12(b)(6) Motions and Fraud Pleading Rules – A Case Note


Wojcik v. Interarch, Inc., 2013 WL 5904996 (N.D.Ill. 2013), provides a good summary of the factual allegations required to allege fraud and civil conspiracy claims.

The plaintiffs sued a national franchisor and its site development consultant for fraud and other business torts when their Saladworks franchise failed.  Defendants moved to dismiss all claims.

Held: motion granted in part; denied in part.

Reasons:  The Court first recited some key Federal court pleadings and motions rules:

A 12(b)(6) motion tests whether the complaint state a claim on which relief can be granted;

–  FRCP 8 notice pleading requires a complaint to contain sufficient factual matter that states a claim that is plausible on its face;

 a plaintiff doesn’t have to plead facts in his complaint that anticipate possible affirmative defenses  (FRCP 8(c)(1);

– FRCP 9(b) requires heightened pleading specificity for fraud and civil conspiracy claims including the ‘who, what, where, when and how’ of the fraud and the conspiracy;

– FRCP 9’s pleading specificity rules are designed to discourage a ‘sue first, ask questions later’ mentality and to account for the stigma attached to fraud-based claims;

– a negligent misrepresentation claim is not subject to FRCP 9’s elevated pleading rules;

– FRCP 12(b)(6) generally only looks at a complaint’s four corners except where the complaint either attaches or specifically refers to outside documents;

–  a court may consider exhibits to a 12(b)(6) motion if the exhibit supplements a document attached to the complaint or where the defendant relies on the exhibit for the ‘same purpose’ as a document attached to the complaint

*5-6, 11; FRCP 8, 9, 12.

Applying these rules, the Court struck several of defendants’ motion exhibits that either weren’t attached to or incorporated by reference in plaintiffs’ complaint. *8.

The Court then sustained the plaintiffs’ fraud claims against the franchisor defendants.

While a fraud plaintiff must specifically plead the “who, what, when, where and how” of the fraud, allegations of malice, intent, knowledge of falsity and subjective matters can be alleged generally.  FRCP 9(b).

Here, the plaintiffs fraud claims were detailed.  They specifically pled the defendants knowingly misrepresented and omitted material facts involving the restaurant’s projected profits, build-out and construction costs, and general operating expenses.  Taken together, the allegations satisfied the pleading requirements for a valid fraud claim.  Wojcik, *11.

The plaintiffs’ civil  conspiracy claims failed.

An Illinois civil conspiracy plaintiff must plead and prove: (1) an agreement to accomplish an unlawful purpose or a lawful purpose by unlawful means, (2) a wrongful act in furtherance of the agreement, and (3) injury to the plaintiffWojcik, *11.

The agreement is the foundation of the conspiracy and requires proof of a defendant’s knowing and voluntary participation in a “common scheme” to commit an unlawful act or lawful act in an unlawful manner. 

Accidental, inadvertent, negligent or haphazard conduct is not enough to impose conspiracy liability on a defendant.  The plaintiff must plead the agreement’s critical details – including the “who, what, where, when and how” – to survive a motion to dismiss.  *12.

The Court held that plaintiffs’ conspiracy claims were too conclusory.  The plaintiffs merely parroted the elements of conspiracy and failed to plead critical details of the defendants’ agreement or their “common scheme” to harm the plaintiffs.  At most, plaintiffs pled negligence or breach of contract; not a conspiracy. *12.


A court can consider external submissions on a 12(b)(6) motion where the challenged complaint incorporates or relies on an external document.  Wojcik also illustrates the required factual allegations that will satisfy Illinois state law fraud and civil conspiracy claims under Federal pleading rules.


Jane Austen You Ain’t! Guidance Counselor Loses First Amendment Suit


In Craig v. Rich Township High School District 227, et al. (12.3.13), a tenured high school guidance counselor and basketball coach pled himself out of court in his Section 1983 action alleging retaliation for self-publishing a book on relationship advice.  The coach claimed the defendant School District violated his First Amendment right to free expression by terminating him because of the book’s provocative themes.  The Seventh Circuit upheld the Illinois Northern District’s dismissal of the plaintiff’s lawsuit.

Plaintiff penned “It’s Her Fault”, an ostensible how-to book on adult relationships geared towards young women.  But much of the book consists of the author’s graphic depictions of his own sexual proclivities and exploits.

“It’s Her Fault” is complete with excruciatingly detailed anatomical references and sage (and paradoxical) advice like women should be submissive to their men yet also wield sex as a power source in their relationships.  The author also cautions women not to “go hoeing around” (we can’t have that now!!) but to experience some um, “variety” in their opposite sex encounters.

Plaintiff has his demons, though.  For while he modestly describes himself as “beyond the highest caliber of men!”, he still confesses a tendency to objectify women and a perpetual weakness for cleavage (cue ‘Debbie Downer’ ‘wah wah’ sound).

In his tract, the author also makes the sweeping generalization that women are too emotional and not logical enough for workable relationships.

I suppose it was no surprise then, that when the school board caught wind of plaintiff’s salacious literary offering, it fired him.  Plaintiff sued, claiming the school fired him in retaliation for exercising his First Amendment rights.

The Seventh Circuit upheld the Northern District’s dismissal of plaintiff’s claims and found that the school’s interest in serving its students in a non-sexualized atmosphere trumped the plaintiff’s right to free expression.

The Book Touches On a Matter of ‘Public Concern’

The court first found that Plaintiff’s book involved a matter of public concern under the First Amendment.  A First Amendment plaintiff must show his expression touches a matter of public concern.

“It’s Her Fault”‘s subject matter – adult relationship dynamics – does interest a large enough segment of society to merit First Amendment protection, the   Court said.

How so? Well, the public concern test doesn’t require the challenged speech to rise to the level of a profound life-and-death subject, such as the secrets of the universe or the nature of God (or something “orthonological” as the late David Foster Wallace might say).

All that’s required is that the topic appeal to some segment of society and be one that people might be interested in.

Here, the Court found that the book’s  adult relationships subject matter met the test and for proof pointed to the glut of relationship advice columns and self-help books that permeate our culture.

The School’s Interest in Restricting Speech Outweighs Plaintiff’s Interest in Publishing His Book

But the court ultimately found that the school was justified in firing plaintiff based on policy concerns.

A government defendant can restrict speech that involves a matter of public concern if the government can prove that the employee’s interest in commenting on the matter is “outweighed by the government’s interest in promoting effective and efficient public service.” 

An employer’s assessment of the possible havoc reeked by an employee’s challenged speech must be supported by tangible evidence and be more than mere speculation.

The Court found defendant’s concerns that plaintiff’s book would create an intimidating educational environment were well-founded.  As a coach and guidance counselor, the plaintiff held a position of trust and authority in relation to the students which made it likely the students would feel uncomfortable seeking advice from him.

The Court also noted that plaintiff’s blatant objectification of women in his book would likely make female students apprehensive about seeking  counseling services.

Because plaintiff’s book created such a sexually charged atmosphere, the court wrote,  it impeded the school’s ability to educate its students.  As a result, the defendants’ interest in avoiding a likely disruption in its services outweighed plaintiff’s free expression rights.

The Court also rejected plaintiff’s claim that the book’s content was protected because it had nothing to do with plaintiff’s employment and was done on plaintiff’s own time.  The Court noted the book made multiple references to plaintiff’s guidance counselor role, the book’s foreword was written by another teacher at the school and the acknowledgements section was replete with praise for specific students.

Since plaintiff directly linked himself  to the school,  his “my own time” argument failed.

Take-aways: Craig describes in detail the kind of expression that qualifies for public concern protection and the government interest that will override a public employee’s right to free expression.

Where a public school’s learning climate could be compromised due to a book’s inflammatory and hypersexual content, a person’s right to express himself can be curtailed.




Brannen v. Siefert: A (Legal Malpractice) Case Study (Ill. First Dist.)


The Featured Case: Brannen v. Siefert, 2013 IL App (1st) 122067, ¶ 52 (11.19.13)


The Facts: Plaintiffs – a land trustee and trust beneficiary – sued the Underlying Defendants, an attorney and his wife, for breach of a written real estate contract for the purchase of a home owned by the plaintiffs.  The strangely worded contract, drafted by Underlying Defendants, called for staggered payments of interest and principle over a several-year period to be credited towards the home’s purchase price.

The Underlying Defendants quickly breached and plaintiffs hired an attorney (the Former Attorneys) to collect the amounts owed under the contract.

The Former Attorneys (a solo practitioner and his professional corporation), unbeknownst to plaintiffs, declared a forfeiture of the contract by written notice to Underlying Defendants.  Several months later, the Underlying Defendants moved out.  At the time they vacated the property, the Underlying Defendants owed plaintiff about $150,000 and hadn’t made any payments for over two years.

The Underlying Case

Displeased with Former Attorneys’ performance, plaintiffs hired substitute counsel who filed a breach of contract suit against Underlying Defendants to recover past and future payments owed under the real estate contract.  The Underlying Defendants successfully moved to dismiss the lawsuit based on the Former Attorneys prior forfeiture notice.  The court found that the Underlying Defendants’ forfeiture remedy foreclosed a damages action by the plaintiffs.  The plaintiffs then sued the Former Attorneys for legal malpractice.

The Malpractice Suit

The thrust of plaintiff’s malpractice suit was that the Former Attorneys committed professional negligence by giving up plaintiffs’ contract rights without first consulting them and by failing to explain the legal effect of that remedial choice.  The Former Attorneys argued they did explain how a forfeiture would impact plaintiffs’ rights and that cancelling the contract was the proper remedy since plaintiffs’ primary goal was to retake the property; not recover damages.

After a trial, a jury entered judgment against the Former Attorneys for $199,500 and they appealed.

Held: Affirmed.  


In Illinois, a legal malpractice plaintiff must establish: (1) an attorney owed the plaintiff’s a duty arising from the attorney-client relationship; (2) the attorney breached that duty; (3) the attorney’s breach of duty proximately caused actual damages to the plaintiff.  Expert testimony is usually required to prove that an attorney breached his professional duties to his client.  ¶ 45, 61. 

A legal malpractice plaintiff must prove not only that he would have won the underlying case but that the underlying defendant was solvent enough to pay a judgment.  But the required solvency showing isn’t stringent: the plaintiff doesn’t have to prove a  defendant’s net worth but only needs to show the defendant’s ability to at least partially pay a judgment. ¶ 63.

The jury found the plaintiffs’ expert more believable than the Former Attorneys’.  Plaintiffs’ expert testified that contractual forfeiture was the wrong remedy since under the Illinois Forcible Entry and Detainer Act (the “Forcible Act”) a contract seller like plaintiffs can sue for both possession and money damages.  735 ILCS 5/9-102(a)(5), 9-209 (plaintiff can sue for possession and damages).  The plaintiffs’ expert also testified that by declaring a forfeiture – when both Illinois law and the subject real estate contract allowed multiple remedies – the Former Attorneys prevented the plaintiffs from recovering nearly $150,000 in money damages.  ¶¶ 46-49.

The Court also found that plaintiffs established the Underlying Defendants’ solvency.  The trial evidence demonstrated that the Underlying Defendants could at least partially pay a judgment based on their income and other assets.  ¶ 65.  Because the plaintiffs proved each element of their legal malpractice case, the First District affirmed the jury verdict for the plaintiffs.

Take-aways: (1) To win the legal malpractice ‘case within the case’, a malpractice plaintiff must prove he would have won the underlying case but doesn’t have to precisely prove the malpractice defendant’s net worth. It is enough to show that the defendant has a source of income and is able of paying all or part of a judgment; (2) The Forcible Act provides for possession and money damages to a contract home seller where a buyer breaches an installment sales contract; and (3) the forfeiture remedy should be exercised with extreme caution.  That’s because if you nullify a contract, it can bar a later action to recover money damages for breach of contract.