MEMORANDUM OPINION AND ORDER

Suzanne B. Conlon, United States District Judge.

Anicom, Incorporated ("Anicom") brings this action for breach of contract, unjust enrichment, and conversion against NetWolves Corporation ("NetWolves"). NetWolves asserts the following affirmative defenses: (1) failure to state a claim upon which relief can be granted; (2) estoppel; (3) unclean hands; (4) fraudulent inducement; (5) failure of consideration. Anicom moves for partial summary judgment pursuant to Fed.R.Civ.P.56 and Local Rule 56.1 and moves to strike and dismiss NetWolves' affirmative defenses pursuant to Rule Fed.R.Civ. p. 12(f).

BACKGROUND

Anicom is a distributor of wire, cable, and connectivity products. NetWolves' 56.1(b)(3) Response to Anicom's Rule 56.1(a)(3) Statement of Facts ("Netwolves 56.1(b)") at ¶ 1. NetWolves is a manufacturer of various software and manufactured products. Id. at ¶ 2.

The parties negotiated a distribution agreement and a warrant agreement in December 1998 and January 1999. Id. at ¶¶ 5-6. These agreements were executed on January 18, 1999. Id. at ¶¶ 7-8. Under the distribution agreement, Anicom was to distribute NetWolves' FoxBox network interface product for a period of five years. Id. at ¶¶ 5, 26. Under the warrant agreement, NetWolves granted Anicom a future right to purchase 300,000 shares of NetWolves' common stock. Id. at ¶¶ 6, 11. Anicom had initially wanted free shares, but eventually agreed to pay $1.00 per share. Id. Anicom issued a check to NetWolves for $300,000 on January 19, 1999. Id.

Anicom's rights were to vest in 100,000 share increments on each of the first three anniversaries of the warrant agreement Id. The corporation could exercise its rights anytime after they vested by executing a subscription agreement and paying an additional $5.00 per share. id. at 12-13. Anicom also had the option of receiving its shares on a cashless basis, meaning it would not pay the additional $5.00 per share and would receive fewer shares as a result. Id. at ¶ 22. The warrant agreement states Anicom's unvested portion of its NetWolves' stock rights would vest immediately if NetWolves terminates the distribution agreement. Id. at ¶ 19. There is no language in the warrant agreement that gives Net Wolves the right to terminate the agreement if Net Wolves believes Anicom breached the distribution agreement. Id. at ¶ 20.

On January 18, 2000, Anicom executed the subscription agreement. Id. at ¶ 22. Anicom chose to receive its shares on a cashless basis, meaning it would be entitled to 74,842 shares rather than 100,000 under the warrant agreement. Id. However, NetWolves refuses to deliver any shares of NetWolves common stock to Anicom. Id. at ¶ 23. NetWolves contends that Anicom is not entitled to the shares because Anicom breached the distribution agreement. Id. at ¶ 23; NetWolves Response to Anicom' s Motion For Partial Summary Judgment ("NetWolves SJ Resp.") at 1. NetWolves claims that the distribution agreement served as partial consideration for the warrant agreement. Id.

DISCUSSION

I. Anicom's motion for partial summary judgment

Anicom moves for partial summary judgment on two issues that would, if resolved in Anicom's favor, preclude NetWolves from using Anicom's alleged breach of the distribution contract as a defense. Anicom asks this court to find that (1) the warrant agreement is clear and unambiguous, and (2) an alleged breach of the distribution agreement cannot provide contractual justification for NetWolves' breach of the warrant agreement.

A. Summary Judgment Standard

Summary judgment is appropriate when the moving papers and affidavits show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); King v. National Human Resource Committee, Inc., 218 F.3d 719, 723 (7th Cir. 2000). Once a moving party has met its burden, the nonmoving party must go beyond the pleadings and set forth specific facts showing there is a genuine issue for trial. Fed.R.Civ.P. 56(e); Silk v. City of Chicago, 194 F.3d 788, 798 (7th Cir. 1999). The court considers the record as a whole and draws all reasonable inferences in the light most favorable to the party opposing the motion. Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th Cir. 2000). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Insolia v. Philip Morris. Inc., 216 F.3d 596, 599 (7th Cir. 2000).

B. Clarity of the warrant agreement

Anicom contends that the warrant agreement is clear and unambiguous. The interpretation of the warrant and distribution agreements is be governed by New York law, pursuant to a valid choice of law clause contained in both agreements. See Anicom, Inc. v. NetWolves Corp., 00 C 2088 (August 4, 2000). Whether a contract is ambiguous is a question of law. ESPN, Inc. Office of the Commissioner of Baseball, 76 F. Supp.2d 383. 402 (S.D.N.Y. 1999). "Ambiguity is determined by looking within the four corners of the document, not to outside sources." Kass v. Kass, 696 N.E.2d 174, 180 (N.Y.Ct.App. 1998).

To support its argument that the distribution agreement provides partial consideration for the warrant agreement, NetWolves points to the following language in the warrant agreement: "NetWolves Corporation . . . for an aggregate purchase price of $300,000 and other good and valuable consideration . . . "NetWolves SJ Resp. at 9. NetWolves contends that the phrase "and other good and valuable consideration" is ambiguous and that the parties intended to refer to Anicom's performance under the distribution agreement with this phrase. However, when reading this phrase in light of the words that follow it, NetWolves' argument is unpersuasive. The entire phrase reads" . . . and other good and valuable consideration, all of which the Corporation acknowledges as being received." Anicom's 56.1, Ex. 2A at 1.

At the time this agreement was executed, Anicom could not have provided all of its consideration under the distribution agreement. The distribution agreement obligated Anicom to distribute NetWolves' product for a period of five years. The paragraph at issue in the warrant agreement stated that Anicom had already provided the consideration. If performance under the distribution agreement was part of the consideration for the warrant agreement, then the latter would not have stated that all consideration was provided. Therefore, this court cannot find that the boilerplate language of "and any other good and valuable consideration" refers to Anicom's performance under the distribution agreement. The warrant agreement's discussion of consideration for the deal is not ambiguous. The consideration for the stock was clearly the $300,000 that Anicom had already paid.

C. Relationship between the warrant agreement and distribution agreement

The issues of whether Anicom and NetWolves intended the warrant agreement to be fully integrated and whether the agreements should be read together are moot. These issues were only relevant if the distribution agreement could serve as partial consideration for the warrant agreement. As discussed above, NetWolves cannot establish that the distribution agreement provides partial consideration for the warrant agreement.

II NetWolves' affirmative defenses

A court may strike "any insufficient defense or any redundant, immaterial, impertinent or scandalous matter." Fed.R.Civ.P. 12(f). Motions to strike are rarely granted because they are considered a drastic measure. Heller Financial, Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989). "A defense should not be stricken if it is sufficient as a matter of law or it presents questions of law or fact that the court should hear." General Electric Capital Corp. v. Munson Marine, Inc., 1992 WL 24067 (N.D. Ill. 1992).

In evaluating whether an affirmative defense should be stricken, the court must determine: "(I) whether the matter is appropriately pleaded as an affirmative defense; (2) whether it is adequately pleaded . . . and (3) whether it is legally sufficient to state a claim under the Rule 12 (b)(6) standard." Id. In order to be adequately pleaded, each affirmative defense must set forth a "short and plain statement of the nature of the defense. Rule 8(a) Fed.R.Civ.P.

Each of NetWolves affirmative defenses fails to meet the technical requirements of Rule 8(a). For the defenses of failure to state a claim, unclean hands, and failure of consideration, Net Wolves merely lists the defense and provides no short statement to explain the basis of its defense.

To plead estoppel as an affirmative defense, the defendant must allege that "(1) a party acts; (2) another party reasonably relies on those acts; and (3) the latter party thereby changes his position for the worse." Id. Not only did NetWolves fail to make these specific allegations, but it also failed to provide any factual basis for this defense. To properly plead a fraud defense, a defendant must allege that (1) the plaintiff made a false representation of a material fact; (2) thought the statement was false; and (3) made the statement to induce the defendant to act. Regensburger v. China Adoption Consultants, Ltd., No. 96 C 3519, 1997 WL 156492 (N.D. Ill. March 31, 1997). A defendant must plead the facts surrounding the allegations with particularity. Fed.R.Civ.P. 9(b). NetWolves provides no factual basis to support its claim that Anicom intended to make a false representation. Moreover, NetWolves does not even allege that it relied on any statements or acts by Anicom, let alone provide any factual support.

Even though NetWolves might be able to correct some of the technical problems with its affirmative defenses, each defense must be dismissed with prejudice. It would be highly prejudicial to Anicom for this court to allow NetWolves to correct any technical problems at this point. Discovery closed on September 6, 2000, and all dispositive motions were due on that date. This court already granted NetWolves leave to file its answer after the September 6th deadline. There is certainly no justification for allowing NetWolves to amend its affirmative defenses when Anicom would not have an opportunity to respond or conduct discovery.

CONCLUSION