Stradford v. Zurich Ins. Co

Facts: π sued ∆ after ∆ failed to pay for a claim that occurred as soon as the π resumed making payments. ∆ counterclaimed for fraud without specificity.

Issue: Is ∆'s counterclaim pleading appropriate under Twombly and Iqbal?

Rule: FRCP 9(b)—you have to plead specific circumstances constituting fraud or mistake in a fraud claim.

Holding: No, because ∆ didn't plead specific circumstances with Twiqbal specificity.

Reasoning: The primary purpose of 9(b) is to afford the accused litigant fair notice of the fraud claim and the factual background upon which it is based. ∆'s counterclaims fail because they didn't give such facts.

Judgment: ∆s are granted leave to ament their counterclaim.

Notes: fraud is treated separately because we enter into contracts/agreements so often, and all of them are attackable under fraud.