Case Information
*1 Before B AUER , R IPPLE , and W OOD , Circuit Judges. W OOD , Circuit Judge.
This lawsuit arose out of a busi- ness partnership that went sour. Glen Hefferman, John St. Pierre, and attorney Yale P. Bass were all involved in an ill- fated car wash venture. Hefferman contended that St. Pierre stole $50,000 that Hefferman had invested in the car wash and deprived him of the value of his legal interest in the business; he also claimed that St. Pierre breached his fiduciary duty, committed fraud, and breached a contract. Bass, Hefferman charged, committed legal malpractice and aided, abetted, or otherwise participated in St. Pierre’s fraud and breach of fiduciary duty. The district court entered a default judgment in Hefferman’s favor against St. Pierre for $54,000. The court found, however, that Hefferman had failed to state a claim against Bass. *2 Hefferman appeals the dismissal of his complaint against Bass; St. Pierre is nowhere to be found and thus has not challenged the default judgment against him. We reverse and remand for further proceedings consistent with this opinion.
I
When reviewing a dismissal under Rule 12(b)(6), we
present the facts in the light most favorable to Hefferman.
See
County of McHenry v. Ins. Co. of the West
,
In July 2003, St. Pierre took Hefferman to Bass’s office and told Hefferman “that Bass would take care of the legal paperwork.” At St. Pierre’s request, Hefferman paid Bass’s legal fees, which came to more than a thousand dollars. Hefferman “understood from what St. Pierre told him that Bass was to represent both him and St. Pierre in rendering these services.” Bass assured Hefferman, “I’m your guy. I’ll make sure you’re protected and you get what’s been agreed.” Hefferman contends that Bass did no such thing. Not only did he fail to deliver on his prom- ises, but he also prepared a release used to trick Hefferman into relinquishing his interest in the business. St. Pierre showed up at Hefferman’s house in the middle of the night with that release and convinced Hefferman to sign it by showing him only the second page, which stated that St. Pierre indemnified and held Hefferman “harmless from any liability” under the lease of the car wash building. But the first page of the release, which Hefferman did not see when *3 he signed, indicated that Hefferman “had resigned as officer and stockholder” of the car wash. In the summer of 2004, not having received any profit on his investment nor a salary for working in the business, Hefferman visited St. Pierre and sought an accounting or the return of his investment. St. Pierre refused, telling Hefferman that he was not entitled to anything.
Hefferman sued St. Pierre and Bass under federal diversity jurisdiction. (Although Hefferman recovered only $54,000 in the default judgment, his original claim also sought damages for the value of his interest in the business and punitive damages; there is thus no reason to think that it did not exceed $75,000.) St. Pierre defaulted, and Bass moved to dismiss the claims against him under Federal Rule of Civil Procedure 12(b)(6). The district court found that Hefferman had failed to state any claim against Bass and dismissed the case. Hefferman appeals.
II
A
The only issue before us is whether Hefferman’s second
amended complaint states a claim or claims against Bass.
We begin our analysis with a reminder about the standards
for evaluating a motion under Rule 12(b)(6). As we noted
earlier, we review the facts in the light most favorable to
Hefferman. No claim should be dismissed unless “it is clear
that no relief could be granted under any set of facts that
could be proved consistent with the allegations.”
Hishon v.
King & Spalding
,
Rule 12(b)(6) does not stand alone. In
Swierkiewicz v.
Sorema N.A.,
534 U.S. 506 (2002), the Supreme Court
stated: “Rule 8(a)’s simplified pleading standard applies to
all civil actions, with limited exceptions. Rule 9(b), for
example, provides for greater particularity in all averments
*4
of fraud or mistake. This Court, however, has declined to
extend such exceptions to other contexts.”
Id.
at 513. The
Court also underscored the fact that “[o]ther provisions of
the Federal Rules of Civil Procedure are inextricably linked
to Rule 8(a)’s simplified notice pleading standard.”
Id.
See
McDonald v. Household Int’l, Inc
.,
Rule 8(a) requires only “(1) a short and plain statement of
the grounds upon which the court’s jurisdiction depends . . .
, (2) a short and plain statement of the claim showing that
the pleader is entitled to relief, and (3) a demand for
judgment for the relief the pleader seeks.” As the Supreme
Court pointed out in
Swierkiewicz,
This notice pleading regime stands in contrast to the
fact pleading Illinois has adopted. “While the plaintiff is not
required to set forth evidence in the complaint, the plaintiff
must allege facts sufficient to bring a claim within a legally
recognized cause of action, not simply conclusions.” See
Marshall v. Burger King Corp
.,
In this case, whether they meant to or not, both the parties and the district court took an approach that resem- bled the Illinois fact pleading rules far more than notice pleading of Rule 8. The district court criticized Hefferman’s pleadings under his legal malpractice claim for failing to allege facts supporting each of the elements of the claim. The court took the same approach with respect to Hefferman’s theory that Bass had aided and abetted St. Pierre’s swindling. But Rule 8 imposes no such requirement. See Kirksey v. R.J. Reynolds Tobacco Co. , 168 F.3d 1039, 1041 (7th Cir. 1999). That this case was brought under federal diversity jurisdiction, see 28 U.S.C. § 1332, and thus state law governs the substantive rights of the parties, makes no difference. The Federal Rules of Civil Procedure apply to all cases filed in federal court, no matter what the basis of subject matter jurisdiction. See Hanna v. Plumer, 380 U.S. 460 (1965). That fact makes Torres v. Divis , 494 N.E.2d 1227 (Ill. App. 1986), which both Hefferman and Bass discuss at length in their briefs, and the other Illinois cases they mention, utterly irrelevant. Torres is similar to this case in that it involves pleading in a legal malpractice and breach of contract case, but it is decided within the framework of Illinois’s fact pleading rules and therefore inapplicable. In federal court under Rule 8, the rules are simple: Notice is what counts. Not facts; not elements of “causes of action”; not legal theories.
B
Regardless of what Hefferman may be able to prove at
a later stage of this litigation, Count IV of Hefferman’s
second amended complaint certainly gives notice of the
malpractice claim. Under Illinois law, legal malpractice
requires (1) an attorney-client relationship, (2) a negligent
act or breach, (3) proximate cause, and (4) damages. See
*6
Webb v. Damisch
,
We recognize that there is always some danger when a
plaintiff puts facts in her complaint that she may plead
herself out of court, because the facts pleaded preclude
recovery. See
McCready,
2006 WL 1881142, at *4.
*7
Hefferman, however, did not fall into that trap. The district
court dismissed Hefferman’s claims because of the absence
of facts that demonstrated his potential to recover, not
because the facts pleaded were inconsistent with recovery.
In the absence of a pleading that clearly precludes a claim,
“[a]t this stage of the litigation, we are concerned not with
what plaintiff did or did not show, but rather with what
plaintiff did or did not allege.”
Brown v. Budz
,
C
The adequacy of Hefferman’s allegations with respect
to his aiding and abetting claim in Count V presents a more
difficult question. Hefferman alleges that Bass aided and
abetted St. Pierre in both St. Pierre’s breach of fiduciary
duties and in St. Pierre’s fraud. In the first place, Bass
argues that as a matter of law this circuit does not recog-
nize aiding and abetting as a tort, citing
Eastern Trading
Co. v. Refco, Inc
., 229 F.3d 617, 623 (7th Cir. 2000), and
Cenco Inc. v. Seidman & Seidman
, 686 F.2d 449, 452-53
(7th Cir. 1982). Bass is technically correct but misses the
point. What these opinions say is that aiding and abetting
is a theory for holding the person who aids and abets liable
for the tort itself; the rejection of aiding and abetting as an
independent tort is not the same thing as saying that there
is never liability for aiding and abetting. See
Refco
, 229
F.3d at 624 (“Law should be kept as simple as possible. One
who aids and abets a fraud is guilty of the tort of fraud
(sometimes called deceit); nothing is added by saying that
he is guilty of the tort of aiding and abetting as well or
instead.”);
Cenco
,
To the extent that the claim is that Bass aided and
abetted St. Pierre in committing fraud, however, there is a
higher pleading standard. Federal Rule of Civil Procedure
9(b) provides, “In all averments of fraud or mistake, the
circumstances constituting fraud or mistake shall be stated
with particularity.” This is a heightened pleading standard,
which requires more than the plain statement of the claim
of Rule 8. Rule 9(b) requires that facts such as “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 to the
plaintiff” be alleged in detail.
Bankers Trust Co. v. Old
Republic Ins. Co.
,
In this case, Hefferman’s complaint adequately iden- tifies the person making the misrepresentation—St. Pierre. We also have the time, the place, and the content of the misrepresentation. According to the complaint, the time was “some time in late August or early September” 2003 *9 “late at night—it was after midnight.” The place was Hefferman’s home in Chicago. The misrepresentation was St. Pierre’s statement that the release, an unsigned copy of which Hefferman attached to the complaint, only gave St. Pierre sole responsibility for the car wash build- ing lease as opposed to control over Hefferman’s interest in the business itself. The manner in which it was communi- cated was orally by St. Pierre to Hefferman at that middle- of-the-night meeting. Indeed, there are multiple misrepre- sentations alleged in Hefferman’s complaint; this is merely the central one. The district court found that Hefferman sufficiently alleged that Bass aided St. Pierre and that St. Pierre committed a wrongful act, but that “nothing in the allegations even suggests that Bass knew (as opposed to should have known) either that St. Pierre was engaged in a fraud or that Bass willingly joined in his scheme.” That point, however, relates to Bass’s “knowledge” or “condition of mind,” which as noted above Rule 9(b) permits to be alleged generally. The complaint does just that, when it says that “Bass’s participation in St. Pierre’s fraud and breach of fiduciary duty was knowing and intentional.” Furthermore, the complaint also specifically identifies the assistance provided—the drafting of the release itself. Thus, to the extent that Hefferman’s claims against Bass turn on fraud, we find that Hefferman’s complaint satisfies Rule 9(b).
III
For these reasons, the judgment of the district court is R EVERSED and this case is R EMANDED to the district court for proceedings consistent with this opinion.
A true Copy:
Teste:
________________________________ Clerk of the United States Court of Appeals for the Seventh Circuit USCA-02-C-0072—10-19-06