Webb, Katharine v. Playmonster Group, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
KATHARINE E. WEBB,
Plaintiff,
v.
PLAYMONSTER GROUP, LLC,
Defendant.
OPINION and ORDER
25-cv-231-jdp
Plaintiff Katharine Webb is suing defendant Playmonster Group, LLC for firing her in
violation of Title VII of the Civil Rights Act of 1964 and the Family and Medical Leave Act
(FMLA). Playmonster moves to dismiss the case as untimely.
Webb admits that she filed this lawsuit after her statutory deadlines. But she says that
Playmonster is estopped from asserting a statute of limitations defense because she filed a
timely lawsuit against Playmonster in 2023, but Playmonster convinced her to sue a different
entity, Playmonster LLC. See Webb v. Playmonster LLC, No. 23-cv-442-jdp (W.D. Wis.). To
avoid confusion, the court will refer to Playmonster LLC as Old Playmonster and Playmonster
Group LLC as New Playmonster.
The 2023 lawsuit resulted in a default judgment against Old Playmonster, but the
judgment was not enforceable because Old Playmonster is no longer a going concern. So now
Webb seeks to hold New Playmonster liable for Title VII and FMLA violations under a theory
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of successor liability, alleging that New Playmonster acquired Old Playmonster’s assets,
continued its operations, and employed most of the same people. 1
For the purpose of its motion to dismiss, New Playmonster does not dispute that it
qualifies as Old Playmonster’s successor under federal law. The sole question raised by New
Playmonster’s motion is whether Webb has adequately pleaded estoppel in her complaint.2
The court concludes that she has, so the motion to dismiss will be denied.
ANALYSIS
Under Title VII, a plaintiff has 90 days after receiving her right-to-sue letter to file a
lawsuit. 42 U.S.C § 2000e-5(f)(1). Under the FLMA, the plaintiff must file her lawsuit within
two years of the alleged unlawful conduct, or three years if the violation was willful. 29 U.S.C.
§ 2617(c). In this case, Webb alleges that the unlawful conduct occurred in 2021 and that she
received her right-to-sue letter before she filed her 2023 lawsuit.
A failure to comply with the statute of limitations is an affirmative defense, which
means that a plaintiff need not allege facts showing that her complaint is timely. See Hyson
USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 935, 939 (7th Cir. 2016). But the plaintiff can plead
herself out of court if she alleges facts showing that the affirmative defense applies. Andonissamy
1 Webb previously sought to enforce the judgment from Case no. 23-cv-442-jdp against New
Playmonster in this case, but the court dismissed that complaint because “federal law does not
recognize an independent cause of action for enforcing a judgment under Title VII or the FLMA
against a successor in interest.” Dkt. 18, at 2. Instead, the plaintiff must assert new claims
under Title VII and the FMLA against the successor. Id.
2 In a footnote, New Playmonster says that Webb did not properly exhaust her administrative
remedies. Dkt. 21, at 4. New Playmonster forfeited this argument for the purpose of its motion
to dismiss by failing to develop the argument. See Thulin v. Shopko Stores Operating Co., LLC,
771 F.3d 994, 997–98 (7th Cir. 2014).
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v. Hewlett-Packard Co., 547 F.3d 841, 847 (7th Cir. 2008). In this case, Webb’s allegations show
that the limitations period ran long before she filed this lawsuit in 2025.
Webb says that New Playmonster is equitably estopped from asserting a statute of
limitations defense. Both parties assume that a plaintiff has the burden of pleading equitable
estoppel when the allegations show that the complaint is otherwise untimely. The parties do
not cite case law on this issue, but the court of appeals has assumed that plaintiffs must plead
equitable estoppel under those circumstances. See, e.g., Vergara v. City of Chicago, 939 F.3d 882,
886 (7th Cir. 2019); Smith v. Union Pac. R. Co., 474 F. App’x 478, 480 (7th Cir. 2012). And
it is well established that the burden of proving equitable estoppel falls on the party asserting
it, in this case Webb. See Stark v. Dynascan, 902 F.2d 549, 551 (7th Cir. 1990). So it follows
that Webb must also plead estoppel.
The parties’ briefs raise two threshold issues: (1) what are the requirements of equitable
estoppel? and (2) which pleading standard applies? On the first issue, the parties cite different
standards without acknowledging that they are doing so. In fact, both parties cite a standard
that is more favorable for the other side. New Playmonster cites a two-element test: (1) the
defendant took active steps to prevent the plaintiff from suing in time; and (2) the plaintiff
actually and reasonably relied on the other party’s actions. Vergara v. City of Chicago, 939 F.3d
882, 886 (7th Cir. 2019). Webb cites a three-element test: (1) the defendant made a
misrepresentation; (2) the plaintiff reasonably relied on the misrepresentation; and (3) the
plaintiff suffered a detriment. LaBonte v. U.S., 233 F.3d 1049, 1053 (7th Cir. 2000). The key
difference between the two standards relates to the first element: Webb’s proposed test requires
a misrepresentation; New Playmonster’s proposed test covers any “active steps” by the
defendant that prevented a timely filing. Webb’s proposed standard applies only when estoppel
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is being asserted against the government, see id., so the court will apply the standard cited by
New Playmonster.
The second issue is whether pleading estoppel is governed by the general notice pleading
standard in Federal Rule of Civil Procedure 8 or the heightened pleading standard in Federal
Rule of Civil Procedure 9(b). Webb assumes that Rule 8 applies. New Playmonster doesn’t
directly contradict that assumption, and, in fact, New Playmonster relies on cases such as Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009),
which apply Rule 8. But New Playmonster also contends that Webb was required to allege “1)
who exactly made the alleged misrepresentations and who received them; 2) the specific
content 	or 	context 	of 	the 	alleged 	misrepresentations; 	3) 	when 	or 	where 	the 	alleged
misrepresentations 	occurred; 	and/or 	4) 	why 	Plaintiff’s 	reliance 	on 	the 	alleged
misrepresentations was reasonable.” Dkt. 21, at 7–8. Those are the sort of details required
under Rule 9(b), not Rule 8. See United States ex rel. Presser v. Acacia Mental Health Clinic, LLC,
836 F.3d 770, 776 (7th Cir. 2016) (under Rule 9(b), “[t]he complaint must describe the ‘who,
what, when, where, and how’ of the fraud to survive a motion to dismiss”).
Rule 9(b) applies only to allegations of fraud and mistake. It does not appear that the
court of appeals has considered whether Rule 9(b) applies to equitable estoppel, and district
courts are split. Compare Telebrands Corp. v. My Pillow, Inc., No. 18-CV-06318, 2020 WL
291386, at *2 (N.D. Ill. Jan. 21, 2020) (Rule 9(b) does not apply to equitable estoppel) with
Arriaga v. Wells Fargo Bank, N.A., No. 09 C 2115, 2011 WL 4738522, at *4 (N.D. Ill. Sept.
30, 2011) (Rule 9(b) applies to equitable estoppel). In the absence of any binding authority or
argument from the parties, the court will apply Rule 8. As already discussed, equitable estoppel
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requires the plaintiff to show “active steps” by the defendant, which is not the same thing as
fraud or mistake.
Under Rule 8, the plaintiff must allege enough facts to provide fair notice to the
defendant and raise the plaintiff’s right to relief above the speculative level. Twombly, 550 U.S.
at 570 (2007); Iqbal, 556 U.S. at 678. Webb’s allegations meet that standard for both elements
of equitable estoppel.
Webb alleges that she originally sued New Playmonster in her 2023 lawsuit, within the
statutory deadline for both of her claims, but counsel for New Playmonster represented to
Webb’s counsel that there was no connection between Old Playmonster and New Playmonster.
Dkt. 19, ¶¶ 55, 76, 82, 89, 97. As a result, Webb says that she amended her complaint in the
2023 lawsuit, dropping New Playmonster and replacing it with Old Playmonster. This is
consistent with the statement Webb’s counsel made when amending the complaint in 2023
lawsuit: “The Defendant advised Plaintiff of the incorrect party and the need for the correction
from Playmonster, Group, LLC to Playmonster LLC.” Case no. 23-cv-442-jdp, Dkt. 7, ¶ 4. New
Playmonster does not dispute that any conduct by its counsel may be imputed to New
Playmonster.
At the pleading stage, it is reasonable to infer from Webb’s allegations, both that New
Playmonster took active steps in the form of contacting Webb’s counsel to tell them that Webb
was suing the wrong party, and that Webb reasonably relied on New Playmonster’s conduct
by amending her complaint. After all, New Playmonster was in the best position to know who
the correct party was.
New Playmonster asserts two other reasons for rejecting an estoppel argument. First,
New Playmonster says that Webb’s allegations are untrue: “the reality is that counsel for [New]
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Playmonster truthfully advised counsel for Plaintiff that Plaintiff was never employed by [New]
Playmonster and was instead solely employed by” Old Playmonster. Dkt. 21, at 7–8. But Webb
alleges that New Playmonster denied any connection with Old Playmonster, and the court
must accept that allegation as true at the pleading stage. Iqbal, 556 U.S. at 669.
Second, New Playmonster states in a footnote that Webb’s allegations suggest only that
New Playmonster provided “incorrect legal advice,” and “[r]eliance on a known adversary’s
legal advice is not reasonable.” Dkt. 21, at 9 n.5 (quoting Atwell v. Lisle Park Dist., 286 F.3d
987, 992 (7th Cir. 2002)). But liberally construed, the amended complaint alleges that New
Playmonster misrepresented facts, including its relationship with Old Playmonster, so it would
be premature to reject the estoppel argument based on unreasonable reliance.
One final point. Even if estoppel applies, that does not mean that a claim has no statute
of 	limitations. 	Rather, 	equitable 	estoppel 	tolls 	the 	limitations 	period 	only 	until 	“the
circumstance giving rise to the estoppel is removed.” Shropshear v. Corp. Counsel of Chi., 275
F.3d 593, 597 (7th Cir. 2001). And there is some tension in the law regarding what a plaintiff’s
own obligations are if she delays suit because of the defendant’s conduct. Compare id. (“[T]he
plaintiff’s lack of due diligence is not a defense [to a claim of equitable estoppel].”), with Sidney
Hillman Health Ctr. of Rochester v. Abbott Lab’ys, Inc., 782 F.3d 922, 931 (7th Cir. 2015)
(“Equitable estoppel . . . applies only when plaintiffs act with reasonable diligence to discover
and file their claims.”). The court need not resolve that tension now because New Playmonster
does not contend that Webb unreasonably delayed in bringing this lawsuit after discovering
that New Playmonster was the correct defendant. If additional facts show that New
Playmonster did not mislead Webb, that Webb’s reliance was not reasonable, or that Webb
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knew or should have known sooner that New Playmonster was the correct defendant, New
Playmonster may raise those issues in a motion for summary judgment.
ORDER
IT IS ORDERED that defendant Playmonster Group, LLC’s motion to dismiss,
Dkt. 20, is DENIED.
Entered November 20, 2025.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge
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