, 1213, 174 Ill. 2d 77, 220 Ill. Dec. 195 (Ill. 1996); Harrison v. Chicago Sun-Times, Inc., 341 Ill. App. 3d 555, 793 N.E.2d 760, 766, 276 Ill. Dec. 1 (Ill. App. Ct. 2003).

Defendants contend that these statements consisted merely of opinion, and therefore are not actionable. HN7Go to the description of this Headnote.Even, where a statement falls into one of the categories recognized to be actionable per se, the statement will not [*7] be found to be actionable if it is reasonably capable of an innocent construction. Bryson, 672 N.E.2d at 1215; Harrison, 793 N.E.2d at 771. In applying the innocent construction rule, courts consider the statement in context, giving the words and their implications their obvious and natural meaning. Bryson, 672 N.E.2d at 1215-16. As construed, if a statement “may reasonably be innocently interpreted or reasonably be interpreted as referring to someone other than the plaintiff, it cannot be actionable per se.” Bryson, 672 N.E.2d at 1215. Determining whether a statement is reasonably susceptible to an innocent interpretation is a question of law. Id.

Accordingly, the Court FINDS that the plaintiff has sufficiently plead the defamation claims in Counts I-III to withstand a motion to dismiss, and the motion as to these counts is DENIED.

COUNT IV — Interference with Economic Advantage

Count IV alleges tortious interference with an advantageous economic relation. HN8Go to the description of this Headnote.In order to sustain this cause of action,

a plaintiff must plead and prove: (1) his reasonable expectation of entering [*8] into a valid business relationship; (2) the defendant’s knowledge of the Plaintiff’s expectancy; (3) purposeful interference by the defendant that prevents the Plaintiff’s legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference.

Larry Karchmar, Ltd. v. Nevoral, 302 Ill. App. 3d 951, 707 N.E.2d 223, 228, 236 Ill. Dec. 378 (Ill. App. Ct. 1999). HN9Go to the description of this Headnote.“The Federal Rules do not require that [the Plaintiff’s] complaint allege the specific third party or class of third parties with whom he claims to have had a valid business expectancy.” E&J Gallo Winery v. Morand Bros. Beverage Co., 247 F. Supp. 2d 979, 987 (N.D. Ill. 2003) (quoting Cook v. Winfrey, 141 F.3d 322, 328 (7th Cir. 1998)). Plaintiff alleged that the law firm had a reasonable expectation of entering into a valid business relationship with members of the car haul industry; that defendant knew of this expectancy; that the defendant purposefully interfered with Plaintiff’s expectancy, preventing that expectancy from ripening into a valid business relationship; and that plaintiff has sustained damage as a result.

Given the federal pleading [*9] standards, this claim sufficiently puts defendant on notice of the claim which must be defended, and therefore, the motion to dismiss Count IV pursuant to Rule 12(b)(6) is DENIED.

COUNTS V AND VI — Negligence Claims

Count V alleges that the defendant negligently submitted, and failed to retract, the publication on the internet. Count VI alleges several acts by defendants which allegedly breached a duty owed to plaintiff, e.g. that defendants had a duty to refrain from the dissemination of false information and that the defendants negligently breached this duty by posting the message, thereby proximately causing the injuries sustained by plaintiff. These allegations sufficiently put the defendants on notice of the claims against them and, the motion to dismiss these counts is DENIED.

COUNT VII — Willful and Wanton Conduct

Count VII alleges that the defendants acted willfully and wantonly by acting with “either a deliberate intention to harm plaintiff or with an utter indifference to or conscious disregard for the welfare of plaintiff.” Again, this Count sufficiently places the defendants on notice of the claim plaintiff is asserting and [*10] the motion to dismiss is DENIED.

COUNT VIII — Civil Conspiracy

Count VIII alleges that the defendants engaged in a civil conspiracy, presumably under Illinois state law. HN10Go to the description of this Headnote.“A civil conspiracy involves two or more persons combining to accomplish either a lawful purpose by unlawful means or an unlawful purpose by lawful means.” Vance v. Chandler, 231 Ill. App. 3d 747, 597 N.E.2d 233, 236, 173 Ill. Dec. 525 (Ill. App. Ct. 1992). The elements of a civil conspiracy are “(1) an agreement between two or more persons; (2) to participate in an unlawful act, or a lawful act in an unlawful manner; (3) an injury caused by an unlawful overt act performed by one of the parties; and (4) the overt act was done pursuant to and in furtherance of the common scheme.” Id. Although notice pleading standards apply, a bare allegation of a conspiracy is not enough. See, Ryan v. Mary Immaculate Queen Center, 188 F.3d 857, 860 (7th Cir. 1999) (holding that bare allegations of conspiracy without defining the form or scope of the conspiracy will not satisfy the notice pleading standards); Belkow v. Celotex Corp., 722 F. Supp. 1547, 1551 (N.D. Ill. 1989). Here the plaintiff has [*11] only claimed a conspiracy, but has not specified the parties involved, where the conspiracy took place, its purpose or plan. Accordingly, defendants’ motion to dismiss Count VIII is GRANTED, and Count VIII is DISMISSED for failure to state a conspiracy claim.

COUNT IX — Consumer Fraud Act

Count IX alleges that the defendants violated the Consumer Fraud Act by their actions. HN11Go to the description of this Headnote.The Consumer Fraud Ace is subject to the heightened pleading requirements of Fed. R. Civ. P. 9(b) and must be “stated with particularity.” In order to comply with this standard, “a plaintiff must state the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated.” Gallagher Corp. v. Mass. Mut. Life Ins. Co., 940 F. Supp. 176, 180 (N.D. Ill 1996). Given that plaintiff has incorporated prior counts, plaintiff has met this heightened pleading requirement. There is sufficient information in the count to identify that the person making the misrepresentation is alleged to have been an agent or employee of the company, that [*12] the misrepresentation occurred on July 18, 2002 on an Internet website, and the exact content of the statement is included in the complaint. Accordingly, the Court DENIES defendants’ motion to dismiss Count IX.

COUNTS X AND XI — Negligent and Fraudulent Misrepresentation

Counts X alleges negligent misrepresentation. HN12Go to the description of this Headnote.To make a claim for negligent misrepresentation under Illinois law, plaintiff must show:

(1) a false statement of material fact; (2) carelessness or negligence in asserting the truth of the statement by the party making it; (3) an intention to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; (5) damage to the other party resulting from such reliance; and (6) . . . the party making the statement is under a duty to communicate accurate information.

Fox Assoc’s., Inc. v. Robert Half Intern., Inc., 334 Ill. App. 3d 90, 777 N.E.2d 603, 606, 267 Ill. Dec. 800 (Ill. App. Ct. 2002). The only difference between fraudulent and negligent misrepresentation is the state of mind required by the defendant. Bd. of Educ. of City of Chicago v. A.C. and S., Inc., 131 Ill. 2d 428, 546 N.E.2d 580, 591, 137 Ill. Dec. 635 (Ill. 1989). Fraudulent [*13] misrepresentation, as alleged in Count XI requires, “knowledge or belief of the falsity of the statement by the party making it.” Id. The Seventh Circuit requires that the plaintiff “have relied on the misrepresentation of which he is complaining.” Great Cent. Ins. Co. v. Insurance Servs. Office, 74 F.3d 778, 785 (7th Cir. 1996). Further, “there is no authority for maintaining a suit for negligent misrepresentation on the ground that other people . . . were deceived by the misrepresentation and as a consequence injured the plaintiff.” Id.

Here, plaintiff has only alleged that potential, unidentified clients, relied on the statement, not that plaintiff relied on the statement. Therefore, defendants’ motion to dismiss Counts X and XI is GRANTED and Counts X and XI are DISMISSED for failure to state a claim.

COUNT XII — Unknown Defendants

Count XII re-alleges all prior claims against unknown defendants. Given that plaintiff has not included sufficient detail of those potential unknown defendants this claim cannot stand. As the court stated in Hastings v. Fidelity Mortg. Decisions Corp., 984 F. Supp. 600, 605 (N.D. Ill. 1997)[*14] HN13Go to the description of this Headnote.although there is not a general prohibition against suing “unknown defendants” nevertheless, the “pleadings must be sufficiently detailed so as to provide notice to opposing parties of the claims against them.” Id. (dismissing as insufficient, a claim against unknown defendants who were identified as corporate officers or managers who were “personally knowledgeable and responsible for the fraudulent practices described in the Complaint.” Id. at 605). Here, plaintiff seeks to include anyone involved without further identification — which does not provide sufficient notice to those potential defendants of possible claims against them. Accordingly, defendants’ motion to dismiss Count XII is GRANTED, and Count XII is DISMISSED.

CONCLUSION

Accordingly, the Court GRANTS in part and DENIES in part defendants’ motion to dismiss. The Court GRANTS defendants motion to dismiss as to Counts VIII, X, XI and XII and they are DISMISSED pursuant to Fed. R. Civ. P. 12(b)(6). The Court DENIES the remainder of defendants’ motion.

IT IS SO ORDERED.

DATED: August 3, 2005

[*15] WILLIAM D. STIEHL

DISTRICT JUDGE

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