United States District Court, W.D. Wisconsin
OPINION & ORDER
D. PETERSON District Judge.
a replevin action arising out of defendants Tom Spensley
Trucking, Inc. and Tom Spensley's alleged breach of a
contract that they had with plaintiff BCL-Equipment Leasing
LLC. BCL has two motions before the court: a motion to
dismiss defendants' counterclaims, Dkt. 32, and a motion
to strike defendants' affirmative defenses, Dkt. 29.
Defendants agree that the court should dismiss some of their
counterclaims and strike some of their affirmative defenses.
But they oppose the remaining aspects of BCL's motions.
After reviewing the parties' submissions, the court will
dismiss some, but not all, of defendants' counterclaims
and will strike each of defendants' affirmative defenses.
court has discussed the facts of this case in two earlier
orders. Dkt. 23 and Dkt. 26. The short version is that in
December 2014, Spensley Trucking agreed to make monthly
payments to BCL for the use of several pieces of trucking
equipment. Spensley himself personally guarantied these
obligations. In October 2015, Spensley Trucking stopped
making payments. A few months later, BCL engaged in
"self-help" by going onto Spensley's property,
disabling some of the pieces of trucking equipment, and
removing other pieces. BCL eventually filed suit to recover
Spensley Trucking's past due payments and the rest of the
order addresses first BCL's motion to dismiss
defendants' counterclaims, then BCL's motion to
strike their affirmative defenses.
asserted counterclaims against BCL for: (1) conversion; (2)
declaratory judgment; (3) trespass; (4) tortious interference
with contract; (5) breach of contract; and (6) breach of the
covenant of good faith and fair dealing. BCL moves to dismiss
these counterclaims pursuant to Federal Rule of Civil
Procedure 12(b)(6). The standard for dismissing a
counterclaim under Rule 12(b)(6) is the same as the standard
for dismissing an affirmative claim: the court
"construe[s] the counterclaim in the light most
favorable to [defendants], accepting as true all well-pleaded
facts and drawing reasonable inferences in their favor."
United Cent. Bank v. Davenport Estate LLC, 815 F.3d
315, 318 (7th Cir. 2016). The court will dismiss a
counterclaim only if defendants have failed to "allege
sufficient factual matter to state a claim to relief that is
plausible on its face." Firestone Fin. Corp. v.
Meyer, 796 F.3d 822, 826 (7th Cir. 2015) (citations and
internal quotation marks omitted).
responding to BCL's motion, defendants voluntarily
dismiss their counterclaims for breach of contract and for
breach of the covenant of good faith and fair dealing. Dkt.
39, at 8. The court will grant these aspects of BCL's
motion as unopposed. But defendants have alleged plausible
counterclaims for declaratory judgment, conversion, trespass,
and tortious interference with contract. The court will deny
these aspects of BCL's motion.
counterclaim for declaratory judgment provides the foundation
for their theory of the case and for some of their other
counterclaims. The parties' contract includes unambiguous
language indicating that it is a lease and not a secured
transaction. Dkt. 24-3, at 6. Despite this language,
defendants ask the court to declare that the parties entered
into a secured transaction and to construe the contract
accordingly. Dkt. 25, ¶¶ 71-75. Defendants contend
that the court's "determination regarding the true
nature of the parties' transaction will have a drastic
effect on [d]efendants' rights in the collateral, "
which are "markedly different if the agreement between
the parties constituted a lease or a secured
transaction." Dkt. 39, at 2-3. Specifically, defendants
contend that if the agreement was a secured transaction, then
they had a right to redeem the collateral and BCL did not
have a right to breach the peace in attempting self-help.
Id. at 5-6. At this point, defendants'
counterclaim for declaratory judgment looks like a long shot.
whether defendants can succeed on this counterclaim, and
whether their overarching theory of the case is correct, are
issues for another day. For now, defendants have alleged an
actual controversy over how to interpret the parties'
contract. These allegations are sufficient to state a claim
for declaratory judgment. See Klinger v. Conan Doyle
Estate, Ltd., 755 F.3d 496, 499 (7th Cir.), cert.
denied, 135 S.Ct. 458 (2014) ("Declaratory
judgments are permitted but are limited-also to avoid
transgressing Article III-to ‘case[s] of actual
controversy, ' 28 U.S.C. § 2201(a), that is, actual
legal disputes."). The court will deny BCL's motion
to dismiss this counterclaim.
counterclaims for conversion and trespass arise out of their
contention that BCL did not have a right to come onto
Spensley's property and disable or remove any pieces of
trucking equipment. See Dkt. 25, ¶¶ 62-70,
76-81. BCL moves to dismiss these counterclaims because the
parties' agreement acknowledged that its agents could
"[p]eacefully repossess the Property without court order
and [defendants] will not make any claims against [BCL] for
damages or trespass or any other reason." Dkt. 24-3, at
6. According to BCL, defendants cannot succeed on their
counterclaims because the language of the agreement
explicitly authorized the actions that BCL took. But again,
this argument goes to the merits of the case, not to the
legal sufficiency of defendants' counterclaims.
prove a claim for conversion under Illinois law, a plaintiff
must establish that "(1) he has a right to the property;
(2) he has an absolute and unconditional right to the
immediate possession of the property; (3) he made a demand
for possession; and (4) the defendant wrongfully and without
authorization assumed control, dominion, or ownership over
the property." Cirrincione v. Johnson, 184
Ill.2d 109, 703 N.E.2d 67, 70 (1998).Likewise, a defendant is
liable for trespass under Illinois law when he enters onto a
plaintiff's land "without permission, invitation, or
other right." Benno v. Cent. Lake Cty. Joint Action
Water Agency, 242 Ill.App.3d 306, 609 N.E.2d 1056, 1061
(1993). Here, defendants have pleaded facts to support the
elements of these claims. They allege that BCL injured them
by coming onto Spensley's property without a legal right
to do so, remained there after Spensley asked them to leave,
and disabled and removed their trucking equipment. These
claims turn on whether the parties' contract authorized
BCL's agents to try to recover the trucking equipment and
on the circumstances under which those agents went onto
Spensley's property. Contrary to BCL's assertions,
the pleading stage is not the appropriate time to resolve
these merits-based issues, which involve disputes of fact.
The court will deny BCL's motion to dismiss these
remaining counterclaim for tortious interference with
contract arises out of their allegations that they had
arranged to sell one of the trucks. Dkt. 25, ¶ 83. BCL
had inadvertently acquired the title document to the truck
(presumably when taking title to the other pieces of
equipment as part of the parties' transaction), but it
delayed in returning the document to defendants. Id.
¶¶ 84-85. The delay caused ...