MEMORANDUM OPINION AND ORDER
Instituto Nacional de Comercialización Agrícola (“Indeca”), a quasi-national corporation organized under Guatemalan law, has as part of its responsibility the purchase of foodstuffs and agricultural staples for the Guatemalan people on international markets. It sues a group of defendants for an allegedly fraudulent scheme in which Indeca was bilked of over $5 million in its attempted purchase of 6,000 metric tons of black beans that proved to be nonexistent. 1
Continental Illinois National Bank and Trust Company of Chicago (“Continental’) has filed an amended answer, in part asserting 12 arguments labeled “affirmative defenses.” Indeca now moves to strike all those defenses as insufficiently pleaded or insufficiеnt as a matter of law. For the reasons stated in this memorandum opinion 4 and order, Indeca’s motion is granted in part and denied in part.
Indeca’s Claimed Facts 2
Indeca sought to purchase 6,000 metric tons of black beans from Rumex International, Inc. (“Rumex”). To facilitatе that purchase Indeca negotiated with Banco de Guatemala (“Banco”) for-the issuance of a letter of credit (the “Letter”). Under the provisions of the Letter (like all letters of credit), Banco as issuing bank was required to render payment when presented with documents in complete conformity with the Letter’s requirements. Because the seller of the beans was located in the United States, Banco engaged Continental’s services to confirm the Letter.
On September 5, 1980 several Rumex principals appeared at Continental and presented various documents as being in claimed conformity with the Letter’s requirements. Upon review, Continental employees observed some of the documents werе nonconforming. After changes were made in the documents, on September 9 Continental determined a complete set of documents in full conformance with the Letter’s requirements had now been sub
Banco in turn transmitted the documents to Indeсa, which received them September 24. On September 30 Indeca signed a statement confirming that the documents conformed to the Letter’s requirements and authorizing payment to Rumex.
Time passed, and the beans (already -overdue by Septеmber 30) never arrived in Guatemala. In February 1981 Indeca’s attorneys communicated with Continental’s attorneys and stated orally the documents .negotiated by Continental and then approved by Banco and Indeca had not in fact conformed to the Letter.
Indeca brought suit against several defendants, including Continental, to recover the money paid for the nonexistent beans. Indeca charges Continental with (1) fraudulent conduct in knowingly assisting Rumex in the fraudulent procurement of paymеnt of the Letter (Complaint Count IV) and (2) negligence in accepting nonconforming documents (Complaint Count III).
Pleading Affirmative Defenses
Fed.R.Civ.P. (“Rule”) 8(c) requires that some defenses be pleaded affirmatively. Its list of 19 specific items is not exhaustive: In addition, a party must set forth “аny other matter constituting an avoidance or affirmative defense.” What the Rule terms “an avoidance” — what the common law used to term a “confession and avoidance” or “shift and avoidance” — is a more restrictive concеpt than loose practice would have it. See Black’s Law. Dictionary 55, 125 (5th ed. 1979).
This Court has discussed that problem at some length in
Bobbitt v. Victorian House, Inc.,
Accоrdingly this Court must determine as to each of Continental’s “affirmative defenses” (for convenience, cited by number simply “AD — ”):
1. whether it is properly designated as an affirmative defense;
2. if so, whether it is adequately pleaded under Rules 8 and 9; and
3. whether, even if the first two questions are answered “yes,” it is legally insufficient under a standard identical to that in Rule 12(b)(6): Can Continental prove any set of circumstances in support of the “affirmative defense” that would defeat Continental’s liability?
Lirtzman v. Spiegel, Inc.,
AD 1
Continental alleges Indeca is barred from recovering because Indeca has defrauded Continental, one of Rule 8(c)’s specifically enumerated affirmative defenses. Moreover Continental has alleged fraud with the requisite particularity, thereby complying with Rule 9(b).
Darling & Co. v. Klouman,
AD 2
Here Continental says Indeсa is es-topped by its own fraud. Estoppel too is an enumerated Rule 8(c) 'affirmative defense, so no technical bar to its assertion exists. But again Continental’s assertion of estoppel is legally insufficient, for detrimental reliance is an essential part of estoppel. 18 I.L.P. Estoppel §§ 22-23. Because Continental was reimbursed by Ban-co, it did not rely on Indeca’s representations to its detriment (AD If 32). AD 2 is also stricken as legally insufficient.
AD 3
Continental asserts Indeca’s recovery is barred by its unclean hands and because it is in
in pari delicto
with Continental. Though not enumerated in Rule 8(c), both are proper as affirmative defenses under the standards specified earlier. Continental has set forth a statement of facts in support of both defenses (AD §§ 24-34, 45), in compliance with Rule 8(a). If Continental succeeds in proving Indeca engaged in wrongdoing in presenting documents to Continental, Indeca could be barred from recovering any damages against Continental.
Kuehnert v. Texstar Corp.,
AD 4
Continental alleges Indeca caused its own harm by entering into illegal contracts with Rumex and Banco. However, that precise question is already put in issue by Continental’s denial of Indeca’s allegation that Continental caused Indeca’s harm (Answer to Amended Complaint HIT 65, 66). Issues raised by denial are not proper affirmative defenses (though if the matter is unclear, as is not the case here, the defense may be left to stand). 2A Moore’s Federal Practice ¶ 8.27[3], at 8.25. AD 4 is stricken as an improper affirmative defense.
AD 5
Continental says Indeca cannot recover for Continental’s negligence in performing the Continental-Banco contract, because Indeca fraudulently induced Continental to enter the contract by non-disclosure of the scheme to defraud Continental. That has the same flaw as AD 1, and AD 5 is similarly stricken.
AD 6
Continental alleges Indeca’s contributory negligеnce. That defense was originally listed in Rule 8(c) at a time when nearly every jurisdiction held it wholly defeated a plaintiff’s claim. Now however Illinois no longer applies that doctrine. Aim's
v. Ribar,
AD 7
Continental alleges the Rumex-Indeca contract was procured in violation of the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 78dd~2. It claims public policy precludes a foreign government from recоvering damages for violation of such a contract.
FCPA prohibits domestic concerns from bribing foreign officials to assist such concerns in obtaining business. 15 U.S.C. § 78 dd-2(a)(l). Violation of public policy has the same confession-and-avoidance quality аs Rule 8(c)’s enumerated affirmative defenses. In addition, Continental’s statement of operative facts asserts Rumex’ bribe of an Indeca employee to obtain the contract (AD ¶¶ 12-18, 35).
True enough, Indeca points out (1) FCPA’s criminal prohibition is against the domestic concern and not the foreign agency and (2) no case law upholds Continental’s ability to base, its rights on the statute. Those factors appear to implicate the analysis of
Cort v. Ash,
AD 8 ■
Continental alleges Indeca has released its claims against Continental, another enumerated Rule 8(c) defense. Once more that facially permissible affirmative defense is legally insufficient. In Illinois, a release is a contract by which one person abandons claims against another.
Whitehead v. Fleet Towing Co.,
AD 9
Continental says Indeca waived its rights against Continental, also a proper affirmative defense under Rule 8(c). Continental’s factual allegations also comply with Rule 8(a) (AD ¶¶ 28-34). Finally, it appears Continental may be able to prove some set of circumstances constituting Indeca’s intentional relinquishment of its known right to hold Continental liable for the discrepancies in documentation.
Pastrana v. Federal Mogul Corp.,
■ AD 10
Continental alleges Indeca’s negligence is greater than Continental’s, thus blocking Indeca’s recovery. Illinois has adopted the “pure” form of comparative negligence (basing damages on relative degrees of fault) and not its “modified” version (which forecloses recovery entirely when the plaintiff is more than 50% negligent).
Alvis,
AD 11
Continental alleges Indeca’s laches in pursuing its claim prevents its now seeking relief. Though permissible under Rule 8(c), that defense is not supported by the pleaded facts. Laches involves unreasonable and inexcusable delay in filing suit.
Lingenfelter v. Keystone Consolidated Industries, Inc.,
AD 12
Continental asserts Indeca’s fail-' ure to state a claim upon which relief can be granted. That contention has already been determined adversely to Continental. Opinion,
Conclusion
AD 1, 2, 4-6, 8 and 10-12 are stricken. Only AD 3, 7 and 9 survive.
Notes
. Like P-K4, this paragraph has become the "standard opening” for this Court’s several opinions in this case.
. In the main this statement of facts has been lifted from this Court’s January 21, 1982 memorandum opinion and order (the "Opinion”),
. Although Continental asserts Illinois law may not apply, it provides ¡no guidance on what other law should apply.
. Though Continental asserts the matter as an affirmative defense, conceptually it appears to pose the same question as whether to permit a private cause of action.