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Reis Robotics USA, Inc. v. Concept Industries, Inc.

United States District Court · Civil Procedure

Civil Proceduremotions to strikeaffirmative defensesRule 12(b)(6)Rule 8 pleadingcounterclaimsRule 12(f)Rule 8

Facts

Reis sold Concept a robotic laser cutting machine and related fixtures under written contract documents, and later sued for an unpaid balance under the agreement. Concept answered, asserted affirmative defenses, and filed counterclaims alleging that Reis had represented before and during performance that the machine would cut parts in 60-70 seconds, but later admitted cycle times of 150-195 seconds. Concept also alleged it never authorized manufacture of certain fixtures without final design approval and that several of its counterclaims arose from the machine's inability to achieve the represented cycle time. Reis challenged the sufficiency of the defenses, answer, and counterclaims.

Issue

Whether Concept's affirmative defenses and portions of its answer were sufficiently pleaded under the Federal Rules, and whether Concept's counterclaims stated claims upon which relief could be granted. More specifically, the court considered the effect of a non-reliance clause, the mend the hold doctrine, the Moorman economic loss doctrine, and the permissibility of pleading equitable theories alongside contract claims at the pleading stage.

Rule

An affirmative defense must be a true affirmative defense, must provide a short and plain statement giving notice of its basis, and, when grounded in fraud, must satisfy Rule 9(b); bare conclusory labels or mere restatements of denials are insufficient. Under Rule 12(b)(6), dismissal is improper unless it appears beyond doubt the pleader can prove no set of facts entitling relief; at the pleading stage, inconsistent and alternative theories may be pleaded, a non-reliance clause does not automatically bar fraud claims absent direct contractual contradiction, mend the hold does not bar inconsistent pleading, and negligent misrepresentation seeking only economic loss is barred where the defendant is not in the business of supplying information.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Maple Circuit Systems, a Wisconsin manufacturer, sued Redstone Fabrication in federal court in Chicago for unpaid amounts under a supply agreement. In its answer, Redstone listed as an affirmative defense only: "The complaint fails to state a claim upon which relief can be granted," without identifying any count, allegation, or defect.

If Maple moves to strike that defense, how should the court most likely rule?

Explanation. The majority permitted "failure to state a claim" to be raised in an answer, but held that the defense must still satisfy Rule 8 by giving notice of the basis of the asserted infirmity. A naked recitation of the Rule 12(b)(6) standard, without identifying how the complaint is deficient, is insufficient and should be stricken without prejudice. (Derived from Reis Robotics USA, Inc. v. Concept Industries, Inc. (n.d.).)